The death of the Business Plan
Photo credit: Bianca Tuckwell
I have a confession to make. I have been running a business for the last 10 years and have not done a (traditional) business plan. Ever. Not at the start; not every five years; not every year. Never.
For decades, business plans were the starting point for entrepreneurs; you had to think about every aspect of your business through a highly structured approach to help you (falsely believe) that you understood every moving part of your new venture. The same happened in the corporate world: "the business," or in other words "the people in the business," would have to spend countless hours and weeks every year trying to craft a static document to prove to the board, investors, stakeholders, partners, etc., that they knew with certainty how the business, market, products, competitors, sales, profits, etc., were going to behave in the future. Typically, it includes a five-year forecast for income, profits, and cash flow. To this date, I still haven’t seen a business plan that accurately reflects what has happened later.
A business plan is essentially a research exercise written in isolation at a desk before an entrepreneur has even begun to build a product or deliver a service.
Luckily, things started to change a decade ago with the introduction of the Lean Start-Up book and concepts. The book taught entrepreneurs how to make the process of starting a company more streamlined. The approach favoured experimentation over elaborate planning, customer feedback over intuition, and iterative design over traditional “big design up front” development. With that movement, we saw the rise of the Lean Business Canvas, a tool that helped entrepreneurs create and organise their business ideas in a one-page document that included all the important aspects of a business, such as its value proposition, target market, channels, cost structure, and revenue streams.
We went from a 50+ page document to a one-page document. From a “future prediction” document to a continuous learning and experimentation approach.
In my experience, traditional corporates, though, have struggled to incorporate these concepts when it comes to the development of their strategy. Business plans still occupy the time and resources (leaders and strategy teams) of many large enterprises, and I am still amazed to see how, after months of hard work, these executives pat themselves on the back, believing that those five-year predictions are going to be right. Instead, what usually happens is that next year, they will spend another three months (or more) correcting those predictions and making new ones.
I remember telling one of these executives once: “Do you realise that in the time you’re spending crafting this beautiful document, there are organisations out there that have launched actual new products that will compete with yours?”
Planning over Plans
This is the way I think about it: incorporate the concept of continuous planning in the organisation rather than the concept of creating plans. Have rhythms at all levels of the organisation that help you stop, assess, think, plan, and react to market and business conditions; but don’t waste time putting them in a beautiful 100-page document. Spend time discussing your overall direction (maybe once a year); the initiatives and projects that will get you there (maybe every 90 days); the initiatives, milestones, and project plans (maybe every two weeks); and keep your finger on the pulse of the business continuously and daily.
Emergent Strategy over Deliberate Strategy
An emergent strategy is one that arises from unplanned actions and initiatives within an organisation. It’s typically viewed as the product of spontaneous innovation and often a direct result of the daily prioritisation and investment decisions made by individual contributors, such as middle managers.
Compared to a deliberate strategy, an emergent strategy is often more flexible. Though the organisation still has an overall vision that it’s working towards, there’s flexibility to adjust and pursue other opportunities or priorities as they emerge. For example, early in 2024, as a team, we discussed the patterns we were seeing in the market and set an ambition for the year to ‘Boldly claim culture through heart and tech.’ That was, in effect, our entire strategy, and it’s resulted in an AI Practice, a product for assessing the Cultural Agility of teams and organisations, the reinvention of our wellbeing product EUDA, new internal coaching and development opportunities, and more. All these things emerged because we read the patterns in the market and weren’t tied down to a static document.
In fact, if I look back and reflect, some of the most successful mergers, acquisitions, new products, or new markets we launched at Neu21 were never planned but instead “emerged” in front of our eyes.
And I feel we were able to see them and grab them because we were not busy writing deliberate business plans, but instead being attentive to the market and opportunities that arose in the moment.
