Do you know what’s common with Management Trends? – They come and go. Only the best ones will remain. To ride the new wave of management trends in 2017, here is a recipe – OTF – Objective, Team, & Funding.
On a lazy Sunday, I had decided to take a complete holiday when my phone rang. “Sachin, we thank you once again for busting the Business Plan myths. But now we are stuck and would like to meet you again and discuss our dilemmas about Business Plan.” Sid was unstoppable in his fast talk. I said “Sid, Can we talk about this tomorrow?” Sid was persistent, “Sachin, we have to meet to meet today itself!” I said “Sid, I am taking a long awaited break from work today, can we meet tomorrow instead?” Sid announced “It’s urgent!” I said, “I can understand your situation and I hope you will understand mine too.” Surprisingly though, Sid agreed. I was trying to recollect something I wanted to ask Sid. I said, “Sid, you said ‘we’ want to thank you. What exactly you mean by ‘we’? Sid said “We have formed a Business Planning Practitioners Group.” I asked ‘Who all is there in the Group?” Sid replied with a smile “All of us who met when you busted the Business Planning myths.” I smiled and was eager for Monday discussion.
Sid seems to have decided to take lead for this discussion and we didn’t mind it at all. Sid asked the question in supersonic speed “How can we give direction to a Business Plan? I know there are hundred different things to work on but we I don’t think going after all those things will be a right solution. What do you think?
The Business Planning Practitioners Group met and gave first round of orders at the Café. Sam ordered Gourmet Hot Cocoa, Tina ordered Red Velvet Latte, Jenny ordered Cranberry Latte, Julia ordered Cranberry Hot Cocoa, Sid ordered Inverted Cappuccino, and I ordered Strawberry Pom Smoothie.
The storm of questions continued – Why we need objective for a Business Plan? Objective will be same for everybody, either growth/profitability/cost reduction/etc. why waste time? Shall we have one or multiple objectives? I said; let’s design Business Plan objectives for each one of you.
I asked Sam who is an entrepreneur with Start-up in Software Product domain, “What you want to achieve in next one year?” Sam said “I want finding, have an amazing team which will build great products, and get the customers quickly.” I said “Sam, your three objectives are:
- Getting customers quickly
- Developing team work
- Raising funds
Sam said “But these objectives sound vague”. I said “Yes, now you will have to add specific details to your objectives like how many customers you want, what kind of team you want to develop, how much funds you will need and how you will utilize those?”
I said, “Sam, now you will need a team to achieve these objectives. In fact, one of your objectives itself is ‘developing teamwork.’ Sam asked, “How can I go about developing a team?” I explained, “You will have to go after identifying team with these skills
- Human Resource
Sales skill is important since getting customers quickly is one of the objectives. A human Resource skill is required for developing team work. Cofounder skill is required for raising funds.”
Sam asked, “Now my pressing need is funding. Since I will be developing a product, it will need lots of funds initially. What should I do?” I replied, “You will need to do following things to get funding:
- Proving you are on the right path
- Contacting right set of fund providers
- Estimating fund requirement precisely
When you are approaching investors while in the process of development, they may avoid you. When you become successful, you will avoid them. That is the rule of the game. When you need funds, they are difficult to get. When you are enough funded, more will approach you with funds.
In development phase, it is important to communicate to the investor that you are on right path. Now you will have to identify and spell out how you are on right path.
We are born with natural instinct for understanding ‘who’ will fund us. A child knows who will fund her new toy or a dress requirement – father/mother/aunt/uncle/etc. Similarly, you will understand that there are number of sources available for funding. It can be crowd, relatives, friends, well-wishers, Venture Capitalists, Banks, Government Schemes, etc.
While looking for funds, remember not only to look for funds but also look for network of the funds provider, knowledge about your industry, etc.
Tina who is working with a midsized manufacturing company said “My Company wants growth. That’s the only objective we have.” I asked, “How will you understand that you have achieved growth?” Tina replied, “When we have scaled up to newer heights, using technology more effectively, and culture of continuous learning is developed.” I told Tina, “So your Objectives are:
- Scaling up
- Developing learning culture”
I continued, “You will have to define how much you want to scale up, what you want to digitize, and what exactly you want in terms of developing learning culture.
You will have to develop a team with following attributes:
- Experienced professionals
- Information Technology (IT) experts
- Learning and Development (L&D) experts
By experience, I don’t want you to restrict your choice only to your industry experience. Since you are looking for scaling up, that’s the experience you should look for.
Digitization is possible through Information Technology (IT). By IT experts, don’t just focus on only technological expertise, if you get someone who understand business and IT, it will be more desirable.
What I mean by Learning and Development (L&D) experts is combination of multiple skills – Subject Matter Expertise, Learning Method expertise, and Learning Technology expertise.
A Business Plan can fail for a lack of funding in well-funded organization. Although your Company has gone through the take-off phase, for maintaining the speed, you need fuel of funding. You will have to do:
- Fund estimation for growth
- Fund estimate for digitization
- Funds for hiring specialists
While estimating fund requirement for growth make sure to identify the right levers for the growth. If you want to increase profitability, you may have to go for premium level customers, which in turn will call for premium quality, and which in turn will demand more funds.
Digitization is generic phrase. Funding requirement for digitization will change based on what you want to digitize. Number of midsized companies will find need to digitize it marketing process, supply chain, etc.
For developing learning culture, you will have to hire specialists. This hiring will also require additional funds than normal.”
Multi-National Company (MNC)
Jenny said, “Since I am working in a top management of leading Multi-National Company, why should I care for Business Plan, it will be prepared by the Head Office team of our Company. They have created a mess with increased costs, complex reporting structure, and slow growth”. I said, “Since you are part of a top management team, it is your duty to participate in business planning process. You can have following objectives:
- Improving cost structure
- Solving System issues
- Getting back to growth path
Team required for execution of effective Business Plan calls for:
- Efficiency experts
- Systems experts
- Turnaround experts
For improving cost structure, you don’t need costing experts but you need efficiency experts. With improved efficiency, you can reduce cost of ownership, operations cost, etc.
By System, I mean Management System and not IT System. Once you have a right Management System in place, you can solve issues such as complex reporting.
Funding for a Company of this scale calls for:
- Identifying investment for saving cost
- People, process related fund requirement
- Growth related funding requirement
For improving efficiency, you will have to invest in quality equipment. For improving people, processes you will need funds. Growth related funding will call for more sales people, investments in new market development, etc.
Julia, who is working with a Municipal Corporation said, “Citizens want solution to all of their problems. It is impossible to identify Objectives for our situation.” I asked, “What are the most pressing problems your City is facing?” Julia replied “traffic, garbage, and our inefficient systems.”
I said, “Objectives for you by adding more specifics can be:
- Solving traffic problem
- Solving garbage problem
- Improving processes through technology
To achieve these objectives, the team you have to gather will require these skills:
- City planning experts
- Garbage recycling experts
- Technology experts
City planning is a specialized skill, so does garbage recycling, and technology for process improvement.
Solving traffic, garbage problem, and technology based process improvement needs funds. You will have to estimate the amount of funds required. For a Government also many options are available for funding. Sources available are internal and external. Each Government has a policy on the investment options that can be opted.
Non-Government Organization (NGO)
Sid, who is working with Non-Government Organization (NGO) working on eradication of diseases globally said, “For us, Objective is pretty simple, that is eradicate diseases globally.” I asked Sid, can you completely eradicate the diseases globally?” Sid replied “It’s impossible!” I said, “That’s why your objective may sound simple but it is impossible to achieve”. Sid asked with hesitation, “So what should we do?” I replied, “What you want to improve in next one year?” Sid replied, “Our efforts are haphazard number of times, number of our globally dispersed teams work in isolation, and we are always running out of money.” I said, “In that case, your objectives can be:
- Effective collaboration
You just need to add specifics like what to focus on, how you will identify that the collaboration is effective, and how much and from where you will get funds.
You need team with skills like:
- Effective collaboration
Skill of being ‘focused’ is easy to talk about but difficult to achieve. Collaboration is extension of team work. Skill of funding is inclination toward getting funds.
For getting, keeping, and growing funds, you will need:
- Analytics experts
- Partnership experts
- Selling experts
With Analytics, you can get insights. Identifying right partner will improve chances of getting more funds. For getting funding you need a team with selling skills.”
About the Author: Dr. Sachin Bhide, Founder & Strategy Consultant, Eha Management Consultancy. He has received excellent Corporate Trainer award. He is an award winning speaker, had received Best Speaker and Best Table Topic Master award at Toastmaster club in California, USA. This article is an excerpt from Sachin’s upcoming book “Effective Business Plan.”