Balancing Long and Short Term Planning – 10KSB

I n 2008, I purchased the kernel of Northwind Pharmaceuticals with the help of a bank.  During that process, I created a business plan to demonstrate to the bank that there was a vision, measurable objectives, and a strategy to make it a success.  For me, the plan was a checkbox; simply one more requirement to fulfill to get the deal done.  The plan was put in a drawer almost as soon as the ink had dried.   My world seemed to be moving far too fast for a written plan to be of much use.

Fast forward to November, 2015.  As a scholar in the Goldman Sachs 10,000 Small Businesses Program, I was taken through a formal planning process focused on taking my company to the next level – whatever that might mean to the business.  Part of the process focused on identifying and vetting a potential “next level.” The other part of the process focused on establishing concrete actions and milestones over the short and long term for making the vision a reality.  My “growth plan” was born and my attitude toward strategic planning was fundamentally changed.

Why did it change?  Since graduating from 10KSB in November 2015, I have returned to my growth plan repeatedly.   One reason is that it serves as a reference point for a baseline and a direction, a “compass and anchor” (check out this post for more).  In addition to providing a foundation and direction, the plan has also provided a structure for conceptualizing and evaluating new opportunities along the way.  In this way, our current growth plan has become exponentially more valuable than my business plan of 2008 because it is a living document.  An evolving road-map that helps us assess and adjust the broader direction along with specific initiatives along the way.

A very interesting side effect of this process and my attitude toward it has been a better approach to balancing long and short term thinking.  In the day-to-day struggle of tasks, fires, and other urgent issues, it can be very difficult to maintain a longer view.  Long term plans seem fluid and superfluous.   Day to day task lists seem far more relevant and useful.  You focus on building your target list for the day, the week, the month, and the quarter shooting for annual metrics like revenue, profit, etc.  What I’ve discovered with a balanced growth plan is that we can more effectively tie those short term tasks with the longer term plans because we linked them in the original planning process.  This linkage creates checkpoints along the way that align long and short term goals.

The key to making the plan useful is keeping it updated and relevant.  We’ve used LivePlan, a web-based tool for managing the plan, to develop and maintain our growth plan.  Though there are limitations with some of the editing and forecasting features, the tool has made it easy to keep our plan updated and evolve it with the business.  Most importantly, it has made it relatively easy to tie changes in tasks and objectives to the financial implications.  In other words, it allows us to test assumptions and “futurecast” our plan to help validate, or invalidate, our thinking.

Ultimately, any process or tool you use will only be as effective as your discipline in using it.  We’ve learned that we can reconcile long and short term objectives in a real-time fashion and even though we’re still evolving how this works as an organization, I continue to be amazed at its usefulness.