Better, or just older?

Last week I sat down with BIID members to talk business planning and strategy, this is what we discussed.  

Your business has a birthday every year, whether or not anyone brings a cake. The question worth asking on that day is not how old it is, but whether it is any better than it was twelve months ago.

Working practices evolve regardless. Every year you will absorb some new habits, drop a few old ones, take on the clients who happen to arrive and develop workarounds for the things that annoy you. You will end up with a business either way. The only real choice is whether it is a business you designed or one that simply accumulated around you, like the contents of a kitchen drawer.

The frustrations do not leave of their own accord. The project that always overruns, the pipeline that vanishes every spring, the clients who are lovely but never quite the right size: these persist until somebody decides, deliberately, to drive them out. That somebody is you, and I would argue you are better qualified for the job than almost anyone else in business.

You already know how to do this

Think about what you do for a client. You arrive at a house and survey it honestly: the awkward proportions, the north light, the hallway nobody uses. Then you imagine, in rich and specific detail, what it could become. Then you devise the programme that takes it from one state to the other, in the right order, with the right trades, within the budget.

Before, after, and the route between them. That is a business plan and a strategy, and you have been doing it professionally for years.

The plan is the concept for your business, and like any good concept it rests on two things. It needs an honest survey of the before: last year's fees, the number and size of your projects, the hours they actually took. And it needs a vivid picture of the after: the income you want, the hours you want to work, the kind of clients and projects you want to fill your days with, whether you are working alone or with a team. A concept without a survey is a mood board. A survey without a concept is a list of problems.

The strategy is the programme of works: the sequence of steps that hauls the business from where it stands to where you have decided it should be.

One more thing distinguishes this kind of plan from the traditional sort. Business plans were historically written to persuade a bank or an investor, so they faced outwards and were concerned almost entirely with performance. Yours faces inwards. It still cares about income, margins and pipeline, of course. But it also cares about what it is like to live inside the business: how many decisions land on you, how often you are firefighting, whether you ever get ahead, and whose company you keep during your working hours. That experience is not incidental. It is a direct result of how the business has been shaped, which means it can be reshaped.

Why most plans die in a drawer

Here is the usual fate of a business plan. Somebody spends a week on it, possibly with a cold towel wrapped around their head. It is thorough and sensible. It goes into a folder, and the folder goes into a drawer, and nobody looks at it again until the following January, when it is discovered with mild embarrassment and the whole exercise begins again. You lose heart, each time it feels a bit more futile. 

The plan was not wrong. It simply spoke the wrong language. Plans are written in years and ambitions; Tuesdays are conducted in phone calls and emails. Nobody can sit down on a Tuesday morning and "become proficient in CAD". The distance between the aspiration and the to-do list is too great, and so, very reasonably, the aspiration loses out to an urgent client issue. 

The answer is a chain of command. Your plan sits at headquarters, and its orders travel down through the ranks, with each level taking only its own share of the responsibility and passing smaller, more specific instructions to the level beneath. I call this the Cascade, and it has five levels:

• Annual (one day a year): set the big goal, figure out how it breaks into manageable chunks and assign a job to each quarter.
• Quarterly (half a day): take the quarter's job and make it more actionable by dividing it again, and giving a bit to each of the three months.
• Monthly (an hour): take the month's job and allocate it to the weeks.
• Weekly (a short session): give each task a place in the diary.
• Daily: do the thing.

Here is how a single goal travels all the way down.

The annual order: This year, I become proficient in CAD.

To Q1: Research the options and choose the right course for me. (Q2 will enrol, Q3 will complete the training, Q4 will put it to work.)

To Month 1 of Q1: Draw up a shortlist of courses. (M2 & M3 will look at the colleges and try at least one).

To the weeks of Month 1: Week 1, AI search candidate colleges as ranked by reviews. Week 2, nothing; it's a heavy installation week. Week 3, investigate candidate course 1 & 2. Week 4, investigate candidate course 3 & 4.

To Tuesday of Week 3: Spend 20 minutes researching Acme CAD College. 

Notice what has happened. Nobody at any level has had to carry the whole ambition. The person Googling on Tuesday morning does not need to wrestle with what CAD proficiency means for the future of the practice. They just need to read a website, look at Google reviews and Trustpilot, ask around, and make some notes.

There is good evidence that this is the level of specificity at which intentions actually turn into action. Research shows that specifying when, where and how you will act substantially increases the likelihood that you do it; it works best for small, clearly defined, concrete tasks and weaker for large, complex goals, which is rather the point. The Cascade exists to convert the large, complex goal into a series of discrete, concrete tasks.

The orders do not travel down unquestioned, either. Each quarterly session begins by looking up at the annual plan and asking whether it is still right. The chain of command is disciplined, but it is not obedient for its own sake.

Strategy is driving, but it can't see the road

So far, so tidy. But there is a flaw in a plan that only travels downwards: the strategist at the top is driving the car blindfolded. It is issuing perfectly sensible instructions based on what it believed in January, while out on the road the conditions have changed. Without reports coming back up, the strategy will eventually drift off the tarmac, into a ditch and away across a field, with everybody still diligently following orders.

A plan that only goes downwards is better than no plan at all. But the full benefit comes when the ground reports back up to headquarters, and the most useful moment for that report is when a project closes. At that point the strategy wants answers to four questions.

1. What did the project earn, against what we said it would earn? This tests your fee model.
2. How many hours did it take, against how many we projected? This tests your estimating, and therefore your pricing.
3. Where did the client come from? This tests your marketing.
4. Would we take this project again? This tests your judgement about the client, and everything that brought them to you.

A project close might look like this:

 On its own, that is one slightly overrun job. But suppose the boss, at the quarterly review, lays three of these side by side and finds the same thing each time: projects taking around 30% longer than estimated, and the best clients arriving through architects. Now the decisions more or less make themselves. Take on fewer projects. Raise the fee floor. Spend more time cultivating architects, and find that time by doing less on Instagram, which has been producing enquiries but not the right ones.

A humble timesheet, plus a client enquiry log, have just changed what the business charges and where it looks for work.

Two rules keep this feedback loop alive.

The strategy decides in advance what it wants to hear. When you set the annual goal, you also decide what you will measure to know whether it is working, and what early signs might start to twitch before the big results arrive. The worker does not go hunting for data; the boss tells them what to collect.

Every record is attached to something that already happens. You can't accurately guestimate hours; they have to be caught at the time. So the timesheet should be the one that feeds the invoice, because a timesheet that exists only out of curiosity will be abandoned by March. And "How did you hear about us?" should be a field on the enquiry form, asked every time without anybody needing to remember. The data you keep should be limited, but it must be critical, and it must be current.

Boss you, and worker you

This is my favourite part, and the one that has taken the most weight off my own shoulders.

I think of myself as two people. When I am in boss mode, I plan and strategise. I set the goals, decide what the worker needs to do, and tell her what information I need back. I am in boss mode at the annual planning day, at the quarterly half day, at the monthly hour, and a wee bit at my weekly board meeting (time spent with my ops manager, marketing manager, finance director... also me). Those are the sittings at which the business is examined and the decisions are made.

The rest of the time, I am the worker. And the worker's job is beautifully simple: do as she is told, and collect data.

This matters because so much of the exhaustion of running a small practice comes from never leaving the boss's chair. Every task arrives with a referendum attached. Should I really be sending this email? Would my time be better spent elsewhere? Is the whole strategy wrong? Oops, I have no work, better jump on to...er...Instagram, what on earth should I say? Worrying about the plan while trying to execute the plan is the business equivalent of designing the scheme while the plasterers are on site.

Research suggests that figuring stuff out when you should be acting stalls you, and acting without having a strategy sends you briskly in the wrong direction. Much of the evidence is laboratory-based and some of the effects are modest, so I would not overstate it, but the central idea is well supported and it certainly feels true. 

So when worker you sits down on Tuesday to Google a CAD college, the question of whether CAD was a sensible goal is not on the agenda. It has a proper forum, and that forum meets quarterly. If worker you has a complaint about management, they are welcome to raise it there, with evidence. In the meantime, there's some online research to do, and there is a considerable freedom in that.

A thing of beauty, not a chore

None of this needs to be elaborate the first time. Your first plan will be small and probably unresolved in places; that is fine. Like any project, it improves with attention. Return to it each quarter, feed it real numbers, adjust it where the ground tells you to, and the direction becomes clearer every year.

A business does not change course in a single heroic action. It shifts through many small actions all pushing in the same direction, consistently, over time. That is what the Cascade gives you: not a burst of effort in January, but a steady pressure applied every week to the same point.

You would never let a client's project proceed without a concept, a programme and site meetings. Your own practice deserves the same care. Embedded in the business, a plan is transformational. In a drawer, it is merely decoration.

So, on your business's next birthday: will it be better, or just older?