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People know me as a marketer but I was also trained as an engineer. Engineers are planners so it isn’t surprising that I’m an advocate of structured business planning. I think setting a corporate strategy and underpinning it with an annual operating plan (and quarterly operational reviews) is a good way to ensure that you achieve your business objectives. But after years of participating in onerous corporate planning processes that seem to have questionable impact, I now realize that it is not enough, particularly for companies in dynamic markets.
For example, recently I’ve been working with a client management team who seem to have difficulty articulating their corporate strategy (let alone write it down). Nevertheless, they do an outstanding job of executing it! They are enjoying high double-digit growth, are outpacing their competitors and are accelerating their success through canny acquisitions that position them well for the future. While they don’t have a well-articulated corporate strategy, they do have clear (and audacious) growth targets and a strong corporate culture that guides employee behaviour.
In many ways, this client’s approach to business reminds me of how Netflix manages their growth. Stripping out the nuance, Netflix figures they can achieve massive growth in a rapidly changing market by ensuring that their employees have stunning colleagues, big challenges, significant freedom and big salaries.
This combination of recruiting, management style and compensation is designed to create a high-performance company that can manage complexity without the need for creativity-killing bureaucratic processes (including, I suspect, things like annual operating plans and ops reviews!) Recent missteps notwithstanding, you can’t argue with Netflix’s progress so far.
A Harvard Business Review blog article entitled “Your Crucial – and Unwritten – Plan” corroborates the notion that an “unwritten” plan, one that exists in your mind as an evolving understanding of what you do, where you’re going, why you’re going there, and how you’re going to get there, is an essential complement to a formal written plan that covers only those portions of your thinking that are clear, specific and thought-through. In other words, a good written plan includes well-defined objectives, milestones, actions, and clear assumptions.
An unwritten plan is more likely to include gut feel, fuzzy goals, general direction and broad priorities – because the future, especially a few years out, is hazy.
For those of you struggling through your annual planning cycle, I’m afraid you can’t escape the need for a written plan. You need it to keep the organization aligned on common near-term objectives.
But let’s give ourselves a break by acknowledging that a little managing by the seat of our pants, with an unwritten plan that is frequently discussed and debated, is also a valid way to prepare for the future.