This may be a line out of Lewis Carroll’s, Alice’s Adventure in Wonderland but it applies equally to business.
“Would you tell me, please, which way I ought to go from here” said Alice.
“That depends a good deal on where you want to get to”, said the Cat.
“I don’t much care where”, said Alice.
“Then it doesn’t matter which way you go”, said the Cat.
How many businesses follow Alice’s approach, wandering aimlessly without any clear direction?
Quite a few it seems, if the results of our new business benchmarking tool, My Catalyst, are anything to go by. The free online tool asks business owners a series of questions to better understand where their businesses are at. It provides real time feedback in fundamental areas such as growth, innovation, exit and succession planning as well as financial performance.
The preliminary findings indicate that nearly 90 per cent of businesses with a growth rate of less than five per cent have no documented and communicated vision for their business. In contrast, over half of all businesses that do have a plan (even if in their head) have a growth rate of higher than five per cent. It is clear that those businesses that have a documented vision for their business and an action plan as to how that vision will be implemented are more successful. In other words, underperforming businesses don’t plan.
To most people this fact might seem somewhat unremarkable, but it begs the question – why? It seems, according to My Catalyst, that business owners have mixed reasons for this:
- 33% don’t have an action plan because they simply don’t know where to start
- A further 22% don’t perceive value in planning
- A whopping 46% aren’t prepared to invest the time to develop a plan and,
- Around 8% consider it to be too daunting
Generally speaking, most businesses undertake some form of marketing (or other growth related activity), even if this is as basic as having a website, placing some advertisements and having some promotions. Some businesses do significantly more than this and invest tens, or even hundreds of thousands of dollars.
These are tactics, not strategy.
Sun Tzu, in his book Art of War, detailed his strategy lesson number one – “tactics without strategy is the noise before defeat”. This is not unlike Alice wandering aimlessly in Wonderland –doing something for the sake of it but not knowing what she wants or where she wants to go.
Clearly you need both strategy and tactics to maximise your chance of success so why do nearly half of all Australian businesses not have a plan?
Furthermore, the fact that around one quarter of business owners don’t know where to start with their planning process is damning. A simple framework can be built around the basic premise of “Now, Where, How” – where is the business now, where does it want to be and then a detailed action plan of how it is going to get there.
Having a vision and a plan is about change – change from where you are now, to where you want to be. Just like the GPS in your car which takes you from A to B. It knows where you are now you just have to tell it your destination and your journey is planned. It’s exactly the same with a business – but you need to develop the plan.
More often than not, our inability to plan and create a vision is one of attitude
In order to bring about successful change you need at least three basic ingredients. Firstly, you need to be sufficiently unhappy with the status quo. There needs to be a reason to change (the why). If there is not sufficient dissatisfaction with where the business is now, then change will be hard to achieve.
Secondly, just like when you focus a camera lens on a subject, you need to have clarity on where you want to take the business – your vision (the where).
Finally, a vision without a plan is just a daydream. You need to have a documented action plan of who has to do what by when, in order for the vision to be achieved (the how). And just as importantly, you need someone (preferably an outsider) to regularly hold you to account to ensure the actions are implemented.
It’s not rocket science, but allocating time to the “important, but not urgent” task of strategic planning is the key to ensuring that you travel down the road that takes you to where you want to go.
Grant Field is Managing Director of MGI South Queensland and Executive Chairman of MGI Australasia, a global alliance of independent accountants and business advisors. A management consultant specialising in family and privately-owned business, Grant has over 30 years accounting and business development experience, complemented by more than 10 years experience in banking and finance.