When Planning Won't Cut It
Planning is something we are all told is critical to an organization's success. While that is certainly true, viable planning can not really happen if the fundamental strategy for the underlying business (or any type of organization) is flawed. Over the past many years of advising emerging and established companies I have often found that business leaders and investors are frustrated and feel stymied by the lack of a well thought through business plan. Too often the difficulty in coming up with a realistic business plan really reflects the lack of a core business strategy that will rapidly propel the business. If the strategic underpinnings of a company are flawed how can a realistic business plan be developed? It is impossible.
In recent months several organizations have engaged our firm (Bluestone+Killion) as strategic advisors to explore why their plans are not developing for raising new funds (attracting capital in this tough economy is really hard, virtually impossible), attracting the right people to the organization, developing, launching and selling new products and services, generating a profit, achieving a meaningful competitive edge and building win-win strategic alliances - one of the real keys to achieving success these days.
In almost all cases we have been finding basic flawed strategies. The businesses lack a clear competitive edge. Their products and services really are not break-throughs. They can not break into the target sales channels which are already clogged with similar offerings. The people in the organization are already discouraged by the lack of results so why will new talented people join the team. And, why should investors part with their hard earned capital to financially back a company without a winning strategy? Detailed, item by item planning won't change the basic issue. The current business model and strategy for the company just won't work regardless of the degree of planning that takes place.
The obvious solution is to step back and re-examine the key elements in the basic strategy of the business:
* who are the right investors for the business and why? What should they expect in return? What can they add besides just capital?
* how much additional capital is really needed? Most emerging companies far over-estimate their need for capital, the lack of which can often be compensated for by creative thinking and hard work. This is almost a universal rule.
*how and why are the products and services truly unique? Who will benefit from them the most? Who is the customer? You can't be all things for all people. We live in a niche world.
*who can you partner with to leverage your own finances, connections and other resources. Going it alone these days is too tough. You have to build win-win alliances.
* how will your products or services increase the profitability or performance or meet other critical needs of your target clients better than other available options? We often see emerging companies trying to sell "OK" products and services to target accounts without being able to really justify the purchase in the account's mind. You have to have a clear, bottom-line oriented selling strategy or forget about it.
* why should the target account do business with your firm? What's the compelling reason for them to pick you?
* do you have a believable organization with the right people in the right slots focusing on doing the right things? Usually the answer is no.
In recent weeks we have worked with companies: developing educational content for a professional market; launching a new cargo airline; mining for diamonds in an African country; streamlining the process for searching for new reality TV show talent; launching new children oriented content for TV programming, books and merchandise. In all these cases they had "business" plans, none of which could really be implemented. What they lacked was a winning, viable, clear strategy for achieving success.
If you are stuck and struggling to implement a business plan that just isn't cutting it, go back to the beginning. Focus on developing a rock solid strategy for sustained growth. Start by asking "Does our company have a reason to exist? What is it? Who needs us?" Without being able to truthfully answer this question you will just spin your wheels, burning through resources.
I welcome your feedback and reaction: Jack Killion,
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