8 Shortsighted Reasons Business Owners Don’t Plan

I’ve been consulting with business owners for over 12 years. Clients typically call because sales are slumping or things are seemingly out of control. They feel lost about where things are going and are just along for the ride. When trying to diagnose what might be wrong I will always first ask to see the plan for their business. The common response, “What plan?” or they will point to their head and say, “it’s in here”.

 What has always intrigued me about this is when I ask an audience of private business owners to raise their hands if they are at all surprised to find that Coca Cola has a 3-year plan. Or Boeing. Or Target. No one raises their hands. “Of course they do!”, they would say.

Yet when it comes to their own businesses - no plan at all. Remarkably, 90% of private business owners operate without a plan. The success/fail records support this. So, why don’t they plan?

Here are the 8 most common reasons I have heard for this shortsighted behavior.

(1) "I'd rather DO rather than plan." Clients have said they would rather do anything than plan. Fix a machine, support a sales call, talk to a supplier, or review a new website. In doing these things they get immediate gratification of accomplishing something, of solving an immediate problem for the team. After all, they rationalize this is the role of the President and owner, to solve problems, to be an expert on all matters and keep the business humming along. Right?

 (2) "It’s just not possible to do any long-term planning for MY business, it’s just too dynamic and unpredictable right now." “Mike, you don’t understand. My business is different.” Then they will site all the chaos they are managing through. Employee performance issues, a customer cutting their order in half, an upcoming conference to prepare for, a new competitor emerging, and the list goes on. “In such an environment, how do you expect me to do any long-term planning?

 (3) "Time spent on this is just not worth the effort." Citing reasons (1) and (2) they will rationalize that it just doesn’t make sense to spend precious time on this priority right now. Some will further justify this position by recalling an instance where a plan was produced only to sit on a shelf - never to be referred to again.

(4) "I don’t know how." I have had owners tell me they intended to do this for years. Some even locked themselves away and stopped taking calls for the sole purpose of crafting a strategic plan. They admitted only getting as far as typing ... “2014-2016 Strategic Plan” ...at the top of a blank Word document. They add that despite the fact there are numerous resources on the web for how to do this very important and impactful, cerebral activity “it is hard to have any confidence I am doing this right”. That’s not surprising. Building a quality, viable strategic plan takes experience just like any other discipline required to run a good company.

 (5) "What if it’s not the right plan?" Here is the logic behind this excuse. A plan puts our company on certain path. If the plan is wrong the path is wrong and that could spell disaster. “No plan mean I have the maximum flexibility to adjust in real-time based on the real-time dynamics of the business.” I’d like to see a CEO of any public company give this rationale to their Board of Directors or a startup to their principal investors.

(6) "I don’t want to be hand-cuffed on how I run my company." A written plan means accountability. “Publicizing our plan means committing myself (the owner) to accomplishing certain things in certain timeframes, right?” Yes. “Me failing to meet written milestones may give others a reason to justify not accomplishing the tasks I assigned them.” We can’t have that now can we.

 (7) "I’ve operated this long without a plan and it seems to be working for me." Why change? This is one of my personal favorites because I invariably find abysmal marketing initiatives, costly bad hires, and expensive, ultimately aborted excursions into new markets that would not have otherwise been pursued had they been operating to a plan.

 (8) "I don’t have time." “I know I should but things are just too busy right now for me to do any planning. Maybe later when things slow down.” Hint: they never do.

As this year draws to an end you have an opportunity to reflect on your business and your leadership. What did you learn this year? About your competition? About yourself? About your customer? What did your company do well? Where are the weaknesses that should be addressed? There is no doubt you possess a wealth of quantitative and quantitative data - inside your head. But that jungled mess of important information benefits no one in there. The planning process draws that out and makes it actionable. And much like making a movie, the finished product becomes the actionable script for your business.

Want to build a growth plan for your metro Atlanta business?  Let's talk over a cup of coffee.  Contact me here.

About the author. Mike Gomez is President and CEO of Allegro Consulting, a growth specialty firm in Atlanta, GA. Allegro has been helping Georgia’s private business owners plan and execute aggressive growth strategies for over12 years. Mike is a strategy and sales process evangelist with a tool chest built on direct experience in sales ($10B) and operations. He is a prolific speaker, writer, guest lecturer at UGA and GaTech, Next Top Entrepreneur judge, and start-up mentor at Atlanta Tech Village.

Tough Decisions are Part of Entrepreneurial Landscape

Whether you are the owner of a start-up or a well established business you are going to be challenged to make tough, agonizing decisions that will have a lasting impact.

Peter Drucker said this about decision making and business, “Whenever you see a successful business, someone once made a courageous decision.”

Decision making is part of the landscape of business.  And in the true spirit of the immortal words "The buck stops here," the toughest decisions are reserved for you the owner.  So how do you make these types of decision.  First and foremost you use your strategic and tactical plan as a guide.  A well vetted, market-based long and short-range plan is a very valuable tool for making tough business decisions. "Is it consistent with the plan?" is one of my favorite questions to ask owners struggling with a tough decision.

But what if both or all the options are consistent with the plan. What then?

There is something to be said about trusting your instinct and making decisions that way.  If you have a lot of relevant experience from which these "instincts" originate then you are likely to make a pretty good decisions. But I am a data guy.  Even with my depth of experience I feel more comfortable and confident when unemotional data is added to the decision process.

Here are the steps I would take to guide me towards making a tough decision:

• What strategic problem am I trying to solve? (Be as specific as possible.)

• What solutions are there to solve my problem? (short-term and long-term)

• What is the approximate cost (financial ($cash)) of each solution? Ballpark it.

• The strategic impact (pros and cons) be of each solution over say a 2-year period? KISS principle

• Rank the solutions by cost.

• Rank the solution by strategic impact.

• After compiling this data step away for a day or two.

• Now put your CEO hat on and look at the data as if a person on your staff is presenting these options to you for the very first time. 

• Make an executive decision.  Document your rationale (On this date, I chose this course of action because.....).

• Proceed - and don't look back.

Getting input from an advisory board for those decisions of strategic significance may also be prudent.  But recognize, you and only you will be held accountable for the decision you ultimately make.  There is a reason for the saying, "It's lonely at the top."

Want some unbiased help exploring options and assessing impact of different strategies?  We can help. Contact us here. The first coffee is on us.

About the author. Mike Gomez is President of Allegro Consulting, a growth specialty firm helping turnaround businesses wrestling with stagnant growth. He grew his very first client’s business from $8M to $35M in just two years. Mike is also a prolific speaker, writer, three-time marathoner, a former military officer and pilot of both aircraft and helicopters. www.allegroconsultant.com

Auburn Football - A "Change" Lesson for Business Owners

“Life will teach you the lessons, it is up to you to learn them.”

A lesson about implementing transformational “change” in your organization.

Two weeks ago Auburn’s head football coach (CEO) Tommy Tuberville fired his offensive coordinator (VP)Tony Franklin in a dramatic mid-season move most will argue was done to save his own job. The firing followed what could only be described as a dismal year for Auburn football where they started the season ranked 9th in the nation and after losses to LSU, Vanderbilt and Arkansas no longer show up in the polls.

For those who don’t follow Auburn football it is important to know that historically they have run a conservative offense relying heavily on running up the middle and the use of the option. The CEO (Head Coach) felt this offense hasn’t been producing the results needed to achieve the goal his Board of Directors (Auburn Trustees) or shareholders (fans) expect - a national title. As a result, the CEO made the bold decision to adopt an entirely new offensive strategy called “the Spread”. Considered by most to be a very dynamic and complex - no huddle/shotgun - offense this style is a vast departure from anything the Auburn “company” has done before.

Like any good CEO introducing “change”, Tommy Tuberville researched and hired one of the guru’s of “the Spread” offense, Tony Franklin, and named him his new Offensive Coordinator (Vice President). He would not let Tony Franklin hire his own assistance but was told instead to use existing assistants - loyal to the CEO.

So what went wrong?

An insightful radio interview with Tony Franklin revealed classic mistakes made by the CEO in implementing change in his organization. The VP stated there was little communication between him and the CEO after he was hired. There was no social contact whatsoever. The VP also stated there was little if any attempt by the CEO’s assistant (long standing employees and managers) to befriend him let alone embrace the new guy. Though the CEO would speak publicly of his support and commitment to this new offense, even when things were not going well, the interview left one with the distinct impression he did little else in the way of actions to make this transformation successful. And on game days, the CEO would not hesitate to make public (over the headphones) critical observations of his new VP’s play calling.

Let’s explore how the CEO’s action or lack thereof undermined and in fact directly contributed towards the failure of this transformation. First, he believed that simply communicating his intention to change was all that was necessary to have his employees and leaders embrace the change. What he failed to understand is from an employees perspective, the kind of communication that impacts behavior is 10 percent “traditional” vehicles (speeches, email, etc...), 45 percent organizational structure (whatever punishes or rewards) and 45 percent management behavior. The last 45 percent includes “off the record remarks”, and daily activities. In the words of Sue Swenson, CEO of Cricket Communications, “What you do in the hallway is more powerful than any thing you say in the meeting room.”

Secondly, he mistakenly believed that you can manage a transformation strategy in the same manner as you would an incremental changes and past success will assure future success with this venture. Incremental change - continuous improvement - is linear, predictable and logical. Transformational change, on the other hand, is a redefinition of who we are and what we do. It is often unpredictable (responding to unforeseen circumstances, challenges and opportunities), and illogical (demanding people and organizations change when they are the most successful). Most importantly, past success is not a valid indicator of future success. In fact, past success may be the greatest obstacle.

In closing, organizations don’t change. People do - or they don’t. If they don’t trust leadership, don’t share the organization’s vision, don’t buy into the reason for change, and aren’t included in the planning - there will be no successful change - regardless of how brilliant the strategy.

Tony Franklin was noble for accepting responsible for the failure - however, those who know about implementing significant change in an organization recognize this failure was caused by the tone and manner in which the CEO, Tommy Tuberville, improperly introduced, embraced and supported the change.

P.S. Tommy Tuberville was fired at the end of the season after a dismal 5-7 record. The new coach, Gene Chizik, reintroduced "the Spread" offense and ended his first year with a respectable 8-5 record and a perfect 14-0 season and National Championship title in his second year.

* Italicized text taken from The Biggest Mistakes in Managing Change by Carol Kinsey Goman, Ph.D.

More information can be found at my
website: AllegroConsultant.com

Have a great day.

About the author: Mike Gomez is the President of Allegro Consulting, an Atlanta-based business growth specialty firm. Allegro provides operating advice to businesses and organizations on a wide range of management issues that effect growth, such as strategic and organizational planning, marketing, sales and business process improvement. www.AllegroConsultant.com