planning | Launch Tomorrow

Take a look at Intel’s business plan (typos and all), circa 1968:

The company will engage in research, development, adn manufacture, and sales of integrated electronic structures to fulfill the needs of electronic systems manufacturers. This will include thin films, thick films, semiconductor devices, and other solid state components used in hybrid and monolithic integrated structures. A variety of processes will be established, both at a laboratory and at at a production level. These include crystal growth, slicing, lapping, polishing, solid state diffusion, photolithographic masking and etching, vacuum evaporation, film deposition, assembly, packaging, and testing, as well as the development and manufacture of special processing and testing equipment required to carry out these processes. Products may include dioded, transistors, field effect devices, photo sensitive devices, integrated circuits, and subsystems commonly referred to by the phrase “large scale integration”. Principal customers for these products are expected to be the manufacturers of advanced electronic systems for communications, radar, control, and data processing. It is anticipated that many of these customers will be located outside of California. Today, Intel is a multi-billion dollar company. Note that they acknowledge uncertainty, with the word “may”.

To me, it looks as though they intentionally wanted to avoid committing to specific product type, while still ticking the box that they have a business plan. The point of business plans isn’t to have a business plan. It’s to make your assumptions explicit, so that you can test them.

In fact, according to the old Startup Genome report on why startups fail, 70% of startups fail because they try to scale up, without having verified enough of their assumptions.

Best of all, verifying an assumption doesn’t require a full business plan.

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Most people are familiar with the 4×4 matrix of urgency and importance that Steven Covey popularized. (Or actually misappropriated from President Eisenhower).

Although it’s true that the majority of high growth stories do include a lot of flexibility, agility, and adaptiveness, that doesn’t mean that planning is worthless. Eisenhower quipped that “Plans are worthless, but planning is everything.” What’s most valuable in planning is being proactive–to prevent preventable crises. And if you really are going quickly, it feels like a car chase already.

How prioritizing during a rapid growth phase feels

Like cash flow crunches. The loss of an important resource. A consistent source of sales.

For example, to help prevent cash flow crises around bills for software and tools that I use in my own business, I realized I can buy annual or lifetime plans. Moreover, I can keep a cash reserve for multiple years’ worth of using the tools. This way, I guarantee I’ll have the option of being in this business for a much longer time horizon.

It helps shift my own focus from an early stage mentality of “low monthly run rate” which made sense as I validated different business models–to one of an efficiently run business. It also means that I eliminate the occasional surprises around not having enough cash to cover this or that bill.

Your riskiest assumptions are probably related to your prospects and customers. Establish empathy quickly with your target prospect, figure out what's valuable, and get your innovation into the market.

Note: this is an internal change in my business only. It gives me a good amount of flexibility. All it takes is setting up a business savings account and transferring over financial buffer, so that I can sleep easy at night. In short, I am eliminating a whole category of problem in my own business with this one small tweak.

In his classic 7 Habits of Highly Effective People, Steven Covey shared a quantitative benchmark around for highly effective individuals and organizations (based on his research and work with them):

As a matter of habit and culture, notice that proactive businesses spend the overwhelming majority of time in Quandrant II. The important and not urgent. Such as coming up with contingency plans and being proactive, without necessarily tying yourself down and committing unnecessarily before you know what you need to.

In the example above, I still have the option to raid the financial buffer. But then I am deliberately changing my decision.

Interestingly, for people who aren’t effective the numbers more or less reverse on average. Most of their time is spent doing things of low importance: quadrants III and IV. This crowds out the time needed to do quadrant 2 work, namely important but not urgent work.

Inadvertently, I fell into that trap myself.

While running an agile and adaptive process–without any real external or existential threats–it was easy to just ignore the need to be proactive. If we were honest with ourselves, most of what we did was neither important nor urgent. And it showed on the bottom line unfortunately, i.e. a team spending 2 and a half years to redevelop a product that ultimately didn’t sell much anyway. Most people have some kind of a similar story.

In practice, we only really planned one sprint at a time. And that was good enough for us. Over time, I habituated my stakeholders at the time to this pattern. And allowed myself to fall into it, too. Which wasn’t healthy. This was the type of product that can’t just be rolled out via the internet or directly. I had good reasons to be suspicious of committing to anything beyond one sprint. If we did commit to anything, the team would need to replan everything a sprint later.

In a way, lack of longer term planning paradoxically helped in this context. Most of the volatility around the work was in the latest news on their side. Even though we knew we needed a longer block of time to get to a truly releasable unit of work, at the end of every sprint I’d hear about a new business priority–before we actually released anything.

When confronted with the need for a plan, I mutinied.

I was pretty vocal about being adaptive, later when asked to provide detailed plans, I locked up. I had forgotten what that meant. I wanted the team to be self organizing, and to be left to our own devices. But, something bothered me.

Begrudgingly, I started to assemble bits and pieces and looked through other examples in the company of “good plans” submitted by other managers. And I realized that thinking through things in more detail was helpful, especially once new products or offerings are largely validated. I’d place small details in a larger context, so that the medium term plan was internally consistent, while still leaving myself the ability to back out easily.

But planning itself is good.

For all the trash-talking about “big planning up front”, I think it’s worth pointing out that in an agile and scrum context, I’ve never heard anyone claim that planning itself is bad.

In the agile manifesto, the signatories stress they value people over process. But planning is ideally done in a way that takes into account everyone’s needs and opinions. Ultimately agile values the team’s need to self organize. And that includes planning, if that’s what the team needs. Or what a number of teams need to ship their work.

The main reason I’ve found planning helpful is to realign details around priorities. If you have a large enough team, there is a car chase of details coming at you in any given moment. Being clear on the priorities and knowing how to apply them is where a purely adaptive process breaks down.

I was afraid making plans would be constraining. And only after a while, I realized that it’s the proactiveness in planning that was most valuable. Not the plan itself. The plan itself is just evidence of having been proactive.

It is dangerous to use a plan as an organizational commitment device, as that shut down the ability to respond appropriately as new learnings came up. But other than that, there is a time and place for a thought through plan for a team in “execution mode” as they’re going to market.

Key Takeaways

Even though high growth requires you to be highly flexible, planning is still a high value activity.
Ideally, you want to aim for spending 65-80% of your time and resources on high importance and low urgency tasks, even as you validate new business ideas.
As a team matures, there will be a longer time horizon of planning ahead, especially if it isn’t possible to actually release at the end of every sprint.

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How Intel wrote a business plan without committing to one

Mind the (alignment) gap

Disproved: I can just react to everything and have a productive culture

Inadvertently, I fell into that trap myself.

When confronted with the need for a plan, I mutinied.

But planning itself is good.

Key Takeaways