Organizing the Process and Assessing Your Environment

Part Two of a Five-Part Series by ActSeed’s Dan Jacobson

 In my previous article I highlighted the importance of understanding the needs and interests of your audience targets.  The next step is putting a process in place to develop and iterate your plan, including assessment of your business and operating environment.

Efficiency and integration of ideas should be your major goals in developing a business plan.  Each of your key team members, including yourself, have other responsibilities, so a clear set of deliverables, activities, and timeline will minimize distractions and delays.  There are three primary areas of focus as you organize the process and assess your environment: 

  1. The first is definition of the product/service concept, target market, and related technical development. 
  2. The second is the specification of an execution and delivery model. 
  3. The third is the iteration and integration of functional execution plans for translation into a financial model.

Make an honest assessment of your staff and those directly involved in your enterprise.  Very few early stage companies can claim (or afford) to have strong representation across all aspects of their venture.  Yet, strong functional representation and relevant experience (particularly venture and emerging company experience) is critical in developing a solid, integrated plan.  For this reason, you should begin early to create and manage an informal, yet involved “Advisory Board”.  You can think of it as a “Delphi” group providing input and perhaps even completing deliverables for your plan.  Members can also provide “eyes and ears” on potential competitors and partners, and also facilitate introductions to partners, vendors, and investors.  Members may later serve in a more formal capacity on a Board of Directors.  A workable number of advisors is typically three to seven people, ideally representing expertise in the spectrum of your market, product,/service, funding sources, and execution model.  Advisors are often given a nominal stock position or options, depending on the level of their involvement.  The purpose of this group is to provide coverage where you need it, alternatives, and also honest, objective feedback on the viability of product/service and execution model.

The following two graphics together describe an iterative process for business planning.

Iterative Business Planning Process
Iterative Business Planning Process

The purpose of the Initial Definitional and Planning stage is to develop a rough-cut, but integrated outline of your key business dimensions.  In this example, I’ve grouped them into Product/Service/Market, Execution, and Administration.  No effective plan can be static, so I recommend three planning horizons, including Development, Introduction, and Expansion.  You can call them anything you want, as long as you express them as assumed timelines for developing your product/service, initially introducing it to the market, and then expanding your operations.  The key questions posed for each dimension are fundamental. 

In the Development horizon key questions include:  What is the product/service concept, requirements to develop, and target markets?  What market will we bring this to, and how will we sell it?  What basic business and compliance functions do we need, and what are the implications for staffing or professional services?

In the Introduction horizon key questions include:  Are there opportunities to phase the development and introduction of the product/service, both\for financial and time to market reasons?  How we organize and operate distribution and provide the required forms of support, including technical and customer service?  How will we obtain the human resources and infrastructure required to support product/service introduction?

Finally, in the Expansion horizon, key questions include:  Which enhancements or extensions of the product/service will allow us to capitalize on the market and financial opportunity?  How will we expand our market and channel operations to efficiently meet sales and operational goals?  What insight and infrastructure do we need to efficiently manage our enterprise?

You may not have direct team coverage for each of the Planning Leads identified in the graphic.  This is where your Advisory Board can be valuable.  Get their involvement to cover the identified disciplines where you lack coverage or strength.  Your Initial Definition and Planning Iteration should generate an outline view of your business model and plan, identify major issues and risks, key assumptions, and general enterprise requirements as you move through the planning horizons.  The rough-cut initial iteration should provide enough detail to support a subsequent, function-based planning iteration.

The purpose of the Subsequent, Integrated Planning Iterations is to develop more detail in functional sub-plans and integrate these sub-plans with regard to the operational intelligence you’ll need to operate efficiently and effectively.  The graphic shows a typical set of linear operational functions – yours may be somewhat different.  Think of this as breaking your Initial and Definition and Planning function and team into sub-groups focused on relatively discreet functional components.  Using the rough-cut plan as a starting point, these sub-teams should be tasked with developing the next level of plan details.  Avoid having your sub-teams write any lengthy narrative about this next level.  Instead, their efforts will be more efficient and consistent if you provide them with an outline of objectives, topics, and a simplified, consistent reporting format.  Planning Leads should obviously represent your grouping of operational functions.

Sub-teams can begin a new planning cycle by developing the next level of detail for their function.  After assigned tasks are completed, the next step is to integrate the sub-team deliverables across functions.  In the graphic I show this as a non-linear Operational Intelligence process, focused on level-setting the plans and identifying the information needed to operate as an integrated enterprise.  A good approach to integration is a structured, facilitated session represented by each of the Planning Leads.  The session should be lead by a good facilitator who can provide structure on the objectives, structure, and deliverables for the facilitated session.  Without this structure your session may go off on tangents or levels of detail that will keep you from achieving closure of the planning cycle.  There are many ways to organize the session; however, one of the best is to have each Planning Lead present their sub-group deliverables while the other Planning Leads make notes on assumptions, issues, and dependencies.  Then, in a second round of discussion each of the Planning Leads can field questions from each of the other Planning Leads to refine and level-set assumptions and dependencies of each sub-team deliverable.  In a third round, the discussion should address the information and systems needed to operate the integrated enterprise.  A successful integration session should generate the target level of planning detail.  If not, a second cycle may be scheduled to drive to the next level.  It is the responsibility of the top management team to specify the planning horizon, level of target detail, and timeline for each planning cycle. 

The structured, disciplined approach I’ve described may sound a bit onerous, but it can be scaled to any situation.  The benefits you’ll derive from structure and discipline include better and more actionable results, a faster timeline, and a shared level of understanding and buy-in.           

More details on functional-level strategy, goals, and the role of the financial model will be included in my next article.

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