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8.5.98  
The New Approach to Business Plans: Tell Me a Story
Bullet-points are popular, but they leave too many holes in your thinking

Bullets are dead. So says an article in the Harvard Business Review contending that business plans with a narrative, story-telling approach get better results than the traditional bullet-point outline.

The idea popped up in an article called "How 3M is Rewriting Business Planning," published in the May-June issue, which argues that business plans punctuated by black dots are little more than lists of "good things to do." Rarely do the plans connect the dots in a logical, well-reasoned way -- something you're forced to do if you write a strategic narrative, says co-author Philip Bromily, an expert in strategic management at the University of Minnesota's Carlson School of Management. "It is also far more compelling to subordinates and superiors to have a real vision," Bromily notes. While the article focuses on corporate middle-managers, he sees applications at small companies, too, because it would give them a competitive advantage when seeking financing and other support.

The three-part formula developed by his team -- which included a professor of comparative literature --sounds like something right out of English class. "It must tell a story of a struggle between opponents," the article says, "in which the good guy triumphs by doing a series of smart things in the right order." It calls for setting the stage, in which the current situation and basic tensions are outlined; introducing the dramatic conflict by focusing on the challenges and obstacles faced by the company; and the resolution, which gives the winning strategy.

It's an appealing idea, especially to business owners who are better at words than they are with math. What's more, some venture capitalists tell Business Week that they prefer a narrative approach because it gives them an idea how a small business thinks through its problems.

"What we are really looking for is the whole picture of the company," says Wayne F. Caskey, senior vice-president of Reservoir Capital in Baltimore, Md. A plan pocked by bullets, he says, "flits across the surface, but it won't give us the background."

Sounds good, but a couple of caveats apply. First, even fans of this idea say you still must have your facts and financials straight. And before you dump your PowerPoint software, call ahead to make sure your would-be partner or financier will go for the New Age approach. Miles Spencer, the founder of MoneyHunt Properties in Norwalk, Conn., receives up to 7,000 business plans each year, and he doesn't have time to slog through a long narrative. "I eliminate 80% of most plans in the first paragraph," Spencer says.

Still, with backing from a prestigious HBR article, you may find more people willing to look at your vision instead of just your spreadsheet.

By Jeremy Quittner in New York
jeremy_quittner@businessweek.com

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