Why business planning is so vital
There was something I witnessed recently that is worth recounting because it was an answer to a question that came from the voice of innocence, as it were. By that I mean, I was with a client in one of their management meetings recently, when the issue of what that company was going to do with their strategy going forward was raised. A junior manager then asked, “what’s the plan then?”. An honest enough question you might say, but then the young manager followed this up with “We don’t need a plan anyway as we’ll just fumble our way through it like we normally do”. Maybe it was an attempt at humour but his comments elicited a response from a senior manager that I will try and recall as best I can, in essence at least.
He smiled and explained to the inexperienced one that planning was vital and although it may not look like it at times, they did actually have a very coherent strategy. He then went on to explain why (quite precisely in a few minutes) that it was so important to plan properly in a modern business environment and also why he may not recognise it as a coherent plan (intimating gently that this was down to his inexperience).
He started with how they view the competition and stated how it was fierce these days, he resisted saying ‘not like when I was a lad’, but he may as well have done. The internet has made things so much more accessible and buying products so much easier. It’s a cinch to do a direct comparison with your products over the competition and make a decision much more quickly. So, he explained, we have to stay ahead of the game.
He continued with; it is vital to have a clear view of where the business is going. He rattled off a couple of really good examples of the company’s short, medium and long term goals. The youngster nodding in agreement as he realised that he did actually know what they were. He talked of knowing their place in the market in which they operate and understanding the mix of that market and what their strengths were.
Planning for a particular product in their range to be aimed at a specific part of that market was something he mentioned. He went on to explain how their senior planning meetings has been focussed on how they would differentiate their product from the rest and really sell their USP. They felt that they had considered everything from production cost, marketing, distribution etc. and planned for the minimum number of sales and how this would scale up accordingly to reach and beat their targeted sales. They had planned a launch promotion that would be vibrant and different, making it unique and something that the competition had never done before – a clear differentiator.
One of the things he mentioned that really impressed was that he had personally been involved in all the planning meetings and spoke with great authority (and pride) about the new product launch and suggested that as good as it was, “if we don’t get the planning correct when we get to market, it will all be for nothing”. It was clear that he understood it didn’t matter how go the product was, if they didn’t have a clear vision as to how they were going to produce and take the thing to market, it would fail.
The manner in which he delivered this brief summary of why planning was so vital so actually very disarming and encouraging, so much so that he had the young manager smiling and nodding in agreement all the way through it. Especially when he delivered his final piece of advice. He said, that above all else whatever plan we make, there is a good chance that through no fault of our own, we will probably still have to change and adapt at some point.
He then referenced a particular supplier going into administration halfway through their production phase and how they had to find a new supplier for that part of the new product which was about to be launched. As a result it changed the very fabric of the product material they could use as it was unique to that supplier. Although the composition of the part had to change, they all agreed that it actually improved the product in the final analysis but he admitted to having a considerable panic when he initially got the news that the part was no longer available to them. He smiled and finished with, “So every cloud has a silver lining I guess – but at least we had a plan!”
We can never really be sure about what the future holds but he left that young manager in no doubt at all that having a coherent plan was definitely preferable to not having one. Yes things are going to change and you may have to adapt but having a clear vision to start with and communication that vision using various methodologies was the way forward.
Here at Maguire Training we have classroom based courses and programmes that can help with strategy and good business planning. We are also proud to offer a versatile and intuitive suite of over a hundred e-learning modules on our website which covers a range of leadership and management topics. Have a look at the module ‘Strategic Analysis’ which would be a perfect complement to the classroom based business planning courses.
If you need further information then you could always call us of course on 0333 5777 144 for a no obligation discussion about your training requirements. Alternatively, simply hit the ‘Contact Us’ on any page of our website at www.maguiretraining.co.uk and we’ll get right back to you.
Either way it would be great to hear from you.