The business planning re-boot

A long time ago I found myself schlepping around the local offices of a major consulting firm  asking what their plan was for the next couple of years. The answer to my question was inevitably “We want to be the first-choice firm in this market”. “Gosh,” I’d say summoning a falsetto of enthusiasm rarely seen outside the jolly-hockey-sticks stories of Angela Brazil, “how absolutely marvellous.” Smiles all round: “but how,” I’d say, delivering my coup-de-grace, “do you plan to do that?”

Business planning has never been one of the consulting industry’s strong suits. For an industry that prides itself on the quality of advice and support it offers to clients, the willingness to practice what you preach has always been limited (think cobblers’ children). And of course it didn’t really matter because consulting firms’ margins were so big that a few strategic missteps had no impact. But lower prices, more demanding clients, greater specialisation, and increased investment are just some of the reasons why that thinking doesn’t – or shouldn’t – apply today. Yet there it was again last week, as I leafed through a firm’s 2015 business plan: “We want to be the first-choice firm in this market.” Gotcha!

If the outputs from business planning are vague, it’s because they’re based on inadequate inputs. Consultants like to tell themselves that their fingers are firmly on the pulse of the market: after all, they spend so much time talking to their clients that, of course, they know what’s going on. Even senior partners still do client work, so, of course, their ears are closer to the ground than their equivalents in industry. But as scientists have learned, the plural of anecdote is not data; decisions based on hearsay are not informed.

But the tide is turning (it has to, if profitability is to be maintained and market share increased). More and more we’re seeing firms carrying out primary research to support their planning process and – more importantly – using that research as a means of asking far more intelligent questions of their clients in very specific areas. If your clients already think you’re ‘first choice’ in – say – cyber security, why do they think that? First choice in what respect? What signifies first ‘choice-ness’ in their eyes? Doing primary research isn’t new, but too often the research we see: is too high level (it assumes all clients think as one); wastes time telling you things you already know (expertise is important!) rather than finding out about things you don’t; and doesn’t tell you enough about clients (whose circumstances dictate their attitudes).

‘First choice’ is a great aspiration, but let’s ground it in data.