How to Plan Holistically, Not Strategically

‘Strategic planning’ – a phrase that strikes at the very heart of many entrepreneurs’ freewheeling spirit, the antitheses of the six-month pivot and an echo of the corporate biz-speak they’ve rejected decisively (only to replace it with the equally predictable lexicon of the start-up?).

It’s understood mostly as something that there is no time to do. Not in the hurly-burly of managing a growing business. Planning is a luxury reserved for big-ego execs who gather at destination hotels and off-season spa resorts to thrash out product release schedules and marketing matrices by day and drain the lounge bar dry well into the night – not an appropriate activity for the lean mean fighting machine you need to be if you’re running your own show.

Having experienced both, I can affirm that there is some truth in that image; I remain unconvinced that an all-night marathon of carousing with a genial bunch of Finnish, Irish and Texan colleagues in a Beijing hotel bar did much for the following year’s corporate strategy – though I did make some good mates. But I’ve seen that it is just as easy to squander time with the senior management of a vastly smaller enterprise, though the wastage is more likely to be the result of persistent calls from demanding clients and un-empowered team members in need of nannying than from partying on expenses.

Most clichés contain a essential nugget of truth and ‘if you fail to plan, you plan to fail’ is no exception. Yes, it can be much harder to do forward planning in a fast-growing early- or mid-stage business. You have less data, fewer people, less time and far less head space. If your workload and revenues are project-based, you are in planning hell, unable to see beyond the end of the month.

Yearly financial planning, for example, often defeats small business MDs. Through a combination of the sheer scale of the task, the huge volume of unknowns and the apparent impossibility of setting aside more than a couple of hours at a time to focus on it, the annual forecast easily becomes one of those daunting non-urgent (in the continuous present of the entrepreneurial MD) tasks that never quite gets done.

There’s a simple remedy; don’t even try. Instead, adopt the habit of quarterly rolling forecasts, which are updated from a combination of the previous quarter’s actual numbers, some reasonable foreknowledge of the next three months’ big expenditure items and a sensible sales forecast that incorporates percentage likelihoods and approximate timings for as-yet-unconfirmed prospects.

There’s still a good smattering of known unknowns in there, like how many new clients might materialise out of the blue, and even a few unknown unknowns – the rabbit-in-headlights look on the creative director’s face when he discovers his partner is pregnant, for example – but you are so much closer to having an evidence-based foundation for knowing what could happen than you were before. And the longer you do it, the more accurately predictive the results. Better still, teach a numerate team-member to do it and delegate. Once you get your management information geared up to provide the necessary data, it can be done within a working week from the end of the preceding quarter, and in less than two hours.

The time that’s freed up when you throw off the tyranny of annual forecasting is better spent on quick-and-dirty long-term road-mapping. This is best done together with fellow founders/owners/directors/senior managers. More than one head is better than one. Shut yourselves off for a half-day, preferably away from the work space. The lobby of a hotel that’s grand – or hip – enough, to have waiting staff serving coffee and bar snacks to blow-ins off the street is a cost-effective venue – and allows for a late afternoon segue into well-earned beers.

Work on a two-year horizon across a sheet of A3 paper, set it down landscape and draw ten vertical lines to create eleven columns, of which numbers 3-10 are consecutive quarters. In your first column list five or six key aspects of your business – revenues, hires, org chart, core costs, product releases, gross profit…whatever you feel is essential – and draw horizontal lines between them.

Set this aside while you spend a half-hour summarising where you want to get the business to in the ensuing eight quarters. This requires a lot of self-discipline, combined with a firm facilitator. It is crucial to frame it as an exercise in downloading what you all already intuitively know; if you are still agonising over and arguing about where the business is heading (the subject of a previous post) then maybe you do need to book into this hotel for a couple of days and go the whole hog. Use the last column of your map to record what you would like the business to look like in two years’ time.

Then, in column two, document the current reality; how many staff, the shape of the org, last quarters revenues etc. Rounded-off rough numbers will do.

Now you have your point ‘A’ and your point ‘B’; where you’re starting out from and where you’re heading. It’s relatively easy now to see the eight columns in between as steady incremental steps along the way. But the real beauty of this methodology is that it acts as a basic primer in thinking holistically.

Businesses are systems and the don’t develop properly unless each element is evolved in synchronisation with all the others. When you can see, together, right there in front of you on the table, how bringing a hire forward by one quarter will affect profits and what that, in turn, means you need to achieve in sales, so you know how to amp up the previous quarter’s biz dev… and you do this many times, in many permutations, across the map over the course of the afternoon, what you build is both an holistic picture of the medium-term future and a different way of thinking together.


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