Question time

In part one of this series I suggested you set down your starting point and where you were heading. It might be setting up a business, or initiating a new objective or refocus an old one. This would be the reason for a business plan.

Looking to yourself, to your heroes in architecture and to inspirational figures would afford clues and motifs to incorporate that might help you achieve and direct the changes necessary to reach your goal.

Industry benchmarks and guides, past performance and suggestions from your advisers would offer measures to investigate.

Part two, using examples of a new turnover target and exploring a new market, suggested you chose the appropriate form to trap and document your route – and that you wrote down previously gathered influences and mapped out the measures and timeframes for review.

Importantly, it was suggested you shared the plan in the office and outside, and finally set it into motion. This is where it really gets tested.

Nearly is a negative

First, sharing a deadline for an initiative is a big incentive to hit it. This is because there is a real black and white measure of success, which others will see, and the grey one we tend to see. If you nearly achieve it then in black and white you didn’t hit it. In grey? Well, you might choose to say you achieved 84% and missed the target only because… (insert excuse here).

These different views illustrate why it is important to interrogate and review the plan. Interrogation is for both you and others. You must constantly question it. Don’t just congratulate yourself or make excuses – think, ask questions, interrogate and use/discard the answer to try and discover the reasoning behind any underperformance. And you must review of what happens with or to the plan.

To illustrate this let’s interrogate two versions of performance – over and under. Both are bad as they mean that either you didn’t plan or estimate correctly, or you didn’t perform. And they both come with problems.

Returning to the turnover example, you would have built up to how this was achieved and hopefully your business plan had captured the assumptions and created measures and benchmarks throughout. Whether you failed or succeeded, you have to ask was the macro target real? What was the starting point (previous year or a view of critical mass for the firm profile that worked)? Were your assumptions correct?

Then, to achieve this target, how many ‘won’ projects did you consider necessary, how many shortlists to achieve this number, how many applications to achieve the shortlist number, had you a mix of initial input in the form of open competitions, OJEU, direct approaches?

Once the project is converted did you allow any margin for delay on conversion? What fee levels had been achieved and when in the cycle did the fee start being earned?

How are we doing?

All these questions must be quantitatively answered; then turn to review.

What does the performance look like? Can you plot a graph of it? Do your industry benchmarks suggest large divergence or are you tracking their pattern (ahead or behind)?

What cycle of measurement had you laid out in the plan at the beginning? Was there a monthly review perhaps and some idea stated of what to expect each month? It wasn’t likely to be linear so did you have a way to plot the migration of a project through the stages (macro/acquisition/conversion)?

If you are picking up divergence from the anticipated profile of performance and you are happy that it is correctly measured, then ask how much it is moving by. Project the effect. Then ask what you need to change to bring the result back to the anticipated curve – and what you must do to correct the loss too.

But what if the result is better than expected? This too can be dangerous. Your performance variation may be gradual, which is manageable, or it may result in significant change. You must re-plan and re-project quickly to understand the implications – not doing so may jeopardise cashflow or may leave you unable to deliver.

These two illustrations show a sophisticated level of modelling and it will take time for you to become confident with this and to trust it.

Now what?

So finally, what to do with it next?

In a period-based business performance plan it is logical to have established a task where you evaluate its direction, assumptions etc, and create one for the next cycle. The easy route here is to boost the numbers and start again but you should be more critical by now, so spend a similar amount of time as before but interrogate each assumption, target, duration of monitoring, and your performance – not just against the targets but also in using the plan along the way. Did you perform? Did the plan perform? Was it the right external mentor?

If it was a single issue plan such as breaking into a new market and the original goals have been achieved then a subsequent stage will concern taking that forward and growing it. This will be a different plan from the first but remember to use yourself as a benchmark.

Self referencing of performance (as in both examples) is a Holy Grail as it is about honesty and reflection. This plan is tailored and specific. Improvement comes through open questioning and awareness and means you are really thinking about managing your business.