As important literary figures and military commanders alike have famously noted, plans usually don’t work out as they’re supposed to. This observation doesn’t just apply to regular life or war, but also to the business world. Being able to plan well, to execute those plans, and to budget predictably are all enormously beneficial to entrepreneurs in terms of managing growth and maximising the productive potential of their working capital. Unfortunately, the real world is messy, and plans can rarely be neatly executed on time, and on budget with all goals met as initially projected.
Because of this, successful businesses often aren’t the ones that create the most detailed and comprehensive strategies, or those with the smartest and most knowledgeable teams, but rather those that can competently adapt to constantly changing circumstances to best achieve their end goals. Successful businesses are fundamentally flexible.
1. Avoid overplanning
Overplanning represents an enormous inefficiency for many businesses. Endless planning meetings are held to come up with a highly detailed action plan, intermediate goals, budgets, and metrics to track, often consuming hundreds of hours of your management team’s valuable time in the process. When those plans are interrupted by unforeseen circumstances such as cash flow issues, market disruptions, or equipment failures, much of that time investment becomes wasted.
When putting together any strategy, whether it’s for growth, process improvement, product optimisation, or anything else, businesses need to plan for flexibility. That means setting more general objectives, and trusting the professionals that are responsible for specific objectives to find the most appropriate way to get the job done.
2. Accept sunk costs
One particularly harmful symptom of overplanning is overcommitment to an existing strategy. When existing strategies become non-viable as a means of reaching your end goals, it’s often difficult to accept the invalidation of such a massive amount of already completed work. As a result, leaders will often resist change and attempt to move forward regardless, short-sightedly sacrificing their objectives for the sake of their carefully planned strategy, instead of changing the strategy to meet their objectives.
This inevitably results in more wasted time and effort, and ultimately partial or complete failure to meet the project’s objectives. The only way to avoid this is to consciously accept the loss of sunk costs, and to adapt the execution of your plan with a focus on realistically achieving your end goals.
3. Keep budgets flexible
Being flexible can mean a lot of things in different circumstances, from making tweaks to your strategy, to changing objectives, to adding new ideas, to going back to the drawing board and starting over. What all these have in common is that they’ll inevitably break your budget.
Budgeting is a fact of life in any business, but it’s important not to be so married to the idea of staying on budget that you miss important opportunities. Budgets provide an important baseline for what a project can cost, but business leaders also need to be able to access additional cash flow when it’s appropriate to the situation. A good way to do this is to work with your representative at your financial institution. They can offer a variety of short term financing solutions, such as invoice financing, unsecured loans, supply chain finance, and others, which you can use to access additional capital as needed.
4. Track progress in a more generalised manner
Many longer term projects, such as multi-year growth plans, are defined by a host of metrics, intermediate objectives, and milestones. When things are going according to plan, these provide a good sense of how things are progressing. Unfortunately, they can quickly become obsolete if the plan changes, or if milestones aren’t functionally traceable. For example, innovation and creative development aren’t predictable processes where a set amount of labour will generate a desired output.
Over the course of a project, strategies can, for a wide variety of reasons, change so significantly that the metrics used to track your progress are no longer sufficient or meaningful, even if they were fairly solid to begin with. Leaders need to track progress in a meaningful way, that, depending on the project, might also include difficult-to-quantify metrics like innovative development, or team cohesion. By doing the work of understanding their progress in this less quantitative, but more generalised way, leaders can more readily adapt to changing situations.
Flexibility comes at the cost of certainty, but that’s acceptable because that certainty is an illusion. Acknowledging that initial planning won’t hold through to the end, and that changes are inevitable, allows businesses to plan for flexibility, and gives leaders the room to adapt to changing circumstances to make their project, and their business, the best that it can be.