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Oct 1, 2005 12:00 AM
After reading several articles stating (or implying) that formal business planning is a prerequisite for success, it seems to me that writers and consultants who take this view have read too many business books and set foot in too few representative printing companies. Without a great deal of deliberation, I can name very successful companies that, while superbly managed, do not engage in formal business planning. I also can name companies that engage in by-the-book business planning that are marginal or no longer in business.
Certainly, it is better to plan than not to plan. Formal planning out of context with other activities, however, is like a breakfast of gravy without the biscuits.
What’s the plan?
I subscribe to the theory that the term “strategic planning” is an oxymoron (ranking up there with the terms “perfect binding” and “Postal Service”). There is strategy. A differentiated strategy/mission/direction needs to precede the planning process. A group of managers meeting off-site in casual dress seeking divine guidance cannot plan its way into a differentiated strategy.
Planning involves the profitable implementation of the differentiated strategy, which should emanate from ownership. The strategy must be established before the formal meeting. Unless this is done, planning is little more than a series of activities defined solely in terms of outcomes.
Furthermore, formal business planning is flawed unless it is preceded by detailed information from both the marketplace and internal operations. It’s inconceivable that a management team can predict and plan the future in this very dynamic economy without first knowing (rather than thinking it knows) the needs, perceptions and experiences of customers. A company should know where it is in the eyes of its customers before determining where it should be going.
The strategic planning breakdown
Without good information, business planning sessions lack a common focus. Production, finance and sales representatives soon engage in a discussion that reflects parochial views. The production person complains about the quality of specifications and irregular workflow and makes an impassioned plea for new equipment, the purchase of which allegedly can be cost-justified with a six-month payback.
The sales representative inevitably argues that the difficulty of selling is not appreciated and that the company’s standards and pricing structure can’t match the competition. Upon hearing this discussion, the CFO usually responds with an “A plague on both your houses!” attitude, pointing out that resources are limited.
At this point, the verbal logjam is broken when someone says, “Let’s discuss what we do best.” This is a terrible suggestion, virtually guaranteed to lead the meeting down a blind alley. It reflects the view of many consultants that companies should concentrate on their respective core competencies.
That’s a great theory, but in practice it can be successful only if a company’s core competency is in demand by, and has elevated perceived value to, customers and prospective customers. Unfortunately, that is rarely the case in the graphic arts industry. The reason: “What we do best” almost always is defined in terms of manufacturing competency. It reflects the type of work that is the easiest to produce—and that type of work is what competitors do best.
Planning for business planning
Formal business planning by itself contributes little or nothing to the success of a company. Success depends heavily on two factors preceding the actual session:
Like first-rate equipment, competent staff and a pool of satisfied customers, a good business plan does not guarantee success in and of itself. A business must have a purpose, offering unique benefits to customers. Everything else is subordinate.
Business writers and consultants who declare, “Formal business planning is a necessary ingredient for success,” are missing the bigger picture. They are many of the same people who say power attire and a rehearsal script ensure sales success. As with many things in life, the truth is a bit more complicated.
Dick Gorelick is president of Gorelick & Associates and the Graphic Arts Sales Foundation. He can be reached at email@example.com.