You never get all three.
Building a business is 20% science and 80% art, and yet all the business schools, the SBA, and the gurus that want to sell us Business Plan software tell us we should treat it like a controlled science experiment in a lab. Business doesn’t work that way.
My next book is called “Bad Plans Carried Out Violently”, and tells the stories of successful start ups who understood clearly that every plan is a Bad Plan because the world is going to interact with it and mess it up.
And “violently” isn’t always bad. It actually means – “with full and total COMMITMENT – great force and motion, extreme intensity of conviction.”
Life itself is a Bad Plan Carried Out Violently. Anyone who has raised kids will tell you that it takes full and total commitment to have a child, great force and motion to raise one, and extreme intensity of conviction to get them to move out.
But we want a tight and tidy process all along the way.
Traditional business planning has taught us that the most important part of planning is to plan the “middle” of the process – the “how”, in great detail, then follow that plan slavishly. Successful parents and business owners don’t do that. Instead they both plan using 2.1 very simple questions:
1) Where am I?
2) Where do I want to end up?
2.1) What are the next few steps?
We always want to have the full third question answered. That question looks like this:
3) How do I get all the way from #1 to #2? Good luck with that.
There are too many variables in business to accurately plan all the way from where I am to where I want to end up. It’s fortune-telling to say exactly how you’re going to either raise a kid or build a Mature Business. All you know is
1) where you are, and
2) where you want to end up.
Then all you get is 2.1) the next few steps.
Successful business owners make a decision and get moving. Then they ask the same 2.1 questions to cover the new known problems that have come up since they moved forward. They are more focused on “taking soundings” than on planning every step of the voyage.
What happens when we try to answer the whole third question and plan the entire middle of the trip?
A $1 Billion Woops
Webvans, Inc. had a brilliant idea – use the home delivery model to bring you groceries. Just call and we deliver. They created a classic Business Plan on exactly HOW they were going to get from point A to point B, and then they shipwrecked without taking any soundings.
Webvan built a detailed plan based on assumptions about how things would turn out, then executed on that plan without wavering. Rather than patiently building and adjusting flexibly as demand grew, Webvan ignored how people were responding and moved forward with giant warehouses and huge infrastructure. The company ran through $1billion and went under with a death grip on it’s commitment to the same “HOW” that had been wrong since the day they started.
A Better Way – The 2.1 Planning Process
FreshDirect, a competitor, decided to grow into business as demand rose, and then change with the demand as it became clear what they needed to do to create success. They’re doing fine. They focused on two things
1) Where are we? and
2) Where do we want to end up?.
Then they asked
2.1) What are the next few steps?
Focus a lot less on HOW you are going to get where you are going two years from now, and focus more on what you need to do this quarter and this month to get there. Every quarter ask yourself the same 2.1 questions:
1) Where are we?
2) Where do we want to end up?
2.1) What are the next few steps to get there?
Stop building complex, detailed 12 month and three year business plans. All you get is the next few steps. The rest is fortune telling that can put you out of business.