Crafting a successful business model requires more than just a great idea. It involves carefully designing a plan that outlines how a company will create, deliver, and capture value for its customers.

But having a solid strategy is only half the battle. Execution plays a significant role in turning that plan into reality.

In this article, we’ll explore how to craft a business model with an execution strategy that sets the stage for success.

Why It’s Hard to Do a Business Plan

Entrepreneurs often encounter challenges when creating a business plan. Uncertainty and unpredictable market conditions make it hard to develop an effective plan. Lack of experience or understanding of business planning concepts can also hinder the process. Without a clear understanding of decision rights and information flows, entrepreneurs may struggle to make informed strategic decisions.

In addition, a lack of clear communication and effective management can lead to poor execution of the business plan. This can result in failure to align jobs with the overall strategy and inability to measure and monitor performance effectively. Therefore, it’s important for entrepreneurs to overcome these challenges by developing skills in strategy execution and committing to a strategic plan to achieve their business goals and objectives.

How to Do a Business Plan the Right Way

Saying Yes to the Plan: The First Step

Implementing a business plan can be challenging. Many companies struggle with execution and rely on structural changes that only bring short-term gains. To embrace a business plan effectively, an organization should prioritize decision rights and information flow. Company leaders should streamline and decentralize decision-making processes. This was seen in a global consumer-goods company where ineffective resource allocations led to stalled decisions and increased overhead costs.

Motivating team members and ensuring their support for the business plan requires open, informal communication. An insurance company addressed this by promoting a culture of open communication, where senior executives engaged with unit leaders regularly. Fostering trust through cross-company communication and setting clear performance targets is also essential for gaining buy-in and motivation from team members.

Make Sure Everyone’s Jobs Fit the Plan

To ensure that everyone understands their roles and responsibilities, it’s important for team members to align their jobs with the business plan’s goals. This clarity helps individuals see how their contributions fit into the bigger picture. When each team member’s job supports the plan’s objectives, it ensures unified efforts for effective execution. Challenges like unclear decision rights and information flow can lead to decision paralysis or misaligned collaborations.

Addressing these challenges before changing the organizational structure can be helpful. Redesigning support frameworks for a new customer-focused strategy or fostering a more open, informal culture can improve information flow to senior management levels. By addressing these challenges, a business can ensure that everyone’s job aligns with the strategic plan and drives successful execution.

Talk to Your Team So They Know What to Do

To effectively communicate the business plan to their team and ensure everyone knows what to do, a leader can use methods such as clear and concise messaging, regular updates, and a forum for questions and open discussion.

By engaging in transparent and open communication, the leader can ensure that each team member understands their role within the business plan and how it contributes to the overall strategy. This approach not only fosters alignment but also empowers employees to make informed decisions and take ownership of their work.

To ensure that everyone’s jobs align with the business plan, leaders can implement methods such as clear goal-setting, regular progress tracking, and ongoing feedback.

These tools enable employees to understand how their contributions directly impact the business plan and make adjustments as needed. This alignment helps teams work collaboratively towards a shared goal, ultimately driving successful strategy execution.

It is important to talk to the team so they know what to do because clear and open communication fosters understanding, engagement, and empowerment within the team.

When employees have a clear understanding of the business plan and their role within it, they are better equipped to make decisions, adapt to changes, and work collectively towards achieving business objectives. Open communication also creates a culture of trust and accountability, which are integral to successful strategy execution.

Check How Things Are Going

Team members need to understand their roles and responsibilities for successful strategy execution.

For instance, if corporate functional leaders override decisions by divisional and geographic leaders, it can cause decision paralysis and increased costs. To support a new strategy focusing on sharper customer focus, delegating accountability for profits to the divisions or encouraging country managers to delegate standard tasks can improve communication and implementation.

Effective communication strategies and information flow are crucial. An insurance company improved information flow by creating a more open, informal culture, where top executives mingled with unit leaders during management meetings and held regular brown-bag lunches.

Similarly, a B2B company charged its customer-focused marketing group with encouraging cross-company communication, which improved relationships with large, cross-product customers.

Making New Ideas and Rules Work Together

Businesses can integrate new ideas into existing rules and regulations effectively by implementing strategies focused on decision rights and information flow.

Ensuring divisional and geographic leaders have decision-making authority aligned with the new ideas and rules can prevent decision paralysis and enhance strategy execution.

Promoting a culture of transparent communication at all organizational levels can facilitate the flow of accurate information, which is essential for successful idea and rule integration.

Effective communication plays a crucial role in merging new ideas with existing rules, aligning job responsibilities with strategy, facilitating collaboration, and ensuring everyone works towards the same goals.

By prioritizing decision rights, information flow, and clear communication, businesses can harmoniously integrate new ideas and rules to achieve successful strategy execution and business objectives.

What Makes a Business Plan Work

Who Gets to Make Decisions?

Effective decision-making in a business setting depends on many factors. These include organizational structure, hierarchy, and functional leadership. For example, in a global consumer-goods company, divisional and geographic leaders’ decisions were overridden by corporate functional leaders. This led to decision paralysis and increased overhead costs.

To distribute decision-making power effectively, businesses can encourage delegation and hold individuals accountable for specific areas. This was demonstrated in a global charitable organization where country managers were encouraged to delegate standard operational tasks.

Furthermore, businesses can ensure that decision-makers have the necessary information to make informed choices. They can do this by improving information flow through open, informal cultures, regular communication forums, and analytical support tools. This was observed in an insurance company that fostered a more open culture and in a financial services firm that provided salespeople with accurate information on the cost implications of their proposed transactions.

These strategies contribute to more effective decision-making and successful strategy execution.

How to Share Information So Everyone Knows What’s Up

To effectively communicate information within a business, it’s important to ensure that everyone understands the plan and their roles. Encouraging open communication and keeping all team members informed and engaged with the business plan is key.

One strategy is to focus on decision rights and information flows first, and then adjust organizational structures and incentives to support those moves. For example, at a global consumer-goods company, accountability for profits was clearly assigned to divisions to support a new strategy centered on sharper customer focus.

It’s also important to assess and monitor the effectiveness of the information sharing process. Creating a more open, informal culture within the organization and holding regular brown-bag lunches where people discuss pressing issues can help. Regular reports showing performance against targets and providing root-cause analyses of performance gaps further aid in assessing and monitoring the process. This ensures that everyone is aware of what’s happening.

Learning to Make a Business Plan Happen

Practicing Skills for Making the Plan Work

One strategy to make sure everyone’s jobs align with the business plan is to consider decision rights.

For example, a global consumer-goods company faced decision paralysis. This was due to decisions being overridden by corporate functional leaders, which resulted in stall costs. To ensure accountability for profits was designated unambiguously to the divisions, the CEO enacted sharper customer focus as a new strategy.

To share information effectively and keep the team on the same page, companies can work on improving information flow.

An insurance company improved information flow to top executives by creating a more open, informal culture and encouraging regular meetings. They organized brown-bag lunches where people discussed the company’s most pressing issues, fostering better communication.

Decisions can be made in a way that supports the business plan and goals by adopting a more informed approach.

For instance, at a financial services firm, management addressed information misalignment through a “smart customization” approach to sales. By establishing standardized back-office processes and developing analytical support tools, salespeople were armed with accurate information to support their proposed transactions, leading to improved profitability.