If you are working for a bigger corporate organization, you will find yourself in the middle of the business planning sessions for 2020 at this moment. Some of you might have started in June, some in spring time. Others even before that. It’s now the time of the year where your many good ideas for business transformation and diversification of your business are strongly endangered. Those Initiatives that should ensure a resilient business also in the future,.
The appetite for excessive planning hasn’t stopped. But everyone knows that business planning sessions became a dry run, constantly drilled again and again. Today organizations are wasting valuable resources by planning the impossible and working on the accuracy in our business plans have become an illusion.
The distance between the new reality and the old methods and hierarchies are growing. The contradictions have become bigger, not the problems. This irritates us.
Recently a study (“Wege aus der Komplexitätsfalle – Paths out of the Complexity Trap” by Thomas Rudolph and Severin Friedrich Bischof, University of St. Gallen) has identified the planning and budgeting processes as main causes of complexity. Too much planning reduces the willingness to adapt. It deprives you of the possibility to innovate and diversify.
How can you drive business transformation and diversification successfully in this context?
This has become a core question of todays’ business owners and marketeers. Beyond the bounds of planning, the new biz world has created a much successful modus operandi. It follows completely different premises. Instead of planning 12, 18, 24 months ahead, they put a focus on immediacy through testing and continuous improvement of their biz. Instead of waiting for the new yearly budget to arrive in order to start a new diversification project, they have an idea for breakfast. Before lunch they finish their MVP, test it throughout the afternoon and get their results before the end of the day. The network organization does not get along with the old way of running a factories.
Strategic specification certainly makes sense, but even more important it is to build a culture and provide tools that allow change, innovation and adaptation, or even promote it. Network organizations focus on de-complexing the business by embracing failure and creating small project speed boats (hink of Amazon’s Jeff Bezos and his 20% failure goal and the the two-Pizza-teams). They avoid running project ideas through large forums, where everything is talked over and over and over.
What we see is that in contrast to these organizations too much planning and too many requests for approval in the traditional business are diminishing agility and depriving your organization of the necessary flexibility.
In a world which seems to be disrupting itself in light speed, we need to free our traditional businesses from habitual complexity in order to speed up, build immediacy and impact to compete with the new players in the market.
How can your ideas survivein the Business Planning Torture Season?
To be successful you need to be able to innovate ongoing throughout the year and to react to change short term. Here the most important advice to give you is to stop working like it is still early 2000. Especially don’t try to plan for diversification and innovation long term. Business-weather has become quite unpredictable. You don’t plan your hols a year in advance anymore. Instead you should buy some „electric speed boats“ and decide short term – based on the biz weather conditions. Plan at least for the 80/20 rule to give you the required freedom throughout the year. Invest 80% in business as usual, 20% in exploring new opportunities and learn.
Once you have set up make sure you track the following five indicators that will help you identifying the right moment and direction to diversify your offer. But watch out – if you diversify too fast, you may invest in the wrong place – since you need first to establish and mature your offer before it allows you to target a new audience or step into a new market segment. As you now, it’s all about your brand’s purpose that need to be established, e.g. like Uber that stands for convenience and reliability in mobility which allows to diversify in various ways, like Car Pools, Uber Eats or even Uber Jump with bicycles.
So which are the indicators you should continuously monitor to detect the right moment for business transformation and diversification?
Your brand / product is growing significantly or reached maturity. If you diversify out of a weak position, you just spent your money at the wrong place. First invest in building your brand and then step further.
You built a strong awareness and association with your brand purpose. Ask you target group to build word clouds and understand the associations connected to your brand. If this is a bullseye and they understand the core of your brand message, go ahead and diversify.
Your consumer understands and values the benefits of your product and of the diversified product, too! Don’t dilute the message . …
There are new demands or needs within your category that fit to your purpose (or are an easy buy in for you). For example the food delivery trend is driving Uber’s food delivery service.
Source of biz
Identify new opportunities to drive value within your network and/or platform.
Keeping an eye on these indicators will help you identifying the right opportunities and building a healthy biz long term – away from the business plan madness.
I am curious to hear how you maneuver around the business plan madness and make sure, you secure space, time and resources to drive transformation and innovation for your business. Please leave your comments below.
If you are interested in learning more about how to start driving business transformation immediately, here is a presentation covering this topic and our results, including a blueprint for a system that helps to address the above on your projects: The Toolbook for Customized Disruption.
(thanks to Jutta Miquelino for helping putting this together)