Most start up business plans only provide a statement of intent. All potential investors/managers need to ensure that not only does the plan talk the talk, but it walks the walk. Most plans, like the proverbial iceberg, conceal much that is important:
- Can the organisation make the concept work?;
- Can it identify problems/ opportunities early?;
- Can it resolve them effectively?
This is why the Ibis business start up/early stage analysis continually stresses the importance of having available the detailed action/ implementation plan. Those plans with such detail consistently score higher than those that lack them. We find that those plans with less novel product/service concepts but far more detailed implementation have consistently higher rates of return that those with novel product/service concepts and without implementation information. Research continually supports the view that plans that meet their objectives on time, budget and specification have significantly better returns than those that do not.
We define novel plans without any clear idea of implementation as "Missions to Mars" – there is a great idea but no spaceship – no vehicle to carry the plan to a successful landing and conclusion.
There are 10 questions that need to be answered on any review of an action plan. Three can be termed strategic, the others specific to the particular project. This checklist also is useful when the enterprise is involved in the implementation of a new strategy – the same general considerations apply.
Strategic factors can be considered as make or break. Should they be absent, the action plan has a very high chance of failure. For the advisor or investor in the SME, these four points need to be clarified before implementation should proceed.
1. Have clear objectives been set for the project, and are they consistent with the overall balanced scorecard of the enterprise/organisation or will they weaken focus??
2. Can the team understand the dynamics of what is required to take the plan forward, and has it experience of similar problems?
3. Do they have the necessary number of people that can handle the necessary detail?
4. Has the team a review mechanism for managing and communicating the variances that will occur during the implementation of the plan, and does the plan meet the required investment appraisal targets (hurdle rate)?
Tactical factors should be part of a detailed analysis of the implementation programme. Prior experience of similar projects is central to their understanding – unless the analyst can benchmark against previous similar programmes serious errors can occur. This is one of the values of post-project analysis and review – to build a foundation of expertise for future programmes.
5. Have the key tasks been identified?
6. Have the success milestones been identified?
7. Do the resource requirements of the plan (time, money, people, equipment,) appear reasonable and consistent with existing best practice?
8. Does the critical path identify any crucial resource problems and does it link with a cash flow statement?
9. Have the key risks of each of the main components been identified and managed (designed out, shared, mitigated)?
10. Is there a contingency plan?
Being clear about what you are trying to achieve and make everyone aware of them
The initial strategic step must be to create clear objectives. All too often implementation starts without clear overall targets, with resulting chaos. Objectives need to be clearly stated and communicated prior to starting. What constitutes an objective in each individual case will vary, but as a minimum there should be a statement of:
- Specifications – what are the output requirements of the plan?
- Budget – what is the proposed expenditure for the plan?
- Timescale – how long will the implementation take?
The advice is obvious: do not start implementation without a clear statement of the objectives that everyone understands
Unless the team has a detailed understanding of what is required to move a project from position A to Z, there is little chance of success. The necessity of understanding is only partially mitigated when sub-contractors are used to provide the expertise in either the entire project or in important parts – but how can the enterprise itself cope with problems that the sub-contractor will experience? In large scale action plans using another sub-contractor to supervise the first sub-contractor is best practice, but this is a high cost option.
The advice is obvious: in the ideal world do not start an implementation plan until sufficient expertise is in place.
Chiefs vs Indians
Experience is all very well, but action planning and implementation require work. If the warehouse requires re-organising for example, someone has to move the boxes – however elegant the scheme may be on paper. The team therefore must include individuals prepared when necessary to complete all the tedious and often boring work that has to be completed on time and specification to ensure that the action plan functions.
The advice is obvious: in the ideal world do not start an implementation plan until there is adequate personnel to complete the necessary tasks.
Measurement and communication
Few implementation plans work smoothly. Being able to respond to problems and to seize opportunities where they exist will ensure that the chances of the plan meeting timing, budget and specification requirements. Being able to keep members of the team and outside stakeholders informed also benefits the enterprise through improved motivation and greater understanding of the demands the implementation is placing on the enterprise. Creating the monitoring and measurement system has become significantly easier with project management software – but manual systems in more simple programmes are just as effective.
Whatever measurement system is chosen, it is vital to set quantifiable targets. Where external funding is provided in high risk operations, it is also sensible to consider random inspection in addition to standard and regular reviews. Whatever measurement system is chosen, there must also be an evaluation of the management information system and how it communicates – information alone being pointless unless it can be realistically acted upon in a timely fashion.
The advice is obvious: there is no excuse to creating and maintaining a measurement and monitoring system coupled with the creation of effective communication of this information prior to the start of implementation so that the programme can be followed from its earliest days.
Once the analyst is content with the strategic components of the proposed management of implementation, the details can be reviewed. The first problem is whether all the necessary tasks have been identified. For each different type of implementation programme there may be elements that, if not identified, may either destroy or seriously damage completion. For example, registration and licencing procedures are often crucial – and sometimes forgotten.
This is one of elements in which experience of the specific requirements is normally vital. A useful example is in planning an exhibition. Those who have been involved in exhibition planning will be aware of the necessary detail – those without expertise will think that it is relatively straightforward. It is not.
A task is not completed until it is completed right. How will the action plan measure success for each task? For the external advisor/ investor, such milestone evaluation may be crucial as they will require some objective assessment of whether the project is in reality (rather than the words of the enterprise) on track. Identifying such milestones will provide a key measure of project development – provided of course that they are adequately communicated (see above).
Each task has the need for resource – either time, money, equipment, or manpower. The action planning problem is whether the resource allocation is reasonable and rational, given the nature of the problem and the objectives. Given infinite time a single person can possibly build a tower block – but this will not meet most action plan objectives which demand a more limited timescale. So, do the resources allocated seem sensible when compared with other similar projects? Again, it is clear that prior experience of similar programmes is very important here – and when it is not available, should be acquired.
For all organisations, resources will be limited. This is will be particularly the case with start up companies and with team based action planning in small enterprises. With the often large variety of tasks that need to be completed within any action plan it is important for the outsider (and enterprise management) to have a clear view of priorities and whether particular tasks can be completed either earlier or later than is initially planned to complete the project on time, specification and budget. A clear view of the critical path will help in this assessment – what sequence of tasks must be completed to achieve the plan objectives?
The critical path can also become a key management control system and part of the communication plan (see above).
Risk identification and management
All action plans involve risk. What is the risk and how will it be managed? Risk management is a major topic in itself, and where substantial investments are concerned, specialist analysis and/or management is likely to improve the chances of success. At a more basic level, the following questions are relevant:
- What are the key risk components?
- What are there probability of occurring?
- What will be the impact on the action plan should they occur?
- Can the risk be reduced by appropriate action plan design?
- Can the risk be reduced by sharing risk with other stakeholders?
- Can the risk be mitigated by appropriate actions including contingency planning (see below)
- Does the project increase the enterprise overall risk management profile?
Stagegate as an important management tool in implementation
The use of stagegate techniques provide an additional control on resource intensive projects. Stagegate essentially demands that the project deliver at certain fixed measurement points (normally time related, but may be budgetary) agreed levels of performance on:
Time (the project is on time or not);
Budget (the project is on budget or not);
Specification (the agreed levels of specification at that stage in the project have been achieved).
When there is significant divergence from these intermediate targets, a review needs to be conducted to ensure that the implementation plan should continue.
All action plans, however well designed will have an element of residual risk. The inclusion of a contingency plan will do much to manage this remaining risk and improve the chances of success.
The devil is in the detail
Such an analysis of an action plan may appear to require too much detail and be too constricting on the enterprise. All experience would suggest that making the necessary investment in time to work through the various components before committing substantial resources to any project will significantly enhance the chances of success and the overall rate of return.
More information on the way in which Ibis can contribute to your business plan development is provided at Advantage Ibis
More information on the Ibis approach is also available on the FAQ page.