“We are not retreating – we are advancing in another direction.” Douglas MacArthur
A good business plan makes a great compass to guide a firm’s daily decisions but you must be flexible about reviewing the goals and initiatives associated with them. Just because you wrote, sold, and implemented the plan doesn’t make it “right” or everlasting. In fact, most plans are short-lived.
Writing a business plan is easy while implementation is the most challenging part in the strategic planning process. The most common time frame for a strategic plan is one to five years. The first key task is to effectively communicate and get input from your employees as much as possible in the planning process. Monitoring it and taking corrective action is another matter entirely.
Changing markets will mean changing plans. This is when most companies under-react and hold to the plan (since the plan is in writing and everybody is sold on the tactics and goals). This is particularly true for sales goals. With forecasted revenue driving staffing and product decisions, sales goals become “gospel” instead of an estimate or best guess.
When the sales force comes back with customer feedback that the business is “soft”, invariably the sales rep are told to get back out there and sell harder. Seldom are the reps listened to nor are the goals changed. How absurd is that? The sales force which has the best pulse of the customer and the market are told to go back and read the plan. My bet is the reps will go back and update their resumes instead.
Good plans need to be reviewed and changed quarterly. While this might be stressful to the CFO, this is reality. Companies need to monitor key metrics for their industry and at the firm. Internal metrics could include book to bill ratios, customer cancellations, sample requests, email click through rates, etc. External metrics could include interest rates, housing starts, new product announcements at the competition, etc.
When the market changes up or down, plans need to be modified. A good plan is a fluid, living document while a bad plan is a stake in the ground that is static.
John Bradley Jackson
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