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Why Business Plans Are a Business Disease

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Day 19 of 21 days with Chuck’s new book, Why Employees Are ALWAYS a Bad Idea

Not a single Fortune 500 was started with a business plan; not one. They understood that the second worst thing someone starting a business can do is create a business plan, and the worst thing they can do is follow it.

Pre-Planning Is a Disease
Exhaustive pre-planning is a disease of the Industrial Age that became popular as companies grew to giant proportions and as educators began imposing the cognitive world view on an otherwise intuitive business world.

Pre-Planning is a New Thing
Pre-planning wasn’t a hallmark of business before the Factory System of the early 1900s. But when you’re propping up a giant factory or trying to take over an entire industry, it lends itself to a lot of pre-planning.

Business plans really only became popular in the latter days of the Industrial Age (1950 on), and the rest of us have caught the disease. It has become an obsession in business schools and has only picked up steam as the Industrial Age fades behind us. This obsession is a natural (but unhelpful) outcome of an Industrial-based education system that relies more heavily on cognitive and didactic lecturing than on real-world learning.

Pre-Planning Is Unsupported By The Facts
In 2011 a website posted an article about Fortune 500 businesses that had started in a garage or other interesting places. They listed the top five, then gave the seven lessons you should learn from these startups. Number one was “Develop a business plan”. This was a strange conclusion, since there was nothing in the history of these startups that would lead anyone to conclude a business plan was a good idea. It was a giant, illogical and biased leap, and completely ignored the history of these companies. But the obsession with pre-planning that we inherited from the Industrial Age is so ingrained that we see it even where it doesn’t exist.

Pre-Planning Favors Lawyers, Not Business Founders
The roots of this obsession go back to the late 1800s. Judge Lord Esher, an Englishman steeped in the Industrial Age, expressed the need for pre-planning in every facet of life. His teaching has evolved since into what is called the Precautionary Principle, which generally states that if you can think of something that might go wrong, don’t do anything until you can either prove it won’t go wrong, or you have a contingency in place to cover for that possibility. And if you do something without having covered all possible contingencies, according to Judge Esher, you’re liable.

Lawyers, who are largely Industrialists, love the Precautionary Principle. It cost McDonald’s millions of dollars because someone spilled coffee on herself that already had a warning label on it. But the lawyers argued the warning wasn’t big enough or prominent enough. The Precautionary Principle says they should have never served hot coffee without knowing that some judge would find their warning too small, or that someone would try open the cup one-handed in between their legs while driving.

The amazing advances of the Industrial Age have allowed us to focus on levels of safety that would never have been imagined for thousands of years. But the more cleaned up our lives are, the more the we are obsessed with making sure we’re not doing anything that might go wrong.

Pre-Planning Kills Creativity
That all sounds pretty reasonable, except it is sucking the life out of our willingness and ability to create, innovate and take the risks necessary to build great things. The cleaned up world we inherited from the 19th and 20th century Industrialists have nearly sterilized the creativity right out of us. We are becoming so risk-averse that it is a national epidemic. The education system, the government and big business all are teaching us to live by the Precautionary Principle; don’t move until you have it all figured out.

Great Founders Do Very Little Pre-Planning
Great businesses don’t start that way, regardless of how much professors and the education system extol the virtues of pre-planning and the sacred cow called “The Business Plan”. But Bill Hewlett, one of those guys who started in a garage, lived in the real world:

“When I talk to business schools occasionally, the professor of management is devastated when I say we didn’t have any plans when we started. The idea of having a business came before our invention of the audio oscillator. We were just opportunistic. We did anything to bring in a nickel. We made a bowling alley foul-line indicator, a clock drive for a telescope, a thing to make a urinal flush automatically, and a shock machine to make people lose weight. Here we were, with about $500 in capital, trying whatever someone thought we might be able to do. So we got into this thing not by design but because it worked out that way.”

That’s how real businesses start, including virtually every business you can think of today that has been highly successful – they made it up as they went along, and planning was something they did as they moved, not before they moved. While speaking to thousands around the world, I find that somewhere between 3-6% of business owners who did not need a bank loan to start, created a business plan anyway.

Pre-Planning Doesn’t Work
Only 3-6% are obedient to what they are told to do by their professors. But I have yet to find a single business plan at any level that worked out the way the plan said it would three to five years later.

Move, Then Plan.
I’m not against planning – we should be doing it at every step along the way as we are moving. I’m not even against a little bit of pre-planning. But massive pre-planning has a near 0% effectiveness at doing anything but killing innovation.

Massive pre-planning like you see in three to five year business plans is a business disease that has its roots in the Factory System and in the cognitive-based education system that grew up to serve that system. Successful companies do it like the early years at HP. They come up with a very simple idea, get moving, then evaluate and plan as they go. They don’t stop to plan, because successful companies understand that planning never creates movement, but movement can create a good plan. Every Fortune 500 is a testimonial to this. Stop planning. Get moving.

Massive pre-planning is a business disease. The Industrial Age was wrong. Implement now. Perfect as you go. If you do, you have a much higher chance of success than if you plan it all out before you get started.

This is a summary of a chapter from Chuck’s new book, “Why Employees Are ALWAYS a Bad Idea (And Other Business Diseases of the Industrial Age)”. Click here to pre-order this new ground breaking book at a discount on IndieGoGo.com until July 28.

The 2nd Most Important Business Word You’ve Never Heard

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Wouldn’t it be great if…?

All too often I hear people say, “I got it”, when everything about their actions says differently. The process of truly getting it is much deeper.

Today, education means getting something into your head. Learning, in it’s traditional form, means doing and being. Education is what a PHD gets. Learning is what an apprentice does.

Notice the difference – you “get” or obtain the first one, you “do” or become the other one. One fills your head, the other one fills your heart, your hands, your life and your wallet. Learning takes four steps, but education is set up to take us through only two of them.

Step One – Hear
William Glasser says 10-20% of what hits our hearing actually gets to our head, and almost none of that gets any farther to actually change something. Hearing is the worst way to learn anything, but is the most common form of education. For college students, itting through canned lectures is what makes Thursday night drinking attractive.

Step Two -Head
Cognition rarely becomes conviction. A very small percentage of what gets into our head actually makes it to our heart as information that we believe can actually make a difference. Most of college is set up to get things stuffed into our heads, and almost never are we challenged by the orators/professors to build a conviction around the information and go do something with it.

Step Three – Heart
A small percentage of information that goes into our head actually stirs our emotion and creates the desire or conviction that we should do something about it. Who challenges us to take the information and use it to be transformed? This is the kind of thing that happens in life, but almost never in education.

Step Four – Hands
While information is rummaging around in our heart, we’re all excited about applying it to our business or our life. But then we get back to email, the phone and the ongoing Tyranny of the Urgent, and the “feeling” goes away. Nothing has changed. Only when we hear something and the information goes from our head, through hearts and out our hands, will it ever make a difference in our lives. Which bring me to velleity.

The Second Most Important Business Word You’ve Never Heard
Velleity is the 2nd Most Important Business Word You’ve Never Heard. (See the first here – http://chuckb.me/x2) Velleity means, “The desire, with no intention whatsoever of doing anything.” Velleity is at the root of the common wishing and hoping phrase, “Wouldn’t it be great if…?” Velleity is something getting all the way from our ears through our head into our heart, but never coming out our hands. We get excited, but never doing anything about it except wish…”Wouldn’t it be great…?”

Doing vs. Knowing
The Greeks (and our education system) were both wrong. We do not think our way to a new way of acting. We ACT our way to a new way of thinking. Want to change something in your life? DO something different. Otherwise it’s just a bunch of velleity.

From our ears, to our head, through our heart and out our hands. Step Four is what creates success. Before that it’s just wishful thinking.

If You Can Plan a Vacation, You Can Plan a Business

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The Random Hope Strategy Doesn’t Work

What are the first three things you have to decide to plan vacation? They are the same three questions you should have asked when you started your business. You’re where you are because you didn’t.

  1. – “Where are we?” If you don’t know that, you can’t begin to plan your vacation. Where you are right now determines everything about how you get where you want to go. Almost no business owner has a “sane assessment” of where they truly are – their leadership abilities, their staff’s capabilities, their finances, their true target market, why their product or service is actually selling. We’re too busy surviving to ask those hard questions. Yet without knowing where you are, you’ll never get where you want to end up.
  1. – “Where do we want to end up?” If you know you’re in Cleveland, then you can ask where you want to go. If you say, “We will vacation at the beach in Florida”, you can begin to picture what it will take to get there and what you need to take with you.
  1. – “When do we want to be there?” Only after you answer this question can you know whether you have time to drive, or are taking a plane.

Once all three questions are answered, you can finally know how to pack.

What if you didn’t answer any of the three? What would you pack? When would you leave? And where would you go? Nobody would plan a vacation without answering these three questions first. Yet just about every business owner goes into business without answer any of them. They just starting “packing” their business with “stuff”, pull out of the driveway without even knowing where they are, and then drive their business around aimlessly because they’ve got no clue where it is supposed to lead them, or when it should arrive there.

The Random Hope Strategy
This is the Random Hope Strategy of business, and is the most common strategy business owners follow. But there is hope. You can ask these three questions any time, and in fact, you should re-ask them all the time.

Get a sane assessment of where you are, figure out where you want your business to take you (how much time and money should my business provide for me?), and by when. If you take the time to answer these three questions, and re-ask them regularly, you’ve got a great shot at success. If you don’t, expect the same result you would get by not asking them to plan a vacation.

Clarity. Hope. And Risk.
Stop everything you are doing, and get Clarity on these three questions now. Clarity brings Hope, and Hope allows us to take the right Risks.

Clarity. Hope. Risk. The answers are worth the questions.

Why Our Favorite Questions Keep Us On The Treadmill

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The Four Short-term Q’s

There are six basic questions we ask in business, but we only love the first four. We ask those four all the time. We’re consumed with them:

What – What do we sell?
Who – Who do we sell it to? (or for English majors – to whom do we sell it?)
How – How do we market it?
Where – Where do we sell it?
…or other versions of the four.

We use those four questions to create, innovate, clarify, repeat the same activity every day, stall and do nothing, pay the mortgage, and in general, to run our business.

The Four Treadmill Questions
But there is something inherently wrong with these four questions – they will never get us off the treadmill. Why? Because they are most often used to help us make money right now, and anything that focuses us on making money NOW is likely to keep us on the treadmill and make it harder to build a business down the road that makes money when we’re not around. These four questions help us a lot in the short-term, but very little or not at all in the long-term.

Why, “Why”? And When, “When”?
There are two other questions that we don’t like so much, but are a lot more helpful to growing a business in the long term:

When – The Second Least Asked, Second Most Important Question in Business
When should be asked every time you asked the first four – “When” will you… →figure out “what” to sell, “who” you sell it to, “how” you will market it, “where” you will sell it?, etc. We don’t like “when” because it holds us accountable, creates metrics that demonstrate clearly how we’re doing, and makes us work when we feel like goofing off (“sorry, got a deadline, need to keep going”).

Why – The Least Asked, Most Important Question in Business
We don’t like why at all. We don’t know how to ask it, it’s too fuzzy, it takes a lot of energy to answer, but most importantly, it doesn’t seem to make us much money right NOW. But “why” is the question that is most likely to build a business LATER that makes money when we’re not around. And the best way to build a business LATER is to ask “Why” NOW with every one of the other five questions, including “When”. (When will I do it? Why then?)

Three Whys to Every Other Question
Want to get off the treadmill? Any time you ask what, who, how, where and even when, ask why. The best habit would be to ask at least two to three “whys” to every other question. (What do I sell? Why do I sell it? Why not sell x instead?)

If you only ask the first four questions, you are likely to only make enough money to pay your mortgage. If you ask the last two, “when” and “why”, every time you ask the others, you are likely to build a business a real that makes money when you’re not around.

Get off the treadmill. Ask when and why all the time.

The Long Pole of Success

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Truth & Consequences.

A few years ago I spent a day finishing my first book, because I wanted to go to New Zealand 21 months later. If I didn’t do it that day, the trip was in jeopardy. Why? Because the Long Pole of Success is very predictable.

Imagine a mile long pole you’re holding against your stomach, and someone else is holding the other end against their stomach, and the goal is to shake hands without them having to move.

What happens if you take one step toward them? If you both keep the pole against your stomachs, a mile away they will have to take a step back. You’ll never shake hands that way. If the game is to keep the pole directly in front of you, the only way to get there is to start cutting off lengths of the pole. Cut off enough and you eventually end up where they are without them having to move.

I’ll just do it tomorrow
The Long Pole of Success illustrates why today is so important to getting to your objective months or years from now. Too often, “the future” looks far enough off that we feel we can ignore it for now and just pay attention to it later.

To finish my book I needed one solid eight hour day. On Tuesday, June 2 a few years ago, I looked at my 2-Page Strategic Plan and saw that I was supposed to be done with the chapter by May 31. The next day, Wednesday, June 3, was supposed to be a gorgeous 80 degree day and I had no appointments. Memorial Day weekend’s weather blew chunks so I was going to make up for it with golf and a bike ride on Wednesday. But now I had a choice to make – finish the book or enjoy the day.

My Business Maturity Date, with a 3 1/2 week celebration trip to New Zealand, was 21 months off. The book was one of a number of strategic things I needed to accomplish to make it to my BMD, which included taking Fridays and the last week of every month off after I hit that date.

I looked at my schedule and realized that it would be at least six weeks before I had another full day to finish the chapter. Doing it in 1-2 hour pieces just didn’t work for me – I needed to be able to focus and get it all knocked out at once or it likely wouldn’t flow well.

Cutting off a chunk of the pole
I had a Long Pole of Success decision to make. Since finishing the book was one of many strategic keys to hitting my BMD, putting off the completion of this chapter for six weeks would push back the publishing date of the book by six weeks, and potentially push back my BMD 21 months later, by that same six weeks.

To keep the BMD from moving, I had to cut off a length of the Long Pole on Wednesday and get the book done. I finished the book and the other strategic things we needed to do in order to build a business that would run while we’re on vacation (hiring people, putting processes in place, etc.). 21 months later we left for New Zealand to celebrate our BMD, on the exact day we hat targeted almost four years earlier.

Today Matters
When things seem a long way off, we don’t see much issue with putting off doing something that might just impact that seemingly far off goal. But the fact is that every time we turn today into tomorrow without completing the strategic things that will build our business, we automatically push back success by one day.

And it’s really hard to make it up later. With the pole tucked into your stomach, you can’t reach 50 yards in front of you and cut off a big chunk all at once a few months from now. The only way to do it without delaying success down the road, is to cut off small pieces regularly every week.

Success is quite predictable
The Long Pole of Success is unforgiving. Either regularly cut it off in small pieces or expect to push off success by each day that you don’t do the small and simple things that will eventually get you there. But success is actually quite predictable, if you’re doing the right thing. Chipping away at the Long Pole will very predictably get you to your goal.

Next year, will you end up where you are?
Are you making decisions based on where you are, or where you want to be? Think about the Long Pole of Success the next time you say, “I’ve got a whole year. I can do that strategic thing tomorrow.”

A Strategy is Not an Objective

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Know the Difference – Grow Your Business

There is a lot of Business Buzzword Bingo out there around these two words, but they are too important to your success to get them confused.

Strategies answer “How”
Specifically two “how” questions; “How do we make money?” and “How do we lead?” Your strategies cover how you think you’ll make money over the next one to three years.

Direct Revenue – Each way you make money should be described as a separate Direct Revenue: strategy, as long as you market and invoice for it differently. If you market furniture differently than floors or to a different audience, list these as separate Strategies for how you make money. If you invoice differently for restoration then for new construction, or to a different audience, they are separate Strategies. Sofas and chairs with different prices but that are marketed to the same audience are one Direct Revenue stream – furniture.

We have multiple Direct Revenue streams – 3to5 Clubs for business owners worldwide, books, workshops, keynotes, one2one consulting and online apps. Since your Strategies should list how you will make money for the next one to three years, we also list some things we aren’t doing yet but plan to add to our quiver over the next three years. Some businesses will have just one or two Strategies – like 1) plumbing repair and 2) new construction plumbing. Or even just one – mortgages.

Indirect Revenue – A second type of Strategy. For small and local businesses, we should largely replace the word Marketing, with the phrase Indirect Revenue. Big business spends a lot of marketing money on things like “brand recognition”. For most of us, we need to think of marketing more as Indirect Revenue. If you can’t track revenue clearly back to your marketing, think twice about doing it. You can’t afford brand recognition; your marketing should cause people to buy stuff.

How We Lead – The last kind of Strategy you need to articulate – a simple 1-2 sentences or a short list of words how you intend to lead your business. It’s very important to have a simple leadership Strategy that guides the way you make decisions.

All of this should take no more than two-thirds of a page. If you get wordy, you’ll never apply this. Complexity breeds confusion.

Objectives answer “Who”, “What” and “When”
Objectives are radically different than Strategies. Once you know how you make money and how you lead, your Objectives will put rubber on the road. Strategies are not measurable and don’t assign responsibility or concrete timelines. But Objectives should ALWAYS be measurable, assign responsibility and define exactly when they should be accomplished. Your Strategy says How you make money; your Objectives make it real.

Take each of your Strategies and attach Objectives for who owns them, what exact amounts or numbers will define success, and when you will have them done. A Strategy would say, “we make furniture”, but the corresponding Objective would be “We made 2,000 chairs in 2012 and will increase that by 50% in 2013, to 3,000 chairs. John is responsible for the marketing, Fred for the production, Sally for the etc., and we intend first to increase by 250 extra chairs produced by March 30, 2013.”

If you can’t measure it, know who owns it, and say when it will be done, it’s not an Objective. If you can, and you run your business with the intent of completing each Objective attached to each Strategy, you’re likely to be successful. Make sure you have at least one annual Objective to get you off the treadmill – “I worked xx hours a week last year, and intend to work xx hours (less) this year. I’ll be 20% of the way there in the first three months.”

A Little Bit Every Week
If I could just get business owners to set aside a couple hours a week to push their intentional Objectives forward, instead of following the Random Hope “we gotta make some money this week” plan, we would have a lot more successful businesses out there.

We don’t know HOW to get where we’re going.

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Neither do you.

A few years ago the Fortune 500 CEOs were all surveyed and ask this question:

“What is your greatest fear?”

The #1 answer – “I’m afraid I will be found out to not know what I’m doing.”

I’ve started seven businesses. None of them have crashed and burned (yet), but I got out of a few because they were bad ideas that weren’t going anywhere, and in some cases barely breaking even. A couple made decent money and grew well, and we sold one to the largest company in that particular industry. Right now we have two businesses growing internationally, one of them on four continents that has the potential of changing the game for small and local business owners worldwide. It grew 392% in the last four years.

But…
So it’s nice to be able to claim a decent track record: to date – so far. And yet I have to be honest and say that when it comes to getting where we want to end up, I have no idea what I’m doing. But I’m pretty comfortable with that, because I’m just as sure you don’t, either.

Utter Clarity by Groping Our Way to the Light
I do have a pretty sane assessment of where we are (most business owners don’t), and I know with Utter Clarity where we want to end up, but I have no grand plan to get from where we are to where we want to end up a few years from now. The journey is not mapped out and the path ahead is full of Intuitive Guesses yet to be made. It’s not going to be easy, and there is no such thing as going on auto-pilot and watching this business fly itself.

Just like the Fortune 500 CEOs, I’m making this up as I go along. But since I don’t have nervous investors, unlike them, I don’t have to pretend I know what I’m doing. I can say, “I don’t know” out loud.

It’s okay to not know how we’re going to get all the way from where we are to where we want to be. In the real world, business owners don’t become successful by a grand vision, a genius scheme, a fail-safe product, or a five-year business plan (also known as voodoo & fortune telling). As Bill Hewlett of HP said, they had no business plan in the early days when they got moving, they were just being opportunistic and doing whatever they could to grope their way to the light.

As We Go, Not Before – The Intuitive Guess
We will grow this business not by having it figured out, but by figuring it out as we go. We will not get to Utter Clarity by digging a canal, lining it with concrete and floating to our reward, but by a thousand changes in a thousand directions, relentlessly doing whatever we have to, adapting however we must in order to get to our ocean.

All we get to know along the way is where we are, where we want to end up (Utter Clarity), and an Intuitive Guess at what we should do next to get there. And we’ll be “wrong” a lot (we already have been)– that’s how we’ll find out what we should really be doing. We’ll get our maps when we’re done, just like any explorer.

You’re going to do it the same way. Welcome to building a business. Stop trying to figure out HOW to get all the way from where you are to where you want to be. Know exactly where you are, and get Utter Clarity about where you intend to end up, then make one short-range decision that you think might help you get to the end game. Take the feedback the world will give you from making that decision, and do it all over again.

A Thousand Little Hows, Not One Big How
Don’t waste time trying to figure out how you’ll get all the way from where you are to where you want to be – as if there is one big “how” that would answer that. Get Utter Clarity about where you want to go, then be comfortable asking a thousand little “hows” along the way to get there. You don’t have to know what you’re doing. You just have to know where you’re going. That’s enough. Anything more would spoil the adventure anyway.

Three magic words: “I don’t know”.
Use them often. They will guide you to the next little “how”, and all the way to where you want to be.

How: the worst, most asked planning question

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How now, never later.

It’s a terrible long-range planning question, but we love to ask “HOW will we get from where we are to our three year objective?” Asking HOW ensures nothing remarkable will happen and is much more likely to lead you to disaster.

Business planning gurus and academics love to teach us to answer all the outstanding questions before we get moving. And “how” we get from where we are to where we want to be is stressed above all else.

Life Happens
The problem is life. It keeps getting in the way of our best plans, and no matter how well we plan how to get where we want to go, as soon as we start moving, the world and life starts messing with our plan. It simply never works out anything like we planned, and the farther out we are planning, the less likely it is to work out.

A Harvard researcher found that 97% of all businesses leave their prime objective in order to be objective. The world’s greatest past and present businesses (Apple, Google, Facebook, HP, 37signals, etc.) all started out to do something other than what they ended up doing. And none of them did much pre-planning, if any.

Even among those few that wasted time pre-planning, they all took a left turn fairly early on to make money. Ben and Jerry put together a nice plan to make bagels, then they went out to buy a bagel machine and found they were expensive. The bagel machine salesman told them ice cream machines were less expensive, so we have Ben & Jerry’s ice cream instead of bagels.

Strategic vs. Tactical
“How” is not a strategic question. It shouldn’t be asked in long ranging planning. That doesn’t make it irrelevant. It is a great short-term, tactical question. Once you figure out where you want to be three years from now, ask “How will I get from where I am to the next step?” Use “how” to answer one step at at time on the way to your long-range objective.

Use “how” only in the short term
Webvan.com pre-planned how to get all the way from non-existent to being a $2billion company, and never wavered from their great plan. They went bankrupt a few years later, taking all $2billion in investor’s money with them. Like Webvan, answering the long-range “how” is much more likely to make us think we’ve got it all figured out, and will keep us from responding to the cues from the real world that always lead us to success. Remarkable things come from answering short-term “how”. Disaster is more likely when answering long-term “how”.

Never use “how” for long-range planning. Use “why”, “where” and “when” for the long-range stuff. Once you know exactly where you want to end up and when, then ask “How do get from where I am to the next step?” Come up with a plan to get through the next few weeks, then ask short-term “how” again. And do it a thousand times on the way to your objective.

A Thousand Short-term “hows”
Life and business are to fluid to ask long-term “how”. Keep “how” for the short term. You’re much less likely to run into problems if you ask a thousand short-term “hows” than if you ask a thousand long-term “hows”.

How now, never later.

Two things a business owner should never do.

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The 2nd is worse than the 1st.

One of the worst things you can ever do is write a business plan. But easily the worst thing you could do is follow it. It’s a great way to go out of business. It’s the 97% rule.

97% of all businesses leave their prime objective in order to find the thing that eventually makes them money. Good businesses almost always start with a bad plan.

You just can’t make this stuff up.

Harmonica Tuners Gave us Silicon Valley
In the late 1930’s two guys started a company for $538 and were messing around in a garage. They made an automated bowling lane violator, a harmonica tuner, an automated toilet bowl flusher and a few other stupid products. Somebody came along with something called an oscillator and asked them to build it. They didn’t think it was a very good idea, but that bad idea became the first thing they made money at – HP was born and became the foundation of silicon valley.

Model Rockets Gave us the First Personal Computer
In the very early 70’s a couple guys were messing around with a simple automated launching system for model rockets. They put the kit in a magazine and thought they would sell a few dozen. They sold thousands. They used that experience to focus more on technology than on model rockets. In 1975 they put another kit in a magazine for something called the Altair 8800, and thought they would sell a few dozen. It was the first personal computer and it sold thousands. They ended up building the kits and selling them as finished computers. Five years later this stuff became the basis for Microsoft’s Altair BASIC language.

HP Gave us Apple
Around the same time some 12 year old kid called HP and demanded to talk directly with Bill Hewlett because he wanted to buy parts (for his Altair?). Bill took the call, was really impressed and a few years later gave the kid an internship. Later in his life that kid, Steve Jobs, who also met Steve Wozniak at HP, said, “Without HP, there would be no Apple.”

Xerox’s Business Plan Gave Apple the GUI
In 1979 Jobs visited Xerox and saw something called a graphical user interface – GUI. Xerox invented it but couldn’t find it on their business plan, so they sold it to Jobs for $50,000. Bill Gates visited Apple later and poached the idea.

All of this, from the 1930s to the 1980s involving a few dozen people from all walks of life in many different places, came together to give us the personal computer. It wasn’t on a business plan, and the only guys with a business plan – Xerox – ignored it because it wasn’t on their business plan.

Bagels or Ice Cream?
Ben and Jerry make ice cream. What few people know is that the ONLY reason they make ice cream is that a bagel machine was too expensive. They were all set to go into the bagel business but hadn’t bothered to price out the machine. When they did, they found out an ice cream machine would be cheaper, so they did that instead. Wasn’t on the business plan.

Panty Lines or Millions of Dollars?
Sara Blakely looked in the mirror just a few years ago and saw panty lines under her slacks. She couldn’t find underwear that didn’t show, so she started Spanx, which is now a huge international clothing line success. Not a business plan – a mirror.

Webvan Followed Their Plan
In the late 1990’s Webvan decided people would buy groceries on the internet and have them delivered by van. They put together one of the most elaborate and detailed business plans ever concocted, raised $2billion, hired the best talent in the technology and distribution businesses, and followed their business plan right off the end of the earth. They took $2billion of investor money with them – a lot of people were really impressed with their business plan.

Let it Collect Dust!
97% of businesses leave their prime objective to become profitable. Webvan stuck to theirs, none of the others above had one, or if they did, they left it behind as the world interacted with their “plan”. If you can’t help yourself and just have to do a business plan, at least have the common sense to put it on the shelf and ignore it like most people.

You won’t find success in a business plan or in an MBA program. You’ll find it in the trenches by being willing to adapt and execute exceptionally on what may seem ordinary or throw-away ideas.

Do Something.
Ask the successful people. It’s never how good your plan is that matters. It’s how committed you are to the bad plan you’ve got.

Speed of execution. Stop planning. Get moving.

People who ask HOW work for people who ask WHY

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Ask WHY a lot more than HOW.

Here are six questions, in the order you should ask them, that will help you start, grow and build your business. The most important ones are the ones you ask least often.

90% of the answer is asking the right question. Are you asking the right questions? In the right order?

Successful business owners ask Who, What, Where, When, Why and How, much differently than reporters use them. TIMING (asking at the right stages) is very important, and the FOCUS of the question is, too.

Here’s the order in which you should ask them as you start, grow and build your business:

WHY – the most important, least asked question (in both the long and short term). Why are you doing this? What is the end game? If you don’t know why you are in business (it’s not the money, it’s never the money), or why you are buying that copier (“it’s shiny” is the wrong answer) you are done from the start. Everything starts and ends with WHY. Ask it EVERY TIME you ask one of the other questions if you want to be successful.

WHAT – the favorite question of the “craftsperson” – the easiest question to get lost in. We’re taught to ask this question first – “What am I selling?”. If you answer WHY first, you’re much more likely to come up with the right WHAT to sell. Know WHY, then ask WHAT.

WHO – Once you know WHY you are in business, and WHAT you are selling,
a) WHO is your target market (hint: it’s not everyone who can fog a mirror)?
b) WHO will work with you? (they don’t have to all be employees).
c) WHO will you buy supplies from?
The best answer to all of these is whoever will provide the lowest maintenance, highest profit culture for you. Ask WHO long before you actually need any of these people – it’s a culture question and if you don’t have a great grasp on WHO before you need them, you’ll hire for skills. Never hire for skills, only for culture.

WHERE – Has multiple long-term and short-term uses, but is rarely used well. Answer it after WHY, WHAT and WHO.
a) “Location” WHERE – used to get a lease
b) “Marketing” WHERE – Know WHO, than ask WHERE to find them? Make it about a) demographics, b) associations, c) strategic alliances, d) cohort groups (similar demographics). The best “Marketing WHERE”? – WHERE do most of your future clients come from? Invest there!
c) “Direction” WHERE – closely related to “WHY” (knowing WHY informs WHERE you are going. Knowing WHERE you are going only helps if you put a date on WHEN you will be there. WHERE ARE YOU GOING?? (WHY?) Extremely Important.
d) “Sane Assessment” WHERE – Do you know clearly where you are right now? a) Strengths/Challenges b) decision-making skills c) leadership style d) business strengths/challenges (market, product, revenue, profit, cashflow).

WHEN – one of the least asked, best questions. We don’t like WHEN because it holds us accountable to do something, which is why we should fall in love with it. Just like with WHY, ask WHEN every time you ask another question, and employ the Three-Step Decision-Making Process:
a) Make a decision (that is not a decision yet)
b) Put a date on it (when)
c) Go public – declare the date and ask someone to support you getting there.

HOW – the worst, most asked question in business planning. HOW is a buzz-kill; it focuses on the fear of the POSSIBLE, not the PROBABLE. It will uncover 127 things that COULD go wrong (possible) without telling you which four of the 127 WILL actually go wrong (probable). It also gets us involved in all kinds of nonsensical preventative planning for things that will never happen while we ignore the four things that are already a problem. HOW is paralyzing unless it is always used in conjunction with MOVEMENT and the other five questions. There are two uses of HOW, one bad, one good:
a) “Long-term HOW” – you should almost never use HOW to answer a long-term question, such as “How do we get all the way from where we are to where we want to be three years from now?” That’s fortune telling and voodoo. Business planners love this question, but no question is of lower value than “long-term HOW”.
b) “Short-term HOW” – this is actually a great question – “How do I get from where I am to the next step?”, because you are asking it about current realities that actually need a HOW to solve them. Use HOW for short-term implementation, not for long-range planning.

WHY, then WHEN; rarely HOW.
Ask WHY first. Always. Then get used to asking WHY and WHEN with every one of the other questions. Only ask HOW when addressing the next few steps. Never ask it about the distant future.

If you get in the habit of asking WHY and WHEN with every question, and asking HOW only about the next few steps, you’re much less likely to run into problems, and much more likely to build a great business.

Which one of these questions do you need to focus on right now in order to build your business? WHY? And WHEN will you act on it?