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Corporate plans

  • A good corporate plan should set out where an organisation aims to be in say five years time and, broadly, how it is to get there
  •  It should define the organisation’s business model  by explaining its choices of products and markets – and how it will make money, grow the business and meet demand
  •  Glen Moreno, Chairman of Pearson and a director of Man Group and Fidelity, says a corporate plan is “the reallocation of scarce capital resources towards the best opportunities for growth in earnings and returns”
  •  The author, Stephen Covey, said: “Plans are the knowledge about what to do and why – others then have to provide the how to do and the employee motivation for want to do”
  •  According to Peter Drucker, the corporate plan should provide answers to:
    • If we were not in this product/ service/ market/ business, would we be going into it now?
    • What goes on outside the business, especially with non-customers, given the first sign of the need for fundamental change rarely appears within?
  • Dr Edwards Deming said managers that face the following questions will soon see the need for an overall integrated plan:
    • Where do you hope to be five years from now?
    • How may you reach this goal – and by what method?
  • Jack Welch, when CEO of GE, said an organisation’s strategy should define the ultimate aim of “how it intends to win in business”:
    • It’s actually very straightforward
    • It’s an approximate course of action that you frequently revisit and redefine according to shifting market conditions
    • It’s about funding the big ‘aha’, setting a broad direction, putting the right people behind it and then executing with an unyielding emphasis on continual improvement
    • It’s resource allocation, given you cannot be everything to everybody, whatever your size
  • Good plans are thus not long-winded, verbose glossies but short, punchy statements of broad aims and how they are to be achieved – they’re not prescriptive in every detail but deliberately leave tactics down to others
  • They’re the equivalent of the short, inspirational briefings that General George Patton or Vice-Admiral Horatio Nelson gave to their commanders before battle – their commanders didn’t need, or want, any more

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