V. Kasturi Rangan

Planning is the process of translating the organization's strategic or mission goals into a set of actionable programs and tracing the path of how they would meet the goals of the organization. According to Peter F. Drucker, the organization's mission is a key element in its plan, along with vision, goals, objectives, action steps, a budget, and appraisal. He goes on to say that when prepared correctly, the mission statement will answer three questions: What is our purpose? Why do we do what we do? What, in the end, do we want to be remembered for?

Although Drucker focuses on the organizational aspect of these three questions, it is my observation that these questions apply equally well to individual entrepreneurs—particularly young people who have a passionate desire to change the world they live in for the better.

As a professor of marketing, it's not uncommon for students to excitedly bring me their ideas for new products that they are convinced will have a positive effect on the lives of thousands, if not millions, of people—particularly the poor and disenfranchised. They are uniformly convinced that their ideas have so much merit that they will of their own accord gain the momentum they need to become successful.

While many of these ideas may indeed be good ones, almost every young entrepreneur who brings them to me shares the same fundamental problem: He or she has no concrete plan for turning the good idea into reality.

Consider the example of an enthusiastic entrepreneur who recently brought me her idea for a sanitary pad produced from locally available plant materials that were freely available at no cost. “It will be affordable and widely available,” she gushed, “enabling thousands of teenage girls to be at work or at school without having to miss any days in between.” To her credit, she had a precise production cost estimate, as well as a price target. But when pushed on the question, “Who is the customer—the teenage girl, her mother, or her father—and who will pay?” she took a step back and started to ponder.

In my experience, young people are not short of ideas—in fact, they are brimming with them. But without a plan, they are just ideas. And it takes more than ideas to identify the real barriers to end user adoption, to construct a supply chain, to raise money, to launch a new product or service, to gain distribution, and to bring closure to the strategic goals. When I talk with my students about creating a plan to make their ideas real, I usually ask them to think in great depth about the answers to four specific questions:

1. What is the problem you are trying to solve, and for whom are you trying to solve it? The lack of availability of sanitary pads at an affordable price is a significant problem in developing countries, but there is more to the problem than initially meets the eye. Clearly, the young women themselves, those in the target audience, do not have the resources to undertake the purchase, so who will be the buyer on their behalf? What are the social and cultural attitudes toward this new product in the household? What are the current prevailing practices? For an idea to be useful, it must be adapted to the realities on the ground. Can you solve the problem? Will it be of use to the end user? Will the buyer be motivated to buy?
2. How will you complete the value chain? Products don't just appear out of thin air; they must be designed, prototyped, tested, built, marketed, sold, distributed, and serviced after the sale. For even the simplest products, this value chain is complex. For example, this young entrepreneur had worked out quite an elaborate supply chain from a specific plant waste with excellent absorptive powers. But would the raw material still be available for free once someone had set up a commercial entity to convert it? Would locally manufactured products still have the same specifications and consistency as the prototypes worked out in a laboratory? Would the product be sold door-to-door or through retail outlets? The supporting logistics and the costs will obviously be different for the two different go-to-market options. Pricing has to not only consider affordability and value for the customer but also consider realistic supply chain costs. Otherwise the spreadsheet projections (which by the way are very easy to do these days because of software availability) can be made to look rosy without being realistic.
3. What is your plan for launch? Once the idea has been reasonably vetted, and the value chain more or less identified, then a business plan must be created with goals and benchmarks and with contingencies built in. Notice that I am not suggesting that an entrepreneur have the answers to all the questions regarding the end user and the supply chain before diving in. It is good to know the alternate assumptions and alternate paths so that one can iterate and adjust if one path does not work as expected. To be effective, the plan must contain the following central elements:
   • A focus on a few operational goals: Entrepreneurs do not like to write formal operating plans. They consider it a burden and a waste of time. Yet this is something that all funders will demand. But unlike large organizations that tend to write detailed plans with all aspects of marketing, selling, producing, and procuring, entrepreneurs—especially individual entrepreneurs—are better off writing a simpler plan that brings down a few key goals to an operational level. These operational goals should be simple enough to fit a on 3 × 5 note card rather than in a blue binder. When these few operational goals dovetail into each other, it should produce a financial statement. A profit and loss statement is less useful than a cash flow statement with growth projections and investment requirements. Whether the entrepreneur likes it or not, without such a financial analysis, no funder is likely to come up with significant investments to seed the business and grow it.
   • Steady but not dogmatic in direction: “Planning is not masterminding the future. Any attempt to do so is foolish; the future is unpredictable,” wrote Drucker in a previous edition of this self-assessment tool. That's why it is crucially important to keep an open mind regarding the several potential alternative ways of getting to the goal, even while staying steady regarding a chosen direction, until a crossover to a different path has been decided. Flexibility and a learning attitude have to be two important characteristics of an effective plan. Passion and ideas drive entrepreneurs. Managing uncertainty should be part of one's DNA, so when an inference about customers or costs goes awry, it means that the plan needs adjustment, not abandonment. That's why it is so important to have thought through alternate paths and assumptions earlier on, so one can make the adjustments based on the new data from the field and go back to the field with a revised approach.
   • Monitoring: Monitoring is essential to better strategy. The main purpose of monitoring the execution is to understand the logic of the plan and its components and whether they are acting the way they were supposed to. Thus, if the purpose of a door-to-door campaign is to convince the mother of the value of the sanitary pad so that she will in turn influence her daughter to adopt and convince her husband to buy it, then it is crucial to monitor the quantity and quality of such house calls, before one looks at sales results. All the major components of a plan must be broken down into measurable chunks and be monitored. Entrepreneurs are notorious for not doing so. They look at aggregate results and go by their hunches as to what worked and what didn't, thus missing a huge opportunity to bring data and rationality to bear on their ideas and enthusiasm.
4. What is your exit strategy? By exit strategy I don't exclusively mean executing an initial public offering (IPO) or otherwise cashing out of the business. That may be a possibility, but when it comes to social enterprise, it means ensuring continuity of the solution to ensure the long-term sustainability of the idea itself. Going back to the example of the sanitary pad, although a business might make a go of directly selling the pads in a small market, chances are the idea will have much greater success if the business can partner with a nonprofit or a health care delivery agency that is on the ground in the developing country to take on responsibility for educating and distributing them to individuals. This would help ensure the long-term sustainability of both the idea and the social value itself. Scaling is perhaps the hardest thing to do, especially in social enterprise, because what works in one ecosystem might be inappropriate for another. Social entrepreneurs should carefully study all aspects of a successful model and scale only when they are able to replicate the critical elements. If not, getting appropriate partners to be part of the collaborative will need to be an integral part of the plan.

Juana Bordas

According to Peter F. Drucker, there are five elements of effective plans: abandonment, concentration, innovation, risk taking, and analysis. Although this may be the case, how do you know whether all the work you have put into the planning process has truly been effective?

In my experience, the best way for leaders to know they have done effective planning is to see their organizations stand the test of time. In 1976 I attended the organizing meeting for Mi Casa Resource Center for Women. I stayed 10 years—serving as president of the board, director of youth programs, and then executive director until 1986. Almost 40 years later, Mi Casa is Colorado's largest Hispanic-serving organization, and it is recognized nationally as a model for economic empowerment and self-sufficiency for Latinas.

What lessons about planning can be learned from a community-based nonprofit that survived and thrived the most tumultuous of economic and political times? How can Millennials who want to start entrepreneurial social ventures or their own businesses use these lessons to plan for and successfully sustain organizations today?

A Plan for Leadership

Mi Casa's organizing committee consisted of Head Start mothers and professional Hispanic women. Bringing together people whom by Mi Casa would serve and women with experience in organizations was crucial. The customer was at the organizing table. The professional women, like me, had grown up in similar circumstances and understood what was needed for Latinas to become successful. This made for an organization that was customer centered, a key element—and I believe a prerequisite—for successful long-term planning.

A Plan That Is Customer Centered and Results Oriented

It is easy to know your customers when they are sitting at the table in leadership roles. Yet Drucker cautions, “The danger is in acting on what you believe satisfies the customer . . . go to the customer.” We designed a door-to-door survey to determine what low-income Hispanic women wanted. The results were not earthshaking: good jobs, high school completion, English proficiency, a supportive place to learn, and help for young Latinas with finishing school. These needs continue to be the core of Mi Casa's programs.

Success would also depend on garnering supporting customers—volunteers, funders, other organizations, and community leaders. Mi Casa built partnerships with corporations and foundations by focusing on numbers and results.

When I was director, a funder could be assured that by investing $1,800 in a program for a high-risk Latina youth to complete high school, Colorado would receive $200,000 in taxes over the young person's life. Eighty-five percent would complete high school, and more than half would go on to higher education. If funders were looking for a qualified workforce for the future, Mi Casa would deliver.

Today, Mi Casa carries on that tradition by incorporating programs into its planning process that meet the needs of today's employers: bilingual bank tellers, computer classes, health care, and customer service programs.

A Plan Based on a Mission for Changing Times

The most important driver for long-term planning is the mission. As Drucker notes, “The plan begins with a mission.”

Mi Casa did not just have a mission—it also had women who were on a mission. In 1976, forging a Hispanic women's nonprofit corporation was groundbreaking and inspiring. Moreover, Mi Casa's logo—a house with the women's symbol inside—signified that as Latinas advanced, so would their families and communities. The mission was broad enough to engender a new one in 2008: to advance the economic success of Latino families.

Even though Mi Casa focused on Hispanics, the organization welcomed others. It was both culturally centered and inclusive. This is particularly pertinent for Millennials today: How do you build organizations that are inclusive of four generations that work side by side? How do you plan to serve our ever-growing diversity?

A Plan That Is Culturally Centered and Inclusive

Organizations that serve distinct populations must be responsive to the special needs of their customers. Mi Casa was a cultural oasis where Hispanic women could gain confidence and learn skills needed to be successful in the dominant culture.

The first house rented in the neighborhood had a sign on the door saying Bienvenido to Mi Casa, reflecting Latino values of generosity, sharing, and inclusiveness. The organization's success has rested on that open-door policy. Mi Casa was one of the first Hispanic organizations to diversify its board of directors. These community influencials became advocates for success. Inclusion takes careful planning, outreach, relationship building, and a welcoming spirit!

A Plan Informed by Learning That Ensures Future Success

Drucker cautions organizations not to subordinate the mission for money. In the 1980s, foundations urged nonprofits to launch businesses to generate funds. After a careful analysis of market needs, of the skills our women had, and of finding start-up money and partners, Mi Casa launched A Woman's Touch—a cleaning service where participants could earn 30 percent more than they could from similar jobs in the marketplace. Within a year, women left to start their own cleaning services. Gone was the original plan to generate operating revenue from this venture. But we knew how to run a business.

Often mistakes are our biggest teachers. Latinas today are the fastest-growing small-business sector. In 1988, Mi Casa launched its business center to assist Latinas and other aspiring entrepreneurs in developing businesses. In 2013, 80 new businesses were launched, generating $7.5 million in revenues.

A Plan That Sustains

Although decades of planning, experience, and learning have spurred new programs, Mi Casa's core mission remains. We learned that effective planning for the long term requires the following key elements:

• The mission must have deep meaning yet be adaptable to changing conditions—it is most powerful when it comes from the people it serves
• Always customer focused but results oriented
• Led by a community of leaders (staff, board, customers, and community partners) where ownership and accountability is distributed—engendering continuity and success
• A strong focus on program goals and monitoring of customers served, cost, and satisfaction—ensuring accountability
• Nurturing an inclusive environment while providing culturally centered services
• Remaining flexible and always learning—a so-called mistake can become a great asset

Historical note: The emerging Hispanic influence is a recent historical phenomenon buoyed by the civil rights movement in the 1960s and by the founding of many organizations in the 1970s and 1980s. Mi Casa's founding in 1976 therefore makes it one of the first Hispanic organizations to focus on serving women.

Caroline Ghosn

As a leader, the most important thing you can do is articulate a vision. Doing so convenes people smarter, more experienced, and better than you in every way—with gathering speed—to move your organization collectively toward that distant horizon. You cannot translate a vision without a clear plan, for that is the tangible matter that people can wrap their arms around once you have successfully inspired them to join forces with you. The clearer your plan, the lesser the loss factor between the people you inspire and those who decide to commit, and the lesser the loss factor between the people who decide to commit and the actions they perform in moving toward your shared goal. Keep that pipeline of vision translation leak-free—your most powerful sealant is your plan.

Significant data show that companies founded and driven by Millennials—and specifically, Millennial females, who index highest—have the highest chance of success. That isn't a coincidence. Millennials are willing to create tenacious plans as architectures for where they're going but then iterate and experiment within the confines of those plans to learn as they go. When you talk about a plan, you're talking about something that is alive and that changes when necessary—not a dead document that is just filed away. A plan becomes the shared basis for brain play, the sandbox in which you can experiment with the most brilliant minds in your organization and ensure you're visualizing the same end, as well as a thermometer that measures the heat of the sand.

When you interview Millennials, many of them say things such as, “I want to create something that changes the world,” “I want to affect the environment,” or “I want to affect the state of women in the world through education.” There is no dearth of problems in need of audacious solutions, many of which are set to a stubbornly ticking clock. We Millennials have been birthed in that fire and it requires moving fast. But moving fast doesn't mean moving without a direction. Quite the opposite—the faster you go, the more small deltas from the straight line you intended to follow create larger diversions, slowed impact, and cost accumulations. Having a plan and gathering the data that help you assess whether you need to make small iterations inside of that plan keep you focused.

In some cases, big iterations are needed. In others, a plan might take you to a point where you realize the hypothesis that it was built on no longer works moving forward. That's a successful plan. Think like a scientist: If you arrive at a point where your hypothesis is found to be wrong, good. You just saved time, and you've learned something valuable. You have to have experimental structure, boundaries, and edges that define success and failure, and those are what make up a plan.

Luck comes to those who are prepared, as the old adage goes, and that preparation is the only reliable tool you have in your arsenal as a visionary leader to potentially stack the deck in your favor. A plan measures the wins that you'll encounter and mitigates the losses by creating milestones that signal, “Wrong way! Turn around!” before doing so becomes too expensive. A well-crafted plan creates a common language around which people in an organization can all move together in that direction.