Planning is a critical function of leadership and management. However, small companies can neglect it because they lack knowledge, not desire.
If you haven’t already done so, this is the time to plan for 2025 and dramatically increase your chances of hitting your chosen targets for the year, i.e., sharp-shooting, instead of hoping things will work out… or hip-shooting.
Thoughts From the Greats on Planning
Jim CastigliaAfter commanding the Supreme Headquarters, Allied Expeditionary Force (SHAEF) during World War 2, Dwight Eisenhower famously declared, “In preparing for battle, I have always found that plans are useless, but planning is indispensable.”
Jack Welch, one of the most successful CEOs in American history, recommends not to do detailed planning because chance events, poor execution, and the will of opponents (competitors) can doom detailed plans.
Welch declared, “Set broad objectives, emphasize seizing unforeseen opportunities. Strategy is the evolution of a central idea through continually changing circumstances.”
The renowned Prussian military strategist Helmuth von Moltke asserted that “no plan of operations extends with certainty beyond the first encounter with the enemy’s main strength.” Or, more commonly stated, “no plan survives first contact with the enemy.”
One of the oldest writings on strategy, the Sun Tzu Bing Fa (Master Sun’s Military Methods or, more commonly, The Art of War), states that “a leader who plans for many eventualities will be victorious; a defeated leader plans for only a few.” And, “many options bring victory, few options bring defeat; no options at all spell disaster.”
The Next Step in Planning
With these ideas in mind, let’s consider what you can do now.
First, the organization’s leader should be clear and able to easily answer the question, “Where are we going?”. What’s the vision of your company? Gene Siciliano, author of Finance for Non-Financial Managers, defines vision as “the world as you define it, arranged the way you’d like to see it.” This is the main charge of company leadership.
One of my client’s visions was becoming the dominant player in his industry in the southeastern part of his state. Another client’s vision was to be the most sought-after provider in his industry in the eastern half of his state. Henry Ford’s vision was “to build a motor car for the great multitude… it will be so low in price that no man making a good salary will be unable to own one and enjoy with his family the blessing of hours of pleasure in God’s great open spaces.” And look what happened!
Secondly, determine “How are we going to get there? " This means analyzing resources, solving problems, and dealing with obstacles. It also means facing reality, which most people and businesses do a poor job of.
Annual Planning Session
An annual planning session can be a great opportunity to do the following:
Review your mission: mission comes from the Latin word ‘misio,’ which means ‘a task.’ What is your company’s task reduced to a one-sentence description? I lived in California for 41 years and visited several of its 21 “missions.” The first mission was founded in July 1769 and called San Diego de Alcala. The last, San Francisco de Solano, was founded in July 1823. These places had a task. This is why they’re called “missions,” not outposts, spots near the ocean, or adobe houses.
Review your core values. Your guiding principles should include honesty, integrity, excellence, etc. Keep your values list short; 3 to 5 at most.
Review your core purpose, “reason for being,” or guiding star on the horizon. Here are the purposes of some familiar companies:
- Hewlett-Packard: To make technical contributions for the advancement and welfare of humanity
- Walt Disney: To make people happy.
- Wal-Mart: To give ordinary folk the chance to buy the same things as rich people
- Mary Kay Cosmetics: To give women unlimited opportunities.
- Merck: To preserve and improve human life.
Review your goals: do they inspire your people? Do they challenge your people? Great goals can help you access the enthusiasm and spirit of your workforce.
Choose what to stop doing: Every organization has projects, initiatives, strategies, tactics, and expenses that they should stop doing, and these are a waste of valuable resources that can be reallocated to areas that matter more. These wastes are built into your organization over time. You pay the bills; “Waste” takes the profits! Be disciplined about this step. Our new government is finally tackling this initiative at the highest levels; note that few companies know to take this initiative or do it seriously.
Choose again where and how you want to compete. Competitive advantage generates excess returns relative to the industry average. Whole Foods generates an 8% return on assets (ROA), while Kroger generates 2.6%. The industry has thin margins, but Whole Foods has found a way to build a strong competitive advantage in a low-margin industry.
Tough Choices Must Be Made
These are tough choices, but they must be made. You may be vulnerable to a disruptive rival if you’re not sitting down together and planning. Consider how Netflix toppled Blockbuster; Tesla affected the traditional internal combustion engine (ICE) industry; cryptocurrency revolutionized the financial industry; Uber challenged the taxi cab industry; Amazon disrupted traditional retail store models; Ford Motors disrupted the automobile industry by introducing the assembly line.)
If you’re profitable and successful, I guarantee someone is looking for ways to imitate your success. Just notice how many commercials there are today for various supplements: Balance of Nature, Prevagen, Relaxium, Qunol Ultra, Relief Factor, Seeds, SeroVital, just to name a few.
If you’ve completed a 2025 planning session, use the information above to check that you’ve covered the most important elements of a plan.
If you haven’t yet done a planning session with yourself and your team, use the above information as a roadmap.
If you have any questions, please email me at jvcastiglia@icloud.com . My mission is to help seasoned business owners and their staff maximize the long-term value of their companies.
Jim Castiglia is the founder of Business Street Fighter Consulting and supports entrepreneurial business owners in their desire to grow and maximize the value of their business. He can be reached by email at JimC@BSF.consulting or by phone at 949-338-7141. Visit www.BSF.consulting
