Plan your business wisely
I recently read an article in the New York Times that reminded me of the importance of not getting too caught up in the business planning process. In this article (“Google Gets Ready to Rumble with Microsoft,” NY Times, December 16, 2007), Google’s CEO—Eric Schmidt—says that his company’s plans intentionally look ahead no farther than four or five months at most. Not only that but, according to Schmidt, the only business plans anyone at Google believes in “go through the end of this quarter.”
Do we need to plan?
The problem with planning is that many small business owners and managers today overemphasize the importance of long-range, strategic planning. It wasn’t that many years ago that an army of consultants descended on American businesses, selling the idea that every company needed a five-year strategic plan. The simple fact is that business today is moving far too fast to accurately project where you will be five years from now. In fast-changing markets, one of two things happens to most strategic plans—either they are constantly updated, modified, or recast, or they are ignored. Here is wisely to mention technology evolution which has enormous power to all of us. A lot of benefits and disasters when wrong people get personal details and use it against us. Now to know what is my IP address became as much important as to know your ID code.
I believe that no small business can afford the organizational friction—and costs—that come with constantly updating strategic plans, and I am certain that no small business can afford to go through the exercise of long-range planning, only to file the plans away in a filing cabinet never again to see the light of day. If your business planning process is slowing you down, then your business can’t make the quick-and-nimble moves it needs to be able to make in response to fast-changing customer needs, hungry competitors, and shifting markets. As Google’s Eric Schmidt says, “Velocity matters.”
So what is the solution? Exactly what kind of planning do small businesses—especially fast-growing small businesses—need, and how can they employ it? When I founded Science Applications International Corporation—a science and engineering firm—more than thirty years ago with just a handful of employees, I had no idea of the size of the company I was planning to build, and I had no long-range plan to get there. To be honest, we just made basic decisions about what kind of work we liked to do (nationally important technical problems) and what kind of company we wanted to build (an innovative company that would support us financially).
Over the years, I developed a four-part approach to planning that served my small business very well as it grew—and grew and grew:
- Recruit smart, inventive people.
- Give these smart, inventive people wide-ranging autonomy and authority, consistent with prescribed financial restraints.
- Keep a constant lookout for opportunities, near-term and over the horizon.
- When a promising opportunity presents itself, unite around it and focus the company’s efforts and resources to make it happen.
So, the next time you are tempted to draft a long-term, strategic plan, first consider the reasons why you’re doing it, and how your organization will be impacted as a result. Upon further reflection, you may realize that the best plans are the ones that are short-term and operational in nature, and that can quickly respond to fast-changing business conditions—the kind of conditions in which every small business today finds itself either sinking or swimming. Which choice will you make?