Case #19
A Refreshed Business Plan with April 2007 Update
One day in late April 2006, Henke Associates received a call from the CEO of a successful 12-year-old privately held company from the heart of Silicon Valley.
The CEO’s Board of Directors had just met the day before. The Board consisted of both inside executives and outside investors. The outside board members noted at the meeting that in recent years, the Company’s revenue had been flat and profitability very modest, well short of the original business plan predictions used to raise the invested capital in the first place. While the invested capital had been “patient money”, the investors have come to believe recently that without significant Company growth and dramatically improved profitability over the next few years, the chances for a positive exit strategy for all parties concerned were slim indeed.
Accordingly, the Board voted to require management to produce a brand new and highly credible Strategic Business Plan, and to do so rapidly -- in time for the very next Board Meeting.
Henke Associates was known to the Company’s executives from past acquaintances and from case histories of related consulting assignments at other companies. So the CEO called Henke Associates and had a Proposal on his desk in a matter of days. The Proposal called for the construction of a special Planning Tool Kit tailored to the Company, to be followed by a consulting engagement to facilitate the creation of the Refreshed Business Plan by a new Planning Team of key internal executives. The CEO agreed to the Proposal and a Consultant Contract was quickly signed in early May.
The Consultant went right to work and within a week had developed the customized Planning Took Kit. This is what the CEO said at the time, “Russ, last night I read the entire Planning Tool Kit that you prepared for us, and it is BRILLIANT! It's going to give us a clearly defined road map to growth and success. I've already benefited, and the management team looks forward to tomorrow's first Strategic Planning Meeting.”
Over the next two months or so, the Consultant met weekly with the Planning Team, coordinating team brainstorming and editing the first and subsequent Company-written drafts of various sections of the new plan, from the Executive Summary through to the three-year financial spreadsheets. Some group meetings were in person, others were held via electronic conferencing. In addition, the Consultant conducted interviews with nearly a dozen other key employee contributors within the Company to gather their ideas and innovations, and provided the text summaries of these interviews to the Planning Team orally and in writing to supplement the Planning Team’s thinking.
The Refreshed Business Plan was completed on time and within budget. It called for doubling the Company’s revenue in three years and increasing the profits by a factor of ten, all backed up by new and detailed product plans, marketing plans, personnel plans, financial analyses, etc. Everyone involved is excited.
Here’s what the CEO said at this juncture, “Hi Russ! Our Planning Team that you organized and led for us has ‘finished’ the refreshed planning process, in that we now have an aggressive time/money line with definite direction out through 2008. And, we are already implementing many of the decisions made during the process. For example, (a) we have redesigned several of our products and are now beginning the build new processes; (b) we’ve flown in the new specialist you recommended to get him up to speed so his crew can start work; (c) we’ve participated in DAC 2006 and Siggraph 2006 with great results; (d) plus lots more. Our team learned a lot during the whole planning process that you facilitated and I personally really appreciate all the work you’ve done helping us get to this positive turning point in our business. Thank you for your professional assistance with this valuable project.”
CEO Update April 2007: "Hi Russ. I'd like to thank you again for all the work and guidance you provided us. It made a gigantic difference in a very positive way! The new business plan and the process of producing it focused our efforts and after several quarters have now led to the development of new technologies, a brand new product line, and a new and successful business model that is being expanded across our entire field and headquarters operations."
