How useful is a business plan in a high-speed world?
27 May 2015
Your business plan is almost certainly out of date – but, whatever you do, don’t write another one, says a leading enterprise expert
We often use the phrase “knowledge-based economy”. In reflective moments, I’m left wondering what we actually mean by this. Many ancient civilisations were pretty good at creating new knowledge, and doing useful things with it: the Library of Alexandria, built between 3BC and 30AD, was probably the largest centre of learning in the ancient world. Economies and indeed societies evolved around such “knowledge-based” projects.
So, what’s the difference between ancient and modern knowledge economies? A book or two could probably be written on the subject, but I’m going to distil it down to a short sentence: the speed and instant pervasiveness with which things now happen, propelled by the push and pull of information and communications technology.
If this simple analysis is right, then the next big question is “So what?” Or, to be more specific, what are the implications for the many communities that make up our global society? Here are a few thoughts for those in management and leadership to ponder:
1. Our current social and economic models were not designed to do things fast
Mostly, there wasn’t a hurry!
2. Democratic processes are a big problem because they slow down decision making
We like to have our say – but in the meantime, events pass us by.
3. We feel comfortable with big, physical infrastructure
We think it makes a statement about who and what we are, but such projects are generally expensive and tie us down geographically.
4. We like to design things to last
But we live in an increasingly throwaway world.
5. Our natural mindset is that “big is better”
But remember: David beat Goliath through speed and agility.
6. When the going gets tough, it’s easier to look inwards
But in a truly global world, our instinct needs to be to look out.
Large organisations and new startups are usually underpinned by detailed business plans and, of course, these are important and necessary. But of themselves, they may not be appropriate if we are to cope with continuously accelerating rates of change.
What we need are business models that enable us to move quickly and with agility, while at the same time managing risk, being open, transparent and democratic. Sustainable competitive advantage in the future will be gained by those who can balance this equation.
Chris Birch is director and professor of enterprise at the University of Greenwich Business School.
For more on the importance of agility in enabling organisations to think ahead, download CMI's Management 2020 report.