Small businesses fail for many reasons. Seemingly, negative financial results are often times viewed as both the reason and result of the demise of a company. Mismanagement is another common factor that is considered by many as the reason for business failure. Often times both of these are the result of entrepreneurs/small business managers not knowing where the company is or where it is going. They simply “feel” their way through and react to the next attention-getter.
Consider the situation where a pilot is flying in a heavy storm at night over a large body of water and suddenly loses instrumentation! Pilots experiencing such crisis have indicated that being sight impaired and flying with no instrumentation, they did not know the “direction” they were moving or whether they were flying upside down or right side up! Flying by instinct may have been their only option, but it was not a comforting one.
Small business may not experience exactly what was described above, but they do experience the same situation – particularly if they operate their business through instinct or emotion. The outcome may not be failure, but at a minimum may result in lost opportunity.
There is a solution!
The Flight Plan
Before pilots depart they typically prepare and file a flight plan. The flight plan identifies where and when the airplane will depart, its destination, who and what cargo it is carrying, its flight path, the length of the journey – in time and miles, when it is expected to land, its fuel requirements, etc.
The flight plan is defined during the flight’s Preparation Phase. It is a map, a strategy, a tool to communicate the pilot’s intentions, as well as a means to track the flight in progress. It is also used to help the pilot navigate so as to keep the flight on course. It is important that the plane at all times is aligned with its destination. One degree off course will be devastating in the end if the flight path is not continuously monitored and adjustments made.
Like a pilot, each and every business normally progresses through what is referred to as the E-Lifecycle – a “business flight plan.” The E-Lifecycle is a key business planning and navigational tool.
Often times a business’s flight plan is considered to be the Business Plan. This is actually true. Unfortunately, there is a major area in the Business Plan that is missing – the E-Lifecycle flight plan! The following provides a brief overview of this powerful tool.
Functioning the same as a flight plan, the E-Lifecycle consists of six phases (see figure). Like the flight plan, the entrepreneur or business owner identifies and defines each of the phases – including the phase’s start point and endpoint – milestones. Each milestone has criteria and related quantifiable measure(s) and metric(s).
The E-Lifecycle is initially defined early during the Preparation Phase and is updated and maintained as the business moves through the lifecycle phases.
Every business during its journey moves through each of the E-Lifecycle phases – assuming there are no disruptions, e.g., introduction of new innovation, effects due to creative destructionism. Like an airplane, a business requires more energy, resources and assets during the “Take-off Phase,” less as it ascends and even less as it achieves cruising altitude. The E-Life Cycle helps to identify and define what is expected.
Business Plans typically do not identify or use the E-Lifecycle flight plan concept – where each phase is defined and strategies and resources determined and budgeted for. If a business is not strategically managed using the E-Lifecycle, like the earlier scenario describing the pilot who is flying without instrumentation, the entrepreneur, too, is “flying” their business with the potential of great peril.
• incorporating the E-Lifecycle into business planning,
• using the E-Lifecycle to proactively plan the business’s direction - identifying the transition points (phases start and end points/milestones) for the business,
• developing a profile and strategy for each of the E-Lifecycle phases,
• using the E-Lifecycle to build a business’ flight plan supported by a resource plan, and
• using the E-Lifecycle “flight plan” to proactively monitor, track and adjust a business’s current state and position, and “flight path.”
Please feel free to contact me for additional information, questions or comments on the “E-Lifecycle” at email@example.com