Make bets not plans
by Dagmar Woyde-Koehler

Posted on Posted in 8th Global Peter Drucker Forum

Plans define a special relationship between people and the future. Plans attempt to anticipate the future and make life predictable and even controllable. A plan is predicated on both these premises while also awakening expectations that the goals it sets can be achieved and sustained. Such characteristics are shared equally by the business plans made in the corporate sector and the life plans made by individual people.

Bets, on the other hand, are clearly recognized as assumptions and suppositions that always include the possibility that something else might happen quite different to what has been predicted. Bets are based on probabilities and possibilities. Someone making a bet is always well aware that they can lose, precisely because it’s impossible to predict the future with absolute certainty.

Unlike bets, plans are generally seen as serious and reliable. So can betting sometimes be more rational than planning? And if so, under what conditions would this hold true? Could a cast of corporate stakeholders agree to bet on the future? And if so, what effects and consequences would this entail?

Planning replaces coincidence with error, Albert Einstein once said. You don’t have to be a genius to take this clever statement to an equally clever conclusion. The Gospel of the planability of the future, as preached in business schools and practiced in enterprise, needs serious critical examination.

We don’t know exactly how much time companies spend year in year out in writing plans that are overtaken by reality and have to be replaced by new plans which then suffer the same fate. What is certain is that at the beginning of all business activities truly grounded in strategy there is not a plan but something that more resembles a bet – a wager that a venture or investment looks highly promising and is likely to succeed. And such a wager obviously has nothing to do with gambling.

It’s much more an expression of personal entrepreneurial commitment combined with a readiness to accept the risk that at the end of the day the bet may fail to pay off. It mobilizes a different kind of energy than planning does because the business plan triggers a kind of collective autosuggestion which nurtures a false sense of predictability. A plan awakens expectations that it will be followed and adhered to, and if this doesn’t happen, blame is generally laid on poor planning. Failure is seen not in the planning system itself but in the planners. Thus the search for the root cause tends to become a tool for wielding power and not an instrument of entrepreneurial thought and action.

The deviation from plan is seen as an error even if it’s a happy coincidence; one which an entrepreneur would embrace, if some bean counter didn’t put him off. Fortunately, there are entrepreneurs, willing to take the risk as well as the chance of such happy coincidence. They will open up new ways of working that are more predictive than historical, which a plan still is even if it´s future based – as it’s predicated on a view of the world that was “true” when it was drawn up.

In California’s Silicon Valley the bets are fast and loose. Investors bet on the wildest ideas of innovative startups, and don’t hanker after business plans that show a fat ROI after one or two years. Fail and fail again is hard-wired in their DNA and if you don’t make mistakes and don’t fall flat from time to time, you aren’t really at the forefront of innovation. Europe is still light years away from bringing anything remotely comparable to life. But the countdown triggered by technological development is on.

Whereas planning is an enclosure reserved for experts, closely followed by controllers and takes place in a kind of closed shop. This means that the collective intelligence potential of an organization remains untapped because it is systematically excluded. In betting, on the other hand, it’s possible and indeed smart to make use of the intelligence of the many. This may well lead to corporate democracy but not inevitably so.

And this much should be obvious: once the bet has been placed, plans should and must be made as to the best way forward to win it. Such a plan, however, is not some bean counting business plan but strategically-oriented qualitative implementation planning.


About the author:

Dagmar Woyde-Koehler, founder and director of the  intercultural OUBEY MINDKISS Project, founder and managing director of new&able. As co-founder and managing director of the EnBW Akademie, she received the 2008 Chief Learning Officer Award for her pioneering work in this field. With Gerhard Borck, she has written an interactive book Wetten statt Planen ((Make Bets not Plans)

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