I’ve written a bit recently about the value in being an adaptive organisation, able to both sense what is happening in the market, and respond to that information as rapidly as possible. Such flexible responses require a pretty hands off approach from leaders in the way decisions are made, information flows and resources are allocated.
It’s on this last point that I’d like to focus on for this post. Or more specifically, the business planning process. Whether you’re a start-up going to the bank for funding, or a business looking ahead to the coming year, the chances are that you’ll be constructing some kind of plan where you’ll create some projections about what you think will happen and what you’ll need to achieve it.
Of course, this has a number of flaws:
- You’re a manager, not a fortune teller – As the wisdom of crowds has taken off, there have been any number of examples whereby expert predictions were proved to be wide of the mark. Life is complex, so the chances of your predictions coming true are likely to be slim. If the data has little validity, does the plan?
- Intellectual echoes – Many business plans are constructed by the executive team, and the executive team alone. Even aside from the general lack of identity based diversity in many boardrooms, there is equally a lack of intellectual diversity. It isn’t the best basis for decision making.
- Rigidity to the core – Business plans often work in an almost mechanistic way, with the executives creating their strategy, applying resources to that strategy, and then hoping it works. The whole process can take months to construct, so should something change in the marketplace that requires a shift in strategy, it isn’t flexible enough to adapt.
- People want a say – Strategy is one thing, execution is another thing again, and I’ve written previously about how the best implementations are often done by employees that have contributed to the strategy itself.
Thankfully the tools and support exist to enable you to do away with much of the guesswork that sits at the heart of traditional planning. It allows you to see in real time what is working and what isn’t. Your job is to be flexible enough to adapt to these changing conditions.
Planning in such an environment becomes an ongoing process. It’s expected that leaders will have medium term outlooks, but these will be reviewed frequently, and the method for achieving them will also remain as adaptable as possible. Input into these goals will come from throughout the organisation, ensuring you gain as much intellectual diversity as possible.
So my suggestion is scrap the 5 year plans, scrap the ‘away days’, scrap the business plan and get experimenting, see where it takes you.
