What does LEGO have to do with good financial planning? Quite a lot if you work through the question.
I came upon an article by Barry Chandler, “How LEGO’s Purpose Made It The Most Powerful Brand.” Barry is a brand expert and the article is worth the trouble for that purpose alone. LEGO is a super-successful turnaround and thus worthy of study. Who among us has no need for a turnaround?
It speaks to financial planning. According to Barry, LEGO turned itself around by focusing on its core values, purpose and resulting mission. Every financial plan needs a focal point. Maybe vision or strategy works better as a word. The idea is that if you have no clear idea where you are going, any method might get you there.
Barry points out that there is no magic pill that gets the result you want. Random tactics will not work. No tactic will work predictably in the absence of clear strategy. Find your purpose and attach everything you do to that purpose.
Building with LEGO provides some of the necessary planning tools needed for life. Everyone can do it. People learn technique doing things they can understand. LEGO helps.
- Know what you want
- Know what you have to get it with.
- Plan the journey. Examine your blocks, find more. Decide how they should fit.
- Build the piece. Anything from a 4×4 box to the DeathStar.
The sequence is imagine, plan, execute. Just like a financial plan.
With simple structures, the builder needs little in the way of instructions. As problems become more complex, there should be more. It would be challenging to build a complex project like the DeathStar from a bag of pieces and no instructions. Financial plans are like that too.
No matter how intuitive the early building may be, eventually there is complexity. Time is an issue. Limits, like too few pieces, become important. Process, like sub-assemblies, become necessary. That is why core values, and purpose must be highlighted. It is easy to get lost in the complexity of how. Without purpose, no one survives.
A financial plan follows a pattern:
- Vision. Establish values, time, priorities, preferences, and purpose
- Mission. Develop a method to achieve the vision. Gather or develop resources. Include helpers. Learn about financial tools which are the means to apply “How” to your vision.
- Review and revise. Learn from experience and from further study of the environment wherein the problem or opportunity exists.
People often wait for the perfect answer before execution begins. Bad mistake. A plan that starts sooner is better even if it is not perfect. That is why review and revise is important.
Anyone who thinks once done, done forever, is doomed. Planning is a process not an event. Review and revise is the key element. No one can get it right the first time and those who demand that will never start. Or finish.
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.