2-1-4-3: A new model for business, sales & marketing planning for the time-poor in a connected, hassled world
Twenty years ago I came across a completely new way to write a business plan. All on one page, I found it immediately attractive, quicker and easier to finish than standard writeups designed to accomplish the same task. Writing less as Bernard Shaw once quipped is however often harder than writing more, because using fewer words requires more rigor. That said, I continue to find 2-1-4-3 to be the most powerful tool in my business arsenal, and have used it within Alltech as part of our internal training. In this time, Alltech has undergone a transformation, growing 30 fold with a turnover now exceeding $2 billion. 2-1-4-3 has also been the bedrock of external training with our customers from China to Canada, from the US to the UK. It has also helped other companies in other businesses, from industries as diverse as software and analytics to animal genetics, coffee and craft beer to bakeries and pet food. All have benefited from its simplicity and its power.
2-1-4-3 pushed me to think disruptively. Are you ready for that?
Disruptive thinking leads to opportunities and the potential for exponential growth. When it comes from within your team it’s far more likely to succeed, because the motivation comes from their own creative thinking and direction rather than yours.
Typical business plans follow a four step process: review the previous year, evaluate the current circumstances, create a plan and budget for the coming year and set targets based on the expected results. I call this 1-2-3-4.
The focus is on using past events to plan and predict future events. Often, the plan from the previous year is simply given a facelift, the numbers updated and rolled forward for another year.
The problem is that this system works best in predictable, linear environments- and there are fewer and fewer of those. Moreover, ambitious high achievers find this process unsatisfying, perhaps because it does lead to predictable, linear results. Who wants ordinary results?
Business books and articles are full of discussions dedicated to stretch goals and how to encourage disruptive thinking- but then managers are asked for a business plan and everybody goes right back to the old by-the-numbers approach of the 1-2-3-4 business plan.
Visionary leaders know the need to focus on Step #4. That the desired results need to drive the actions (#3). They focus on where they want to go and work the plan backward from that point.
So if this is what visionary leaders do, why is 1-2-3-4 business planning still the norm? It is a consequence of business plans being written for bosses, banks or investors where the goal seems to be to aim as low as possible. Stretch goals are popular in the literature but bring uncertainty and increased risk of failure. This naturally creates anxiety for employees and managers alike. Staying with the familiar process is more comfortable, and gives cover if something doesn’t go to plan.
Disrupt the process, get a new vision
Rearranging the order of the steps is more than a cosmetic change: By starting at a different point you disrupt thought patterns, which creates opportunities for fresh thinking on familiar topics. It may seem a minor change to start with the present, instead of the past, but now has immediacy to it that the past simply does not. Starting with where you are, and then looking to the past with a specific focus on the differences between then and now provides relevant information with which you can ask and answer the key question of any business plan: Where do we want to go? As Lewis Carroll noted, “If you don’t know where you are going, any road will get you there.” If particularly apt- and by the same token, once you know where you are going you can meaningfully evaluate the ways to get there. So, instead of 1-2-3-4, the disruptive approach to a business plan, as outlined below, is 2-1-4-3.
Talking Stretch Goals
Goal setting is a critical part of the planning process, and business literature is full of discussions dedicated to “stretch” goals. Stretch goals have objectives that are far more difficult and require extra effort to accomplish. They involve creative thinking and ambition on the part of the person or team trying to achieve this goal. Often requiring people to truly extend themselves, stretch goals are meant to push the team or individual into uncharted territory.
Unfortunately, imposing poorly chosen stretch goals can have adverse effects on a team (or individual). The prospect of attempting to achieve challenge or impossible goals can be overwhelming and make it uncertain where to begin.
One way to reduce negative reactions is to include all participants at the onset, rather than imposing these goals through a top-down process. 2-1-4-3 addresses this by allowing all members of a team to be involved in the goal setting process, immediately increasing the chance of compliance.
Getting Started…
2. Present: Where are you now (Really!)
Understanding where you are- in your company and in your competitive environment- is the crucial first step. Typical business plans start with analyzing lots of data: There are all types of analysis and key metrics available to gain an understanding of where the company is: profit & loss sheets, market share analysis, customer metrics, SWOT (Strength/Weakness/Opportunity/Threats) analysis, etc. But using these tools first limits their usefulness. Reversing the order, starting with identifying what you want to know and then choosing which of these tools is most appropriate opens the door to fresh thinking. So the first step is to ask: What is the true state of our current business? It can be both useful and enlightening to ask team members to answer each of these questions separately, and then pool their responses.
What business are you in?
What are the mega long term industry trends?
What is your (real) market share?
What outside factors affect your organization?
What resources do you have?
What are the barriers faced by new entrants?
It is important to be both specific and blunt in answering each question. This is going to be the foundation used to execute the 2-1-4-3 framework and the stronger the foundation the better.
1. Past: How you got here
Organizations tend to focus unduly on past achievements in business planning. The same sort of analytics can be used as in step 2.: P&L statements, sales growth, market share, etc. The difference here is that the 2-1-4-3 framework demands a disruptive approach, challenging participants to think differently by asking the second question: How did we get here?
Have you always had this business? How have you diverged from your original mission?
What are some highlights or historical milestones your company has achieved thus far?
How does your company’s past affect its options for the future?
What are your truthful core strengths? Honest weaknesses?
Asking the right people in the organization to answer these questions, without resorting to only to data or other analytic tools, challenges them to identify aspects of the business that have changed or irrelevant and outdated ways of doing business.
When pulling together and evaluating the responses, it is important to dig into the data which can independently corroborate or challenge the outcome. The advantage of asking the question first and looking for the data second is that it disrupts the standard thought processes by ensuring that responses are not limited either by old habits or led by data that may or may not be relevant to the question being asked. Secondarily, when you know what you are looking for, you can identify the type of information that will answer the question you are asking. That could well be your existing data, but it may also require you to gather information that you hadn’t thought of looking at before.
4. Future: Where you want to go
Knowing where you are, and how you got here, the next crucial question is: where do you want to go? A great business plan should have a vision, which at its best it should be immediately attractive, understood by all and be challenging yet achievable. Again, the process begins by asking questions:
What is the topline goal of the organization? Where opportunities are there?
What are your key breakthrough opportunities for growth and what is the potential?
What are the barriers you face to achieve this goal?
What types of resources are required?
The format may look something like this:
These questions should be discussed as a group by the participants from the first two phases of the 2-1-4-3. Too often, business plans are the work of a small, closed group which increases the likelihood of group think and is poor resource management. Identifying and selecting the organization's “stretch goals” is too important to leave to your B team.
Together, the answers to these questions will illuminate opportunities that the organization is well placed to reach for. This vision can then be broken down into specific goals and targets, which is important for accountability. Counter-intuitively, bigger goals are no more complex than smaller, incremental goals, and having the clear focus can improve focus and allow better resource allocation.
The overarching focus should be on making the goals SMART: specific, measurable, attainable, realistic and timed.
3. Future Present: How are you are going to do it?
Now it’s time to put it all together. This final question is simple: How are we going to achieve these goals? The answer is the roadmap for the team. This part can be the most fun, because the answers have evolved organically from the analysis and goal setting stages of the process, and because there is already so much buy-in from the earlier stages, most of the team should be excited about getting started on actions. These actions identify the resources that are required, the changes that need to take place and may require new metrics to determine success.
Some questions to consider:
Who is carrying out which action?
When will the goals be achieved?
How will we know that we have achieved the goals and targets?
This format helps outline everything clearly:
And, because the team has been involved in the process, the answer to ‘why’ is already known.
Putting it all together
The 2-1-4-3 process is designed to be an alternative to the standard business plan: A process that will encourage disruptive thinking in a constructive manner. It can be used in a wide range of situations, at the individual level, for a team or a corporation. Successful team 2-1-4-3’s have the people involved do phases 2 and 1 on their own, with feedback during preparation only provided where more detail is required. Having the team gathered for phases 4 and 3 (in sequential meetings) is where buy-in, action and accountability happen. The 2-1-4-3 process should be revisited at planned intervals, with the interval reflecting the overall timeline of the goal.
I hope 2-1-4-3 works for you as it has for me.
Disrupt linear thinking, embrace transformation and enjoy extraordinary results.
Want to get started? Access the 2-1-4-3 template here. I recommend printing in A2 format, but as I understand not everyone has this available to them, it is also printable as a ledger in 11X17 and of course, you can download it and type on it to send and keep electronically.
Acknowledgements
The origins of 2-1-4-3 are obscure. Rumor has it a process similar to 2-1-4-3 was presented at a conference by legendary sales trainer Brian Tracey but I can find no record of it. 2-1-3-4 came in an infancy stage to Alltech via the late Kevin Davey, previous owner of Transform, a Dublin based training company. We quickly realized, however, that 2-1-4-3 had incredible potential as a powerful sales/marketing/business model. It was embraced by our team in Asia, subsequently in Europe and took the rest of the company by storm.
