Business Planning

Oct 11, 1999

Is all business planning necessarily strategic planning? That was the topic of a lively discussion among some of our most successful management consulting folks a few weeks back— whether or not to lump all business planning activities under the strategic planning moniker. I was against it for a couple of reasons. Strategic planning sounds soft and theoretical, and that may turn off skeptical engineers, architects, and scientists who are tired of the philosophical stuff and want to get down to action. My other rub is that I have seen countless strategic plans with all sorts of grandiose language that no one understood and no specifics on how anything was going to be accomplished. The planning process should not be restricted to theory! Business planning includes strategic planning (important stuff, especially for the long term) but it also includes more. It has measurable goals and action items to be accomplished in the next year. Here are some more of my thoughts on business planning: It is the responsibility of the board of directors to develop the plan. And it’s the responsibility of the CEO to implement that plan. This doesn’t mean that the board does it by themselves in a vacuum. Lots of employees, if not all, should have the opportunity to participate in the process in some way, even if it’s only to offer up what they feel are the biggest problems facing the company or the hurdles they face in doing their jobs. This kind of input should not only be gathered from the principals. What really drives me nuts is when firms take their owners all off-site for a big planning meeting where they talk about marketing, money, and people problems, and leave their marketing, finance, and HR heads back at the office! It’s crazy! If the owners cannot agree on a vision, everything else gets bogged down. I could say the same thing about the mission and strategies, just not as strongly. The vision neatly sums up what you’re trying to do with the company. I will never forget one environmental consulting firm we worked with several years ago. The three major owners all had different ideas about where they wanted to be five years down the road. One wanted to shrink the firm to a third of its current size. One wanted to double in size. And the last wanted to become Bechtel Jr. Can you imagine the crisis they had when their marketing director quit? The one who wanted to shrink could easily take the position of “What do we need a marketing director for?” The one who wanted to double could say, “We need to hire someone who’s just a little bit better than the last one.” And the one who wanted the company to metamorphose into a mega-firm could say, “Hire someone at principal level with international marketing experience.” In most companies, the lack of a clear vision paralyzes all significant decision-making. The plan must be shared with every employee. And the firm’s success in meeting its goals has to be measured and reported constantly for the plan to have meaning. Again, it’s shocking how few A/E/P and environmental firms actually do these two things with their plans. No wonder so many people feel disenfranchised, disconnected from their organizations, or confused about what their priorities are if someone is not telling them what to do. And no wonder, too, that the worker bees question how useful some of the non-billable management time really is. No one has explained the initiatives that will take the firm to a new level of competitiveness or how all of this stuff integrates into the big picture. The firm has to show incremental progress toward its goals for them to be perceived as valuable— and to reinforce the idea that the company is in charge of its own destiny, not floating out there in a potentially uncertain economy. Uncertainty and the lack of a feeling of accomplishment demotivate the troops and the management! The plan must be viewed as a tool to help people be more successful, not a hindrance or bureaucratic exercise that no one has a passion for. For all of you change agents out there, the business plan is your chance to redirect the firm. Here is where conflicts between teamwork and resource sharing can be addressed by changing your organizational structure, accounting practices, or incentive compensation scheme. Here is where the company can finally get away from constant and continuous debt by overhauling the ownership program so that there’s a way to raise capital from employees. Here is the chance to re-energize flat areas of the company by changing their leadership or combining them with areas that aren’t flat. Here is the chance to commit resources to the marketing budget so that the phone starts ringing with good work and the technical people are no longer forced into being door-to-door salespeople. This is all wide-ranging, important stuff, and it can have a huge impact on everyone in the firm. See it as such, and you’ll get more from it. Management needs to sell the plan and constantly bring people back to it. It’s a shame when a company spends the time and money to develop a new business plan, and then it’s barely mentioned in the CEO’s quarterly letter to employees. We suggest holding meetings in every office immediately after the plan is done to sell it enthusiastically. Not everyone will agree on your direction. Many will have misconceptions about growth, new market directions, a new organizational structure, or a new compensation scheme. These doubts need to be addressed in a convincing way by the developers of the plan. They’re the ones best equipped to counter these objections. And as far as “bringing people back to the plan” goes, think about how you react when someone brings you an idea for a new market or service. The first question I would ask is how this idea meshes with the firm’s mission, vision, and strategies. If it doesn’t, then you may have to pass it up. There are other directions in which the company has decided to go, and resources are limited. Knowing what you don’t want to do may be as important to your success as knowing what you want to do! Now is the time to confront sacred cows, have an honest discussion about what you want from the firm and your careers, and make tough choices about where to invest your time and money. If you want to grow, realize there is a cost. But also know that faster growing firms are worth more and are more profitable in the long term. If you aren’t happy with the way things are going, speak up. And if you are, be ready to get out of the way for those that aren’t. It’s not easy, but nothing worth doing ever is. Originally published 10/11/1999

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Zweig Group, a four-time Inc. 500/5000 honoree, is the premiere authority in AEC management consulting, the go-to source for industry research, and the leading provider of customized learning and training. Zweig Group specializes in four core consulting areas: Talent, Performance, Growth, and Transition, including innovative solutions in mergers and acquisitions, strategic planning, financial management, ownership transition, executive search, business development, valuation, and more. Zweig Group exists to help AEC firms succeed in a competitive marketplace. The firm has offices in Dallas and Fayetteville, Arkansas.