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Home » Strategy

Why the best plan is to have no plan at all

Human Directions

In this post we look at why a great idea or a good business plan is no substitute for taking action.

 

“Too much talk, too little do”

Tom Peters, In Search of Excellence

In 1982, Tom Peters along with Bob Waterman wrote the business classic In Search Of Excellence: Lessons from America’s Best-Run Companies. In that book they identified 8 themes which they argued were the foundations of success of the companies  in the study.

The first theme was a bias for action – active decision making – “getting on with it”.  At the time Peters and Waterman came to the conclusion that the number one problem facing business was “Too Much Talk, Too Little Do”.   In other words a lot of talk about what needed to be done, but not much effort in delivery.

As Peter’s himself commented in 2007:

“As the pace of change has accelerated, the problem has gotten worse.”

Ready, Aim, Fire

In many firms, most business planning processes go something like this:  Management go away for a few days and figure out what they are going to do. Then then gather the team around and task them with  creating a business plan. This process can take many months and go through many iterations. Especially the projections beyond the current year. The business may seek funding and if after many rounds of presentations, and the plan is deemed “good enough”, then the business will get funding.

The next stage of the process is then to work out exactly what needs to be done in order to achieve the “vision” at the management retreat. This could involve project plans and detailed task planning. Maybe building prototypes and figuring out what needs to be done.

Then they start to execute the plan.  Invariably something is wrong with the plan and the project team goes back to the drawing board and figures out what went wrong and try again.

This is a lot of activity, but not a lot of results.

Fire, Fire, Fire

Whilst we aren’t advocating randomly stumbling around trying to figure out what to do, and doing it, we are saying that business planning is important, after all you need to know what you’re trying to achieve, but figuring out every detail will take a lot of time and in today’s competitive marketplace too much planning and debate can make the difference between being first to market and becoming relegated to playing catchup.

At the end of the day, business planning is guessing. You might be good at guessing (i.e. lucky) and your plan comes off or things don’t work out quite the way you planned and you do something else.

Who knows what the future holds?

The original launch date for the iPod was scheduled in September 2001 and all the planning had been geared up to that date. But no one could have predicted the events of  11th September and the launch date was rescheduled until later the same year.

The point is that if Apple’s business plan was based on September sales then they wouldn’t have been met targets laid out in the plan. Did they fail? I think not.

Things happen, things change and we shouldn’t get too hung up about it.

Over the years I’ve been in countless planning meetings discussing the “5 year plan”. AKA the “5 year guess”.  No one has any idea what demand’s going to be, what’s going to happen to the price of computing over that time or the rate of inflation.  In the end someone shouts up “let’s go with 3%” and everyone nods sagely.

The longer the time period the more variables come to play in proving your guess to be right or wrong.

“We made mistakes, of course. Most of them were omissions we didn’t think of when we initially wrote the software. We fixed them by doing it over and over, again and again. We do the same today. While our competitors are still sucking their thumbs trying to make the design perfect, we’re already on prototype version #5. By the time our rivals are ready with wires and screws, we are on version #10. It gets back to planning versus acting: We act from day one; others plan how to plan—for months.” Bloomberg by Bloomberg

You’re never going to know all the details before you take action, so make sure you know what the critical items are to the project success and do those.

In Eric Ries’ book: The Lean Startup: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses he describes the MVP.

MVP = The Minimum Viable Product. This is the mimimum product necessary to get a sale. It’s not got all the fancy features and it’s not the finished product. It’s not created to make the most profit, but to gain valuable insights to ultimately sell more products.

You can use the same techique when you’re executing your next business idea. Do the minimum necessary to get the product or service launcehd and get a sale and use the process as a learning exercise to make improvements and refine the product. All the time taking action and improving your products or services.

What do yo think? Share your thoughts in the comments below.

Empire Building Kit

6 Comments »

  • Steve@Affiliate Marketing Tips said:

    Matthew,

    This seems to make perfect sense to me. Although I love good planning it is certainly easy to “overplan” and I would assume it gets even worse every finger you stick in the pie.

    It is far better to have a more general plan that allows for those unforseen circumstances and is nimble to the changes.
    Steve@Affiliate Marketing Tips´s last blog post ..13 Ways to Use Fiverr.com as the ULTIMATE Link Building Service [Niche Affiliate Income #4]

    Matthew Needham Reply:

    Hi Steve, thanks for the comment. Yes, you’re the organisational guru! But you take action!
    I think there’s probably some mathematical equation you can do based on how many fingers you stick into your business plan pie, with complexity increasing disproportionately to the number of fingers!!

    I agree, a general plan is best. Take your trip to Europe, you knew where you were going, but not to the extent that every hour of every day is planned in detail.

  • Diane Kern said:

    Great advice Matthew,
    Our creativity thrives at the threshold of chaos. Too much structure gives rise to stagnation. Too loosely goosey gives rise to chaos-but there is that point when you’re moving along and surprise, surprise, here’s a new idea, surprise, surprise, here’s a new opportunity.
    So business ideas? Yes. action? Yes. Some planning? Yes. Not a bad way to do life, eh?

    Matthew Needham Reply:

    Diane, I love the comment “our creativity thrives at the threshold of chaos”. You’re absolutely right, too much structure can also mean that you fail to pivot when the market changes or it’s clear that your customers want something else and you fail to meet their needs.

    I’ve also seen though the other way round where a business changes course so often it never actually achieves anything.

    Thanks for the comment!

  • Alex Aguilar said:

    A lot has to do with management. They have to be nimble enough to push through their vision across all levels of the company and get everyone working towards a common goal. Unfortunately most companies are structured in such a way that makes them top-heavy and slow to react to quick market changes. This is also the reason why startups with a skeleton staff are quick to pounce on market openings where established companies are slow to act.

    Matthew Needham Reply:

    Hi Alex, thanks for the comment. You’re absolutely right. Although I have seen some people spend so long in the business planning stage that they never actually get started!