The Goldilocks of Planning

by Shaun R Smith on July 13, 2010

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Some people plan too much.  Some not enough.  Here you’ll learn to plan just right.

Last week, we discussed the advice of the new business book REWORK (affiliate link to buy here) by 37signals to not plan.  This week, we’ll look at the right level of planning for entrepreneurs and small business owners — by looking at the original articles that 37signals’ blog was quoting and by reviewing what’s worked and what hasn’t for other clients in the past.

McGrath and McMillan’s Interview

Far from telling you not to plan in today’s rapidly changing world, these Ivy professors, in discussing their new book Discovery- driven Growth, espouse building learning and doing into the planning process.  Or, maybe more accurately, recommend learning as the main pillar of the planning process and recommend doing as early as possible in as small and low risk away as possible to begin to gather more and more information to enable better decision making.

MacMillan’s Steps in “Not Planning”

In the interview quoted by “Matt” in his blog, Professor MacMillan actually gives a rather lengthy planning process.  It includes:

  1. Set a firm target of what you’d like to accomplish
  2. Ask the following:
    1. What is the scope of what needs to be done?
    2. How much physically must happen?
    3. If I want to make x dollars, how much must I sell to get there?
    4. What are the activities I must undertake to deliver this plan?
    5. How will people know I have an offereing?
    6. How will people search for that offering?
    7. How will they be able to buy what I’m doing?
    8. What processes must be in place for them to be able to receive whatever I’m delivering?
    9. How are they going to use it?
    10. How do I need to service it?
    11. Document the assumptions and begin testing the offering and the assumptions at checkpoints
    12. Creatively invest only as you learn

How to Plan Around the Planning Fallacy

In Yudkowsky’s post, he references a very small research study showing that people overestimate how much they can get done in a given time period – or, more accurately, when they will finish a project.  I am not at all surprised by this finding.  When I work with clients to teach them planning and to improve their workflow, they are usually starting from a point of pretty low performance.  Because of their lack of experience and practice in planning, they don’t know how long things take.  They do not have a sense of time.

So while “Matt” of 37signals recommends throwing out planning, Yudkowsky mentions a technique to improve your estimation skills.  He suggests taking an outside in approach (or big picture view) instead of an inside-out approach (or detail/task level orientation).  Instead of listing all the tasks and figuring out timing from the bottom up, recall similar “sized” tasks or projects and estimate the time to completion based on that past experience.  This method tends to give a much more realistic answer.  One reason is that people underestimate how long individual tasks take, forget certain tasks, and don’t factor in sick days and other administrative time and overhead.

Practice Makes Perfect

What is not mentioned in either of these articles is the idea that with practice, you can actually improve.  Planning is a skill that can be learned.  The more you plan, the better you become at planning.  Most people are bad at estimating how long tasks take and how many and which tasks are required for a project because they haven’t done project planning in the past.

The process to get better is similar to that of other skills:

-          Learn the skill – either through training or trial and error

-          Execute/practice the skill

-          Analyze your results

-          Repeat

To speed the process, you could hire a professional consultant or coach with expertise in the area.

The Balance between Planning (Analyzing) and Doing (Executing)

The problem with most small business owners I know isn’t that they plan too much – it’s that they don’t plan enough.  Or they spend their planning and analyzing time on the wrong things.  Of course analysis paralysis is a potential issue – especially for perfectionists.  But jumping into a new business line or product or service without some basis forethought is irresponsible.  Do you need a 40 page plan?  Probably not.  But you need the basics:

  1. A sound financial model
  2. A basic marketing plan – are there customers?  How are you going to find them and attract them?
  3. A vision of your end goal

As Jack Canfield likes to say – you can get from New York to San Francisco with only seeing a few hundred yards in front of your car.  However, it’s important to know you want to go to San Francisco not Los Angeles.  Going fast in the wrong direction isn’t helpful.

Find the Balance

If you’re lost – you don’t know what you’re doing, where you’re going, or why you’re doing it – you could probably benefit from some more planning.  If you don’t have a lot of movement, but a lot on paper or on your computer’s mindmaps – you probably need to do some more executing.

A smart level of planning will pay major dividends in time, money, and happiness.

Photo Credit: Jason Rogers

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