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Why business planning is a waste of time
Why business planning is a waste of time
June 07, 2012
I regard myself as a bit of an expert on business planning. I even wrote a few books about it, with “imaginative” titles such as Planning for success, TENbizplan, Business planning for the social economy and the best-seller Start your own business: a workbook.
With regret, I’ve concluded that my books are no longer as relevant. They focus on a lot of preparation, lots of research and a very formulaic approach towards a business plan document. Too slow, too cumbersome, too detailed.
The tension is between the need for preparation, preparation, preparation, the way you communicate your venture and coping with the chaos and speed of change that makes long-term planning impossible.
If a “Twitter” becomes mainstream in a month, there is no point in having two-year planning cycles. 42% of the most successful entrepreneurial businesses in the USA have no plan at all.
Rework
Rework by Jason Fried and David Hansson is a book that tells about the journey two entrepreneurs made setting up a company that builds project management software with huge success (three million people around the world use their product and they are generating multi-million dollars of profit). I think we can agree that we can regard them as experts.
From Rework we find out that:
- Planning is guessing
- Plans let the past drive the future
- Plans are inconsistent with improvisation
- Decide on what you are going to do this week, not this year
- Ignore the details, focus on the big picture
- Your estimates suck; break things into smaller things (weeks vs. years)
The whole message of the book is that it is not about long-term planning, but short-term movement.
A three-year business plan is pointless
I can quote a long list of books that talk about how the business world is getting more and more complex, chaotic and moving at ever increasing pace. (“funky business”, “future files”, “break from the pack”, to name a few). Combine that with information overload and you can see why a three-year business plan document is completely pointless.
- You can hear a podcast of our radio slot on Newstalk FM, reviewing Rework.
Ron Immink is managing director of BookBuzz
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Comments
Sweeping generalisations such as "business planning is a waste of time" can't be defended in the face for example of the absolute requirement for a robust, written business plan by any company wanting to raise finance. Try telling a funder that business planning is a waste of time!
Further, an extremely valuable function of the business planning process is that it "forces" proper consideration of the questions that any business person needs to be asking and re-asking.
Finally, can't the authors of 'Rework' see that there is a total contradiction in at least two of their statements? They are:
Decide on what you are going to do this week, not this year
Ignore the details, focus on the big picture
??????
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