The business plan
Abstract:
The strategic business plan is the visible outcome of strategic business development. It is not an action plan or task list and should not be too detailed. Even if there is a standardised form to be used for the plan, it is important to see it as a tool for business development and not just a form to be filled in. The business plan is also a good tool for promoting the business and making it visible. Often there is an annual process for drawing up the business plan and an example of this process is described, starting with formulating the business concept and ending with the presentation and discussion of the plan with the key stakeholders. The important elements of the business plan are listed.
The purpose of strategic business development is, as mentioned earlier, to ensure:
that the business is delivering value and benefits for the parent organisation;
that enough resources are available for operations;
Strategic business planning is focused largely on the future and the changes that may come. What happens within the organisation: new stakeholders, changing needs, changes in resource allocation, personnel changes? What happens in the surrounding world: new stakeholders, changing needs, new legislation, new technology? To monitor and analyse signals of changes in the outside world, to network within the organisation and generally to keep ears and eyes wide open and the brain running help to catch what is important to our business and to be prepared for meeting it. Our mission and business concept, including the information strategies, are the basis for strategic planning.
In the process of business planning we may feel that our financial, temporal and knowledge resources are insufficient. We must set aside time that we do not have, gather facts that are often difficult to find, analyse and make qualified guesses with a large degree of uncertainty, and present the results in an easily digestible and attractive manner without trivialising and simplifying too much. These are big challenges, and the keys to success are to take the process seriously, to devote enough time and to involve the staff in the work.
The process of developing and planning the business is, as mentioned earlier, a learning process that also provides some positive side effects. Therefore, the actual work of planning activities and developing long-term strategies gives great benefits which may even exceed the plan itself. The work delivers side effects in the form of increased awareness among the staff, management, users and other stakeholders and a better capacity for dealing with changes within the organisation. Hopefully it will also increase participation, motivation and job satisfaction along with the greater insight and knowledge of the business that are gained during the process.
A strategic business plan is not an action plan or a task list. It is generic and should therefore not be too detailed. Action plans and task lists are made at a later stage when the business plan is finalised and result in a plan that can be implemented and followed up. Action plans and task lists are, however, not dealt with in this book.
Developing a business plan is both a support for our own work and for the marketing of the business. Even if someone (the CEO, the vice-chancellor, politicians) commissioned the business plan and there is a deadline for when it is to be submitted, it is important to see the plan not as a ‘necessary evil’ but instead as a ‘necessary advantage’ for our operations.
To make the business visible and to anchor it internally among the staff and externally to key stakeholders, such as the parent organisation’s senior management and the users, is an important reason for writing a business plan. In order to be attractive to the readers, the plan should be concise and easily accessible and have a logical structure with clear headlines. Often the organisation has a method and/or a template with standardised headlines that must be followed in the planning. In recent years, computer-based systems have appeared where the planning is part of a general enterprise system. The advantage of these systems is that the different parts of the organisation are described in a uniform manner, which facilitates the reading and above all the follow-up of the business finances. Disadvantages are, however, that the focus is moved from the content to the reporting procedure, especially if the system is complex to use. A standardised template, ‘one size fits all’, is also likely to steer the thinking too much and the important work with business planning can degenerate into a simple fill-in exercise. It is therefore essential to start with the unbiased work and not with filling in the template.
Along with the mission, business concept and information strategies, we also need the intelligence analyses and facts from the evaluation and follow-up of the business to develop our business plan. In addition, certain basic facts about our services and processes are needed. This also applies to new services that are to be developed and that may replace old ones:
What are the purpose and benefits of the service/process in question?
Who are our primary and secondary stakeholders for the service/process?
What are the content and the expected deliveries?
What are the objectives for the service/process and how do we fulfil them?
What are the key success factors to achieve the objectives?
What resources are required – time (number of personnel) and money?
The efforts required to assemble these basic facts teach us a lot about our business and increase the awareness of the business and thus the ability to promote it.
Many organisations have annual planning days with the staff to discuss current issues and also to consider what the future might look like. In these planning days we can, for example, bring up key events and trends in the outside world (based on the systematic competitive intelligence that hopefully is continuously running in the organisation). We can discuss the competition in the form of activities that are used in place of our own business. Furthermore, it is a golden opportunity to do an unprejudiced review of the business (see Chapter 8). This review can be done every three to five years.
The annual cycle of the business plan
In the sections ‘Voices from practitioners’, the process of how to make business plans, among other things, is described, taking examples from various organisations. Often the plan is expected to be delivered at a certain date each year, which means that there is an annual cycle for the work. It is also quite common to have rolling three- to five-year plans that are revised from year to year. This facilitates the work while the possibilities to retain flexibility and adaption to changes in the surrounding world increase. The timing of the budget process is of course very much steering the annual cycle of the business plan. The planning should precede the budgeting. First, we formulate our business concept and business plan; second, we estimate the costs and make a budget for the business. (Third, we might of course be forced to revise the business plan due to the actual size of the allocated resources.)
Case: the annual planning process
The following example is a hypothetical annual cycle for the first year of a three-year plan, which has a final delivery date of 1 October. A critical time is when the staff are to be involved. The right timing is important to get commitment and engagement from the staff. The right timing, of course, varies from organisation to organisation, but March–April is usually a suitable time for such work.
The proposed organisation in this example consists of the director (ultimately responsible for the business plan), the heads of the different departments (departmental managers) and the staff.
The first step is that the director, together with the departmental managers, discusses and formulates the business concept, strategic goals and important changes that need to be implemented. Examples could be to develop the services in another direction, remove services that are out of date or for which resources are lacking, or undertake other measures to respond to a change in priorities and/or anticipated declining resources.
Thereafter discussions follow in the staff group in conjunction with the annual planning days. Here it is of importance to set aside uninterrupted time for the discussions. Their purpose is not only to achieve a result but also to anchor, motivate and engage. After these discussions, the director formulates a draft that is discussed with the departmental managers, and then distributed to the employees and other key stakeholders such as members of boards and committees related to the business and the principal (if appropriate). It is helpful, if time permits, to have an oral presentation and discussions of the draft when it is distributed.
The final step involves the director formulating and submitting the final version of the business plan to the principal (possibly after more discussion rounds). If it is feasible, the best thing is to present it orally and not merely leave a written report. The final version is also communicated to the employees. The business plan is, as mentioned earlier, also used as a tool to anchor and promote the business to the stakeholders. When it is distributed to them, it may need to be rewritten and may also be shortened to suit the audience. Table 5.1 lists a summary of the activities and the time schedule for this case.
Table 5.1
Business plan activities and schedule
| When? | What? | Who is involved? |
| January–February | Formulate the business concept and the strategic goals. Formulate proposals of strategic changes. | The director + the departmental managers |
| March–April | Discuss. | The director + the departmental managers and the staff |
| May–June | Draft the business plan. | The director + the departmental managers |
| June–August | Remit / discuss / anchor. | The director + the departmental managers, the staff and other important stakeholders. Possibly also the principal. |
| September | Final formulation of the business plan. | The director + the departmental managers |
| October | Deliver, communicate. | The director + the departmental managers, the staff, the principal and other important stakeholders. |
The business plan draws heavily on existing operations and organisation. Now and then it may be helpful to have an open and unprejudiced discussion about the complete business where we start from a blank sheet and question everything. In Chapter 8 I describe how to do it in the form of workshops and how to engage staff in such work.
The content of the business plan
The content of the business plan clearly changes with the type of organisation and operations and the requirements that the parent organisation makes regarding the plan (templates, enterprise systems, etc.). In the list below I have highlighted what I consider to be important elements of a strategic business plan. This can apply to the entire business or parts of it:
our long-term vision for the business;
how the vision and commission relate to the parent organisation’s vision and mission.
the stakeholders – primary and secondary;
how the business contributes value and benefits to, above all, the primary stakeholders.
Competitive intelligence – challenges and opportunities, competitors, new technologies, etc.:
the current situation – factors in the surrounding world that are important to our business;
the future – important trends;
major changes that we face and the impact they have on our business.
− summary of current activities, the range of services, etc.;
− how our business is integrated in the parent organisation’s activities and processes;
important upcoming changes in our business:
− regarding current focus and direction;
− regarding existing services;
− regarding new upcoming and planned services;
− other known or likely changes, for example, announced budget changes;
Action plans and task lists are either added to the strategic plan or appear as separate documents. If they exist as separate documents, it is important that they relate to the generic strategic plan.
Voices from practitioners: Jette Guldborg Petersen
Library Director, Malmö University
When I am in the middle of it, it sometimes feels demanding and cumbersome to have to explain to everyone why we do what we do. But once I have gone through the process, I feel happy and proud.
How do you work with business development and planning?
My work with business plans is part of the university’s governance model. There is an annual cycle that all faculties and support activities follow. We at the library start initial discussions in February among the heads of divisions and myself about next year’s topics. In April there are discussions with the Council for Library and IT1 and in May we have a dialogue with the university top management about the direction of the business. The library director is participating in the meetings that top management has with the faculties. In June, the university board makes a preliminary decision on the overall direction, but also concrete issues such as the volume of education, profile and plans to start new education programmes. In September the budget process begins when we estimate the costs for the operations. In October/November, the budget is discussed within the vice-chancellor’s management team, of which I am a part. In December the university board makes the formal decision on the allocation of resources and then we have a finalised plan for the coming year.
The governance model is handled in the system ‘SILA’ (strategic management and analysis). All business plans are available in SILA and the system retrieves data from the accounting system and the human resources system. The system is also used for follow-up. The foundation of SILA is a purchased business system, ‘DIVER’ (developed by the Swedish firm Infotool2). We are now in our second year of using SILA and only now do we feel tuned up with the system.
At the beginning of the year the heads of divisions formulate detailed action plans for their areas of responsibility, based on the business plan. All activities should be related to the business plan and it should be clear and distinct in what ways the activity and the business plan are related. If not, the activity is not included in the action plan. This has the effect that everyone is aware of what the business plan entails.
Do you have any example of a plan that was successfully implemented?
We are currently implementing this year’s business plan.3 It is well thought out and discussed in both the university top management and in the employee group. Everyone knows what will happen. The plan of 2009 was implemented on the whole, but because of the economic crisis, we could not buy all the electronic resources that were planned. Now the action plans are easier to implement as we have the overall business plan in place and have linked the action plan to this one. Previously we only had the action plan and not a strategic business plan.
From where do you get inspiration and ideas for business development?
Primarily from colleagues, the people I talk to daily. In this dialogue with other people I get inspiration and get to hear about new things.
It is also about working consciously with networks and relations and where we should be represented – ensure that I or my staff are around where things happen, both at home and in other parts of the country. It also means that I reserve money in the budget for travelling. I very much rely on my network but I also keep abreast of blogs, lists and journals (both library journals and journals focused on the academic world). This is very individual. Some people want to read through things and others want to talk!
What are your top tips for engaging employees in change management?
Make sure the timing is right. If the employees are engaged too early in the process it becomes too big an undertaking. My staff have expressed the view that they want to know more about the focus and general direction before formulating plans. With us the action plans are made at the beginning of the year and then it is of course difficult to simultaneously engage the staff in the process of setting the direction for the next year. Therefore, they do not contribute their ideas for next year until the heads of division and I have had our discussions about the direction and have set specific themes.
Sometimes, maybe every three years, you can have more open-ended discussions about the entire business – stirring the pot.
It is important to make demands on the staff, but also to ensure that creativity is retained. It requires that the heads of divisions are on track and work in the same direction and towards the same goal.
How do you deal with new ideas that come from the staff?
Ideas are dealt with on a case-by-case basis. If it is a big thing that is not included in current plans, I ask them to describe it and maybe get it into next year’s plans. I try to be open. Some minor suggestions can be implemented directly. There are many good ideas from the employees. Sometimes ideas come from the university top management that we do not have the resources for, and then it is good to have a plan to show. In general, business planning fits the LIS sector well. The staff like to have control and want to know what to do beforehand. But at the same time we must be flexible and ready for things that were not planned.
What are the biggest challenges for business development?
It is difficult to keep the balance between the role as a support function and that of being at the forefront. We should not have too much on our own agenda, but act as a support to education and research. We want to do a lot of things, but there should be a need for it.
Further long-term planning, maybe three to five years, is needed. One year is too short a time period. But this can be difficult to do for the faculties as they are financially dependent on how many students they get.
For the administrative parts of the university long-term planning would be useful. It is rather tough not to know about the funds available for next year until in December and still get down to business in January.
When I am in the middle of it, it sometimes feels demanding and cumbersome to have to explain to everyone why we do what we do. But once I have gone through the process, I feel happy and proud.
Sometimes I also get a bit tired of the administrative work. There are too much control and too many guidelines to follow. As a consequence I want to do more practical work and to realise some wild ideas! To visit someone or to talk to a colleague helps to be lifted from the ground a bit.
What are your top tips for working with business development?
To start with the wild ideas and to be very open from the beginning, and then to become more and more concrete. To have workshops and meetings in the beginning of the process where you can be creative and let the ideas flow freely.
It is important not to be alone but to work together with others in the planning process, in my case the heads of division. It clearly works best this way.