Business Plans are Always Wrong

Seth Godin includes venture competitions in his Pundits are (nearly) always wrong post yesterday.

I say take that a step further: business plans are always wrong. I have to say I like how well this ties into his post on Starbucks from a couple days earlier.

That’s because we’re human. Business plans predict the future. We humans suck at predicting the future. Istock_000000549056small_2

Paradox: nonetheless, planning is vital. Planning means starting with the plan and then tracking, reviewing progress, watching plan vs. actual results, correcting the course without losing sight of the long-term destination.

Planning is a process, like walking or steering, that involves constant corrections.

  • The plan sets a marker. Without it we can’t track how we were wrong, in what direction, and when, and with what assumptions.
  • Use this marker to manage the constant conflict between short-term problems and long-term goals. You don’t just implement a plan, no matter what. You work that plan. Use it to maintain your vision of progress towards the horizon, while dealing with the everyday problems, putting out fires.
  • So the plan may be wrong, but the planning process is vital.

The truth is that forecasting is hard. Nobody likes forecasting. But Istock_000000408066smallone thing harder than forecasting is trying to run a business without a forecast.

A business plan is normally full of holes, but you fill them, after the fact, with the management that follows. That’s what turns planning into management.

Good planning is nine parts implementation for every one part strategy.

— Tim

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5 thoughts on “Business Plans are Always Wrong

  1. This sucks. The National Journal's Technology Daily is shutting down. This means that the country's only source of focused daily technology policy news will soon be no longer.

    According to an email blast sent to subscribers today, the online pub closes at the end of January.

    I was an original subscriber way back in 1998 — back when Bara Vaida was the pub's first star reporter — and stuck with it through what is (shockingly) almost a decade. It was and is the only place to get a consistent and in-depth perspective on issues that are otherwise glossed over or opined to-death by know-it-alls (who know little).

    Over the years, Tech Daily, frankly, became a little too easy to take for granted. It was always there in a way that was almost overwhelming for even the biggest tech policy geek. But, when you really needed a quick perspective on policy doings related to issues like Health IT, cybersecurity, or copyright (to name just a few), you could get everything you need and more with just a little time on the site. Just as importantly, from a tech policy communications perspective, you knew that when you needed to provide a clients' viewpoint on an issue, there would very likely be an educated, highly-professional reporter at Tech Daily who would be up to speed.

    Despite the high cost of a Tech Daily subscription, it's understood that the pub ran a tight margin. Apparently, for whatever reason, Tech Daily recently ran on the wrong side of the red/black line in the opinion of its corporate parent.

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