Lnet’s plan to have a successful year in 2015. Unlike the recovery phase of the last five years, 2015 has started with a rosy jobs report, a record breaking S&P 500, and an overall healthier U.S. economy. Even though the Fed is expected to announce a rate increase and some segments of the lending industry continue to face heavy regulatory scrutiny, it’s still a good time and a good year to be in the lending industry.
Peer to Peer and big tech companies have shone light into an industry that is not usually thought of as sexy. I’m sure this will bring better technology to the lending industry, along with heavier and newer competition. Now more than ever, a successful plan and strategy can launch your company ahead of the competition. When I think about planning, I think about the advice I’ve read over the years. I also think about how it all fits together with modern business.
Business Planning Advice Basics – Ideas You May Have Heard
Business planning, like any other type of planning, starts with two things: setting goals that are hard but reachable, and making those goals SMART. From there, we realize that the hard part isn’t the plan but the execution of the plan, which means we have to figure out if we have the right team, the right organization, and the right communication. It opens all kinds of operational questions. Besides making you look at the operational side of things, planning allows to take a step back and perform a SWOT analysis. Let’s dive in and look at the big picture in planning:
- Think Big. – We have seen this idea in many shapes and forms. Some other familiar ways of saying the same thing are: “Plan Big, Hairy, Audacious Goals” from Jim Collins’ book Built to Last. We’ve all also heard “Reach for the moon, even if you miss, you will land upon a star.” Or my favorite – “Expectations change everything” from Tina Seelig’s lecture at Stanford. There are also experiments backing this up, from The Stanford Prison Experiment to the Blue Eyed vs Green Eyed experiment. They all point to the same thing – you and your company need to have high expectations, hard to reach goals to have the drive and mindset that comes with that.
- Execution. – This one is a little more difficult to explain because we have gotten varied and ample advice on this topic. But it remains clear that the difficult part about planning isn’t the plan itself but how well you and your company are able to carry out said plan. Some of the advice will undoubtedly include, “You can’t track what you can’t measure,” and “Break down big goals into smaller more achievable goals.” The advice is solid, but it’s easier said than done. The truth is, successfully executing a plan often involves taking a step back and analyzing your organizational structure, your employees, and your overall business. This is where good management shines. In that respect, the more you know about management and strategy, the better off you’ll be. I recommend reading some of the classics like Peter Druker’s books and Andrew Grove’s High Output Management. Then move onto strategy books like Crossing the Chasm and The Innovator’s Solution. Plus, you can always watch lectures of leaders in management and tech fields via Stanford’s Technology Ventures Program website.
- Align. – Your goals for 2015 should align with your five year plan, and that, should align with the overall mission and purpose of the company. In a sense, that may mean going back to the drawing board if your mission statement is dull and boring, or even worse, if it’s just something that your customers see but your company doesn’t actually follow. If you happen to have the self-awareness to realize this is the case, I highly recommend reading Rework by Jason Fried and Heinemeier Hansson (37 Signals). Where bigger companies run into trouble is the miss-alignment of multiple departments. That is, departments are isolated from each other and create their own goals, often without taking other department’s goals into account. This often a sign of deeper organizational problems.
The biggest advantage we have for planning for business growth in 2015 is that we can leverage our access to information like never before. Everything from research studies to learning how globally successful companies like Google run is easily accessible. Let’s leverage it!
Up Next: I’ll cover three very important ideas in a future blog post: the concept of making small changes vs long-term planning; setting up feedback systems; and the big change in organizational structure that all the new companies are doing because it has proven successful.
