Business Planning and the Crystal Ball and Chain
by Tim Berry, Guest Blogger
- Created: April 24, 2013, 11:28 am
I came up with the phrase “crystal ball and chain” years ago to describe one predictable barrier to introducing a useful business planning process into an existing small business.
The phrase is intended to combine the crystal ball with the ball and chain. It happens because normal people, even good performers, and stars on a business team, naturally worry about changes. And when compensation is involved, and management structure, and raises and bonuses, it’s only natural to worry.
Good planning involves setting performance goals and tracking results against the goals. Milestones and metrics, which mean setting numerical goals and then tracking performances, are essential.
It’s obvious how this kind of tracking can help a business perform better. The plan vs. actual analysis gives the whole team an objective way to look back at what they planned – the milestones and metrics, in this case – and analyze what happened.
Still, good people still worry, because that’s a very human reaction. Are they trying to get the goods on me to fire me later?
Those objections almost always come as objections to the idea of predicting the future. People will say:
"But how can I possibly know today what's going to happen six months from now? Isn't that just a waste of time? Can't it actually be counter-productive, because it distracts us, and we spend time trying to figure out things in the future?'
The right answer to this, from the leadership of the business or business team, is about collaboration and cooperation. Projecting future business activities isn't a ball and chain at all, because in the right planning process the existence of the plan helps you manage effectively.
Here's a concrete example: it's September and you are developing your plan for next year, which includes an important trade show in April. You plan on that trade show and set up a budget for expenses related to that trade show. Even though it's September, you have a pretty good idea that this will happen in April.
When January rolls around, though, it turns out that the trade show that normally takes place in April will be in June this year. Does that mean the plan was wasted time? Absolutely not! It is precisely because you have a plan running that you catch the change in January, move the expense to June, and adjust some other activities accordingly.
In this example, the plan isn't a brick wall you run into or a ball and chain that drags you down; no, it's a helpful tool, like a map or even a GPS device, because it helps you keep track of priorities and manage and adjust the details as they roll into view.
We’ve all seen how technology is changing our attention span and sense of time. And we’ve seen how technology allows us to work at all hours, and from any location. These changes make planning and management, working with good planning that focuses on milestones and metrics, more important than ever before.
About the Author
Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 44 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.
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