In the October newsletter, I started a series describing the "Seven Deadly Mistakes of Business Planning". If you have accountability for business planning in your job, or if you help your clients with planning, you'll want to avoid these common pitfalls to create a planning process that is truly leading edge. If you missed the first issue about "Planning for All the Wrong Reasons", visit: www.planningbootcamp.com/Bookkeepers and follow the newsletter link to "archive".

In this edition, we will look at the deadly mistake of "Planning only once a year". This may sound like standard practice, but it's part of a legacy of bad business planning that you need to help your clients eradicate to really take their business plan to the next level.

Deadly Mistake #2: Planning Only Once a Year
This is the way most companies plan; and it just doesn't work. There are many compelling reasons why planning once a year is a bad idea:

• Too much happens in a year. The pace of change in business is only getting faster. The environment changes, competitors change, and products change. In fact with acquisitions and mergers, entire industries can change in one year. In many big companies, people move around so much, that many of the people are in different roles, or no longer work for the company between planning cycles. An annual plan just can't keep up with all this change. So what happens? The plan becomes redundant, and unused. The business carries on without a plan.
• When planning happens just once a year, there is a tendency to make a big deal out of it. Annual planning is more often a big process involving a cast of thousands. The size of the process and the number of people slows everything down, and the plan is usually out of date by the time it gets completed.
• When companies only plan annually, people don't really develop good planning skills, and the process needs to be re-learned every year. By contrast, quarterly planning becomes part of the management toolkit, and it doesn't really feel like a process after a few quarters.
• Planning that only happens once a year falls too much out of step with the ongoing management of the business. Managers and staff have a difficult time fitting planning into their routine. The plan gets less than full attention, and most people just want to get it over with. The result? A lousy business plan.
• There is a major reluctance to change an annual business plan. By contrast, when a plan gets refreshed quarterly, it?s always getting changed. This makes the plan much more nimble to changing business conditions, and dynamic as a useful management tool.
• The time between planning cycles usually strips away managements' sense of urgency, and accountability. If you wanted a salesperson to improve her results, which approach do you think would have a better chance of success? 1) Tell the salesperson to present you with their plan to sell more in the next 3 months, and then present their progress to you in 3 months and adjust the plan for another 3 months as necessary. 2) Tell the salesperson to come up with a plan to sell more in the next year, and come back to you in a year to present their progress.

If annually planning is so bad, why do so many companies still do it? The main reason, of course, is that it's hard to change something as ingrained as your planning process. The primary fear I hear is that quarterly planning will be four times as much effort as annual planning. I have shown dozens of organizations that this just isn't true. In fact, planning quarterly, consumes much less organizational effort and resources than annual business planning; and the results are superior. I spell out the details for helping your clients plan quarterly in The Planning Boot Camp.

When you don't know what to do, walk fast and look worried.
Dilbert

Next Issue of The Planning Boot Camp Newsletter
In the next issue, I'm going to actually use the words "fun" and "planning" in the same sentence! Watch your inbox in early December.

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www.planningbootcamp.com/Bookkeepers