“A vision without a plan is a daydream. A plan without a vision is a nightmare.” I do not recall where I saw this quote, but it got me thinking about the challenge faced by entrepreneurs. I serve as a mentor for eForAll, a terrific national organization that helps under-represented individuals start and grow businesses. Often, when I read prospective candidate’s business pitches, they fall into one of these two categories. They have a vision or a passion, but no plan for how to get going, or they just feel like they want to start a business, but do not have a real vision or business strategy.
The same challenge exists for many later-stage businesses. Even though the company managed to get off the ground and has products or services and clients, there still may not be a plan to truly turn the vision into a sustainable business. This is similar to the challenge presented in Geoffrey Moore’s classic “Crossing The Chasm.” Starting with a vision, it may be possible to find the early adopters who share a similar vision, but without a plan to scale and build on the vision, the business will find itself stuck in low gear, dreaming of greatness but unable to cross the chasm to a healthy business.
The alternative behavior of a plan without a vision is evident in business plans that are mostly spreadsheet exercises where the entrepreneur makes arithmetic assumptions about growth rates and revenues that show a terrific business, but they forget about the hard work of ensuring product / market fit. In grad school, a professor called this the ‘Shoe Analogy.’ The entrepreneur’s plan goes something like: “Every year, there are 24 billion pairs of shoes sold. If we can just get 1% of the left feet, we will be a huge success.” The problem is that nobody buys just the left shoe, and the math exercise is not supported by an actual vision for a viable business.
Connecting the vision with a plan is the key to laying a foundation for a sustainable business. Rigorously testing the viability of the vision by formulating a plan and testing it is a critical process. Years ago, I learned a method from a fellow CEO that has served me well in my own companies, and as an advisor and board member for other companies. The method is called a Strategy Staircase, and I have written about it in the past. For purposes of testing a vision and plan, it can be applied as a thought exercise to see if the vision and plan hang together. The elements of the staircase are:
An honest, no fluff statement about the current business: revenue, growth, profitability, funding, customers, team, etc. Make sure this is a purely factual description of where you are, with no aspirational optimism. This is the ‘Today’ picture.
A timeframe for the analysis. If your runway is twelve months, then see if you can formulate a viable plan for 12 months. If you have more or less time to execute your plan, adjust your test accordingly. A two or three year plan is usually a good timeframe to work with.
Create a statement of what success will look like. Be specific about how you want to transform the elements of your current situation during the timeframe of the plan. For example, if today you have a slow growth business that is burning capital, perhaps your six month goal is to increase your growth rate to 15% and move to breakeven. This is the ‘Tomorrow’ vision.
Write a headline that defines the general nature of what you will need to be doing in order to move from Today to Tomorrow. Example: Grow our sales skills and improve prospect targeting, or replace our outdated product and launch a new updated version. This is the ‘Headline’
Clearly state the prioritized steps you will have to take to climb from where you are ‘Today’ at the bottom of the Staircase to where you want to be ‘Tomorrow’ at the top of the staircase. Each step should be a simple statement of one activity that will result in a measurable outcome that will lead to the next step. Most Staircases have about 10 steps. Force yourself to put the steps in priority order as if you can only do one thing at a time. This is the ‘Plan.’
Build a pro-forma business model that realistically follows your Staircase. If your steps include increased investment in sales or marketing or engineering, build that into your financial model. Be realistic (or pessimistic) about the pace of your revenue growth and ability to generate new business or retain existing business. The model should start with your Today situation and lead to your Tomorrow vision in the timeframe of your Staircase.
By iterating on the Staircase plan and testing it against your business model, you will build a picture of how your vision can become your dream instead of your nightmare. Share the result with your board or business advisor, and ask them to be critical and constructive. Debate the order of the steps and the practicality of achieving each step. The objective is to avoid the daydream and the nightmare by creating a viable plan that will result in achieving your vision. Once you think you have it worked out, the hard work begins. You have to turn your thought exercise into practice in the real world. Hold yourself to your timeline as you execute the steps. Adjust as needed, and re-plot your Staircase and plan if you find the business is not performing as you expected. The key is that you will have a plan and a goal that ultimately result in your vision, so you are on your way to turning your dream into reality and avoiding it becoming a nightmare.