The monthly review meeting is absolutely essential to real business planning. The real value of business planning is the decisions it causes, and the management that results; and for that you need not just a plan but a regular monthly review to track results and revise as necessary.
And the toughest part of the review meeting is this crucial question: Do we stick to the plan, or do we change it?
That comes up often because in the real world things never go exactly as planned. Business plans are supposed to set goals, tracking, milestones, and expectations. The review meeting is when you look at what happened and figure out what went right and what went wrong.
And that main question leads to some follow-ups, too. If I change the plan, then is my plan versus actual valid? Doesn’t it take consistent execution to make strategy work?
These are valid questions, and there are no easy answers. You won’t find some set of best practices to make this easy. You’ll end up deciding on a case-by-case basis.
Hear more about changing business plans with Peter and Jonathan on the seventh episode of The Bcast, Bplan’s official podcast:
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The arguments for staying the course:
I consider this an awkward, difficult fact about business strategy:
It’s better to have a mediocre strategy consistently applied over three or more years than a series of brilliant strategies, each applied for six months or so.
Too often, management teams get bored with strategy before it’s had a chance to be effective. I was consulting with Apple Computers during the 1980s when the Macintosh platform became the foundation for what we now call “desktop publishing.” We take it for granted today, but back in 1985 when the first laser printers came out, it was like magic. Suddenly, a single person in a home office could produce documents that looked professional.
What I saw in Apple at that time was smart young managers getting bored with desktop publishing long before the market even understood what it was. They started looking at multimedia instead. They were attracted to new technologies and innovation. As a result, they lost the concentration on desktop publishing, and lost a lot of market potential as Windows vendors moved in with competitive products.
That argues for staying the course. Strategy takes time.
The arguments for revising the plan:
On the other hand, this is also true:
There is no virtue in sticking to the plan for its own stake. Nobody wants the futility of trying to implement a flawed plan.
You’ve probably dealt with the problem of people doing something “because that’s the plan” when in fact it just isn’t working. I certainly have. That kind of thinking is one reason why some Web companies survived the first dotcom boom and others didn’t. It also explains why some business experts question the value of the business plan.
This is sloppy thinking, in my opinion—confusing the value of the planning with the mistake of implementing a plan without change or review, just because it’s the plan.
How to decide: Stay the course, or revise the plan?
This consistency versus revision dilemma is one of the best and most obvious reasons for having people—owners and managers—run the business planning, rather than algorithms or artificial intelligence. It takes people to deal with this critical judgment.
One good way to deal with it is by focusing on the assumptions. Identify the key assumptions and whether or not they’ve changed. When assumptions have changed, there is no virtue whatsoever in sticking to the plan you built on top of them.
Use your common sense. Were you wrong about the whole thing, or just about timing? Has something else happened, like market problems or disruptive technology, or competition, to change your basic assumptions?
Do not revise your plan glibly. Remember that some of the best strategies take longer to implement. Remember also that you’re living with it every day; it is naturally going to seem old and boring to you long before the target audience gets it.
(Note: Some of this material is taken from my new book, Lean Business Planning, which will be available later this summer.)
Does your business usually stick with the plan, or are you more likely to revise?