GenXmanager: Leadership for the Generation X Manager

Last night we were treated to a double-dose of The Office. These two episodes, The Dream Team and The Michael Scott Paper Company, gave us a glimpse at true start-up genius (okay, maybe not!). Michael launched his business with no plan. He had a dream, followed his gut, and launched a company. Michael showed us the power of not planning.

I’m not advocating that you start a business without a plan, but some research has shown that there is no difference in terms of success between those entrepreneurs who had a business plan and those who did not.  An Inc. survey found that 60% of the Inc. 500 CEOs did not have a business plan when they launched their business.

So is a plan really necessary? If you need funding for your venture, you likely need a formal plan. In last night’s episode, Michael went to “Nana”, his grandmother, to obtain funding for his start-up. Nana asks, “How do you plan on turning a profit in this economy?” Michael responds, “By wanting it more. By working hard…” His grandmother then interrupts, “What’s your mission statement?” He says, “My mission is stated as follows. I will not be beat. I will never give up. I am on a mission. That is the Michael Scott guarantee.” Nana was not convinced. He didn’t obtain funding. Here’s the clip.

Researchers at the University of Maryland, however, found that business plans don’t really effect venture capitalist funding. They say, “Our results are most supportive of the premise that planning documents play, at best, a minor ceremonial role and do not inform venture capitalists.” But then the article does state that, “A business plan may be useful in helping entrepreneurs organize their thoughts and details.” [Source: WSJ Blogs]

So, should you start your business with reckless abandon or carefully craft an ultra-detailed, “budget-to-the-penny” business plan? A formal business plan may not be necessary but you must be prepared. I listened to Ron Shapiro, author of Dare to Prepare, give a talk at a recent SmartCEO event. The people he presents in his book (and during the presentation) all attributed their accomplishments and success to being prepared.

You cannot start any venture haphazardly but at the same time you may not need, according to the research, a 50-page detailed business plan. A simple plan, however, does help define your goals and how to get there. Here are some resources for helping you plan:

• Simple but effective
• Small Business Planning Guide
• Small Business Administration

With any plan, whether on the back of a napkin or an elaborate masterpiece, you must be able to adapt, change, and be nimble enough to shift the plan at a moment’s notice. Agility is the key. And of course, it is essential to be intuitive and at times and follow what your gut tells you. Having trouble listening to your gut? Here’s how.

Michael Scott started The Michael Scott Paper Company on a whim. A little planning on his end while being flexible and following his gut instincts would have likely put him on a more solid footing. But hey, at least Pam made a sale for his new company.