Five Reasons to Rewrite Your Business Plan, Again
Written by AddOns’ Greg Madsen
1) Regulatory Compliance
2) Technological Advances
3) Rapidly changing Labor Factors
4) Volatile Competitive Environment
5) Social License
You’ve finally delivered up the final, approved version of your published Business Plan to the printing company. Its 150 pages of best-practices and sage predictions; color-coded multi-tabs; fully foot-noted and cross-referenced; with dazzling-but-relevant graphics throughout. The Stakeholders love it: you’re a hero.
Do NOT delete those working files. Most of your numbers, and some of your assumptions are already wrong: not by much, but wrong.
My point here is simple: Business Plans are either dynamic, or uselessly outdated immediately after signature.
The World is not static – so your Business Plan can’t be static.
There are 5 big reasons to update your Business Plan every year:
√ Regulatory Compliance
√ Technology
√ Labor Factors
√ Changes in Competition
√ Social License
Let’s consider Public Transportation: something that everybody is at least casually aware.
First, I’ll mention that the Public Transportation industry is currently facing a new regulation that requires them to have a 20-year business plan. Keep that 20-year timeframe in mind for a moment.
Regulatory Compliance
I won’t sugar-coat this: if your Business Plan doesn’t consider Federal, State, and Local reporting requirements; plus OSHA/MSHA/DOT, employee benefits, and health insurance – well, you’re just not done yet. In fact, there is a trend emerging in several industries to have a Regulatory Compliance Officer among the C-Suite to make absolutely certain that all this get done – correctly – on time – in the correct format. Yes, its that important.
This is not all bad. I’ll give a shout-out to the DOT here. When I put my Grand-Daughter in the back seat, she reprimands me if I forget to buckle her car-seat: she’s 3. When I was 3, cars didn’t have seatbelts, car-seats hadn’t been invented, and “traffic accidents” were the #1 killer of children under 6 years old.
The trend is very clear: regulatory requirements increase year-on-year; they never decrease. Secondly, whining and complaining may be fun, but ineffective: resistance is futile. Put your big-boy britches on and just … put it in your Business Plan.
Technological Advances
We may very well have driver-less buses and trains 20 years from now: that will have a profound impact on the Public Transportation industry, obviously. As an Aircraft Maintenance Officer back in the early 1990’s I would often hear the Aerial Reconnaissance pilots assert that “They’ll never take the Human out of the cockpit! And, we dutifully risked the lives of 4 brave Patriots flying their jets at 600 miles per hour a mere 500 feet above downtown Bagdad to make absolutely certain that the Desert Storm bombs were hitting the right targets. Today, we use un-manned drones – risking zero American Lives – to get the same job done. If you are writing a 20-year plan for a Public Transit group, you NEED to think about how you might deploy driverless-vehicles safely and effectively – sooner rather than later – because its VERY likely to happen whether you plan for it or not.
2017 marks the tipping-point: 51% of our buses are now non-diesel-powered: alternative fuel, electric, or hybrid. What will power our mass-transit vehicles 20 years from now? The convergence of technological ingenuity and environmental reclamation is driving a wave of change: no, a tsunami of change. Your business plan cannot stop at “which engine should I put in these buses”. You must also plan for the infrastructure: battery-powered vehicles require strategically place recharging stations – and time; liquid propane and compressed natural gas require highly specialized storage tanks and refueling stations; ground-level “3rd-rail” electric operations have a horrific safety/reliability record; overhead catenary operations take the phrase “fixed-route” to whole new dimension. Suddenly a fleet of traditional buses doesn’t sound so bad. But, nobody wants to ride a smelly/smokey ‘ol diesel bus in the 21st Century. Question: what will You be doing 20 years from now?
Labor Factors
The U.S. labor market has been struggling with record-high unemployment and under-employment for more than a decade. Yet, hundreds of Public Transportation companies, thousands of employers across this Great Nation, consistently complain about “the lack of qualified applicants”. So, where is the disconnect?
Reaching back to your freshman year Business 101 class, “Staffing” is 1 of the 5 basic management functions – and it legitimately belongs in your Business Plan.
• How are you going to attract enough of the right talent?
• What are the most-effective training methods for each type of job?
• How can you retain the best, most effective Employees, within the constraints of your budget and market factors
Too many HR Directors think they can use metrics, guidelines, and hourly-rates from the previous century to attract new employees in the 21st Century – and they fail. No, they FAIL – in big, bold, bright red letters. Too many companies buy software, from the lowest bidder, using keyword algorithms to filter through electronic resumes. I’m sorry, my experience is that safely operating a moving vehicle has the square-root of nothing to do with your ability to upload your resume to a web site. No software package can measure how badly a single-parent wants to feed and house her family. No electronic algorithm can quantify the integrity, reliability or trainability I see in man’s eyes when I ask him if he can rebuild my engines correctly.
My personal experience is that the current job-application processes employed by most HR agencies effectively drive away 99% of the best, most qualified applicants. When I’m looking for drivers, mechanics, and cleaners, I really don’t need them to demonstrate a 90%+ keyword match on an application web site. I’m a lot more interested in their willingness to come to work in a snow storm.
American employers are just now rediscovering that People are THE resource most critical to the success of your company. Further, ALL of the most successful and profitable companies identify their staff as a top-ten contributor to their success – if not the #1 factor.
I’ll cut to the chase: how you recruit, train, and retain a 50-year old is vastly different from how you attract, teach, and hang on to Millennials. To be truly useful, your Business Plan needs to address all 3 functions across 3 or 4 generations. And strike an equitable balance between the Human Reality and the Economic Reality
Changes in Competition
The “discount airlines” no longer compete with the big national airlines for your discretionary travel decision: they compete with the price of gas and your rather-personal valuation of your driving time. I can drive from Denver to Salt Lake City in 8.4 hours for a fuel cost of about $60; or I can buy a ticket on Southwest for $145 and be there in 90 minutes. You do the math – while I check us in online.
Ridership on American public transit systems is declining, right across the continent. Why? Congestion continues to get exponentially worse. The price of gas hasn’t changed much. Millennials don’t even own “personal vehicles”. So, where did all the people go? Uber. Lyft. Grab-a-cab.
When the whole flexible-transportation and social-media mashup happened – and continues to happen, formal Public Transit companies missed the bus: they had zero web-presence.
The point is very simple – and critically important: does your Business Plan keep you visible and relevant to people who “google everything”, have never seen an encyclopedia; and don’t know what “the yellow pages” refers to.
Social License
Can you name the 5 most-hated companies in the U.S.? Yup, I agree. Now, how is your Business Plan going to guarantee that Your company never makes this list? Social License is actually short for “social license to operate”. It’s a phrase I plagiarized from the World’s second largest gold mining company.
The headlines, the news-feeds, the internet is rife with examples of people and companies that have screwed up soooo bad that their Social License to Operate has been summarily revoked.
United Airlines injured a passenger when they dragged him out of his seat – to make room for non-revenue United Employees
• Huffington Post Executive Editor fired for a racially-inflammatory tweet – while she was on a flight to South Africa
• CEO of the World’s largest oil company eventually fired for under-reacting to 1 of the largest oil spills in history
• Your Business Plan actually needs to include 2 components here.
First is a day-to-day media presence, in the same venue and format where your Customers are already engaged. The most forward-thinking companies have mobile apps that work on whatever phone you have in your hand – and its free. They use GPS coordinates to identify next-closest from wherever you happen to be right now. They even partner with Uber to get you there, Pay-Pal to buy whatever you want; and UPS to ship it to your Mom – with “the perfect greeting card” from Hallmark attached. Your Business Plan objectives = more visible on any device, more convenient from anywhere on the planet, faster, more connected, more accurate, and cooler than all your competitors – 24/7/365. Go.
Secondly, your Business Plan needs to accommodate –and effectively mitigate – crisis situations. When things go wrong, your Clients/Customers want to be informed – right now – updated frequently. In bad situations, nothing beats a good communication plan. The plan should include people who can speak with authority and confidence – because they knew their Roles-and-Responsibilities before the crisis started; they know what the Plan-B is; they can state with some degree of credibility what the get-well timeframe looks like.
Lastly, most importantly, your Business Plan should afford your people the authority to do the Right Thing in a crisis. If you have recruited good folks, and trained them well, and they understand the strategy, goals, and objectives contained in your Business Plan – trust them. This really goes back to that 5th basic function of management: control. Have you thought out how your business will stay in control when everybody else is in a total panic?
I remember very clearly a picture of a bus stranded in about 4 feet of water at a flooded intersection. The Driver had successfully evacuated all his Riders to a safe location. Then he re-programmed his Route Sign before he waded up to higher ground: “Send Help – Go Team”. I’d ride that guy’s bus ANY day.
