Planning Failure Files
Problem: It’s 1902 and the city of Hanoi is plagued by rats. Proposed Solution: Eliminate the pesky rodents by encouraging entrepreneurialism. Pay a bounty to citizens for each rat they kill.
Sounds pretty straightforward. What could go possibly go wrong?
The linked article from Atlas Obscura details what did go wrong and why. (No spoilers here!) It’s a fascinating, real life example of that old saying: “Foolproof systems seldom take into account the ingenuity of fools.” I encourage you to read it.
While the events that the article chronicles took place overseas more than a century ago, they offer lessons that are still relevant here, today. For instance, no planning process is truly complete unless it includes a means of monitoring and analyzing its results. Planning is a continuous process, not the finite, put-the-plan-in-a-drawer task seen in so many companies. All too often I’ve worked with firms that conduct annual strategic planning “exercises,” each one nearly identical to that of the previous year. Completing the plans is the primary objective. Implementing recommendations and measuring results? Those steps, many times, just aren’t part of the plan.
Another lesson to consider is that of having (at least) a basic understanding of expected outcomes. Know what the key metrics should be. Does a particular number, ratio, or accounting look right? Include cross checks in your spreadsheets. Look for red flags in your accounting reports. If something looks too good to be true, it probably is. To do otherwise is to risk, figuratively speaking, being overrun by rats.
Instead of disappearing, the pesky rodents proliferated.
Mr. Dragone has spent the past twenty years as an acting/consulting CFO for a number of start-ups in a wide range of industries. Peter’s prior experience is that of a serial entrepreneur, managing various start-up and turnaround projects. He was a co-founder of Keurig.