Business plans in the corporate sector are undertaken by the CEO on a yearly basis so that revenue will always be ahead of costs. New opportunities are pursued, marketing plans are executed and senior managers are fully geared towards meeting the set targets.
Only in this structured manner can the key objectives of any business plan be achieved.
But while this may sound easy, many CEOs will say it is not as straightforward to implement.
Still, a business plan must be formulated, prepared and executed. It does not matter that it is not the best. Better to have one than none at all.
Without it, a firm operates on an ad hoc basis, opens itself to volatile market forces, has no strategy to fight off its competitors and would likely be unable to price its products or services according to market demand, share and position.
The wrong pricing mechanism and strategy will directly affect sales revenue and, ultimately, your bottom line.
Managing a country may be different, but the basic fundamentals remain the same.
Think of a government as a corporate entity with the prime minister as its CEO.
The CEO must have a business plan every year in order to:
- generate sufficient revenue (income) from all forms of taxes, including corporate taxes and individual;
- be aware of cost elements both in terms of production and human resources;
- be successful in servicing market demand (clients or voters) and market share; and
- be aware of new market opportunities (projects and FDIs) that will generate new income and employment opportunities in order to expand the market base (more clients or voters).
The Pakatan Harapan (PH) government obviously did not have a business plan for the country. The leaders of the coalition did not demand such a plan from their CEO.
Not having a business plan meant the CEO was left to his own devices with no clear direction.
PH’s CEO operated by his own ideas, managed the country on an ad hoc basis, brought in irrelevant projects (think third national car) not demanded by its clients, and lost market focus.
PH was confused between its own clients and that of its competitors, and priced its services either too cheaply or too high.
Eventually, it lost its market position and collapsed.
Perikatan Nasional (PN) could learn from the failure of PH.
So far, though, PN has failed to plan. This is likely due to the Covid-19 pandemic, but that is no reason for not formulating a plan – one that would secure its market share within the sphere of its client base.
This is crucial as PN is a new, unproven brand of service with no established brand loyalty.
Its current market position is not stable and widely open to competition.
PN is also derived from old brands that matured over the years, showing a decline in sales and loss-making strategies which the market had rejected before.
The board of directors in PN should demand a more creative business plan from the CEO for the purpose of setting the right targets and objectives.
Board members and senior staff holding various positions do not guarantee sales and revenue.
Be warned: the lack of a viable business plan will likely result in the replacement of the CEO and possibly a change in shareholders too.
The views expressed are those of the author and do not necessarily reflect those of FMT.