It all started when I decided I wanted to buy a small interactive shop and called a CFO friend for advice. He set up lunch with a private-equity buddy of his. I laid out my plan and asked what they thought. The private equity guy said before you spend a dime on lawyers, go talk to my friend Jeff. Jeff has started a handful of companies, bought companies, and run companies for venture groups. He also knows how to use Excel. It took an hour over lunch in Harvard Square for Jeff to convince me that my acquisition would be among the stupidest in advertising history. Before I could hope to pull off an acquisition, Jeff believed that I needed to make sure that I had the systems and management structure in place to capture the value of any investment. One conversation led to another and before I knew it we were drafting a business plan.
I'm not new to strategic plans. In fact, I work pretty hard with my senior team at charting our direction for the year and present the plan at a company meeting. After the meeting, we do an online survey, and for the last couple of years I've gotten the same response from the office: love the plan and I've got no idea how you intend to do it. Jeff is all about figuring out how to do it.
Now we're days away from rolling out the plan to the management team. Here's what I've learned:
- You can build a revenue model that will give you a pretty good idea of where you're going to end up. I've argued that we don't have that much visibility in to the future. Jeff argued we have as much visibility as anybody else.
- Most plans include too much and will sink under their own ambitions. You've got to figure out the essential accomplishments you want to achieve and then stop. Our plan is two pages long, not including budgets. And I'll be damn happy if we complete everything in it.
- This sounds obvious, but the management team has to own the plan and know exactly how they will benefit by its success. To this end, we ended up redesigning the company bonus plan. (If anyone from PJA is reading this, you stand to make more money.)
- Finally, and this is somewhat embarrassing, I learned the difference between a goal and an objective. A goal represents an aspiration. An objective, on the other hand, can be measured, and you know when you've accomplished it. Recently, I sat next to a guy on a flight from Boston to San Francisco who spent several hours rearranging "goals" and "objectives" in a Powerpoint presentation, and I started to think that he needed medication. I, on the other hand, solved half a dozen Sudoku puzzles and thought I was way ahead of the game.
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Phil Johnson is president of PJA Advertising & Marketing, Cambridge, Mass. (For more info, check out the bio section of Small Agency Diary.)