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WE KNOW SPB as the initials of a famous playback singer. But Norton Paley's song is SBP, or strategic business plan, that he introduces in his book titled Successful Business Planning, from Viva (www.vivagroupindia.com). "We know the value of planning — in theory," writes the author. "But either we fail to spend the time required to go through the thinking process properly and produce a half-baked plan or we fail to use the plan effectively."

Look out of the window, exhorts Paley; there, you will see `inevitable change'. If you look into the mirror, it will reflect `existing patterns'. The difference between the two is what divides the market-driven from the product-driven. Don't call yourself a railroad company, but a transportation one. Not oil, but energy, not baby food manufacturer but in childcare business. Valve becomes `fluid control', vacuum cleaner manufacturing evolves into `cleaner environment business', and electrical wire factory can rather describe itself as a player in `energy transfer'.

If managers fail to create `a viable strategic direction' based on marketable trends and connected to customers' needs, your company will rely only on "the longevity of existing products to sustain company growth." A risky bet, that is.

Next to strategy that spans 3-5 years, comes the tactical part, divided into five sections, viz. situation analysis, market opportunities, tactical objectives, strategies and tactics, and financial control and budgets. Analyse the situation at three levels, and split tactical objectives into primary and functional, advises Paley.

It is quite possible that management jargon starts going above the head, so the author presents more than a dozen cases to explain how SBP works in practice. Thus, the discussion of Cummins Engines answers the question, "How do you deal with offshore competitors selling into your market with prices 30-40 per cent below yours?" To manoeuvre into a market already occupied by an industry leader, read the story of Canon.

And Sony answers the query, "How can you justify the high up-front expenditure for new product development with the inevitable drop in prices as products move rapidly into the mature stage of their life-cycles?"

There's a section on `strategy principles' — viz. speed, indirect approach, concentration, alternative objectives, and unbalancing competition. "Speed is essential to most operations of the enterprise," explains the author. "There are few cases of overlong, dragged-out market-driven campaigns that have been successful. The draining of resources without achieving planning objectives has ruined more companies than almost any other factor." What are the speed-eaters? "Extended deliberation, procrastination, cumbersome committees, and unwieldy organisational hierarchies from home office to field sales." When efforts are drawn out, enthusiasm falls, and morale dips. "Individuals become bored and their skills lose sharpness." Most important, "gaps of time created through lack of action give competitors a greater chance to react and blunt your efforts."

On the last of the principles, `unbalancing competition', Paley writes that victory in many competitive situations is often due to the mistakes of the opponent. One example is to announce a new product that could make the competing manager's product line obsolete. "Even a press release about a yet-to-be released product line can `make them sweat' and create panic — and mistakes," is a clue that he offers. Well, that make you doubt almost all press releases, but a finding from PricewaterhouseCoopers on the back cover of the book is instructive: "Growth firms with a written business plan have increased their revenues 69 per cent faster over the past five years than those without a written plan."

If you've waited all along to write your BP, you can delay it by a few more hours, so you can read Paley and aim at achieving a revenue growth that's better than what PwC says.

ManageMentor@TheHindu.co.in

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