Over the years, I’ve reviewed a couple of hundred long-term and annual business plans and a few dozen proposals for new products or projects. These business plans almost inevitably followed the cookbook approach you would find in any modern business school curriculum: a review of past and recent financial results; a simplistic SWOT analysis that was heavy on strengths and opportunities and light on weaknesses and threats; a short list of the “big name” companies who competed directly with the products and services of the business; and a set of goals for the next 3 years, invariably phrased in terms of increased sales, increased profits, and decreased variable costs.
With the “facts” and “goals” thus established, these “strategic plans” would move on to establishing next year’s budget. Stating with BAU (business as usual), a base budget would be calculated by increasing the prior year’s budget by an amount equal to 2 or 3 times the rate of inflation. Added to this would be requests for funding new initiatives, usually encompassing either geographic or product line extensions, or significant IT infrastructure projects, justified not by quantifiable financial benefits but by “strategic” considerations often determined by what competitors were doing or consultants were selling. Depending on the industry and the egos involved, some strategic plans might also discuss merger, acquisition, or divestiture opportunities.
On the face of it, these plans did everything right, and they asked (and maybe even answered) the fundamental questions that managers are supposed to ask: how are we doing, who is doing what, how much does it cost, how can we improve, where should we spend our money. But in my experience, almost all of these plans failed to ask the only question that really mattered.
Why are we doing what we are doing? Why do we believe that our underlying (often unstated) assumptions are true? Why do we think our results will be different next year? Why do – and why should – our customers care what we do?
When I work with a failing company, I ask why. I get the managers together and ask them why do they think they are failing? Then I do the same thing with their employees. Then I ask, if what they’ve done is the past isn’t working, why are they still doing it?
When I work with a start-up, I ask why. Why do you want to do this? Why do you think there is a need that you can fill? Why do you think you can do it better than anyone else?
When I work with an established company, I ask why. Why do you do what you do? Why do you want to change? Why do you think the world is the way you think it is?
Why is the forgotten and fundamental question. Sure, the whos, whats, whens, and how muches matter, but without the context of why, those questions can only lead to recreating today tomorrow. Asking why is the key step in creating tomorrow today.
— David Grant