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4 compelling steps for business planning

Updated: Apr 3

Year end is something everyone looks forward to. It’s a time of the year to wind down a bit, schools being closed, its good time to spend with family, greet everyone for the upcoming new year or go on a vacation.

Professionally too, many organizations have year end furloughs and employees get a much needed break. However, for those in sales and/or leadership roles, the year end is dreaded. You have to plan for the next year, rush to meet targets for the current year while seemingly everyone else is having fun.

Whether the planning cycle is Jan-Dec or Apr-Mar or Nov-Oct, the rush associated with it is quite intense and it does take away a lot of attention.

The challenge in business planning is not preparing the plan itself, but in most cases, ensuring it aligns with the overall strategy and all dots are connected.

Every business unit must synergize to deliver as an enterprise rather than prepare plans with their own agenda (as much as this sounds improbable, it does happen pretty often)

Business plans follow the call outs from a Business Strategy document at an enterprise level. A common pitfall is for the Business Strategy to be a wish list and the Business Plan to be a list of “what” will be done.

While the “wish list” is good, the “what” list may or may not be inline. The biggest gap is not detailing the “what” list into a “how” list. This makes governance ad-hoc and cumbersome leaving the leadership team dis-oriented. Eventually, its an annual catch up game in last quarter and the familiar “misses” being rued year-on-year.

If it offers any comfort, it happens in most organizations!! Obviously, there are ways to doing this better.

Here are some simple set of steps to follow:

STEP 1: Higher Order Thinking

What is it that binds everyone in the leadership team together and motivates everyone in the organization. For e.g. when Tata Motors launched their passenger car project in the 1990s, Ratan Tata famously said, “we will make a car that has the interior space of an Ambassador, driving comfort of a Premier Padmini and fuel efficiency of a Maruti 800”

Clearly calling out the “objective” helps lay out the fundamental expectations to everyone in the leadership team. The leadership team of Tata Motors clearly knew, they were not just launching a car, but a product that needs to stand out in the crowd.

The “objective” needs to be aspirational but achievable. It should make you stretch but not give up.

STEP 2: What is success?

This is the most difficult part!! Have you ever visualised what “success” is?

Giving a visual call out of what success looks like in business terms is the crucial next step. Leaders typically struggle to define what is success. In order to get to your “objective” what are all the things you would you like to achieve? Those achievements are your successes. The journey you take should help you and your team to achieve that “success”.

What is success becomes a set of goals for you to achieve that would eventually lead your team to meet the objective. 

A common pitfall is to avoid using revenue and margins as “goals”. The financials should be an outcome of meeting the “goals” which need to be defined in non-financial terms. E.g. completion of a major R&D initiative, Entry into a new region, launching a new digital platform, etc


STEP 3: Break it down to results

From STEP 2, you know “what” to do. Business planning always requires a team to execute the actions. In order to achieve the goals identified in STEP 2, the team would need guidance on what it means for them. Therefore breaking that down into results to be achieved in the upcoming quarter will provide an “end state” or “milestone” for the teams executing the actions. Further, the teams may be guided to figuring out the actions to be taken every month to help meet the results for the quarter.

At all points in time, the leadership team should ensure that the dots from Objective to Goals to Quarterly results are all aligned.

STEP 4: Explain the HOW

All the above steps detail out “what” should be done. Action is where rubber meets the road. The next big task is to brainstorm with the team and prepare “how” the results will be achieved. This is an important step.

In many organizations, the business plan typically stops with “what” needs to be done. Its only when you chart out the “how” that you actually think of implementation level actions. These are the actions that can then be assigned to individuals and tracked and measured.

If “how” is not well mapped out, the “what” remains on paper and no actions are taken in the absence of clarity. This is a major reason why annual goals are not met and results in a scramble to meet the numbers during year end. This behaviour also impacts the quality of revenue.

The challenge here is that most teams do not ask for help. However, in their enthusiasm to achieve the goals the team might end up taking actions which are not fully aligned to the objectives.

So, focus on the “how” and put in place forward looking measurements to tell you that the “how” actions are working in the intended way.



There are several frameworks to create a business plan – Balanced Score Card, Business Model Canvas, Objectives and Key Results, etc. The key is to articulate an Objective that motivates everyone followed by defining goals that essentially call out what is success. Once the goals are defined, breaking that down into forward looking quarterly results and mapping detailed actions that explain “how” the results will be achieved.

A leader’s time is best used when he/she spends time with their team to mentor or coach them with a set of lead indicators to reach the “successes” rather than sit in reviews with a bunch of lag measures.


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