DFN: If you don’t know where you’re going any road will do.
A GPS for business
November 27, 2009 by Stan Maupin
The views expressed in Guest Opinions are those of the author and do not represent BizSense or BizSense reporters.
Have you ever started out on a long trip using a set of directions from Google or MapQuest and found yourself off the path or found that the road was closed? Once that happens, your only choices are to retrace your steps or stumble along, hoping to get back on track.
Many growing businesses face the same situation in today’s uncertain economy. They know where they are, and they know where they want to be, so they develop a business plan that provides great directions to their destination. But somewhere along the way, they run into a roadblock or take a detour, and their business plan is no longer as useful.
In the past, the biggest complaint about business plans was that, once they were finished, they were “put on the shelf” and never looked at again. Today, it may not even make it to the shelf. It might be saved to a thumb drive and thrown in a drawer.
Today, even if management tries to use a plan to keep it heading in the right direction, the pace of change in business today means it will probably need major revisions time and time again.
Think of the telecommunications industry. The telephone didn’t change dramatically for most of the latter 20th century. It had one application that allowed you to talk on it. Just a couple of decades later, it has 85,000 “apps” that allow you to spend hundreds of hours looking for new uses that will save you hundreds of minutes by using your phone to improve your productivity (or unproductivity, as the case may be).
Now, try to imagine what the phone will look like in 10 more years. How do you develop a business plan for that?
To bring that example closer to home, think about INM United. This company was founded by Joel Erb, who started his entrepreneurial career in his mid-teens. (He is way up in his twenties now.) Joel’s company develops apps for the iPhone, so he has to develop and execute his plans in an industry that has 85,000 new products in a little over a year.
How can businesses stay on the right track in this environment?
I think that Tom-Tom and Garmin have the answer.
Instead of thinking of business planning as a set of direction or a road map, we need to think of it as a navigation system that provides directions but, more importantly, “recalculates” those directions whenever we got off the path or the road ahead is closed.
A GPS system even gives you periodic updates on your progress in a pleasant and calm voice.
The idea for GPS-like planning came about in discussions with Mike Appleby, the founder and CEO of Charlottesville-based Mikro Systems, Inc. Mikro has developed a lithographic molding technology that has applications in many industries. With a number of current contracts in place, and with opportunities appearing every day, Mike and his team have recognized that they need to be disciplined in the way they allocate their time and resources in the next few years if they want to reach their long-term goals.
We quickly realized that, in such a fluid environment, a traditional business plan would be out of date before it made it to the shelf.
Our answer was to focus on developing a planning process rather than a plan. Like a GPS system, the process will record and communicate the company’s destination, but it will also be proactive in keeping Mikro on the path to that destination and recalculating the path when needed.
Keep in mind that even the best GPS system needs to have a clearly defined destination in order to be effective. The most important step in developing any business plan is still agreeing on where you plan to go.
I know that male business owners will like GPS planning. They won’t have to stop and ask for directions.
Stan Maupin is a managing director with Transact Capital Partners and has worked with technology and emerging growth businesses in Virginia for more than 25 years. He is also a founding member of the Richmond Venture Forum and the Greater Richmond Technology Council.