Whatever time of year it is, you have almost certainly established a working direction for the remainder of the year, complete with specific objectives. Your initial plan for achieving them should be in place. This moment (or whenever it is – if you are thinking about it) seems like an ideal time to reconsider the entire situation, does not it? Plans are subject to change as soon as they are written – or perhaps even before they are written – in our fast-paced twenty-first century world.
If you have not already, now is an excellent time to review your company’s year-end results and make year-end plans. If you have already created an annual plan, you might want to reconsider it.
A typical approach to planning is to multiply the quantitative results from the previous year by an acceptable growth factor. Industry standards vary widely, frequently ranging from 5% to 25%. Add to that number scheduled product line enhancements and solutions to critical problems you have been meaning to address, and you have got your plan.
If you have been reading my articles, you are aware that I advocate for a different approach to this process:
Step 1) Gather as much information as possible from last year’s results – something many of us overlook. For instance, make 1998 the year you act on the knowledge that field rep training takes six months, not the six weeks you previously allocated. Step 2) Establish targets that will excite you and your team and motivate you to get out of bed each morning; Step 3) Determine how to achieve the targets established in Step 2.
A well-balanced strategy that establishes a foundation for continuous growth should have an effect on the following critical factors:
* profit and revenue generation * product development * customer satisfaction * quality * intellectual capital * productivity * strategic relationships * new customer growth * employee retention
Proceed with the three-step analysis for each factor.
Step 1. In each area, what can you learn from last year’s experience?
What did you do well – what worked – and what should you do more of in the future? What did you do incorrectly – what did not work – what should be immediately halted?
Additionally, inquire as to what is missing from this area. In other words, what could you add – or eliminate – that would significantly improve the effectiveness of your organization? An organizational knowledge manager, periodic competitive analysis, a market share report, and an employee training plan are just a few examples of what may be missing.
Step 2. What outcomes do you intend to achieve in each area?
Bear in mind that these outcomes should be audacious and dynamic. They should motivate everyone responsible for bringing them to fruition to do whatever it takes to complete the task. These objectives or measures are most effective when they are measurable and objective. They must be attainable, regardless of how difficult that may be. Bold results include a 50% increase in sales; dominance in prospect mindshare; 100% customer repurchases; three new products shipped by June; customer problems resolved in half the time currently required; a career path established for each employee; and zero turnover.
Step 3: How are you going to accomplish these objectives?
Your implementation strategy is composed of the following components:
Who is responsible for each of these factors? Which senior executive? Which supervisors? Which division? Certain factors, such as revenue, are directly related to a functional department, such as marketing/sales. Those are the straightforward ones. Less obvious are factors such as intellectual capital and customer satisfaction, which do not fall neatly into one category. Nonetheless, someone must pick up the ball. Whoever accepts accountability for specific targets and goals, along with their teams, will address the remaining questions.
Which strategies and tactics are most likely to succeed? Bear in mind that if you have set audacious goals, you probably have no idea how to achieve them. That is why they are audacious in the first place. You are inventing the responses, fabricating them.
Certain targets will require a straightforward approach, while others will require a more complex one. While there are no guarantees of success, each objective should have a clearly defined path that has a reasonable chance of getting your business where you want it to be. This path will define one or more initiatives that will be assigned a due date. Additionally, the path will include milestones – checkpoints that will be used to determine the initiative’s ongoing success.
What structural and procedural changes are you going to implement in response to this factor? Adding two salespeople, establishing a quality czar, establishing new reporting lines, eliminating paper memos, making a significant capital investment, acquiring a component vendor, or having a monthly new business quota are just a few examples. Each structural and procedural change will generate its own set of initiatives, all of which must be time-lined.
Is there any staffing implications associated with this initiative? Do you require additional staff, new job descriptions, or the addition of specific managers? What is the annual staffing plan for a factor that is directly related to a department, such as revenue or customer service? If a staffing increase is necessary, ensure that financial considerations are factored into the budget.
When all the variables, targets, accountable parties, initiatives, structural changes, timelines, metrics, and milestones are added together, a strategic plan for the year is created.
Is it possible to live without addressing all of these issues?
Of course you can – but how prosperous will you be, and for how long? Increase sales while sacrificing quality – what will become of customer satisfaction? Increase product quality while ignoring employee retention? What will become of quality in the coming year? And what will become of sales? Concentrate on profits rather than new customers or strategic relationships – sales (and profits) will decline the following year, and so on. Each factor’s improvement contributes synergistically to your business’s survival and prosperity.
Last issue: Are you capable of accomplishing everything at once?
You probably lack the necessary resources. However, the solution cannot ignore any of your critical factors – we have already seen the result of that approach. Rather than that, engineer another breakthrough. Develop a planning breakthrough that commits your organization to some level of advancement for each of the factors. One that ensures they all receive some level of attention, even if not all to the same degree. To paraphrase a well-worn adage, if you do not make progress in each area, you will lose ground. ground.