I had an interesting discussion yesterday with a founder I’ve been advising. Their company is fairly early stage and is closing in on the 12 month window where they will have to either raise or get to cash flow positive. That’s a stressful time, especially when everything isn’t quite clicking into place.
I was trying to convince the founder that it was important to put together a plan for the next 12 months. Set an expectation as to what key milestones need to be achieved. Figure out the goals and tactics along with way. And then work with the leadership team to finalize a plan, assign responsibility and accountability, and get everyone driving toward the same set of expectations.
I laid this out in what I thought was a compelling way, explained the thinking behind my recommendations, and assumed we would quickly move on to execution.
Instead, the founder pushed back.
Why do I need a plan? I know what we have to do. We have to win business….if we win business, we’ll be ok, and if we don’t, we’re in trouble. It’s not complicated. Every moment I spend building a plan that we may, or may not, hit is a moment I’m not selling.
I couldn’t move this founder off of this way of thinking.
So I’ll make my case here, and if you disagree and sit in the founder’s camp, I would love to understand why.
A plan is always built on a set of expectations and assumptions that may turn out to be wrong. In fact, particularly in early stage companies, many of your assumptions regularly turn out wrong. But putting a plan in place, with longer term goals and shorter term milestones, alerts you quickly that you’re off track. Hopefully in enough time to adjust your tactics to try to wind your way toward your ultimate destination.
You might not get there in a straight line. You might have to zig and zag, adjusting your tactics and your organization as you go.
A well thought out plan can even alert you to the fact that your original goals aren’t at all achievable, and if you find that out early enough, you can adjust accordingly.
The fact that your plan is wrong isn’t a reason not to plan at all in the first place. It’s exactly why you should.
There is a second, often overlooked, reason why putting a plan in place is important. You as the founder might be content to just push against a goal as broad as “win more business”.
That’s going to be far less effective for the members of your team. Employees need to understand what you are trying to achieve, and how their efforts specifically impact the company’s progress to that goal. And they want to know that they are working on the right tactics that can lead to the company’s success.
There is a huge difference between “win more business” and “we need to win 6 more clients in this category with ARR of at least $50k”. That level of specificity allows your leadership team to put in place a plan to achieve these specific goals, and then cascade that goal and those tactics to the members of their teams.
This is what builds alignment of efforts across an organization. A well developed plan with thoughtful short-term milestones gives everyone specific targets to strive for, to celebrate when achieved, and to adjusted when missed.
Executing without a plan is essentially building your business on the foundation of hope. And hope is not a strategy.