New Year’s Reflections: Business Plans Are Always Wrong 1

I wrote a post with this title more than four years ago. Today, a good day for reflection and looking back as we welcome a new year, I want to revisit the basic truth in the title of this post, and point out what that really means.

Out of Bounds

from istockphoto.com

Why are plans always wrong? Because they predict the future, and we’re human. We humans suck at predicting the future.

Paradox: nonetheless, planning is vital. Planning means starting with the plan and then tracking, reviewing progress, watching plan vs. actual results, correcting the course without losing sight of the long-term destination.

Planning is a process, like walking or steering, that involves constant corrections.

  • The plan sets a marker. Without it we can’t track how we were wrong, in what direction, and when, and with what assumptions.
  • Use this marker to manage the constant conflict between short-term problems and long-term goals. You don’t just implement a plan, no matter what. You work that plan. Use it to maintain your vision of progress towards the horizon, while dealing with the everyday problems, putting out fires.
  • So the plan may be wrong, but the planning process is vital.

    plan vs. actual

    from istockphoto.com

The truth is that forecasting is hard. Nobody likes forecasting. But one thing harder than forecasting is trying to run a business without a forecast.

A business plan is normally full of holes, but you fill them, after the fact, with the management that follows. That’s what turns planning into management.

Good planning is nine parts implementation for every one part strategy.

 

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    I enjoy reading your article. New years reflection is a way we can think of good and bad times of our last year life. We can also change our bad attitudes by reflecting it form last year.

About the Author Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry. Follow Tim on Google+ Read more »

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