PLANS ARE WORTHLESS, BUT PLANNING IS EVERYTHING

“Plans are worthless, but planning is everything.” Or put another way, planning is everything, THE PLAN is nothing. The actual quotation, attributed to Dwight D. Eisenhower, US general and 34th US president, is: "In preparing for battle I have always found that plans are useless, but planning is indispensable."

In a military context, which is what Eisenhower was referring to, this means thinking through every single possible outcome and contingency of an operation, and very carefully assigning probabilities that each would occur.  Plans can serve as useful guides for decision making and should help to ensure that goals are met efficiently. However, they should be flexible and regularly reevaluated to account for changes in circumstances.  Plans should be developed as responses to the various contingencies, and those contingencies could be developed from the answers to a series of “what if” questions. However, the team should be ready to pivot or adjust its response/its strategy as the actual situation unfolds.  In other words, while you have to plan and be prepared to execute the plan, once the battle actually starts, the plans become a lot less useful because things may unfold in unpredictable ways.

The impact of Covid-19 and the well laid plans of many businesses come to mind. If you’re in the restaurant, entertainment, transport or tourism business, your well laid 2020 and 2021 plans were most probably not worth the paper they were printed on. Many of you in the carnival business are now most probably taking another look at your projections for Trinidad & Tobago’s 2023 carnival.

However, this does not mean that you should abandon the planning process altogether.

A contrasting quotation, referred to in the military as the 6Ps is: Prior Preparation and Planning Prevents Poor Performance.

The strategic planning process should be a mechanism for stimulating disciplined thought.

Jim Collins, renowned author and strategist of books like “Good to Great” and “Great by Choice” advises that great companies didn’t do plans and then get stuck on them. Their strategic planning process was not a rote exercise followed by rote implementation of decisions. It was a mechanism for stimulating disciplined thought. The idea being that if we use a rigorous and disciplined strategic planning process, starting with the right people who can engage in rigorous, vigorous debate and disagreement infused with the brutal facts and insight seeking, it will produce an iterative series of decisions that add up over time. He notes that one thing that really stood out about the process was the extent to which it was driven by a search for the right questions more than a search for the right answers.

I believe that any planning process has to begin with a discussion about purpose. As mentioned in my previous articles, you need to ask why the company, organization or business exist. Who does it serve? What problem does it solve for its customers? Who is it for? What is it for? These questions point to the MISSION of the enterprise—its purpose.

Strategic Planning: A search for the right questions more than the right answers

Having arrived at these answers, you need to carefully articulate the value that you are creating for your customers. You need to answer the question: why should they buy my product or service? You also need to determine whether you can create that value at a cost that is low enough to justify your investment.

Michael Porter, in his book “Competitive Advantage” notes:

“Value is what buyers are willing to pay, and superior value stems from offering lower prices than competitors for equivalent benefits or providing unique benefits that more than offset a higher price. There are two basic types of competitive advantage: cost leadership and differentiation.”

As we come to terms with the continued impact of the Corona virus we must face the brutal fact that we are now living in a new normal, AND, we are not going back. Therefore, most businesses will have to adjust, adapt, or die.  I would suggest that we not waste this crisis. We should use the time to take a hard look at our business and industry. Porter’s “Five Competitive Forces Framework” for analysing industry attractiveness and crafting competitive strategy is a good place to start.

Many well-established restaurants closed their doors during the pandemic. I suspect many other bars, restaurants, entertainers, and promoters are facing the same dilemma—how do we create value for our customers in an age of social distancing?  And, more importantly, can we do so at a cost that is lower than what customers are willing to pay or can afford?

As restauranteurs contemplate the future, what does the Five Forces model offer by way of insight? Let’s start with substitutes—how are customers satisfying the need for celebration over a good buffet? I suspect that they are not. I also suspect that the older clientele of some restaurants, part of the high risk cohort for Covid-19—are avoiding in-house dining and such establishments at all cost. And I am not sure that demand for this type of dining will return to pre-pandemic levels.

So how can these entrepreneurs respond? Should they plan for a hybrid model? Offer both in-house dining and take-away, like Veni Mangé?  Can they pivot and offer their equipment and chefs to buyers looking for good meals that they can also order for take-out? Can they contact offices and other business establishments to provide buffet meals for meetings and celebrations? Or offer daily delivery of meals in partnership with taxi drivers or other delivery services, who are no doubt also feeling the pinch.

At the same time can they negotiate with their suppliers to source inputs—vegetables, meats, fish, beans, etc.—at a lower cost? Food for thought, no pun intended, but you get the picture.

As Porter notes, “The five-forces framework allows a firm to see through the complexity and pinpoint those factors that are critical to competition in its industry, as well as to identify those strategic innovations that would most improve the industry’s—and its own—profitability.  The five-forces framework does not eliminate the need for creativity in finding new ways of competing in an industry. Instead, it directs managers’ creative energies toward those aspects of an industry’s structure that are most important to long-run profitability.

I hope that this helps as you work to craft your strategic responses to a post-pandemic world. As usual, I look forward to your questions and comments. Be safe. Take good care, and if you can, help someone in need.

Cheers, Nigel

Nigel Romano, Partner, Moore Trinidad & Tobago, Chartered Accountants