The Roles of Business Planning

in
Successful Business Growth

Jack Derby
Professor of the Practice, Tufts University
Head Coach, Derby Management
Venture Partner, Converge Ventures
 Session 2…
• What the role of business plans?

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 Jack Derby
– 25 year successful track record of coaching over 400 companies.
– 17 year successful track record in medical devices as Executive Vice
President of Becton Dickinson Medical Systems, CEO of Datamedix
Corporation and President of Litton Medical Systems.
– 3 years as President of CB Sports
– Co-founded 14 companies
– Raised over $840 million in venture and private equity
– Current Director: AIM, Aviant Healthcare, Brainshark, Rome
Snowboards, Loci, and Reiser
– Professor, Tufts University, Marketing, (Teacher of the Year in 2015)
– Activities…
• Partner, Converge Venture Partners
• Past Chair, Common Angels
• Past Chair, Association of Corporate Growth
• Past Chair, MIT Enterprise Forum- Distinguished Service Award
• Past Vice Chair, SBANE- Pro Bono Publico Award
• Past United States Peace Corps volunteer

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 Just 1 little word…

…why?

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 All Businesses Must Have Growth…
• Product growth in any business
– Product evolution
– Product extensions

• Sales growth in any business.

• Startup and emerging company growth

…why?

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 The Five Stages of Growth…

Success
Growth
Stability
What’s the point that my
Survival business or my product
Concept absolutely needs to get to
very quickly ?
The Idea

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 The Five Stages of Growth…

Success
Growth
Stability
Survival …and why is that?
Concept

The Idea

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 The Five Stages of Growth…

Success
Growth • Positive cash flow
• “A” level managers hired
Stability
• Strategies locked down
Survival • Tactical plans in place
Concept –Product Plans
• Engineering Plans
• Sales Processes
• Marketing Plans
What this really means is…
• Product Portfolios
• There must be metrics at every stage
• Products and the business must reach Stability at a minimum
• In order to succeed every business, every product MUST grow
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 The Five Stages of Growth…
• Recognize also that this line is never straight
• Success at the start is merely surviving.
Success
• Must move your product and your business if
Growth
you’re a startup to Stability in 18-24 months
Stability
Survival
• Success in the middle of your product’s or
Concept
company’s life means increasing revenues year
over year by X % and achieving a high EBITDA %

• Success at the end game means highly valued

products and a company tracking above the
industry’s metrics

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 GROWTH
A Way to Think About Every Company

Your Business Plan

A Way to show that Growth

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 A Business Planning Architecture

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 Elevator Speech

Planning Architecture… Executive Summary

Presentation Pitch

Why do you need one?

The Business Plan

…Just 3 reasons

1. Need to define where you, your managers and your

business models are along the path to growth.

2. You need to balance month-to-month activities with

monthly and quarterly Tactics, Strategies & Vision.

3. You must be able to easily communicate your

status against what you said in your plan
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 Just What Are Business Plans?

Elevator Speech

Executive Summary

Presentation Pitch

The Business Plan

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 Elevator Speech

Planning Terms & Timelines

Executive Summary

Presentation Pitch

The Business Plan

Vision: Future State in 24-36 plus months

Strategies: Primary Directions in 1-18 months

Tactics: Operating Plans in 1-6-12 months

Every Tactic has Objectives

Objectives: Measurements in 1-6-12 months.

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 Elevator Speech

Executive Summary

Presentation Pitch

The Business Plan

“Vision without action is hallucination’

jack derby

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 Elevator Speech

Business Planning Architecture Executive Summary

Presentation Pitch

The Business Plan

60 months
Vision CEO & BOD
1-18 months
Strategies All Managers
1-12 months
Tactics & Objectives All Employees

Actions

Operations

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 Elevator Speech

A Business Planning Architecture Executive Summary

Presentation Pitch

( Everything needs to fit ) The Business Plan

Product & Engineering

Services &
Plans Manufacturing

Marketing Finance
Strategy
Company
Business
& Market
Analysis
= Metrics
& Review
Plan
Plans
Sales Service
Plans Plans

The Management Team’s Job is One Simple Thing

Must create and perform to highly scalable growth plans

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 Elevator Speech

Planning Architecture… Executive Summary

Presentation Pitch

The Business Plan

Common Business Planning Mistakes…

1. A lack of process consistency

2. A lack of timely follow up
3. A lack of consistent (quarterly and annual) reviews

The biggest mistake is always…

• A lack of consistency on the part of the senior team

• An inability by the CEO to hire experienced management

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 What’s my responsibility? Business Planning Architecture

Common
Mistake #1

24 months
Vision CEO & BOD
1-18 months
Strategies All Managers
1-12 months
Tactics & Objectives All Employees
Common
Actions
Mistake #2

So that at the end…

Operations
Common
Mistake #3

• Vision is totally aligned with Strategies & Tactics

• Your goals are married with your managers & investors
• Your managers have accepted responsibility
• Your managers have accepted accountability
• There is an interlaced environment of objectives.
• There is a common architecture of metrics & rewards
• Experienced managers are in place and unified to the Plan

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 What does my own plan look like?

My own plan…

• A Personal Business Plan

• You owe it to yourself to develop one
– It’s written out once a year typically in January
– It’s typically just for you
– It defines…
• Personal Success Measures
• Critical timelines: 5 years & 1 year.
• Critical Improvement Factors
– You review it every six months

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