Lean Business Planning – Is it for You?

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I am fortunate to be able to assist a couple of small start-ups in their business planning.

However, the “old world” of comprehensive business planning has given way to more timely and flexible ways of planning — and replanning.

One of the frameworks that I have found successful is that of “Lean Business Planning — originally expounded in Eric Ries’ book, the Lean Startup, in 2011 and subsequently popularised by Tim Berry of Palo Alto Software.

In the words of Tim, “Lean business is a better way to do anything in business. Take small steps, look back, track results, see what works, and change often. Lean business planning is a way to optimise your business with focus, specific steps, tracking results, and changing quickly. The principles of lean business planning are to do only what you need, track and review often, expect change, develop accountability, and remember that it’s planning, not accounting.”

I have to admit that previously I was biased toward doing more detailed planning, especially about issues such as market segmentation, pricing, analysis of competitors, etc.

However, I found that this did not always allow flexibility and change — even by the time the one-month planning process (including interviews and workshops) was completed.

So it is not to say that Lean Business Planning is not comprehensive. Instead the difference is in the level of granularity — and still requires thoughtful insights.

According to Tim, “First you define your strategy, such as focus on specific target markets and business offerings to match. Then you set tactics, such as pricing, messaging, and location, to execute strategy. Then you develop concrete specifics, including dates and deadlines. An you also do the essential business numbers, including sales forecast, expense budget, and cash flow”.

He further emphasises, “The point isn’t the plan, but the business you get from it. Do the plan and then adopt an ongoing process or run-review-revise-repeat.”

I have found particularly helpful the structuring and conduct of a brief series of workshops to help “populate” this Lean Business Plan. Also important is the building in as a natural cadence the review process.

In summary, the benefits of Lean Business Planning are the early consensus of proposed direction and key elements, keeping sight of the “big picture” and not getting lost in the “forest for the trees”, and having a planned simple and sustainable focus on managing the business.

It is easier, faster, and better — especially with a demanding marketplace!!




About addedval

Ken's journey has been as a pathfinder who seeks out opportunities for making a real difference to global teams working together effectively and realising amazing business results. This covers his work as a Partner for a major management consulting company in multiple countries, as an entrepreneur with starting and selling various businesses, as a property developer and capital raiser and as head of various boutique consultancies.
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