Looking at the World Through Plan-colored Glasses

I just spent some time this morning with an entrepreneur whose business was operationally demanding and depended a lot on 3rd party companies.  In the very near term, the best laid plans always seemed to go awry when the next customer fire needed to be put out.  Writing out a roadmap seemed like an exercise in futility. 

On top of that, he wasn’t sure how much board communication was necessary.  How much should he be telling his board?  What things should he be asking for?  Should he float each opportunity by them or only tell them about the important stuff.  The investors, on the other hand, had a tough time figuring out the progress the company was making, because communication was random and seemed like the play by play of a good game of wack-a-mole versus a purposeful march forward. 

The root of the issue was that both sides were lacking the lens and filter of an explicitly communicated plan.  It was tough for the entrepreneur to prioritize new information, problems, and opportunities without placing them in the context of an agreed upon plan.  Instead of declarative statements about whether important new opportunities helped the company reach strategic goals, he’d ask his investors whether or not these opportunities made sense.  What he got back didn’t seem particularly helpful, because it was in the vein of “You tell us."  It made him want to stop asking questions altogether and it made the investors feel like he wasn’t moving the ball forward.  Clearly he was working hard, but was he treading water?  Without demonstrable progress towards a stated goal, it was tough to tell.

I run into a lot of businesses that ask for money, but haven’t drawn a line in the sand in terms of where they want to be at the end of that runway.  When I ask what they’ll do with it, I get, “spend a little more on marketing, improve usability, work on features”, but no big, hairy goals—just a ton of little small ones.

I’ll admit that writing up a business plan may seem a little archaic after you already have a business up and running—and many businesses don’t start out with business plans.  Sometimes they’re just small apps that solve a problem for a few people, and they turn into a lot more than that before anyone has a chance to write a plan down—but I think it’s a critical aspect of running a business.

The analogy we talked about was a football coach who decides, with the input of his coaches, prior stats, and even his team, that he needs to get back to establishing the running game—particularly in the first half of the next game.  That’s something everyone could agree upon as a solid goal that would change the way the team had played previously.  The operational details of which running backs were going to get the carries could change from play to play, and it doesn’t mean he couldn’t call for three passes in a row at one point, but “establishing the run in the first half” is a measurable, achievable goal that shouldn’t change too much.  At any point in time, you could use the stats of yards per carry and the mix of runs to passes to tell whether or not you were successful in setting up an effective running game.

That could make your goal something like: “Creating a viable product for SMBs by third quarter”.  We could adjust what that means, but having the whole team, the outside world, the investors, etc. know you’re focused on the SMB market helps set expectations for all involved.  It also helps you turn down that marketing partnership with MySpace, because you know that’s not where SMBs are.  The details of which features go into an SMB product should be left up to the team and worked on through customer research.  It’s something you might show to your investors at the outset, but they don’t need to know all the adjustments.

Without these kinds of value-creating goals, teams spend too much team fighting fires.  What’s interesting is that when you’re doing nothing but fighting fires, it feels like you don’t have time for audacious goals.  “How can we attack the SMB market when we have all these bugs to fix?” 

The answer, many times, is that the amount of time you can spend on engineering and operations varies greatly.  The difference between “It works” and “Its bulletproof” can be six months of engineering—six months you may not have the resources for at this time.  When you don’t communicate to your team what needs to be done in two weeks, a month, and three months—what you’re aiming for from a product goal perspective—it’s tough for them to calibrate to what level of engineering needs to go into the product.  They’ll often default to “top quality” when you’re just trying to get a product out the door.

Writing out plans shouldn’t feel like a chore.  When executed well, plans should actually save you decision making time.  When new data or opportunities come in, you can quickly go back to a plan as a reference and ask yourself, “Does this fit with the plan?  No?   Does this inform me that my plan should be different?  No?  Ok, move on…”  They provide a frame of reference for monitoring your progress and enabling others to do the same.  They also enable you to better delegate tasks as an entrepreneur.  You’ll never be able to communicate to your team exactly what to do in every situation, but with a going strategic plan in place, the people under you will have a frame of reference which will guide them to make informed decisions on the little things that a CEO shouldn’t need to worry about.