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Strange Bedfellows: Uncertain Economy + Business Plan? Yes

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Strange Bedfellows: Uncertain Economy + Business Plan? Yes

Even during days of economic uncertainty, try to stick to your company plan


By Scott Sedam April 30, 2001
 in uncertain economy need business plan-photo-man taking notes from laptop-Pixabay
Uncertain times still demand the certainty of a business plan. (Photo: Pixabay)
This article first appeared in the PB May 2001 issue of Pro Builder.

Every once in a while, great wisdom comes from otherwise suspect or even comical sources. Years ago, I just happened to see a "Blondie" comic strip with a quivering Dagwood replying to some grand scheme just expressed by the big boss, Mr. Dithers, with, "That makes a lot of sense, if you don’t think about it." Absolutely perfect. That has become a catch phrase for me over the years, and its appropriateness occurs to me at least twice a week.

More recently, Dr. Evil, of "Austin Powers" fame, has offered up many gems. Having multiple teenagers around the house, I have been repeatedly exposed to Dr. Evil’s business philosophy — whether I wanted to be or not. It turns out, once you get past the moronic humor (OK, so I enjoy that, too), the dialogue is, at times, positively brilliant. Listen closely, and you’ll hear a litany of familiar boss-jargon as Dr. Evil utters such time-honored classics as "throw me a bone here" or "honestly, what do I pay you people for!"

But last Sunday, Dilbert hit the proverbial nail on the head, and as many firms enter into a planning process for 2002, it couldn’t have been more appropriate. The humble staffer Asok enters his boss’s office asking, "Did you call me here to punish me?"

The boss replies, "No, no, Asok. I want you to manage our annual Business Plan Process." After Asok asks, "How do I do that?" the boss replies, matter-of-factly: "First, you beg your co-workers for information about their budget needs. Half of them will give you lies, the other half will ignore you, thus underscoring your unimportance. Then, you’ll combine the lies and guesses into a worthless ball of data for senior management. Then our CEO will make budget decisions based on magazine articles."

The Numbers Game
Ouch! Been there. Done that. For many of us, this is more painful than it is funny. I used to be one of five regional directors for a large consulting firm. We all reported to Don, who, generally speaking, was a good boss and manager. But come planning time, we went through the same ridiculous drill every year. Don would ask all of us to get together with our people, look at the business from our best, most experienced eyes as only we in the field could, and then come back in with our numbers, projections and needs for the next year. We were good lieutenants and did just that.

Each year the outcome was the same. Don would review our numbers, then give us his revised numbers (which he actually had all along and were typically 50 percent higher than ours), then give us just about half the resources we asked for to do the job and then tell us to "sic 'em!" And so we did. We always beat our original numbers but never reached his, so we never got our full bonus money. This is called, you guessed it, motivation.

Where Don got his numbers, none of us knew. Having read Dilbert, I now suspect it was, indeed, from an article in some magazine.

After four years of this drill, the now six regional directors decided to make a stand. We went to the planning meeting empty-handed. I, being the one with the defective gene for always saying what’s on my mind, was elected spokesperson. The message I delivered was simple: "Don," I stated, "every year we give you our numbers, and every year you throw them out and give us yours. So this year, the six of us decided to just skip step one and simply ask for your numbers and save ourselves the brain damage. Just tell us what you want."

Don was not pleased. He proceeded to rip our heads off about not being team players, being selfish and unwilling to participate in the planning process that was so important to the company. We got the whole speech, about how the process was our process, not his, and how we should be eternally grateful that they even give us the chance to speak to it every year. I watched stunned as the other regional directors fell on their swords, agreed with Don and promised to have their numbers in by next week. I became a spokesperson unto myself. It was the beginning of the end there, for me.

The Power of Process
Later, working with a large national builder, I went through a similar process, but from the other side. I was on the corporate side, demanding the numbers from the field. Part of me hated the game of charades it seemed we were playing, but after a time, I began to notice a phenomenon. Divisions went to elaborate lengths to plan, and even though so much of their plans ended up in the trash, it made a difference. Winston Churchill said it best: "People who plan always do better than those who don’t plan, even though they rarely follow their plan."

What I observed was that the quality and effort put into the planning process made a true performance difference, even when legitimate economic, demographic or business variables conspired to make the plan essentially obsolete long before the year was out. The process itself did something. The process itself oriented the collective brains toward the success of the enterprise and resulted in positive actions, even when those actions were considerably altered from what had been predicted. Fascinating.

Some corporate hard-liners tried to assert that the plan was the plan, and success didn’t matter if it didn’t match the plan. After all, we can’t run a business on luck. But most of us started to understand that it was not luck at all. It was, indeed, the planning process that remained a positive factor even when the technical content had missed the mark.

I’m not suggesting here that all plans are good plans. I’ve seen some seriously delusional activity going on at times under the guise of planning. But I am suggesting that a good planning process remains valid, even when you have to seriously depart from it.

So in retrospect, Don’s scheme wasn’t completely without merit. True, it would have been nice if he didn’t have the cards up his sleeve and actually used our numbers, but there was merit alone in the process of planning. I was a little too young to see that then, but I see it now, in spades.

All we hear these days is of uncertainty in the economy and the housing market. In times like this, we are sorely tempted to just skip the plan and keep at it, come what may. Don’t make that mistake. Keep the plan—but keep it real. Appreciate the process for what it is.

That just might keep you in the game.

Lessons Learned by Scott Sedam tells the stories of the home building industry. As only an industry veteran like he can, Scott examines our habits and practices with an eye to improving the craft and business of home building. Scott is the president and founder of TrueNorth Development.

Written By
President

Scott Sedam is president of TrueNorth Development, a consulting and training firm that works with builders to improve products, process, and profits. A senior contributing editor to Pro Builder, Scott writes about all aspects of the home building business and won the 2015 Jesse H. Neal Award, business journalism's most prestigious prize, for his commentary in Pro Builder. Scott invites you to join TrueNorth's Lean Building Group on LinkedIn and welcomes your feedback at [email protected] or 248.446.1275.

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