Plans are intended to guide your execution and will never be as precise as a mathematical formula because of the many variables they do and don’t contemplate. And let’s not forget the human factor, which is an essential part of any plan, is the least predictable variable of all. So a good plan should incorporate some room for mistakes, delays in timing, revenue misses, and cost overruns. These are downsides that require mitigation. You should think through them before you execute. Outcomes can also be better than plan. Isolate those variables as well and include them in your upsides list.
Isolate key assumptions that drive your financial performance.
These assumptions / variables are the critical factors that you need to manage. They can include launch dates, hiring levels, expenditures, new product introductions, price changes, advertising, response rates, etc. It is critical that you get a clear handle on the 3 – 5 things that will drive your financial results and thereby determine your success. Have clear monitoring plans in place and stay on top of them. Make course corrections as needed.
Look for weak points that require attention.
Always assess your plan, actuals and gaps. If you have a miss or a win by 10% or more, it bears looking into. It isn’t luck (good or bad). Something more important is going on. If you address misses as they arise, you lower your risks and get control of your execution before it can get out of hand.
Build on strengths and don’t abandon them.
Operating plan management is not just about downsides. If you did a good job planning and you are executing well, you will be delighted to find that some things are going better than expected. Don’t ignore them. Isolate the reasons why and make sure the wins are sustainable.