Five Questions with Jim Horan

Our expert author this week is Jim Horan, President and CEO of the One Page Business Plan Company and author of The One Page Business Plan … the best selling business planning book on Amazon.com. He is also the developer of The One Page Planning and Performance System.

Jim founded his company in 1990 after nearly two decades in senior level financial positions with Shaklee Corporation and Bayer Pharmaceuticals. Over the past 17 years, his company has helped thousands of businesses achieve sustainable cash flow and profit growth.

He was good enough to lend us some of his time for our “Five Questions” section this week, and although his business planning process can capture business’s entire future on a single page his answers here provide volumes of useful information.

If everyone knows and accepts that business planning is so important why is it that so few businesses are doing it effectively, if at all?

The reason they struggle so much is because creating a business plan is a thinking process, and I don’t mean that as an offense. I mean that a CEO or executive needs to stop what they are doing and go to a quiet place within themselves to reflect.  The day to day tasks have to be put on hold, which as we all know can be difficult, and they need to spend some introspective time observing their business.  Then face those observations and prioritize what they want to do.

Here in the US an incredible percentage of businesses are considered by definition to be small businesses, and particularly in those cases it can be a very personal process. The lines get between a person and their business.

As entrepreneurs they feel as though they can only grow their businesses as fast as they can grow personally.  It’s a process of learning, growing, experimenting, and the business plan is where they capture what they’ve learned and where they want to go. It can be a challenge to write a business plan  in a lot of cases because it is really about themselves, and they try to write it by themselves.

Anyone doing this should have a partner where they contribute to each others’ business plans, or get a mentor who can provide some feedback to ensure that the business plan that they write gives them the best outcome.

We’re looking at two major forces that are effecting all business, with the tightening economy and the pending retirement of the Baby Boomer Generation, taking these types of massive forces into consideration how often should a business plan be reviewed and revised?

Another of the things that we’ve seen is the change where employees aren’t all coming to a fixed location for 40 hours per week anymore. That is yet another sign of the times. You can have employees across the town, state, or even the world, so the important question here is how do you manage employees you can’t see? What we observe is that there are still too many managers telling their employees what to do rather than asking employees what they think the proper steps might be. In this new generational and economic environment you need to be able to manage without a line of site, and one way is to have people create their own plans. It becomes an agreement and an accountability system with their managers for both work being accomplished and resources being consumed.

Your business plan needs changes any time it no longer represents the owners best thinking, and best interest. When there are evironmental changes or mission changes due to external issues their also are requirements to change the business plan.

The business plan is a blueprint of your entire program. I was doing a talk recently and I made the point that none of us would have a house built without having a blueprint, and wouldn’t work with a builder who wasn’t using one, but yet we’ve got people starting and creating businesses without a plan. They are putting at risk substantial personal assets and failure in general. Having a plan raises your chances of succeeding.
 

How do you protect against the business planning process from just becoming a “lip service” activity for managers?

Once the plan is created and agreed upon you’ve got to meet at least monthly to see what progress has been made and what results have been achieved. Its is the responsibility of both the manager and the employee to ensure that your are achieving what you want. If you don’t have that, and can’t or won’t commit to it then you aren’t ready to begin the process.

The fact of the matter is that a lot of back-and-forth learning needs to happen between employees and managers. Lots of unexpected things happen in business and both sides need to keep the other in the loop. Since none of us have 20/20 foresight we’re flying blind if we aren’t planning and communicating that plan.  

Hermann Miller has been using our program for over 6 years. And one of the dealers we work with has the highest satisfaction rate in the country. When they get together the dealers want to use their one page plan as the agenda for their meeting, to discuss what’s working and what’s not working. So we’re seeing this type of plan function as the foundation for meetings when they get together, which is something new.

Sometimes I wish there was another term for performance management and accountability. People want to be high performers and feel supported, they don’t want their performance to be managed, per se, or to  feel any oppressive pressure of accountability. Employees want to execute against the plan, but they’ll always do better with a boss who is supportive and will help him to learn better.

 

I think that one of the most underused portions of what you do is the career planning capability of planning, which you cover in your product. Tell us a little bit about how personal planning works best.

I don’t think we do our best thinking until we pick up a pen and paper and get our thoughts down. It causes us to more fully engage our brain. We don’t fully understand who we are until we start writing and the format of career planning is a fantastic way to learn more about yourself and your goals.

 The reason it’s important particularly for the career--changer type, the over 35ers, is because they’ve got the life experience and job experience but until they truly explore it on paper and have the chance to pick it up and read it you’re still talking about potentially shallow thinking.  In order to break through they need to explore.

Through introspection and exploration people stand a better chance to find out what is interesting, methods of work, and much more than they would have otherwise gotten. This is particularly true with entrepreneurs. They are old enough to work with who they want to work with, so we ask them to create a visual picture of who it is. Getting it down in writing, even if they think they already know, will give them a much clearer idea of where they want to go and they become more successful..

 

What do you see as the opportunity and future of effective business planning, and how do you tie it to Strategic Alignment, which is a key subject for companies right now?

When you ask your employees, management teams, or anyone else for that matter to “put it in writing” you’re going to see where they’re coming from. It’s hard to fake your business plan. People will express honestly where they think they’re going to go. Once they see it in concrete words we can see whether there is an alignment or not.

As I said before, there are too many managers telling instead of asking, that is a change that needs to occur in the future. We’re still too caught up on giving the big picture we’ve painted. What we need to starting doing is asking  “What do YOU see, what do you think the opportunities are? That is a key to strategic alignment across all borders.

If you are doing all of the talking you have no idea what’s happing in anyone else’s head. With our program you can get a very clear picture of what is going on in each employee’s head. The discipline of doing it in a just a single page means there is no room to hide, no fluff or filler, and you get rid of the B.S. that can get buried in an overabundance of  paperwork.

 

People love to see their ideas, their strategies, and their goals in writing. Now, most people just put suggestion in emails and they aren’t creating a true context of an effective  buiness plan. With a little coaching they see that they have some new ideas and tap into a new level of their capabilities that they didn’t even know they had.