Are Business Plans a Waste of Time?

Planning per se is not a waste of time since it enables you to spell out your goals and objectives. What happens in practice though, more often than not, is not planning but ivory tower planning. A classic example of this emanates from one of the world's largest corporations. When the process of nuclearization of families started in the USA, a huge opportunity was seen for small appliances. The managers who came to this conclusion were from the ivy league B-Schools. What they failed to do was to come down to the ground level and observe the social phenomena that were evolving.

The nuclearization of families no doubt meant that families were now smaller. However, with the increasing notion of DINKS, the family processes were undergoing a metamorphosis. Family chores like cooking, washing and shopping were all transformed into less-frequent processes. Shopping was done once a fortnight as was washing of clothes. Thus, paradoxically, the opportunity was not for small appliances but for large appliances - large refrigerators, large washing machines, and large microwave ovens.

The other interesting phenomenon was that while the size of the family had reduced, the size of the kitchen and the washrooms had not changed. This gelled with the need for large appliances.

Overlooking these social phenomena, and sitting in their ivory towers, brilliant managers planned for small appliances and introduced them into the market at break-neck speed. The result was a disaster. When a large corporation makes such an elementary mistake, there are always other players waiting in the wings to seize the opportunity. And that is exactly what happened.

The second problem with planning as it is practiced is planning in isolation or silos. Thus you have financial plans, marketing plans, HR plans, operations plans, quality plans but rarely do you have an big picture integrated organizational plan. In other words, one of the outcomes of the pursuit of specialization is that managers develop a highly compartmentalized and narrow view of the world. As a result, synergy which is critical to success rarely occurs.

The third problem is when plans become grand obsessions. DEC was a great company making probably the best (VAX) minicomputers. They became so obsessed with technical perfection that they lost sight of everything else. The story goes that Directors used to attend Board meetings with micrometers in their hands. It is not surprising that the company went down.

To tweak an old and popular saying, an ounce of constructive action is better than a pound of pompous but purposeless planning.