On June 19, 2012 the New York Times published an article, “The Body’s Protein Cleaning Machine” about the Nobel Prize winning chemist Dr. Avram Hershko. His life work has been on understanding how the body’s cells rid themselves of old, defective proteins. Every cell has a protein ubiquitin that tags old and degenerated proteins for destruction. “Maybe you’ve heard of Parkinson’s disease and Alzheimer’s? There we have bad proteins accumulating in the brain and destroying brain cells. The reason we don’t get Alzheimer’s when we are 10 is that when we are young, the bad proteins are disposed of quickly. With age, the cell’s machinery may lose the ability to do that.”
This very interesting notion that the body has a built-in mechanism to rid itself of bad proteins reminded me of old lessons about the need for our businesses to have a similar mechanism. Product obsolescence is a terrible drag on sales and gross margins. A better strategy is to have an end of life process to drive out product obsolescence. Peter Drucker ((Peter Drucker, The Effective Executive, Harper Colophon Books, p.108)) put it this way:
Systematic sloughing off of the old is the one and only way to force the new. There is no lack of ideas in any organization I know. “Creativity” is not our problem. But few organizations ever get going on their own good ideas. Everybody is much too busy on the tasks of yesterday. Putting all programs and activities regularly on trial for their lives and getting rid of those that cannot prove their productivity work wonders in stimulating creativity even in the most hidebound bureaucracy.
“Perfection is attained not when there is nothing more to add, rather when there is nothing more to subtract.”
Le Petit Prince book cover borrowed from GoodReads.com
Listening to an interview with an author about his writing process brought this wonderful quote from Saint-Exupery. ((He is the author of The Little Prince (Le Petit Prince if you got to third year French in high school), though the quote come from Terre des hommes))
Simple, clear, direct, user-friendly, straightforward, honest, classic, understated. These are some of the attributes that flow from thinking about your business with Saint-Euxupery’s aphorism in mind. In philosophy, science, and engineering Saint-Exupery’s aphorism is best expressed by Occam’s Razor where the razor shaves away the unnecessary assumptions.
Then, of course in the day-to-day world we have KISS – keep it simple stupid – that stands in for these more elegant formulations. The general lesson here is to beware of complex explanations, strategies, and plans.
Recently I was on an commercial air flight and was greeted by a bit of corporate sloganeering that accompanied by meal (yes, you guessed correctly that I was on an international flight). The napkin shouted out in bold blue text, “Planes change. Values don’t. Your priorities will always be ours.” Continue reading →
In the two earlier postings on key causes for business plans to fail, we took note of the lack of a vigorous implementation process and poor understanding of the customer value proposition and market environments.
A third significant cause is poor financial planning. Entrepreneurs fail to plan six basic financial elements: Continue reading →
In the preceding post about key causes for business plans to fail, we discussed the lack of a robust process to convert strategy into tactics, to convert the plans into the day-to-day work of the organization. This posting will take up another major failure mode. That is the failure to have a compelling customer perceived value proposition and the corollary failures to understand markets and customers more generally. Continue reading →
The failure rate in bringing business plans to fruition is very high. Many observers, including me, have found a number of common failure modes. First among all are the shortcomings in the planning and execution processes themselves. The failure to actually put the plan into action
A good planning process engages all of the significant stakeholders in the creation of the plan. This practice is productive because 90% or more of the facts required to create the plan are sitting in the room when all of the stakeholders are there. Creating the plan through a team effort leverages this knowledge, provides opportunities for problems and opportunities to surface and be resolved, and the resulting plan is inherently owned by everyone because they were present and involved in its creation.
A good planning process insists on ruthlessly testing every assumption. It is a common practice to conduct sessions with no holds bared brainstorming and critiques. This is most essential when planning for a transformation strategy for a mature business. Business leaders find it extremely difficult to prune away the past even when it has no future. Past successes seductively appear to forecast future success.
By far the most significant cause of failure for business plans is the inability of the management to translate the plan effectively into day to day work. Most business plans fall far short of the detailed work required to decompose strategies into tactics. No where do the list of tasks, properly sequenced, appear with clear delineation of responsibility, authority, deliverables, budgets and resources and deadlines. And, finally, there is no clear communications and feedback plan so that those in frontline positions know what to do, why, when, and what are the expected results.
More about why business plans fail over the next four postings