In a world with dynamic markets and fickle customers, it’s best to build into your plan strategies to respond quickly to new opportunities and threats. Long gone are the days when you could just create a valuable product, price it to attract customers while making a profit, and then just keep doing the same thing year and after.
Today, that’s a formula to go under before your banker invites you to the annual golf outing. And that’s assuming anyone will put money into your business in the first place, which is unlikely if you can’t convince them that your business will adapt quickly when the reality of your business plan meets the reality of the marketplace.
So how do you build adaptability into your plan? First, do your homework so you come out of the box with a solid plan with real world assumptions, but also create systems to keep gathering that data to test those assumptions. Successful entrepreneurs keep collecting data about their customers, competitors, supply chain, industry trends, and so on long after they’ve written their business plan.
Then they act on it. Be sure your plan includes a management structure that enables quick decisions, without more process than is needed to properly vet things.
One way of looking at the CEOs job is s/he needs to be constantly disrupting things as a means to achieve that kind of adaptability.
A recent Business Week article describes successful CEO’s who intentionally disrupt the status quo, their own business models, and institutional analysis paralysis; that’s when slow moving organizations seek complete clarity before acting. For most important business decisions, that’s too late. Your goal should be to understand just enough about the problem to make your next decision.
It might be the wrong decision sometimes, but often there are even greater risks from inaction, moving too slowly, or just taking too long to act.
So make sure you build decisiveness into your business plan.
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For more resources, see our Library topic Business Planning.
Copyright © 2010 Rolfe Larson Associates – Fifteenth Anniversary, 1995 – 2010
Author of Venture Forth! Endorsed by the late Paul Newman of Newman’s Own
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Rolfe Larson provides consulting and training in areas such as strategic planning, market research, feasibility analysis, business planning, marketing, and implementation strategies.