Action Plan: What’s Going to Happen? When?

I call it an action plan but in some ways that's just another buzzword. The real flesh and bones of your plan is what's going to happen, when, who's going to do it, how much is it going to cost, and how much sales will it generate. Strategy is nice, but the real plan-as-you-go business plan is about specifics that you can track and manage. And that's the flesh and bones of the plan.

The Plan Review Schedule

Here's one element of the plan-as-you-go business plan that you won't see automatically on most other business plan outlines or formats: the review schedule.

One of the lesser know, but more important, facts about planning is that every business plan needs a review schedule. People have to know when the plan will be reviewed, and by whom.

For example, in Palo Alto Software we established the third Thursday of every month as the "plan review meeting" day. In the old days we brought in lunch and took over the conference room. It wasn't a big deal. We were done in 90 minutes. But we scheduled all the meetings as part of the next year's plan, and key team members knew they should be there, and wanted to be there. Absences happened, but only when they were unavoidable.

I speak in the past tense only because after our UK subsidiary managing director was added to the group, those lunch meetings became morning meetings. Our 9 in the morning is London's 5 in the afternoon. Then in 2007 when the new management team took over, the review meetings moved to Wednesdays. But we still have them.

Remember, there's no reason to plan without plan review. I hope I've made that clear throughout this book. A few more tips:

  • Try to always start your review meetings with an initial discussion of key assumptions. This is why I say elsewhere that it's so important to list those assumptions where they stay on top of mind.
  • Mind the discipline of keeping changes in strategy and changes in assumptions related to each other.
  • Keep review meetings as short as possible. One of the biggest threats to efficient effective planning process is too much time in meetings discussing the same things.
  • Emphasize metrics. Focus on concrete specific details. Metrics are most important. How do actual metrics compare to plan metrics. Variances, meaning the differences between plan and actual, should be discussed. The obvious metrics are the financial results, but don't let those be the only metrics (refer to Develop Metrics).
  • Be keenly aware of the "crystal ball and chain" phenomenon. The risk is that planning becomes a no-win game in which people commit to future metrics that come back to bite them. It's as if it were a management trick to hold over people's heads. Don't let that happen. Make sure planning is collaborative, so that it is always understood that change can happen and when it's managed, is good. Planning helps us manage change; it isn't really just to keep track of how bad we are at predicting the future. Remember, your business plan is always wrong.

Identify Important Assumptions

Identifying assumptions is extremely important for planning process and the plan-as-you-go business plan. Planning is about managing change, and in today's world, change happens very fast. Assumptions solve the paradox between managing consistency over time, and not banging your head against a brick wall.

Assumptions might be different for each company. There is no set list. What's best is to think about those assumptions as you build your metrics, including sales forecasts and expense budgets, and write them out as much as possible.

The key here is to be able to identity and distinguish between changed assumptions and the difference between planned and actual performance. You don't truly build accountability into a planning process until you have a good list of assumptions that might change.

Some of these assumptions go into a table, with numbers, if you want. For example, you might have a table with interest rates if you're paying off debt, or tax rates, and so on.

Many assumptions deserve special attention. Maybe in bullet points. Maybe in slides. Maybe just a simple list. Keep them on top of your mind, somewhere where they'll come up quickly at review meetings.

Think about event assumptions. Or date assumptions.

  • Maybe you're assuming starting dates of one project or another, and these affect other projects. Contingencies pile up.
  • Maybe you're assuming product release, or liquor license, or finding a location, or winning the dealership, or choosing the partner, or finding the missing link on the team.
  • Maybe you're assuming some technology coming on line at a certain time.
  • You're probably assuming some factors in your sales forecast, or your expense budget; if they change, note it, and deal with them as changed assumptions.
  • You may be assuming something about competition. How long do you have before the competition does something unexpected? Do you have that on your assumptions list?

Develop Metrics

Metrics are a critical element of the plan-as-you-go business plan. The planning process requires pulling people into the regular review schedule and helping them care about performance and results. For that, you need to develop metrics.

Recently I listened to an HBR Ideacast interview with Patrick Lencioni, author of The Three Signs of a Miserable Job. Here's a quote from that podcast:Miserablejob

All human beings in any kind of a job need some way to assess their own performance that's objective. It might not be numerical or easily quantitative, but it's somewhat objective and observable by them, because then they are not left to depend upon the opinion or the whim of a manager once a year during a performance appraisal. People need to be able to go home from work every night, or every week, or every month, and know where they stand, and know what they can do to influence how they're working. This is why sales people are generally very satisfied in their job, because they have very clear evidence of their performance. Most people think they are coin operated, but in fact a quota is a wonderful scoreboard for them evaluating themselves, and all people need that.

Sometimes it requires a manager to be very creative in how they come up with that. In my book this one guy works at the drive-through window in a fast-food restaurant and the manager helps him realize that the best way he can measure the impact of his success is to find how many times he can make somebody smile or laugh that comes through his line. So he writes down or records for himself how often he can do that.

We have to give people that sense that they have some measure of control.

This is about metrics. Find ways to help people track progress towards goals. Build numbers into your plan so people can see their own progress, and peers can see each other's progress.

The most obvious metrics are in the financial reports: sales, cost of sales, expenses, and so on.

As you build your planning process, look for metrics throughout the business, aside from what shows up in the financial reports. It's different for every business, and every function in the business. For example:

  • What about measuring sales beyond the sales numbers? How about what leads to sales, such as leads, or presentations, or proposals?
  • You can measure calls taken, minutes per call.
  • Some companies set an objective poll or survey, maybe even something as simple as what you can do at to measure intangibles like customer satisfaction.
  • A software company might measure product quality by tracking support incidents, or incidents by type. It might also measure the effectiveness of support providers by measuring minutes per call, or calls per incident, or by taking a survey of customers after their service transaction is finished.

I find that in general, developing the metrics required to bring your people into the planning process is very important. Get the people involved in how they are going to be measured. Often the team leaders fail to realize how well the players on the team know their specific functions, and how they should be measured.

If you like trendy terms, the buzzword these days is scorecard. Business analysts use scorecard techniques to measure and track performance beyond the simple financial reports.

The Magic of Metrics

I love metrics. Metrics in business means some specific set of numbers you measure and get measured by, ideally numbers that anybody can understand. You know you have metrics when you find yourself checking the numbers every morning, every day, or every hour.

Cheering Crowd

I think it's a good thing. It makes a game of it. You get a score. I'm a person who times myself when I run, and I run very slowly, but I still note whether it takes me more or less time on the days I do it. I like scores. I like to compete. I usually compete against myself and my past, but still, I like to compete.

When I was with United Press International in Mexico City, many years ago, every day when we came into the office we had "the logs" as a metric. The logs were a scoring of how many newspapers used our story and how many used the competition's (Associated Press) story. The logs were like a football score. If more newspapers used my story than the AP story, I'd won. Scores were like 12-7, 4-3, 20-1 ... you get the idea. I still remember the one I won 23-1, a story about a mudslide. My lead was people "buried in a tomb of mud" and the newspapers liked it.

Fast-forward to business today. Ideally, every person in the company has his or her own metric to watch. The CEO watches a bunch of them, of course, but the bunch is composed of lots of separate metrics. The customer service rep counts calls taken, or orders. The tech support rep counts issues resolved every day. The product development people watch returns, tech support issues per capita, and issue flow. The finance people watch balances, interest income, and margins. The online webmaster watch visits, pages, pay-per-click yield, orders, sales volume, and search placements.

follow the numbers

My vision of a company working well is people checking and sharing their metrics. They are accountable for metrics, and proud when they do well. The goals are built into the plan, and the actual results are compared against the plan regularly. The plan is reviewed and revised and the course is corrected based on, among other things, the metrics.

Of course the metrics have to be the right metrics. Don't track somebody on things they can't control, and don't accidentally use metrics to push the wrong buttons. For example, years ago I had a sales manager who was tracked on sales dollars alone, who also controlled expenses and pricing. Sales went up but margins went way down. That was predictable. Track a customer service agent on call volume alone, or a tech support rep on issues handled, and customer satisfaction will suffer.

The metrics should also be built around a reasonable plan. They need to be aligned with the plan, so they tie directly into strategy.

And metrics have to be tracked. They are part of a larger planning process in which plans are kept alive and reviewed and courses are corrected as assumptions change.

These days I am particularly happy with the flow of the metrics in my job. Until recently I was responsible for the entire company, the CEO. My metrics were all over the map. Sales, profits, cash flow, unit sales, payroll, health, wealth, and the pursuit of happiness, all of which was pretty vague and hard to track. Today I'm still president, but my job is about teaching, writing, speaking, and blogging. And blogging gives me a single set of metrics (traffic, page views, subscribers, etc.) I can watch and enjoy, or suffer, every day. Like back in the old days, at UPI. That's cool.

Adapted from

Key New England Patriots Stat: Restroom Wait Time for Women

How Analytics Help Build this Champion

Posted by Tom Davenport on January 31, 2008 8:54 AM

Last spring, on baseball’s Opening Day, I confidently identified the Boston Red Sox on these very pages as the eventual World Series winner—based in part on their analytical prowess. You may recall that I was correct in that prediction. This Sunday, I will go out on a much more solid limb and pick the Patriots to triumph in the Super Bowl. I’m more of a baseball guy than a football nut, but fortunately both of the Boston teams I cheer for are not only winners of late, but also heavy users of analytical approaches to their respective games (the Celtics aren’t doing badly either, but I think Kevin Garnett is more of a factor in their success than any statistician).

Like the Red Sox (or any analytically-oriented sports team, for that matter) the primary analytical application for the Pats is selecting the best players for the lowest price. This is particularly critical in the NFL, with its stringent salary cap. In-depth analytics helped the team select its players and conserve its dough. (Until last year the team had only a middle-ranking payroll in the National Football League, but now Tom Brady is getting expensive!) The team selects players using its own scouting services rather than the NFL-generic one that other teams employ; Brady, for example, was the 199th pick in 2000. They rate potential draft choices on such nontraditional factors as intelligence and willingness to subsume personal ego for the benefit of the team (though I had my doubts about their fidelity to that variable when they signed the famously mercurial Randy Moss before this season).

The Patriots also make extensive use of analytics for on-the-field decisions. They employ statistics, for example, to decide whether to punt or “go for it” on fourth down, whether to try for one point or two after a touchdown, and whether to throw out the yellow flag and challenge a referee’s ruling. Both its coaches and players (particularly quarterback Tom Brady) are renowned for their extensive study of game video and statistics, and head coach Bill Belichick has been known to peruse articles by academic economists on statistical probabilities of football outcomes—over breakfast cereal, the legend goes.

Off the field, the team uses detailed analytics to assess and improve the “total fan experience.” At every home game, for example, twenty to twenty-five people have specific assignments to make quantitative measurements of the stadium food, parking, personnel, bathroom cleanliness, and other factors. The team prides itself not only on scoring the most points ever this season, but also on having the lowest wait time for women’s restrooms in the NFL. External vendors of services are monitored for contract renewal and have incentives to improve their performance. This won’t help them win the Super Bowl, but it helps fill Gillette Stadium every home game.

Belichick deserves a lot of credit for the analytical emphasis (God knows, he can’t get by on charm), but so do the team’s owners. Just as the Red Sox owner John Henry moved the Sox in an analytical direction, Bob and (especially, I’m told) Jonathan Kraft believed that analytics could make a difference in football. Jonathan is a Harvard Business School alumnus and a former management consultant. In addition to Belichick, they hired Scott Pioli, a former Wall Street investment analyst and now the “player personnel” guru.

The only thing the Patriots lack is an analytical secret weapon equivalent to Bill James, the god of baseball statistics who acts as a “senior adviser” to the Sox. I’m not sure there is a Bill James of football. If there is, the Pats need to hire him (or her). Such a move could keep the Patriots dynasty going for many years to come.

From Harvard Business', posted by Tom Davenport on January 31, 2008. URL

Milestones Make Your Business Plan a Real Plan

Use a milestones table to plan what's actually going to happen. I have a simple example here. It's not much more than a list of what's supposed to happen, when it starts, when it finished, what's the budget, who's in charge, and -- in this example, at least -- which department is responsible. To me it's the most important table in a business plan, because it's so obviously important for tracking progress and making your planning part of your management.

You don't need to get sophisticated with the milestones. A good list is enough.

Using simple software (meaning Microsoft Excel, Apple iWork, Lotus 1-2-3, and of course, Business Plan Pro), you can sort the list by date, by manager, by department, so you can, for example, use these milestones as agenda setters for the review meetings. Sort by manager to set the discussion points when you work with the people on your team to set expectations and follow up by reviewing results.

When and if you're thinking about plan document output, a set of milestones makes a good chart, like the one below.

This is the bread and butter of real business planning. You can't build implementation unless you put it into meaningful steps. Then, of course, you have to follow up on it, make it happen. Management is setting expectations and following up on results.

Strategy Pyramid

This is a simple framework to help you think through the steps to take. The question is how to go from strategy to concrete and practical steps. I developed this idea, and named it the strategy pyramid back in the mid-'80s. I was consulting with the Latin American group of Apple Computer, led by Hector Saldana. I had done the group's annual business plan for three years when Saldana issued a challenge: "We want you to manage our annual plan again this year, but with a difference. This year we want you to sit with us the rest of the year and make sure we actually implement it."

The repeat business for my consulting was good news, but there was a catch. The Apple Latin America group at that time was a collection of a couple dozen young, well-educated, brilliant people. Saldana and I were the only ones over 30 years old. It was hard to keep that group focused. Strategy takes boring consistency to implement. The strategy was desktop publishing, but we'd been working with that for so long that multimedia was much more interesting -- to the managers, but not to the market.

So I came up with the strategy pyramid, which made it possible to track implementation and work on strategic alignment. We used it to build a database of business activities that we called programs and track them back up through tactics and strategy. One strategy, for example, was to emphasize desktop publishing. Tactics used included advertising, pricing of bundles, and distribution channels. The detailed programs were things like advertising insertions, seminar marketing, bundling of hardware and software, and distributor pricing. Each program was assigned a manager, a start date, an end date, and a budget. Sometimes the budget was zero. The database incorporated an input spending amount for every activity, but that didn't involve spending. Leaving a zero was allowed.

The result was strategic alignment. The next year we were able to sort and manage programs according to strategies and tactics. We could show a spending pie divided into pieces representing each of our strategic priorities. We could also track implementation to the level of specific tasks assigned to specific managers, with performance on start date, finish date and budget. In some cases we could even track sales back to projections in the plan. So seminar programs that began with sales projections had to live with sales results.

You can use the strategy pyramid in your own planning. Focus on three or four main strategic priorities and build a conceptual pyramid for each one. Don't sweat the details like definitions of strategies and tactics; just make it work for you, in your business, with your pyramid. Do sweat the details like making programs with specific responsibilities, budgets and projected outputs when possible. 

You don't have to be a big company. Apple was a huge company to me in the mid-'80s, because it had more than 1,000 employees; yet the Latin American group had fewer than two dozen people. We made the pyramid work because we wanted to make it work; we wanted to build strategy, not just great parties.

Remember, good business planning is nine parts implementation for every one part strategy.

Adapted from a column for

Value-Based Marketing

This is just a thought, a tip, not something you're supposed to do or you have to do.  But it might help. The idea of value-based marketing can help you figure out what to do to take your core strategy into specific activities to reach your customers.

  1. It starts with what the experts call a value proposition. In its simplest forms that is benefit offered minus price charged. Price is relative. So an automaker might offer a more comfortable car at a price premium. Or a safer car or a faster car. A national fast food chain probably offers the value of convenience and reliability, probably at a slight price premium (at least when compared to the weaker chains). A prestigious local restaurant, on the other hand, is offering a completely different set of benefits (luxury, elegance, prestige, for example) at a marked price premium. A graphic designer is probably selling benefits related to communication and advertising, not just drawings.

    [see-also]How to Create a Unique Value Proposition[/see-also]

  2. Then you communicate the value proposition to your customers. The restaurants communicate with customers using their location (drive-through facility, perhaps, or a playground for kids), their menu, and also decor (bright colors for one, fancy table dressings and white tablecloths for another) and signage and lots of other messages. What do you think about a mosty-crab restaurant that plays loud music and has peanut shells covering the floor? And of course there's the more obvious advertising, collaterals, websites, and what employees say, and do, and how they are dressed. For example, if a computer store's business proposition has to do with reliable service for small businesses, peace of mind, and long-term relationships, then it probably shouldn't be taking out full-page newspaper advertisements promising the lowest prices in town on brand-name hardware. It probably should communicate its proposition with sales literature that emphasizes how the computer store will become a strategic ally of its clients. It might also think twice about how it handles overdue bills from customers, who might really be holding out for more service or better support. Look at specific business activities.
  3. None of this works if you don't deliver on the promise. The expensive restaurant needs to deliver good food well, with good service. The fast-food restaurant needs to deliver food quickly. The automaker claiming safety, speed, reliability, or whatever, has to deliver on those claims.

Where all of this becomes particularly interesting is when what you do doesn't line up with what you say. Or what you promise isn't what you deliver. I worked with a computer store that promised reliability and peace of mind to small-business customers but didn't deliver until it finally revamped its business plan to include more service training, more installation, white delivery vans, and the promise not to cut prices to compete with every box-pushing office superstore.

And the value proposition shows up in all functional areas of the business, not just the sales pitch. For example, do the people who collect the bills know that you are trying to offer your customers superior service? How about the people who receive returns at the customer service counter?

Value-based marketing should be included in the action plan, the activities, most of which are listed on the milestones table. It's a way to give some logic to the actual sales and marketing and administration and related everyday business activities.

All Those Ps

You have a marketing strategy. It's the heart of your plan. You've talked it out, probably written it out. You may have done the market research and industry research, or maybe you're just sure of yourself in your market. We used to call it marketing mix, or the three Ps (pricing, promotion, and an artificially forced place to stand for distribution and make the alliteration work). Then it became fashionable to make it four Ps by adding product. And even 5 Ps, to include packaging. The problem, at this point, is knowing what do I do, specifically with each of those Ps. That's the heart of the action plan. One the biggest problems many businesses face is strategic alignment. By that I mean making what you do every day match what you say is your strategy. It's amazing to me how often the daily activities don't match the strategy. That's why I've included the strategy pyramid and the value-based marketing as part of this book. More than that, though, as you fill out the what's-supposed-to-happen parts of your plan-as-you-go plan, I hope you get turned on to new ways of marketing.

Being Remarkable

Marketing has changed. It's about being remarkable. Don't fill in your marketing plan until you've been through at least one of Seth Godin's books from the list here. I don't know which to recommend. Purple Cow is perhaps the best summary of a new kind of marketing, but All Marketers Are Liars is great reading and makes its points in a more direct way, and Meatball Sundae is the latest, released early in 2008. John Jantsch's Duct Tape Marketing has transformed service marketing for small and medium companies. It's more method than approach. It's full of specific steps to take. And it's very much rooted in the new world of blogs and social media and Web 2.0. Conrad Levinsonand Al Lautenslager's Guerilla Marketing in 30 Days has had remarkable staying power for more than 20 years. It was written before the Internet became widely available, but still managed to foresee a lot of what has happened since then. Levinson was probably the first to free marketing from the corporate budget. What's still critical is the message and how to deliver it, to whom, for how much money. It has to do with focusing on your key target market, figuring out the media, and getting that message across. Marketing is delightfully creative. What you want in your business plan at this point is something specific about what you're going to do, and how much it's going to cost.

Purple Cow: Transform Your Business by Being Remarkable by Seth GodinRead more about this book...
Guerilla Marketing in 30 Days (Guerrilla Marketing) by Levinson, Al LautenslagerRead more about this book...
Duct Tape Marketing: The World's Most Practical Small Business Marketing Guide by John JantschRead more about this book...
Meatball Sundae: Is Your Marketing out of Sync? by Seth GodinRead more about this book...
All Marketers Are Liars: The Power of Telling Authentic Stories in a Low-Trust World by Seth GodinRead more about this book...

Aside from the target market strategy, your marketing strategy might also include the positioning statement, pricing, promotion, and whatever else you want to add. You might also want to look at media strategy, business development, or other factors. Strategy is creative and hard to predict. Some of the following sections will give you more ideas.

Positioning Still Matters

Positioning is an old-fashioned buzzword, but it still works. I talked about positioning in the heart of the plan. The question is how do you do it? You can use advertising, marketing collaterals, your website, your employees, so many different methods. Try this positioning statement to help: For [target market description] who [target market need], [this product] [how it meets the need]. Unlike [key competition], it [most important distinguishing feature]. For example, the positioning statement for the original Business Plan Pro, was: "For the businessperson who is starting a new company, launching new products or seeking funding or partners, Business Plan Pro is software that produces professional business plans quickly and easily. Unlike [name omitted], Business Plan Pro does a real business plan, with real insights, not just cookie-cutter fill-in-the-blanks templates."


One of the strongest messages you deliver is your price. It's also the most important tool for positioning. Don't be afraid to price at a premium if you're offering a premium product. In today's world, it isn't true that lower price necessarily delivers higher volume. That may be a standard of microeconomics, but it doesn't happen that often in the real world. Consider your value proposition. Does your pricing fit your strategy?

Promotion Means Telling Your Story

Promotion is a pompous word. I could call it telling your story, or spreading the word. It isn't just what Seth Godin calls shouting, which he uses to refer to traditional advertising that interrupts people. For a lot of today's business, it's very much a matter of website positioning and guessing about search terms to buy from Google. In retail, it's about location, signage, interior design, and the kind of positioning that has to do with what you sell and to whom, for what price. For products going into distribution channels and eventually to retail, packaging is still critical. Consumers in stores make so many of their buying decisions based on packaging. Does the packaging support the underlying story? Do you have strategic alignment with the packaging. Does it match the rest of your positioning? And of course you still have the old standbys, for more traditional marketing.

  • Do you look for expensive ads in mass media, or targeted marketing in specialized publications, or even more targeted, with direct mail?
  • Do you have a way to leverage the news media, or reviewers?
  • Do you advertise more effectively through public relations events, trade shows, newspaper, or radio?
  • What about telemarketing, the Web, or even multilevel marketing?

You Say Your Plan Every Day

Jim Blasingame, Small Business Advocate, has a website at and has an important new book out called The Age of the Customer. I'm on his radio talk show roughly once a month. As I was preparing this section for this book, I was on the radio with Blasingame talking about it and he referred to one of his newsletter articles, which he summarized as "You Say Your Business Plan Every Day."

In that newsletter article he imagines the following conversation:

Me: Hi Joe. Heard you are starting a new business. What kind?

You: Oh, hi Jim. Thanks for asking. Yeah, John and I are going to be selling square widgets to round widget distributors.

Me: How're you going to do that? Jbsba

You: I found out that no one has thought to offer square widgets to these guys. I asked around, and it looks like these guys not only NEED square widgets, but they will pay a premium for them.

Me: Sounds good. Where are you going to get your square widgets?

You: I found out that the round widget guys don't need the perfect square widgets, so I am buying seconds, cleaning them up a little, and repackaging them for my round widget customers.

Me: Sounds like you found a niche. How many can you sell in a year?

You: We've identified the need for 15,000 this year, and with the trend in the market, we think we can double that within three years. Gotta go. See you later.

How long did this conversation take -- two minutes from start to end? Let's look at what was said. You identified your

  • business;
  • management team;
  • industry;
  • business focus (your niche);
  • customer profile;
  • vendor profile;
  • pricing strategy;
  • market research; and
  • growth plans.

See? You probably "say" your business plan every day, you just might not be getting it down on paper, or in your computer.

This kind of core value is one of your business drivers. This is a lot of what I mean by the heart of the plan, the elevator speech. If you're normal, you're interested in this, you think about it a lot, and you refine and revise it as necessary in a changing world, changing market. Build your business plan around this core, like leaves surrounding the artichoke's heart.