March 21, 2017
Edge-Wise: Getting a Word in on Industry Dynamics and Trends
Streamlined Planning—A Focused Approach
By John Stiernberg, Principal Consultant
Where Is Your Company Headed?
Here’s a frequently asked question: “With things changing so much, so rapidly, and beyond our control, why bother to plan?” This article addresses that question.
Our industry is growing and changing at the same time. The global technological, sociopolitical, and economic situations add to the volatility and uncertainty. There are multiple future scenarios, some complex and challenging, some exciting, all elusive and unproven.
As an entrepreneur, executive, or manager, do you know where your company is headed? What will your business look like one, two, or three years from now? In our practice, we ask clients and colleagues to answer this very question in an effort to narrow the focus and plan for action. While there are no right or wrong answers, answering those questions are fundamental to narrowing the focus and streamlining the planning process.
Each company and person answers differently and from a unique perspective. A big competitive threat to one person may be an exciting opportunity to another. This is one of the things that keep our job simultaneously intriguing and challenging.
Benefits vs. Consequences
In Stiernberg Consulting’s previous white papers and articles, we have often focused on the benefits of planning. For example, companies with written plans can 1) measure success more accurately, 2) attract and retain better people, 3) outpace competitors, and 4) make more money. Those benefits (among others) provide rational justification for both strategic and tactical planning.
But in today’s global marketplace (the real world), those benefits sound elusive, idealistic, even textbook-ish. You may rightly ask, “So what? Why do any kind of planning when technology and market factors make the plans useless as soon as they are complete?”
This is a valid question. We decided to explore the other side of the same coin. What’s at stake? What are the consequences of not planning?
Potential Risks of Insufficient Planning
Here are examples of consequences when planning is left to chance. Which ones resonate with you?
- Competitors come to market with better products (goods, services, or both) and deliver them faster.
- The brand loses market share and cachet to competitors, some of which are arguably less qualified, and customers (whether end-users or channel partners) gradually switch loyalty to a competitor’s brand.
- Investors, banks, or other financial stakeholders pull back, don’t understand your good potential, or worse, refuse to do business altogether.
- Operating costs rise unexpectedly and migrate out of control.
- Every new project, program, or deal feels like the team is starting from scratch, leaving better opportunities incomplete or abandoned.
Too Much vs. Too Little vs. None at All
Some planning is better than none, and the streamlined planning process addresses uncertainties and risks with sharper focus.
So how much planning is the right amount? Here are three scenarios to avoid.
- Too much planning. This leads to the proverbial “analysis paralysis” and terminal inaction.
- Too little planning. The annual “business plan” is nothing more than a budget (prepared by the financial department) combined with a short list of affordable tactical initiatives. Too often these plans are based on a template that was developed long ago and may no longer be relevant.
- No planning at all. Most companies have a general ledger and a system to sell and collect the money. That’s not a plan. In addition to its annual budget, every company needs an actionable sales forecast, product roadmap, customer relations strategy, hiring timeline, promotional campaign, or all of the above.
The Streamlined Planning Approach
Here are five suggestions for doing better work and offering better products—driven by a streamlined approach. Spoiler alert: All five involve at least some planning vs. none.
- Set concrete business objectives and do this first. Objectives are specific, measurable, and achievable. Objectives also include the non-financial-yet-measurable elements of your plan that specify the “who, what, where, when, why, and how” of the decisions that you and your company make. This is the essence of both strategic (long-term) and tactical (this year’s budget) planning.
- Build your company’s objectives and action plans around a set of verifiable data. Be sure that you and your team actually believe the data. Is it from a reliable source? Do the numbers and trend information make sense in the harsh light of market realities?
- Compare today’s company initiatives with last year’s. With change being a constant, a decision that you made a year ago may no longer be valid. Get an outside perspective. Run the numbers one more time. Trust your mind as well as your gut. Make your plan a living, breathing document—not just a one-time effort to get a higher line of credit (or whatever last year’s business development scenario was).
- Know what happens at the point of sale. Decision-makers’ criteria have changed and continue to evolve. Understand how end-users and channel partners are now making buying decisions. Know where and how they get information that forms the basis for those decisions.
- Understand applications, not just features. In addition to product features and specs, know how the end-users are going to use and benefit from what you and your extended team provide. Note: “What you provide” is also changing rapidly and ranges from traditional hardware and software to now-essential pre-sale consultation, clear upgrade paths, and the end-customer’s feeling of confidence that “I bought the right thing.”
We encourage you to start now with streamlined planning before your customers decide to look seriously at the many alternatives facing them.
And a word of encouragement: How many of your competitors have a head start or edge on you? Likely there are relatively few. All the more reason to get going!
About Stiernberg’s Edge-Wise Series
Our industry (entertainment technology, music products, and AV/IT systems) is changing rapidly and growing slowly. While business is better than a few years ago, there is more competition than ever before. You need a competitive edge. The team at Stiernberg Consulting has designed this series of quick thoughts on industry issues and dynamics to support your own good sense. Whether you are a manufacturer, equity investor, distributor, dealer, rep, or technical design firm, this series aims to spark new thinking to optimize sales, profits, and growth of your business. We cut through the clutter and point you to ways to build your competitive edge, grounded in common sense wisdom. Sometimes irreverent, always timely, Stiernberg’s Edge-Wise is published periodically.