What Does it Mean to Plan as a Leader Effectively?

As a business leader, you are responsible for setting the direction of your business and without careful planning, you will be heading towards an unknown destination without a roadmap. Planning gives you direction and provides you with tools to achieve your goals, whether they be expansion or launching a new product.

Planning is a continuous process which is constantly in use to monitor, control, and guide the progress of the business. There is a right way to plan, and it begins by keeping the end goal in mind.

Back planning as a key

Back planning has an integral role to help you be an effective leader. When you back plan effectively, you think about all the details thoroughly so your goals and objectives are well defined. You are also clear about the strategies you need to use to achieve them.

Back planning is simply to start with the end in mind. To do that you must first have a strong understanding of where you are.

Sit down and assess where your business is right now in terms of its goals and objectives. Are you meeting the milestones you have set for your business? What is proving to be a hurdle? Are you happy where your business is? Are you clear about what your milestones are?

Once you know where your business stands, think about where you want to see it. What is your ultimate business goal? Do you want to reach a certain financial target? Do you want to remain local or become a global company?

These questions will help you determine the end, a specific goal you want your business to achieve. Back planning starts once you have your end goal because it allows you to focus on and prepare for the details. You then come up with ideas, goals, and strategies to use in the future.

A look at Werner Erhard’s work

For the last 40 years, Werner Erhard’s work has allowed people access to creating possibilities in their own lives. Erhard’s work has been an inspiration for, and in many respects, has influenced the foundations of BusinessLife Coaching

Take for example one of the key principles of his work: “Consider that all accomplishment is constituted by a series of resolved breakdowns.”

This is back planning — realizing that goals are reached by being broken down into objectives, and the objectives into strategies and tactics.

Every target is achieved incrementally in business. You plan the future of your company by looking towards the future, and not the past.

It is important to understand that your current business situation does not determine your company’s future. You cannot dwell on your past or present because it will not help you move forward.

The results you get at the end of the day are just results. Instead of using them as an excuse, your business can benefit by evaluating them and then adding what is needed or taking away what is unnecessary, giving you a direction for future planning.

Examples of back planning

The leader is responsible more than anyone to prepare for success in business and BusinessLife. The best preparations you can make are by creating a thorough back plan which has your goals, objectives, and tactics defined in detail.

Let’s take a look at a business acquisition as an example of both poor and strong back planning.

Example of poor back planning: Acquiring a business

Imagine that you, as a business owner, are looking to grow your company by acquiring another business.

The first step in creating a back plan is deciding the final goal: To sign the contract so the acquisition process can be completed. From there, you might fill out the plan with a few key milestones:

• Before signing the contract, having the business inspected
• Before the inspection, deciding on the best prospect for acquisition
• Which leads us to the first step: What are you looking for in an acquisition, and why have you set your sights on this particular goal?

This is an example of poor back planning because it is very sparse — not many details have been provided. There is minimal detail in any of the steps, and although each step is a milestone in achieving the final goal, there is little insight provided.

The purpose of creating a back plan is to help a business owner achieve a target or goal by providing details and a clear road map to success. The example above is less a road map than it is a short list of due diligences. Because it leaves a lot of gaps to be filled in, it is an example of poor back planning.

Example of good back planning: Acquiring a business

Now we will take a look at a good example of back planning using the same situation, the acquisition of an adjacent business.

• The final goal is to sign the contract and complete the acquisition.
• Before signing the contract, you must ensure that the offer you made to the business is accepted.

• Before passing along a final offer, your lawyers must review the contracts for the acquisition and make sure no details have been missed out.

• Before getting into the technicalities of the contract, an audit should be done. Make sure you have dealt with all the legalities at this stage and the lawyers have reviewed the documents of the new business.
• Before that, you must search for and getting quotes from different lawyers if you do not have someone already on your team with experience in mergers and acquisitions. Who is offering you the best option? Decide if she is the right person for this job.
• Before hiring a lawyer, you inspect the business you’re looking to acquire. Find out and discuss its financial reports, tax returns, and previous contracts.
• Before starting a conversation with a potential target, consider what the available options for acquisition are. Which businesses can you buy that will fulfil your company’s needs? Do you want to venture into a new market, or stick to what you know best?
• Before that, take a look at a variety of different businesses. Do you want to stay in the same business or want to explore other opportunities? Are you prepared to take on the challenges that will come with diversifying your portfolio?
• Before beginning that exploration, contact your company’s lawyers and executives to discuss acquiring a competitor or potential asset company.
• Before opening conversations with partners, look at your balance sheets, income, and cash flows statements. It will give you an idea about the health of your business so you know how much money you can spend on an acquisition.

• The first step to back planning for acquiring a new business is to look at your financial situation and current business environment, decide whether it will be fruitful to carry out an acquisition.

This is an example of a good plan, because it really dives into each step. By fleshing out the details to each component of every objective and tactic, you are able to more effectively visualize the end goal and more efficiently allocate time and resources to each step.

Conclusion

Back planning is a key way to plan as a business executive or owner. Planning is required for any organizational goal that has to be achieved. To become an effective leader, it is imperative to choose to be a strong planner, as well.

Visualize the end goal and work backwards towards it keeping in mind the milestones and you would have an effective back plan to take your business to new heights.