Do you have plans or planners?

 I'm diverging a bit from my normal focus on innovation and strategy to write a brief piece on planning.  You see, planning is vital for strategy and for innovation, and is so ubiquitous that no one in corporate America believes that they lack for planning.  Planning is vital for innovation because planning is the concept of thinking ahead - getting ahead of the market, of competition, of customers.  There is no innovation without planning - you simply cannot innovate a new product or service immediately.  Most real innovation take years of development, or years of trial and error before they get it right.  We often only see the result, not realizing that a successful innovation was actually a twelve year overnight success.

Likewise, planning is important for strategy.  Thinking about strategy is thinking about how to win in a competitive marketplace and making decisions about investments and differentiations that will happen in the future and be realized in real time.  Planning is the art of thinking ahead, and if done well, thinking further and more deeply than your competition, leading to better ideas, but not necessarily better outcomes.  While I'll focus today on planning, obviously good planning without execution is worse than doing nothing at all.

A few quotes will guide us through our look at planning.  First, Ben Franklin.

Failing to plan is planning to fail

This quote is somewhat paraphrased, but it means basically the same thing as what Ben Franklin wrote as one of his many quoted sayings.  Few individuals can live by luck or happenstance alone, and this fact becomes reinforced and enlarged when we pull back to the larger scope and issues of a business.  Planning is vital for success and failing to plan is akin to driving down the highway at night with your headlights off.

Ah, you'll say, but we know this.  All of us plan regularly.  Don't we all have annual planning cycles in which we develop detailed plans about the next 12 months?  I'll acknowledge that many companies go through an annual planning cycle, but they do it in a rote manner, merely shifting the demands and timelines forward, repeating many of the same activities as in previous years.  Planning in many companies is formulaic, simplistic and very narrowly focused, looking only at what the company does, ignoring customers, markets, competitors, economies and so forth.  

When doing a little research (a fancy way to say Googling) on quotes for planning I came across one of my new favorites, from an unlikely source - Tolkien - who said, roughly paraphrased again, that it does not make sense to leave dragons out of your plans if they live in your neighborhood.  In other words, there are issues and challenges in your markets, competitors and environment, and if you are paying attention your plans should include these challenges to your business.  Far too often, corporate planning is conducted as if the company lives in a sealed bubble, impervious to what happens in the wider world.

Plans are useless, but planning is everything

The quote just above is attributed to Eisenhower and sometimes to Churchill, but it doesn't really matter who said it.  The concept is true.  Eisenhower was thinking about fighting a war, when an army has a plan but circumstances, weather, the enemy and other factors get in the way.  His point was that a plan, any plan, is, by itself, useful in one set of conditions, and an interesting artifact if the circumstances change.  Or, as Mike Tyson famously said - Everybody has a plan until they get punched in the mouth.

A plan is an artifact about what you thought might happen at a specific point in time, with fixed parameters and assumptions.  It is useful as long as its scope and assumptions hold true and becomes significantly less valuable as those assumptions or scope changes.  This is why Eisenhower and Churchill both recognized the value of planning - the activity - rather than the value of the outcome, the plan.  Planning, thinking about the possible futures, the things that will work in your favor and those elements that will work against you, and being able to foresee them and prepare for them, is what is valuable.

Companies today talk about being "agile" and nimble but make annual plans that are fixed to a specific set of conditions and assumptions.  If those assumptions change, or conditions aren't what were anticipated, plans go out the window, and little additional planning or thinking is done.  What is done is reacting to conditions.  A good planner understands the sensitivity of his or her plan to various conditions and assumptions, and carefully watches to track which of his or her assumptions or conditions are changing or are no longer true. The concept of being agile is valuable but being agile requires good planning.  Being reactive is not the same as being agile.

If your planners create dynamic, flexible, adaptable plans, they will identify the areas of sensitivity in their models and plans and will adjust to meet emerging challenges and conditions.  Planning, therefore, isn't an activity you conduct once a year in advance of the budgeting season and neglect the rest of the time.  Planning is a verb, an action verb, and should be engaged all the time.  The more competitive the market, the more change is underway, the more planning you need.

Don't just do something.  Stand there.

This is one quote I'd like to claim as my own, but I'm sure others have thought of it as well.  It turns the well-known demand - don't just stand there, do something - on its head.  I always think of this idea when I am reminded of how Einstein approached problems.  If given an hour to solve a complex problem, he said he'd use 55 minutes planning and considering the problem and 5 minutes defining an answer.  In the same way, we could bring into this discussion the Stephen Covey principle about "sharpening the saw" or Abe Lincoln's idea about sharpening the axe before cutting the tree.  These are all ideas about taking time to do the prep work and the planning correctly before plunging into the work.

Corporate America is often very ready to get the plans done, so that their teams can move out to do the "real work", so planning often gets very little time or focus, and once completed, plans are rarely reconsidered unless a business unit or product group is well off-plan.  And, when that happens, few people stop to consider whether or not the plan was wrong from the beginning, or if the conditions have changed.  No, if a team is off plan, it must be the team's fault.  For putting so little actual thought into a plan, we definitely make very high-quality plans.  That last sentence was entirely tongue in cheek.

Plan. Do. Check. Act.

I like the PDCA cycle because it starts with planning, has an action verb (do) and then has a review step (check), meaning that you should go back to check your plans.  Too often we treat these activities in a linear fashion, always moving forward but rarely going back to the source to confirm what we thought then is true today, or how we may need to adjust our thinking or actions.

In this brief post, I wanted to highlight the importance of an activity that we all think is important, but that we rush through, do once instead of honoring the fact that planning is an active verb, and rarely revisit even when the conditions the plan was built for have changed.

The faster the world works, the more change that is upon us, the more strategy and innovation we want and need, the more we need planning.  Plans are vital, but they are ephemeral, here today and gone tomorrow.  The skill of planning, and the regular exercise of planning, is what will create real market opportunity and differentiation.  Plans are useless, but planning is indispensable.

Do you have plans or planners?  Do your plans ever change?  Do you know which assumptions or conditions the plan is based on create the most sensitivity and upend the plan?  Do you regularly check your assumptions and conditions and update plans as the conditions change?  Are your plans gathering dust on the credenza in your office? Planning is an art, a verb and creates value.  Plans are an artefact, a noun and are useful in a moment.  It's important to know the difference.

Time for Innovation 2.0

 I've been writing about innovation for close to 20 years.  During most of that time, I've had the good fortune to lead innovation projects for clients as well. The work I get to do, and the material I see online and read in (yes, I still read paper magazines) has provided a lot of fodder for this blog over the years. There are kids out there, getting ready to graduate from college, who were just being born when I started doing innovation work.  Not to say I have a lot of experience, because equating years on the job with experience is a risky proposition.  Longevity is one thing, results is another, and renovation and renewal are a third.  It's really time to renovate innovation, or perhaps redefine or reclaim it from those who misunderstand or abuse it.

The problem with the word innovation is that it has multiple meanings.  It means whatever the person speaking intends it to mean and is often interpreted far differently by the listener.  Many executives understand this truth, so they litter their annual reports with the word innovation, hoping that the reader will assume the company is actually a leader in creating new products, services or business models.  This is yet another thing about innovation that needs to change.  Much like the green movement identifies greenwashing as talking about the environment without acting, we need to identify the use of innovation without results as what it is:  hype.

Innovation.  We're so over it

Sometimes I feel like Luther, asking the janitor to post the arguments for next week's debate on the church door.  Luther was frustrated with the way the Catholic church operated.  He felt that the Church needed to look closely at its practices and that it needed to reform.  He did not start out to overturn the Catholic Church or create the grand Reformation, or to create a new Protestant faith.  But, in the time and in the space in which he lived, his focus and passion, and the growing distance between the origin of the Church and what it had come to stand for, meant that many people were as frustrated as he was, and wanted to see change.

I'm no Luther, no deep thinker or scholar, but I can tell that corporations need change.  The economy is in a state of flux - the market up 500 points today, down 600 points tomorrow.  In a recovery from a pandemic, we are still working out supply chain issues.  Inflation is causing people to adjust their spending habits.  A futile and unnecessary war in Ukraine is creating global instability.  

In the midst of this Volatility, Uncertainty, Complexity and Ambiguity (VUCA), many corporations are frozen.  They need new revenue streams, new growth opportunities, but are terrified of making the wrong bets.  Managers, who have been taught to avoid risk and uncertainty, are now living in a period where every decision seems risky and uncertain.  In a period of high volatility and a lot of uncertainty, doubling down on what worked before is not a recipe for success.

Time to stop talking and start defining

We need to stop talking about innovation.  We need to start defining what it is, why it matters and then how we can deliver on its promise.

Recently, a good friend who works at a university asked me to provide some questions for an interview.  I asked:  what's the role?  Why do you need questions from me?  My friend replied that there was a new role opening up for innovation at a local university.  My first question was:  how are they defining innovation?  As tech transfer of intellectual property out of the university?  As a way to innovate the way the university works - content delivery and student experience?  To teach innovation to students?  All of these and more are possible.  The answer came back - they aren't sure.  My sense is that it seemed like a good idea to have a senior person at the university who had "innovation" in their title.

We need to stop playing word games, stop using innovation when we mean incremental change, stop implying that we are creating larger change than we really are.  The word innovation, and the act of innovating need to mean something.

What role should innovation play in your business?

Once we've defined what innovation is, we can next decide what role it will play in your organization.  Innovation can be very strategic - helping companies identify new opportunities and to create radically new products and services.  Innovation can also be rather incremental - improving existing products, services and business models.  The role and scope of innovation is important, and often poorly defined, which leads to confusion.  The speaker talks about innovation and the hearer thinks - innovation = big change, radically new ideas.  But in the end, what is delivered is an incremental change to an existing product or service.  The gap between the definitions, and between expectations, creates a lot of cynicism about innovation.  It seems to be more ephemeral, more filled with magic and possibility, that never fully delivers.  This is wrong, and it is detrimental to businesses and to those who could fully engage innovation if it were defined correctly, implemented fully and embraced by executives.

Right now, as inflation grows, uncertainty presides, and we have a looming election and very unsettled global trade and economy.  businesses need to accelerate their growth while defending their margins.  Few companies are going to take on large, uncertain projects at what could be the cusp of a recession.  Except history shows that many innovative firms were launched in a recession, and because they were new and different as the economy emerged out of the recession, they grew much faster and were more profitable than the firms that merely hunkered down.

There's never a right time to innovate, just as trying to time the market is a fool's errand.  In investing, dollar cost averaging, doing a little bit of investing each month, is a proven winner.  Similarly, doing some innovation all the time is far more effective than a periodic spurt of innovation followed by no activity.

Innovation 2.0

Meet the new innovation.  Makes many of the same promises as the old innovation.  New revenues, new profits, new market share.  Increased differentiation. What could be different about this innovation is its application and its purpose.  Rather than simply talking about innovation, perhaps we can actually "do" innovation, and do more than extend the life of existing products and services.

What's going to be important in 2023 and for the next few years is addressing the post-pandemic needs.  More virtual work, less 9-5.  More people juggling more things with less time and bandwidth.  A rising young segment who feels left out of the Boomer prosperity and wants some of that for themselves.  An old political guard that may finally step aside and let new voices, with perhaps more radical ideas, take over.  

This leads me to believe we'll need innovation in our government, in our societal structure, in how we interact with each other.  It leads me to believe that corporations will spend time innovating on climate change, becoming more carbon neutral.  Companies will evolve their business models to become more flexible for their employees, to allow people to work when and where they can.  Businesses will finally understand that services business are people-centric businesses and move away from ideas like shifts and recognize output rather than clock hours.

Older, larger, more entrenched companies will find this difficult to do.  Newer and younger companies will find that creating value and generating margins is more difficult than their young managers had been led to believe.  All will need to innovate their business models.  

Innovation 2.0 will be about innovating business models and business processes, along with government structures.  As we become more diverse, and a younger generation with new ideas and attitudes presents itself to take on the leadership mantle in both the economy and the government, we can expect change.  And change opens the door for a new, more purposeful innovation.

Mostly though, Innovation 2.0 will be about being honest about what innovation is, the role it plays, how it is defined.  Innovation 2.0 will be about fully funding and supporting what are risky and uncertain projects, hoping to gain new insights and create meaningful new products, services and business models.  A new generation of leaders who are more open to experimentation and change may be coming on the scene.  They are less steeped in Jack Welch's GE models and perhaps more open to learning, discovery and experimentation.  Or, at least, I hope they are.

Let's get innovation right this time.