Wishy-Washy Business Plans
Jul 29, 2002
While it certainly wasn’t the case 20 or even 10 years ago, today most design and environmental firms have a business plan. Most of them are labeled “strategic plans,” though I’ll confess that I usually cringe when I hear that term. It conjures up images of verbose mission statements and flowery visions. Or strategies that you could read 10 times over and still not be able to restate what they were supposed to be saying. Or goals that are really action items, the completion of which is completely within the control of the firm’s management, yet they are still considered “goals” because they may not get around to it! Company top management/ownership (usually they are one in the same) feels compelled to have some sort of strategic plan. It’s conventional wisdom (and valid thinking) that a well-managed company with responsible owners will have one. So they go off for a couple days, perhaps with an outside consultant, and put together “the plan” that is supposed to serve as a guidemap to the future for years to come. Too often, somewhere along the way the authors of the plan forget why they are doing it. It metamorphoses into an exercise of word-smithing politically correct statements of intent, purpose, strategy, and practice that are designed not to offend anyone. Each work group must be represented at the table and in the final product. There is rarely a forum to discuss whether or not the company even wants to be in that particular business or why. There’s no forum to discuss non-performing principals. There’s little opportunity to get into what the employees on the floor or what the clients and non-clients of the firm have to say about it. The real issues aren’t confronted. And the end product, while created with the best intentions in the world, doesn’t really do its job. Few people understand why the firm is in business, what type of work it really wants to do, or what its core philosophies are for ownership transition, selling jobs, counting the beans, splitting up the spoils of their labors, hiring people, and more. It’s a shame because the whole process is tainted. We could be breeding a generation of skeptics in the next tiers down from the top who won’t see why business planning is important. I hope I’m wrong because I don’t think that’s good. I know a good business plan is worth far more than its weight in gold. It is an instruction set— a “bible” if you’ll forgive the overuse of the word— on how the company lives its life. It should guide everyone’s behavior and answer questions such as: “How much should we budget for marketing this year?” How much does the plan say we want to grow? What did we spend over each of the last five years and what was our growth rate then? “Should I hire two interns or one experienced person who can do the job at hand but will never be able to be promoted?” What does the plan say about new employees? Is it permissible to hire anyone at any level who doesn’t have the potential to move up in the organization or is that counter to the company’s staffing strategy? “Here’s a project that is for a client type we have never worked for in the past— should we go after it?” What does the plan say? Is this is one of your target markets? If not, is there a statement in there that describes the situations where you would pursue a project that is not in your stated market areas of focus? “How long should we prop up the Houston office?” What does the plan say about branch offices that are not generating their own work? Is the office there because you need to be there for some greater good in the long haul or is its sole purpose to get work you could not get otherwise? “How much stock should the founders sell this year?” What does the transition plan call for? How much stock can the next group of shareholders afford to buy based on the valuation formula, the firm’s projected profits, and personal cash flow? The point is that these are the kinds of questions and issues that a well-crafted business plan will help give some answers to. It’s got to be more than a wishy-washy bunch of words that makes the rank and file design and technical staff laugh out loud when they hear them, or worse, retch up their lunch over! Originally published 7/29/2002
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Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.