Total Business Planning: A Step-by-Step Guide with Forms / Edition 3

by Edwin T. Burton

Overview

Total Business Planning: A Step-by-Step Guide integrates strategic, operational, and financial planning in this comprehensive resource. Now completely revised and expanded, this popular business guide answers key questions concerning the preparation and structure of a business plan. With special focus on creative thinking and vision process, it provides methodologies for successfully constructing feasibility studies for new products, building short-term operation plans for business units, and creating plans aimed at the capital markets. Covering the nine levels of the planning process, Total Business Planning addresses such essential topics as vision, philosophy and mission, corporate objectives, tactics and projections, and budgeting. Along with an exhaustive appendix and helpful definitions, you'll also find a disk with easy-to-use form templates to make the planning job easier.

Product Details

ISBN-13:	9780471316299
Publisher:	Wiley
Publication date:	04/13/1999
Edition description:	REV
Pages:	256
Product dimensions:	7.05(w) x 9.95(h) x 0.71(d)

About the Author

E. JAMES BURTON returned to teaching after more than 16 years of hands-on operation of businesses he started, managed, and sold. Formerly president and founder of Professional Growth Associates, Inc., he is now Professor of Accounting and Executive Director, Jones Chairs of Excellence at Middle Tennessee State University.

Read an Excerpt

Level 1

Vision

Now we begin to put the planning process into action. The Level 1 vision elements (who, what, when, where, and how long) from the introduction section are repeated. You, the planning facilitator, should complete the blank version of this form found in the appendix and on the forms disk. As the facilitator, you may also want to build a file of articles and/or books you find on the vision process. Share these with senior management on a regular basis as a means of helping them to continue their efforts to prepare a vision for the organization. At the risk of suggesting things which will obviously become dated, consider the following list of articles as examples of the types of things you might like to consider collecting and providing:

• Ted Gautschi, "Organizational Vision Forges the Missing Link," Design News, May 20, 1996, p. 138[1].
• James R. Lucas, "Anatomy of a Vision Statement," Management Review, February, 1998, p. 22[ 5].
• Ron A. Wolf and David T. Gering, "Making Strategy Work," Journal of Business Strategy, March-April, 1998, p. 11[4].
• John C. Camillus, Richard T. Sessions, and Ron Webb, "Visionary Action: Strategic Processes in Fast-Cycle Environments," Strategy & Leadership, January-February, 1998, p. 20[5].
• John Welton and Bruce Cook, "Institutional Vision: A Prerequisite for Fund Raising Success," Fund Raising Management, November, 1997, p. 28[3].

You may also want to create a file of other information that might be useful for the visioning process. Articles on technology, new products or processes, differentmarketing strategies, new markets trends, and so forth may be helpful in determining what the organization should be like in the future. No specific examples are offered here because the types of things in which you should be interested are determined by the type of organization you are. However, a quick review of Internet sources will reveal a plethora of articles in these areas for almost any type of organization. In fact, the real problem is not a lack of information but rather the problem of sorting out what may be relevant to you.

Level 1

Vision 0101. doc

Who: This is often the product of a single visionary--the owner, chief executive officer (CEO), or head of the organization. It is possible to "vision" by committee but it does not seem to work very often. Usually, the vision is that of one person, but it may be refined by a group as they consider it.

What: A picture of the future that can be clearly communicated to others in the organization so they, too, can know what future the organization is working towards.

When: Vision does not come on demand. It is a process--a never-ending process of reading, thinking, dreaming, studying, and observing. It is a process of questioning and then looking for answers to those questions. It should be going on constantly. As the vision becomes clear, then it should be articulated to others who can and will challenge and refine it.

Where: It may be a good idea for the senior management team to go away and consider ideas. But, because this is an ongoing process, it happens not so much in special circumstances but in the daily routine.

How Long: For some the vision never comes. They are so busy taking care of today they have no time to think about tomorrow. There is no time limit on vision. Take it as it comes. Work on it daily. Think about it constantly.

Exhibit 1.1 is an example of a partially completed Planning Process Assumptions form. Each participant at each level should get a copy of the blank form (provided in the appendix and on the forms disk). The form is used to document assumptions made throughout the process. These accumulated sheets are very useful in several ways--not only to ensure that all are making the same assumptions but also to help prepare contingency plans in the event assumptions are violated.

EXHIBIT 1.1
Planning Process Assumptions--Vision
Since the planning process deals with creating outcomes by future actions, it is essential and necessary to make assumptions about events and circumstances outside the planners' control. These assumptions are critical to the plan. Please complete this sheet for each key assumption you make.

Assumption	Probability of Assumption Being Violated	Impact if Assumption Violated
1. Company will not be taken over and will continue with essentially present management.	1. Low	1. Operating philosophies and policies will change.
2. Raw materials will remain available at about current level.	2. Low	2. Alternate inputs are available that will not change product from customer view.

Return a copy of this sheet to the plan facilitator who will provide a copy to the next level planners.

It is important to understand the process and the concept of visioning. Much has been written, but the truth is that visioning is more art than science. Thinking about what visioning is and what it means may be helpful.

Vision means seeing. When used in the context of an organizational vision, it requires the ability to see what others cannot or will not see or conceptualize. It looks beyond the typical operational horizon, beyond all the typical operational limitations. It integrates diverse variables such as time, technology, personnel, and more in new and perhaps unique ways.

Vision is about becoming. It may bear little resemblance to what is. While it is often a top-down process springing from the mind of a single visionary, such is not always the case. In fact, when the vision wells up from within, it is much easier for it to permeate the organization and to become a force majeure.

The time horizon of the vision depends upon the organization and the environment within which that organization functions. Some situations dictate that five years is a very long time because change occurs so rapidly. Computer software may be an example of this environment. In other cases, perhaps utilities, the time horizons are much longer. Vision looks out as far as is reasonable and synthesizes a picture of what can be. The visionary will begin to see this picture so clearly that she/he will be able to communicate it to others and to cause them to want to be a part of making that vision a reality.

It must be emphasized that vision is not a forecast of what the future holds unless someone communicates the vision and there are plans and actions to cause it to happen. It is not the natural result of allowing things to take their course. It is a chosen path and a selected destination. All roads considered by the organization should be judged by how well they lead to this destination.

Passion is critical. The vision needs a champion who desires the vision with single-minded intensity and will let nothing keep the vision from becoming reality. At least one person in the organization, preferably everyone in the organization, must be passionate about the vision. In order for the vision to be integrated into the organization, it must be translated from a mind picture into a word picture, articulated precisely so others can hear it and translate it back into the same mind picture held by the visionary.

Vision is work. It is a never-ending process of reading, thinking, dreaming, studying, and observing. The visionary must watch for trends, see nuances, and recognize obscure connections and relationships. The visionary must ask question after question. When something is seen through the distance of a spotting scope, it must be brought as quickly as possible under the scrutiny of a microscope.

Unfortunately, the development of a vision does not lend itself well to any set pattern. Like any creative process, it is subject to flights of fantasy and moments of inspiration that seem to come without warning, often from unknown sources. Although it is difficult to give you a process that is sure to work for you, it is possible to give some examples of vision statements from other organizations. These may be helpful in stimulating your thinking processes.

For example, in its early days, Microsoft focused its vision on putting a computer everywhere--on desks and in homes. In 1997, the vision ex-panded to cover the broader reach of the personal computer, especially internet capabilities. (www.microsoft.com/corpinfo/corpprof.htm).

The Dupps Company, Germantown, Ohio, historically a manufacturer of equipment for the rendering industry, expresses its vision as follows:

While maintaining the traditional values of our privately held company, The Dupps Company will be a world-class competitor in the design and manufacture of evaporation and liquid/solid separation systems and equipment with a significant share in each market segment selected. (www.dupps.com/mission.html)

In an industry touted to grow some sevenfold in 20 years, FedEx must be forward looking or face death by being left behind. In the 1997 Annual Report, Chairman Fred Smith expressed the company's "V3" strategy--Vision, Value, Virtual. The explanation of "V3" tells much about the kind of company Chairman Smith sees FedEx becoming in this 20-year window of extraordinary opportunity. (www.fedex.com/us/about/annualreports/fy1997/letter. html)

Northwest Airlines says that it wants "to build the world's most preferred airline with the best people; each committed to exceeding our customers' expectations every day." The president of Northwest, John Dasburg, has described this as a destination to which they are going--not so much one at which they have already arrived. (www.nwa.com/corpinfo/profi/vision. shtml)

Columbia/HCA, the healthcare giant troubled by government accusations and in a period of downsizing its hospital network during 1998, has said it is "building comprehensive networks of healthcare services in local markets, integrating various services to deliver patient care with maximum efficiency." (www.columbia.net/overview/indes.html)

Sometimes, the vision statement can be simple, direct, and one line. For example, Promus Hotel Corporation of Memphis, Tennessee, says it wants to be the "premier hotel company in the world." It intends to achieve this status by focusing on "high quality, consistent accommodations delivered as an outstanding value, 100% guaranteed service, and dynamic growth. . . ." (www.promus.com/cgi-bin/quot...\\ Default.htm&stock.htm"e.file)

Texas Instruments is a company constantly reshaping itself to the future. President and CEO Tom Engibous has a vision based on technology. "We see a future where all personal electronics are connected and speaking the same language--a digital language." The things that will aid Texas Instruments to realize its vision are value, growth, and improved financial stability. (www.ti.com/corp/docs/library/montgomery97.htm)

As you review these few examples, some things may become apparent. Visions of the future are leveraged off of the competencies of the present. Visions of the future take into consideration the political and business environment in which the business does and will operate. Visions of the future recognize the impact of technology on how the business should be in the future. Visions of the future include the people who must make the vision a reality. Visions of the future often (but not always--see Columbia/HCA) are focused on growth and the costs and benefits associated with that growth.

The Visioning Questions form that follows (Exhibit 1.2) will help you document answers and to track changes to some of these types of things. Answering these questions will not automatically produce a vision. However, answering these questions may help you to begin the process that will lead to a vision. One of the best ways to use these questions is to have several different people answer the questions independently, then to discuss the answers as a group.

You may want even more detailed information of visioning. If so, there are a number of books dedicated solely to this area. One you may find helpful is Visionary Leadership by Burt Nanus (Jossey-Bass, 1992).

Table of Contents

Vision.

Philosophy and Mission.

Strategic Plan.

Corporate Objectives.

Planning Unit Goals.

Tactics and Projections.

Budgeting.

Coordination.

Implementation and Follow-up.

Conclusion.

Appendix.

About the Disk.