Should You Write a Business Plan?

In a fabulous read titled REWORK by Jason Fried and David Heinemeier Hansson, one of their first chapters is “Planning Is Guessing.”  As a marketer and one who ardently advocates planning, my initial reaction to the chapter name was: this could be interesting.  The succinct chapter begins by describing the chaos of market conditions, declaring that “Writing a plan makes you feel in control of things you can’t actually control” (19).  And to a point, they’re right; Fried and Hansson assert that planning is little more than guesswork made in the past when taken in context of the present.  In other words, things change: “Plans let the past drive the future. They put blinders on you…Plans are inconsistent with improvisation.”

When it comes to the “traditional” annual planning process, I tend to agree, but plans are a double-edged sword; they can be the driver of business growth when they are communicated clearly and often and intended to be flexible.  And they can inhibit innovation if you get too wrapped up in long, drawn out process that does not allow flexibility in their execution despite circumstances in the market that are different than you ‘planned’ for them to be.  A good planning process will enable you to pounce on opportunities as they pop up, and dodge any unforeseen obstacle; only a bad plan would prevent adaptation.  And I think that distinction must be made.

Fried and Hansson later concede that contemplating the future and its obstacles is “a worthwhile exercise,” but they stress that you should not “feel you need to write it down or obsess about it” (20).  I agree with the latter–obsession is never healthy—but in my experience working with businesses, it’s the process of developing and writing the plan that is most valuable. It helps you sort through new ideas, challenge assumptions, and develop strategies and the means to achieve your goals. Writing a plan helps people organize ideas and make them more concrete.  Again, being ‘concrete’ does not mean the plans can’t or won’t change, but plans instead give you the confidence to take risks, set goals, and establish the strategies to achieve them.

I agree with the authors that whatever plans you do have must be current and relevant. “Figure out the next most important thing and do that,” they say, suggesting an admirable, rather zen-like aim to be present in the moment.  It’s okay to jump on a plane and go, they say, you can get your necessities when you arrive; and this could work as long as you knew enough and have the resources to survive in the environment you went to. This might be true for a small minority of people, but not for most businesses. You need to make sure you have the resources necessary to sustain your business and the staff that runs it. I say put a plan together first, then improvise. Planning might sound rigid, but it’s not; it is actually a framework that allows for more creativity.

I don’t think the question is whether or not to plan, because planning is (like it or not) proven to help businesses succeed. I think the real question is “What kind of planning process are you following?” Is it a once a year planning processes that is time consuming and produces little value, or are you implementing a real-time planning process that is flexible to changing business needs?  If a plan isn’t used, reviewed and updated often by the people who use it to guide decision making, then you are probably better off without it. As Fried and Hansson summarized it perfectly, “Working without a plan may seem scary.  But blindly following a plan that has no relationship with reality is even scarier.”

While I don’t agree with everything Fried and Hansson said in this chapter, they nevertheless bring up some excellent points. So take this opportunity to ask yourself a few questions about your marketing planning or business planning process:

1. Do we follow a rigid planning process every year, just because it’s the way it has always been done?
2. Have we evaluated how a real-time planning process can actually be more effective?
3. Does my company culture foster an environment that encourages and facilitates open discussion and adaptation?  Do people feel comfortable speaking up if they see the plan isn’t working as anticipated?
4. Is the plan communicated often and with everyone?  Talking regularly about your business plan is a great way to make sure everyone understands where you are going, and why. This will also help with your internal branding (company culture) to build awareness and gain valuable input on the plan to build it further.

How successful is your planning process? I would love to hear about your experiences and what works for you.