Optimism - Its Role in Business Planning

How optimistic should a business plan be? When a business starts, the thinking is about success and the plan will be optimistic. This is appropriate, but there is an issue of credibility linked to the degree of optimism. For the realistic long-term (3-5 years) and the realistic short-term (6 months to 1 year), the plan goals should be reasonably achievable for the plan to be credible. As a business matures, the setting of plan goals can have a significant effect on business growth.

An overly optimistic plan containing goals that cannot realistically be obtained will not be a credible plan. Where there is an unrealistic goal, the productive workers will know upon learning of the goal that it is unrealistic and will regard the goal, if not the entire plan, as not worthy of respect. Contrast that situation to the satisfaction experienced by a business team when goals are achieved. Many times, even though a goal is not of great overall significance, the feeling of accomplishment to those who worked hard as a team to accomplish the goal is substantial motivation to take on and achieve new goals.

Workers in a situation where there are no defined goals will lack focus on performance, and overall morale will suffer. Workers in a situation where the goals defined are unattainable will be in a similar situation to that where there are no goals. When workers are given goals that reasonably can be achieved, the natural incentive is to work as a team to achieve the goal. Even if the goal is not achieved, the effort builds the team morale and prepares for goal achievement efforts in the future.

When the policy-making group (usually the owners) of the business sets goals, the decisions about goals should be made pursuant to the decision-making policy of the business, which should be a defined procedure including the aspect of group decision-making. Where all groups of a business are involved in the making of a decision about goals, it is less likely that the goals set will be overly optimistic. The involvement of all groups in the business in setting goals not only provides a variety of perceptions about reality it also provides insight into the direction of the business growth. These are all morale-building factors enabling continued growth. A series of achieved goals does wonders for the morale and efficiency of the business workforce.

An efficient business plan for a growing business will supply an accurate reflection of the reality of the business environment and allow the execution of actions to meet reasonable goals. As the plan cycles through goal setting, defining actions to meet the goals, the execution of the actions, monitoring of the effect of those actions, and revision of the goals; the beneficial repetition of setting and meeting goals will the source of business growth and success.