Why Your Business Plan Is Collecting Dust & What You Need Instead

team

Even the most nascent of businesses have some sort of business plan that captures their “strategy”, their “vision”, the competitive landscape and how they’re going to disrupt and dominate it.  After the hard work of authoring it and excitement of promoting it, it’s likely now sitting on a shelf or old hard drive collecting dust.  Why?  Because, while it’s relevant to your investors and management team, it’s not at all helpful on a day-to-day basis to the entire company.  Mind you, business plans ensure that the company’s mission and strategy are elucidated clearly and that is valuable in and of itself; however, once it’s time to execute, the business plan is a bit lacking in guidance.

We are taught in business schools and industry alike that strategy is king and the business plan is the central document capturing that strategy.  We’ve so glorified the notion of “strategy” that we’ve completely ignored what is arguably even more important: execution.

Execution is the art & science of turning vision & strategy into realized success.

The Business Operations Plan

Enter the business operations plan (BOP), the analog of the “business plan” but with an execution focus.  The BOP starts where the traditional business plan stops: it addresses the “who” and “how” instead of the “what” and “why”.  The BOP should address how the organization is structured and how inter-organizational collaboration occurs, what the desired customer experience of the organization should look like, how the organization scales from a financial perspective, how performance is measured, and what enterprise systems and tools are needed to support all of the above.

The BOP is a living document that should be owned and maintained by any organization’s chief operational leader.  Progressively more specific versions of the BOP can and should exist at various levels of the company.  The company’s Chief Operating Officer (COO) would maintain a top-level BOP that has a company-wide perspective; however, a Vice President or Director of a particular department would also maintain a department-level BOP, building upon the COO’s version, with specifics for the operations of that particular department.

The remainder of this article covers the five core sections of a comprehensive BOP.

1. Customer Experience Model

cxpWhile it’s en vogue to claim to be customer-centric, actually delivering on that promise requires that the desired customer experience become the root of one’s execution plan.  It is in this portion of the BOP that “the perfect customer experience” is detailed in such a way as every employee in the organization can be reminded of the model customer life cycle.  Some of the questions that must be addressed here are:

  • What is the “first contact” experience between the organization and its customers like?
  • How are prospective customers guided through the sales cycle to contract?
  • Who is the “organization’s face” to the customer and how does that face change through the life cycle?
  • If the customer has an issue or question, how does the organization mitigate its quick resolution or response?

Addressing these questions and others can be done through a “user story” (to borrow a software engineering term) approach where the experience is described in very tangible terms than can resonate with every employee responsible for delivery or supporting this customer experience.  One might wonder how to address this section for organizations that provide back-office functions: even they should consider their internal stakeholders as their customers and design a customer experience for them.

2. Organizational Architecture

organizationWith the that end (i.e., the customer experience) in mind, it’s time to design and document an organizational architecture to support it.  Most organizations get to where they are less by design and more by circumstance and organic randomness.  Over time, they collect what I refer to as “organizational debt” (see this article for context) and so much of their collaborative effort is around feeding and supporting that debt instead of what it should be focused on: providing a great customer experience.

Everything from the organizational structure to the external titles to roles and responsibilities should be designed to accommodate the customer experience.  What do your staff’s titles convey to your customer about their goals and motivations?  What organizational model makes the “hand-off” between organizations of a customer the most seamless?  When customer issues require cross-organizational effort, how can that collaboration occur in such a way as to give the customer a sense of priority?

3. Financial Scalability Model

budgetWe now have a desired customer experience defined and a supporting organizational model that supports it.  The next area to address is how the organization and its costs scale with the business.  Some of the questions that must be answered here are:

  • How does every team and role in the organization scale with a dollar of revenue or bookings?  That is, how do we know when we need someone else to help?
  • What costs (and therefore margin) results from that model and does the organization gain financial leverage as revenue grows?

The financial scalability model helps an organization not only determine what their size and costs should be, it enables the organization to forecast its future and begin hiring ahead of bookings and revenue growth.  This model addresses the question, “when do I get a new ‘head’ to help me?” and makes the traditional budget cycle a much more straightforward discussion.

4. Performance Measurement Model

measureWe can’t have a complete operational plan without a way of measuring performance.  In this fourth section of the plan, the key performance indicators (KPIs) for the organization as a whole as well as for each individual role in the organization is outlined.

For the organization, it’s important to not just consider operational or financial KPIs but to instead ensure that other dimensions of the operations are measured.  Here is an example of how an organization can design three or four KPIs that measure its performance holistically.

  • A voice-of-the-customer KPI that measures the customer’s assessment of our performance against our desired customer experience.
  • An employee engagement KPI measuring how effectively our organizational architecture is achieving a team-oriented environment, collaboration, and trust between our employees.
  • One or two operational efficiency and/or financial efficiency KPIs measuring how effectively we’re adhering to our financial targets.

5. Supporting Systems Model

toolsFinally, to operate effectively, organizations depends on systems and tools to make their jobs possible.  Any employee should be able to read this section of the BOP to understand how the systems and tools the organizations provide play a role and which of them are relevant to his or her role.  Once again, it’s not uncommon for information technology solutions to materialize rather inadvertently with little planning or design.  Instead, a very intentional design should be established that ensures that all functions have the supporting tools they need and that these tools are sufficiently integrated as to create an efficient experience for employees.

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