Page 162 - Finance for Non-Financial Managers

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Business Planning
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how that will enable the company to move closer to achieving
its fundamental purpose.
The operating plan, by contrast, is primarily intended to be a
short-term guidebook (usually one year) for the executive man-
agers and staff who have the responsibility for carrying out the
plan. It contains details they need to do their work—milestones,
action steps, detailed budgets and timetables, and so on. It
would make dull reading for the analyst who is studying the
company’s strategic direction, yet its contents are essential to
the manager who is charged with delivering the assigned sales
goal, upgrading the computer network to Windows XP, or find-
ing out how much money is budgeted to build the new trade
show booth or hire the new engineer.
Let’s look at the principal elements of a business plan, and
examine how they might be treated differently in a strategic
plan, as opposed to an operating plan.

Vision and Mission—The Starting Point

This is the grand purpose of the organization, the point from
which everything else should emerge. There are a thousand def-
initions for these terms—and at least that many opinions about
whether either, or both, or a “purpose statement” instead,
should be the foundation for a plan. Rather than add my opinion
to the pack, let me tell you what they bring to a plan. Then you
decide whether a plan has adequately included them.
Vision of the Future
Any organization starts with some sort of grand purpose.
Typically that grand purpose arises when the founder looks
around and sees a worthwhile need that is not being filled.
Abraham Lincoln had the vision of a great nation undivided by
slavery. Henry Ford had the vision of a world in which almost
any family could afford to own and drive an automobile. Bill
Gates had the vision of a computer in every home. In each
case, the vision was of the world as they thought it should be,
not as it was then. Their visions seemed beyond the imagination