Once you have developed your strategic framework it is much easier to make a successful project plan. So let us recap on how we bring together the strategic planning: at the beginning we identified ‘where’; the beginning and the end of the journey.  We defined success in the ‘what’ so that we definitely know when we have arrived, and we have also established ‘why’ we are setting off in the first place.  The where, what and why provides us with the strategic framing for our project plan.  Now we need to choose a route and also work out what we are going to take with us; what resources we will need.  This is where we come on to the ‘how’, the method by which we achieve the mission; the goals and activities that measure our progress towards our desired outcome.  Combined with answering the ‘when’, ‘who’ and ‘which’ we can come up with the plan we need to employ in order to achieve the overall vision and mission.

Let us put this all together with the aid of a story.

Planning to achieve a life goal

I mentioned previously the expedition to Greenland that I undertook with my wife to make some first ascents of a group of mountains on the east coast.  For the planning of the expedition we used all we information we had at our disposal, although the maps and aerial photos showed very little in the way of real detail.  But these coupled with some knowledge gleaned from an expert on the area meant that we were able to identify a way to approach the hills, find a likely spot to make a base camp and select some peaks that we could attempt while we were out there.  These peaks each became a goal in their own right and we now had the outline of a plan.

Once out in Greenland we were able to confirm physically the scalable peaks in the area and work out a more detailed climbing programme that suited our available time, our ability, and the weather.  This itinerary was designed to build towards going up the largest of the hills in the area.  I had spotted the peak on the photo back in the UK; but now that I could see the mountain in three-dimensions I was able to identify some potential routes to get to the top. I knew these could be explored yet further when we got close enough to ‘rub our noses up against it’.

From plan to reality

From what I had observed I could see that the climb would break down into several natural stages: the approach to the mountain, a traverse of a plateau, the main climb and achieving the summit, and then recovering back to our camp.  Each stage had a planned duration and had milestones we set and measured our progress against. This all helped to keep us on schedule.

By the time we were in striking distance of the summit we were tired, the going was hard and the temperature had dropped significantly.  At this point the measure of progress reduced from milestones to ‘I will take ten more steps and then rest’.

“How do you eat an Elephant? In lots of very small pieces.”  Anon

This was how we achieved our aim and how I fulfilled my dream: one little step at a time.  I am happy to say we got there and back again safely and during our two weeks in that region of Greenland we ‘bagged’ six first ascents.  It was a truly successful expedition.

The key to planning success

This story holds the key to planning any great venture.  A dream powered by passion turns into a mission.  We then start to plan ‘how’ we are going to achieve that mission and break it down into goals.  Each of these goals is further broken down into smaller stages; milestones are set and the nearest steps are planned in the greatest detail.

This is an important point: the detail of the project plan or strategy depends on our proximity to the goal. If we start with too much detail – for events too far in the future – we will find the situation will inevitably have changed. By the time we get there, the detail is unlikely to work out.  Therefore it is better to remain flexible and adapt. As new information comes to light, and as we get closer, we can then plan in ever greater detail.

Breaking the plan down

It is like breaking down a landscape into the near, middle and far distance.  When we look out from our starting point we can naturally see the near ground with more clarity. We may even be able to identify the exact path we want to take.  As we strain our eyes towards the horizon we cannot hope to have the same level of detail. So we have to keep our long term plans broader in scope.

The near, middle and far could be measures of proximity, as they were for me in Greenland. But they could also be time-horizons such as 6 months, 2 years and 5 years for a business plan.  We will look at this a little more under ‘when’ and timing.

Planning to several stated horizons, with varying levels of detail, helps us to strategize comprehensively. It helps to maintain plans that are both simple and flexible.  With our goal in mind, there maybe two or three routes that we could use to get there.  We choose the best course and then we plan for this strategy to the required level of detail.

The most important question in a project plan

The amount of detail we need is dependent upon the task. But, what is essential, is that we have broken down our goal to the extent we know exactly what to do next.  We need to be able to answer the question: “what is the one most effective thing that I can do right now to effectively take me towards my goal?”.

In this way, we can make the next few steps very clear and achievable; even if the overall goal seems daunting.  If we fail to break things down properly then our more audacious goals will evade us. We know exactly what we need to do next. That is where the detail lies.

“Prior Planning and Preparation Prevents Poor Performance.”  Military saying

“Happiness is a positive cash flow.” Fred Adler – Venture capitalist

I may not be a millionaire but in many senses, I am rich.  This is because for much of my life I have had the pleasure of not having to worry month by month about the balance in my current account.  When billions of people are worrying about whether they will have a decent meal today or if they will have a roof over their head tonight then it is good to be thankful for such mercies.

But I did not start out flush with cash and there have been times since where things have been a real struggle. At times every business pitch seems to fall flat, work is short and reserves are needed to keep afloat.  At such times I have become very keenly interested in profit, loss and cash flow and therefore they should be things we have a handle on before we hit a challenge.

The day to day challenge of cash flow

In a previous post, we looked at cost and resourcing in the context of a given task or project.  When thinking in project terms, the finances are focused on a finite amount that we are wanting to raise and control.  When thinking about a business there may well be projects that we want to achieve, but the day-to-day of the business is defined by profit and loss and – perhaps even more importantly – by cash flow. So I just want to highlight some crucial things to remember before we move on.

Cash flow is important as it determines the rate of return and affects liquidity. As Dragon’s Den star Peter Jones points out:

“There’s nothing more important than cash – cash flow issues are one of the biggest causes of company failures.”[1]

Liquidity is especially important to the SME (small and medium-sized enterprise). This is because you may well have invoices on the way but if they don’t arrive in time (to pay off your own debts) then your company can go under. Then it does not matter how profitable you are on paper. This is why all companies need a reserve of some sort, to manage these cash-flow challenges.

Cash flow and personal finance

The same goes for personal finances; after all a household is effectively a small-sized business.  You have certain a certain income and outgoings.  Each month you need to make sure more comes in than goes out.  If you achieve this then the amount left over is profit. This is the bit you get to choose how to use; to save or invest, could be considered profit.  If you spend more than you earn then quickly you will get into debt.  As debts compound it can become impossible to pay them off and then your household or business goes bust.  It is very simple.

As an individual, this could mean being declared bankrupt or as an organisation going into administration or liquidation. Either way, it will be a huge hurdle in you fulfilling what you set out to achieve. So, it is best to reduce the risk of this happening. Do this by planning as carefully as possible and keeping on top of your accounts.

Keeping your accounts and balancing the books

At the most simple level, you may just need a ledger or spreadsheet with three columns: one for money in, one for money out, and one to work out what’s leftover. This gives you a snapshot of your finances at any one time. If you then produce a table predicting this information over a period of weeks or months, then you have the making of a cash flow forecast.

The issues of profit, loss and cash flow are perhaps most important when starting out in a new business.  It can often take several years for a company to really become profitable and for finances to stabilise.  It is therefore those first few years where the business is most vulnerable.

The Business Case and forecasting

Part of the business case and business plan at the beginning will be forecasting the finances over this critical time.  If you want to attract finance or get a business loan then any investor will want to examine these figures.  It is part of their risk management; they want to get their money back, with interest.  You need to be profitable for them to be profitable.

It can be tempting to be overly optimistic about your finances in the beginning stages of a business.  Therefore I recommend you produce several models for your cash flow: a best case, most likely case and worst-case scenario. Work out the most stripped-down version of what you need to operate and the investment required, as well as your preferred initial equity.

Final thoughts

I am not going to go into more detail on book-keeping here as it is outside the remit of this post. There are plenty of good resources on accounting that you can look at. Software packages such as Microsoft Excel and Apple’s Numbers provide spreadsheet templates. These can be used for household and business budgets as well as cash flow forecasts. I have also suggested some useful links below where you can get more information.

The most important thing is to have a method that works for you where you can track you’re finances. And remember, cashflow is at least as important as profit, especially if you are a small enterprise!

Useful links:

http://www.businesslink.gov.uk

http://www.hmrc.gov.uk

Project planning is all out working out your plan in time and space. In The Right Questions Framework, the ‘When’ question relates to the ‘How’ of tasks and resources. As well as mapping these against time the ‘when’ also revisits the concept of priorities, first looked at under ‘why’. Putting this all together brings us to the concept of programming. There are various ways to graphically show a time-based plan but the Gantt Chart is probably the best known and most frequently used.

Programming

I was part of the initial project management team working on the construction of ‘The Shard’, the new tower above London Bridge station, which is the tallest building in Western Europe.  It goes without saying that it is massive and complex; too big to contemplate in all its detail.  What’s more, it is unique, there is not another building quite like it anywhere in the world.  Considering this, how could someone possibly decide how long it was going to take to build?  The key, as we looked at it under the ‘How’ question, was to break the whole plan down into manageable pieces. It is hard to estimate how long it will take to build a 330m tower, but you can start by working out how long it will take to construct one pillar or fit one window.

We can do the same for our goals.  We are already mostly there as under ‘How’ we broke down our dreams into goals and our goals into tasks.  It should be easier to assess the time for one task and if we need even greater accuracy we can break the task down into steps and work out the duration for those.

By doing this we are building up a programme (a plan with timings) to achieve our vision.  We have identified goals, worked out the necessary tasks and resources and now given time to each step.  Through this process, the dream starts to become more tangible.  Once again, don’t worry if you can’t work out everything – the important thing is to know the next few steps in enough detail to start to act.

Critical path analysis and keeping things simple

If you work out all of the activities that you need to achieve and the duration of each task then you will have a fully functioning programme; the sort of thing a project manager will create.  When you put all your activities into sequence the quickest route through the plan becomes the ‘critical path’ and gives you the shortest duration to achieve your aim.

Remember: a programme can include as little or as much detail as you need.  The important thing is that the programme helps you to plan and helps you track your progress towards a goal.  My advice is to start simple and if you can’t fit it legibly on one A4 page, or it starts being hard to understand, simplify it.

Gantt Chart Example

Earlier when we looked at tasks and milestones we looked at the example of building a shed. Let’s use the same example to make a simple programme. We can start by estimating the duration for each activity:

• Work out what type and size of shed you need and where it will go. We will need to go out and do some measuring so let’s assume 1 hour.
• Select the best shed to suit your purpose. This might require some time researching on the internet so let’s give ourselves 2 hours.
• Purchase the shed. I am planning to do this online, so once I have decided on the right shed, it should only take me only a few minutes.  It is a good idea to always give ourselves 30 minutes, even for a simple task, so I am going to assign a half-hour here.
• The shed is delivered. This is a milestone so I will not give it a duration. But, there is likely to be a time lag between purchasing and delivery and I will assume it will be 48 hours between payment and receiving the goods.
• Prepare the ground. I will need to level the ground and my garden is on a slope so this is likely to take some time. I will initially give myself 4 hours. This could take longer, especially if foundations are required. So I might have to re-calculate this after inspecting the ground and the shed I have chosen.
• Erect the walls. I am going to allow myself 2 hours for this task. This job will probably require the help of another person. I will have to ask someone to help soon to prevent my project from being delayed.
• Construct the roof and make it waterproof. Again I will estimate around 2 hours for this.
• Fit the door and windows. This could be a fiddly job so once again I am going to give myself 2 hours here
• Furnish the shed ready for use. This will likely require popping to the shops again so I am going to give myself 3 hours for this.
• Start using the shed. This is a milestone so I won’t give it a duration.

Now we can create a pictorial representation of the programme. This is known as a Gantt Chart (named after Henry Gantt, the man who developed the idea). Putting all the activities into the correct order, I have created a Gantt Chart. You can see the first version in Figure 1:

You will notice that as I start to fit the tasks into normal working hours, some activities roll forward. Now they take place over several days. I can now see that I won’t be able to start using the shed until the 5^th day.

Prioritising

“Time is free, but it’s priceless. You can’t own it, but you can use it. You can’t keep it, but you can spend it. Once you’ve lost it you can never get it back.” Harvey MacKay

Time is limited so therefore within the plan we need to prioritise.  There is never enough time to do everything. Therefore, we need to be able to decide which things to forgo.  Our values point us towards our priorities and that helps us make the right decisions, especially when under pressure.

We have to know the tasks that are vital to success but this is not always straightforward to ascertain.  Therefore, we may need to go through a process of elimination until we can perceive the essential elements.

Which things can be done concurrently?  Which tasks could you delay or rearrange? What could you delegate or even dispense with altogether?  By asking these sorts of questions you get down to the bare bones of what are the vital actions.  You may well find that you can refine your programme after asking these questions.

For example, looking at our shed project again I can see that I don’t need to wait for the shed to arrive in order to prepare the ground. I can save myself some time by starting this task while I am waiting for the shed to be delivered as you can see in Figure 2:

You can see that by getting on with the groundwork concurrently I have reduced the total duration of the project by a day. Therefore, I will now be able to start using the shed on day 4.

Cash Flow and Budgeting

After adding the duration to the tasks the next thing to do is to add the resources needed for each activity.  This is the next layer of the programme and can be added to your table or spreadsheet.

In this way, we can establish not just the cost of any task but also the yearly, monthly, weekly or daily cost of a goal or activity.  In other words, we create a cash flow forecast or budget.

After doing all this you should be able to link the dream you have right through to the very next step you need to take.  Hopefully, you will also know exactly how long it will take and how much it will cost.  You can now put that step in your diary and you are on your way!

Project Management Programming Software

The Gantt Charts for this post was created using Merlin Project Management Software. Merlin 2 is the best project management programming software that I have used for the Mac and if you want to find out more or try a demo then click here.

Merlin is very similar to Microsoft Project, the main software I have used on PC. This is something of the industry standard for project management software, although perhaps not the best.