Archive for the ‘Planning’ Category

What is a Strategy Focused Organization?

Tuesday, February 17th, 2015

 

This week’s guest is Dick Albu, the founder and president of Albu Consulting, a strategy management consulting firm focused on engaging and energizing leadership teams of middle market private and family business to formulate robust business strategies and follow through on execution of key strategic initiatives.

 

 

The ultimate prize for all NFL football teams is a Super Bowl win.  There is no greater reward for a well planned and executed season.  Management, coaches, and players need to be aligned and focused for every game.  They also need to be committed to the overall team strategy.  Successful teams embrace the strategy focused organization model.

What can business owners and CEO’s learn from these NFL football teams?  A strategy focused organization understands that strategy is dynamic and it has adapted a continuous strategy management process of addressing issues and weaknesses, leveraging strengths, and exploiting opportunities on a timely basis. As with a winning football team, the ability to successfully execute the game plan is critical to business owners and their management teams. Here are three key elements for successful strategy execution.

Mobilize and engage the senior team – Alignment and commitment from the senior team is an essential ingredient to success.  Without complete buy-in from the leadership team, it is a sure bet that little change will happen.  Management and coaches all need to be on the same page, guided by a strategy that everyone has bought into.  Involving and getting buy-in from all managers through a collaborative process is critical to creating a strategy focused organization.  Keep in mind that this type of engagement does not happen overnight.  Establishing a strategy focused organization happens over years, not weeks or months.

Translate strategy to action in a way everyone can understand – Use a simple system that everyone can understand to explain who needs to do what by when.   Successful coaches make game plans easy to understand and make execution as flawless possible.   In our experience, a simple framework where objectives, initiatives and tactics are aligned creates a great deal of clarity and ensures engagement.   Employees get energized when they understand how they can contribute to the success of the strategy.

Embed the strategy execution process into day-to-day business operations – Organizations need a predictive, consistent, and continuous methodology to manage strategy execution.  Coaches are constantly making adjustments to their strategy as the season progresses because they appreciate that the football season is dynamic.  New opportunities or critical issues come up at any time, like an injury that leaves you without your starting quarterback.   Organizations need to think in the same way.  Strategy requires a dynamic and continuous process with consistent follow up throughout the year with the entire organization. Our approach with clients requires an ongoing execution process of monthly, quarterly, and annual meetings to measure, review progress and adapt strategy as necessary .

There are obviously many more aspects to creating a strategy focused organization that can lead change and improve performance.  Skipping any of these elements will prevent any company from achieving success.  We would like to hear your reaction to these important points, and let us know how you are creating a strategy focused organization.

Dick can be reached at 203-321-2147 or RAlbu@albuconsulting.com. For more information on Albu Consulting visit www.albuconsulting.com.

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3 Lessons About Successful Business Growth

Tuesday, January 27th, 2015

Two books, published 19 years apart, yet saying similar things about a key aspect of successful business growth:Lessons about successful business growth

‘Built To Last’ was published in 1994. In it, Jim Collins analyzed 18 companies that he called visionary because they were the best in their industries – and had been that way for decades.

Collins argued that the core values and enduring purpose of all 18 could be separated from their operating practices and business strategies. And that, while the former never changed, the latter changed constantly in response to a changing world.

In her book ‘The End Of Competitive Advantage’, published in 2013, Rita Gunther McGrath studied the performance of large, publicly-traded companies from 2000-2009.

She found that only 10 of them grew their net income by at least 5% every year. All 10 had found ways to combine tremendous internal stability with tremendous external flexibility.

McGrath argues that to win in volatile and uncertain times, companies must learn to exploit short-lived opportunities quickly and decisively.

If you look at the things that Collins’ companies kept unchanged and those that gave McGrath’s companies their internal stability, you find, in my opinion, a number of similarities:

  • Collins’ companies all had a sense of purpose, a lofty aim. So did McGrath’s – to become world class. Neither talked about making money.
  • McGrath’s companies focus on values, culture and alignment. Collins’ had ‘cult-like’ cultures, only employees who shared their values stayed.
  • Collins’ companies invested in ongoing employee education, some building learning centres. McGrath’s also invest heavily in employee education and ‘upskilling’, increasing peoples’ internal mobility as the strategy changes.
  • The most senior executives in all 10 of McGrath’s companies were promoted from within. Collins’ companies showed amazing consistency promoting ‘home grown’ senior management and CEOs.

I think there are 3 lessons for the owners of smaller, privately-owned companies:

  1. Think about why you started the company. I’ll bet it was not ‘to make money’. Communicate that constantly, use it to shape the company’s values and vision, build your strategy on that foundation.
  2. Be clear about your values. Hire only people who share them and train those people to grow with you.
  3. View the company as something that can contribute to your community, long after you have moved on and develop people who will carry on your vision.

There are other lessons from these books. More on that later……..

 

If you enjoyed this post you’ll also enjoy 4 Things That (Positively) Affect Growth

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

6 Tips For Growing Your Business in 2015 – How to Use Them

Tuesday, January 20th, 2015

I was asked a good question last week.How to implement 6 tips for growing you business in 2015

“Loved your last blog post, Jim – but how do companies like mine do those things?”

So here are some ways any business owner can implement the 6 tips in his/her company.

1. Able to spot trends earlier than most of their competitors.

  • Stay close to key customers and suppliers – ask what they see in the future, how you can help them. Don’t leave it to sales people, meet with the owner/CEO twice a year. Pay special attention to customers who are ‘early adopters’ of new technologies and processes.
  • Get involved in industry bodies, serve on committees, listen for trends in what suppliers and competitors are saying.
  • Make your own internal data easy to access and analyze.

2. Very willing to try new things (innovate, adapt).

  • Have a pipeline full of growth initiatives at different stages of development.
  • Understand that people who are good at making things efficient aren’t good at innovation. They’re 2 different skill sets, have a mix of both.
  • Do limited tests of new products and systems and quickly roll out the ones that work.

3. Always trying to be better – than themselves.

  • Adapt your culture so that employees are comfortable challenging the status quo. Continuous improvement and innovation become by-products of that.
  • Never sacrifice effectiveness to short-term cost reduction programs.

4. Following a strategy or plan.

  • Have a clear picture of what your Company will look like in 3 years.
  • Set priorities and allocate investment and resources accordingly.
  • Anticipate change. Update your current situation twice a year and adjust where required. (Staying close to the market also allows you to surface risks and respond to them early.)

5. Skilled at turning their plan into results.

  • Link your strategy to your annual planning cycle.
  • Do forecasting and budgeting after your annual plan.
  • Link every individual and department’s goals to the company’s goals.
  • Hold everyone accountable.

6. Working from a solid foundation.

  • Automate everything you can:
    • For example: your CRM system; accounting system; project management system; etc.
    • Use dashboards to monitor key financial and operational metrics e.g. cash flow forecast, number and value of incoming orders; delivery times; IT down time; etc.
  • Implement ISO, Six Sigma or any other standard/process that could apply to you.
  • Ensure all your core business processes – e.g. selling, product development and launch, HR (developing in-house talent, recruiting, onboarding) – are robust and effective and document them.

There now, let me know if that’s better. And if we can help……..

 

If you enjoyed this post you’ll also enjoy Slow and Steady Growth Is The Key To Success

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

6 Tips For Growing Your Business in 2015

Tuesday, January 13th, 2015

January is the month for New Year’s resolutions, freezing cold and, for many, a new fiscal year.Tips to successfully grow your business in 2015

Everyone wants to ‘do better’ in 2015 than in 2014 and, for business owners, ‘doing better’ is shorthand for growing.

I don’t know how often, in the last couple of weeks, I’ve been asked something like “What are your top 6 tips for growing successfully”.

The answer depends on a number of things.

That said here are some of the things that the companies I’ve seen grow successfully have in common.

Those companies are:

1.  Very willing to try new things (innovate, adapt). However they don’t bet the farm. They do limited scale tests of new products and ways of doing things first. Ones that work are rolled out quickly; ones that don’t are killed – just as quickly.

2.  Always trying to be better – than themselves. They are continually looking for ways to, for example, improve their own quality, do things more quickly and become more efficient. They don’t compare themselves to others, they just want to the best they can be.

3.  Following a strategy or plan. They know where they want to be in 3 – 5 years but don’t expect to get there by following a straight line. They try to keep growing steadily in good times and in bad.

4.  Skilled at turning their plan into results. Knowing what success will look like makes it easier for them to set priorities and allocate the resources and funds to achieve them. They link every individual and every department’s work to the company’s goals and hold themselves accountable.

5.  Able to spot trends earlier than most of their competitors. They stay close to their customers and suppliers, monitor their competitors and watch for developments in technology.

6.  Working from a solid foundation. All of their core business processes – sales, marketing, operations, finance and HR – are tried, tested and automated wherever possible. They find, hire and retain smart people who are a good “fit” with their culture and values. They are fiscally cautious, never over extend themselves and can fund their growth.

Here’s the rub. All 6 are much easier to talk about than do.

But if you start on them now you can make some progress this year. And if you need some help just give us a call…….

 

If you enjoyed this post you’ll also enjoy 3 Leadership Tips From A Great Scotsman

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

From Strategy to Results – Plus Some Succession Planning

Tuesday, January 6th, 2015

In an ’80s TV series called “The A Team”, one of the main characters used to say “I love it when a plan comes together”.Good strategy executed successfully

Here’s a wonderful example of a real life plan coming together.

In 2009 a recruiting company called LEAPJob hired us to help them with their business strategy.

It was a family business founded by Donna and Marcus Miller. One of their sons, Jeremy, worked in the firm with them. Stephen, their other son, had a very successful career with a large software company.

There were 3 major issues to consider.

First, the Millers believed the recruiting industry was undergoing fundamental change. They were concerned about the future for smaller companies.

Second, LEAPJob had an extremely high level of brand recognition in its target market and a very successful on-line lead generation engine.

Finally, Donna and Marcus were thinking about retiring.

The outcome was a 2-step strategy.

The recruiting business would be sold in approximately 3 years and Donna and Marcus would retire.

While they were positioning LEAPJob for sale, Donna and Marcus would help Jeremy launch a new business. This would leverage his skills in marketing and branding – competencies Jeremy had honed by leading the rebranding effort and building the lead generation engine.

Fast forward to January 2015.

Jeremy’s first book, published by an established Canadian label, is about to be launched. It will be available in stores and on-line via Amazon, Barnes and Noble and iBooks, amongst others, in a few days’ time.

The title of the book “Sticky Branding” is also the name of his company.

Jeremy’s commented a number of times over the years that our process played a significant role in his journey.

But the idea to pinpoint and profile small and mid-sized companies with sticky brands; the analytical skills to see the factors common to them; and the creativity to combine those factors and his own experience were all Jeremy’s.

The result – lessons which can be applied by the owners of small and mid-sized companies who want their companies to “stand out, attract customers & grow an incredible brand”

He’s had to deal with some hard knocks and tough times but now Jeremy is on the brink of success. I admire his focus and willpower.

Donna and Marcus are happily retired.

I love it when a good strategy is executed successfully.

 

If you enjoyed this post you’ll also enjoy Strategies That Get Results Are Developed By Thinkers And Doers

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Top Ten In 2014……

Monday, December 29th, 2014

The results are in!

Our top 10 blog posts in 2014 were:

1.   Adaptive Strategy – A Way To Profits In The New Normal? looks at an alternative strategy that is built on the 3 R’s (Responsiveness, Resilience, Readiness) required in a changing environment.

2.   6 Ways A Business Owner Can Influence Culture looks at the ways a business owner can develop a culture which will help increase operating profits and build shareholder value.

3.   6 Challenges Fast Growing Companies Face discusses the 6 challenges of execution which, if not dealt with, could prove fatal.

4.   3 Times When You May Need To Change Your Strategy explains when a company should review its strategy and what makes that review and any subsequent actions necessary.

5.   The Difference Between A Strategy And A Plan talks about the difference between strategy and planning and why it’s important to understand what these terms mean.

6.   6 Things We Can All Learn From Family-Owned Business puts forward 6 simple things business owners can implement to achieve better long-term financial performances.

7.  Use These 3 Tips To Make Your Next Critical Decision offers 3 things Ram Charan, co-author of “Execution”, says business leaders do when faced with a critical decision.

8.  5 Traits Effective Business Owners Share outlines some of the traits effective entrepreneurs have in common that contribute to the growth of their businesses.

9.  3 Reasons Why Consulting Assignments Fail and 3 Reasons Why Consulting Assignments Fail – Part 2 addresses the most common reasons why things can go wrong between consultants and their clients.

10. Strategic Planning – 3 Things That Are Wrong With It outlines how business owners make 3 mistakes that could destroy their company when they confuse strategy and strategic planning.

If you missed any of them, here’s another opportunity!

Santa Claus and VUCA

Monday, December 15th, 2014

The Holiday season set me thinking.VUCA and its impact on strategy

One of the traditions in our version of the Holidays is the letter/email from each child to Santa Claus, the determination if the child has been naughty or nice and, assuming the latter, the resulting delivery of gifts on Christmas morning.

To execute successfully, Santa manufactures or purchases the gifts then packages and delivers them.

These operations take place in his workshop and distribution centre, located at the North Pole and staffed by elves.

This much we know for fact.

This year, however, there’s a question around Santa’s strategy which is of fundamental interest to all strategy consultants.

What is the impact, if any, of VUCA (volatility, uncertainty, complexity and ambiguity)?

Academics and key figures in the consulting world appear to agree that VUCA exists. But that’s about it.

Because, while some say it has made strategy and strategic planning redundant, others argue it has no impact whatsoever on the need for an organization to develop and execute a coherent strategy.

It’s important at this point to determine Santa’s KPI’s.

The 2 critical performance factors are accuracy (the right kid gets the right toy) and on time delivery (the toys are delivered during the night on Christmas Eve). Quality is irrelevant because kids spend more time playing with the wrapping than with the presents.

It’s assumed that Santa has availed himself (I’m assigning a male orientation to the incumbent. A discussion of the suitability of other genders for the role is a topic for a future post) of all modern processes and technologies.

Lean manufacturing; warehouse management systems; mobile computing; performance-based compensation for elves; and video monitoring of child behavior, with NSA input on social media patterns; the use of ‘big data’ etc., etc., are all givens.

And Santa’s strategy is tried and tested over many years.

So the only variable is VUCA.

The only way we can be sure of the outcome is to wait until Christmas morning and conduct rapid research by monitoring social media trends and conducting structured telephone interviews with a representative sample of the population.

Now, I am not given to making predictions.

But, given the season, I am going to break this habit. I predict that Santa’s performance this year will be at least on a par with previous years.

Which means that VUCA will have had as little impact on his need for a strategy as it has on the needs of every other organization.

Happy Holidays!

 

If you enjoyed this post you’ll also enjoy 3 Techniques For Removing Bias From The Big Decisions

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Can Strategic Planning Pay Off?

Tuesday, November 18th, 2014

“The most fundamental weakness of most corporate plans today is that they do not lead to the major decisions that must be made currently to ensure the success of the enterprise in the future.”Key factors to make strategic planning pay off

It sounds like something I might have written in one of my blog posts because the point applies equally to owner-managed businesses.

But, regrettably, it wasn’t.

It’s from an article written by a 31-year-old, who then goes on to say:

“…..Nothing really new happens as a result of the plan, except that everyone gets a warm glow of security and satisfaction now that the uncertainty of the future has been contained……”

Does that sound familiar? The author goes on to say:

“……too many managements fail to…….recognize that the end product of strategic analysis should not be plans but current decisions.”

He then lists the reasons why decisions aren’t made:

• It’s risky – a bad decision could jeopardize the company.

• It’s difficult – “Strategic planning….deals with the most complex questions facing a company……synthesizing critical issues and strategic options to resolve those issues….is fundamentally a creative process. Many…..find it an elusive, uncomfortable task.”

• It requires leadership – making controversial decisions requires a willingness to be tough-minded.

• The value system works against it – owners often emphasize short-term results, which have little to do with long-term strategic success.

Next the author points out that “Many planning systems simply….produce forecasts of financial results, or statements of objectives”.

This is “….momentum” planning as opposed to dynamic planning that is attuned to the realities of external change……..

To deal with this, emphasis must be given to 3 things – evaluating the external environment; thorough evaluation of competitive strategies; and developing contingency plans.

Finally, the author provides 2 recommendations for motivating the people who can make or break a strategy. Involve those who will actually have to execute the strategy and adapt reward systems to recognize longer-term performance and the achievement of strategic goals.

So, which of today’s leading thinkers wrote the article? None of them did.

An up-and-coming member of the McKinsey team called Lou Gerstner (of IBM fame) wrote the article in 1973.

I like the article because it addresses all 4 of the Risks we believe growing companies face – having a Clear Growth Plan; linking it to Action; getting Buy In and holding people Accountable.

You can find the full article here.

 

If you enjoyed this post you’ll also enjoy Strategic Planning – 3 Things That Are Wrong With It

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Recommended Reading – Winter 2014

Tuesday, November 11th, 2014

Hello, winter!  Snowflakes are dancing on the air and covering the land in a wardrobe of white.  A touch of arctic air is pinching our noses and cheeks.  Time to get comfortable and pick up a good book. Here are some of the personal favourites we’ve selected from the various “best books in 2014” lists published recently on 800ceo read’s blog:

Drawing upon a six-year research project at the Stanford University Graduate School of Business, James C. Collins and Jerry I. Porras took eighteen truly exceptional and long-lasting companies and studied each in direct comparison to one of its top competitors. They examined the companies from their very beginnings to the present day — as start-ups, as mid-size companies, and as large corporations. Throughout, the authors asked: “What makes the truly exceptional companies different from the comparison companies and what were the common practices these enduringly great companies followed throughout their history?” Filled with hundreds of specific examples and organized into a coherent framework of practical concepts that can be applied by managers and entrepreneurs at all levels, Built to Last provides a master blueprint for building organizations that will prosper long into the 21st century and beyond.

Obviously, there are lots of things that matter now. But in a world of fractured certainties and battered trust, some things matter more than others. While the challenges facing organizations are limitless; leadership bandwidth isn’t. That’s why you have to be clear about what really matters now. What are the fundamental, make-or-break issues that will determine whether your organization thrives or dives in the years ahead? Hamel identifies five issues are that are paramount: values, innovation, adaptability, passion and ideology. In doing so he presents an essential agenda for leaders everywhere who are eager to…move from defense to offense, reverse the tide of commoditization, defeat bureaucracy, astonish their customers, foster extraordinary contribution, capture the moral high ground, outrun change, build a company that’s truly fit for the future. Concise and to the point, “What Matters Now” will inspire you to rethink your business, your company and how you lead.

A guide for protecting your wealth in an age of turbulent business cycles. In “Prosperity in the Age of Decline”, Brian and Alan Beaulieu offer an informed, meticulously-researched look at the future and the coming Great Depression.

Surprisingly, most companies fail not because demand is low or conditions are difficult, but simply because they don’t know how to manage, nurture, or even maintain their own growth and success. At each developmental stage, they become vulnerable to chaos, no matter how strong or expert their leaders. Most leaders feel a sense of isolation, assuming they have to know it all and end up making critical mistakes. Dando calls these critical mistakes the 12 Warning Signs of Success, and he helps leaders across industries identify, anticipate, and avoid them on the way from startup to Fortune 500. Maybe you’ve hired the wrong person, have too many direct reports, or say yes to everything; you might believe your own hype, incentivize failure, or lose track of your core values. Dando, known in leadership circles as the Company Whisperer, encountered all the same challenges as a C-level executive in a high-growth billion-dollar business, and he knows that these moments of truth determine whether the leader and the company become a strong, mature, and sustainable organization, or drift toward an uncertain future.

If you’re aiming to innovate, failure along the way is a given. But can you fail “better”? Whether you’re rolling out a new product from a city-view office or rolling up your sleeves to deliver a social service in the field, learning why and how to embrace failure can help you do better, faster. Smart leaders, entrepreneurs, and change agents design their innovation projects with a key idea in mind: “ensure that every failure is maximally useful. In “Fail Better”, Anjali Sastry and Kara Penn show how to create the conditions, culture, and habits to systematically, ruthlessly, and quickly figure out what works, in three steps:
1. Launch every innovation project with the right groundwork
2. Build and refine ideas and products through iterative action
3. Identify and embed the learning
You may be a “Fortune” 500 manager, scrappy start-up innovator, social impact visionary, or simply leading your own small project. If you aim to break through without breaking the bank–or ruining your reputation—“Fail Better” is for you.

An insider’s look at how a successful leadership pipeline can make or break a company Starting out at GE, where he headed up the company’s leadership institute and revamped the leadership pipeline under Jack Welch, Noel Tichy has served as a trusted advisor on management succession to such leading companies as Royal Dutch Shell, Nokia, Intel, Ford, Mercedes-Benz, Merck and Caterpillar. Now Tichy draws on decades of hands-on experience working with CEOs and boards to provide a framework for building a smart, effective transition pipeline, whether for a multi-billion dollar conglomerate, a family business, a small start-up, or a non-profit. Through revealing case studies like Hewlett Packard, IBM, Yahoo, P&G, Intel, and J.C. Penney, he examines why some companies fail and others succeed in training and sustaining the next generation of senior leaders. He highlights the common mistakes that can generate embarrassing headlines and may even call an organization’s survival into question, and reveals the best practices of those who got it right. Tichy also positions leadership talent development and succession where they belong: at the top of every leader’s agenda.

The market for business knowledge is booming as companies looking to improve their performance pour millions of dollars into training programmes, consultants, and executive education. Why then, are there so many gaps between what firms know they should do and what they actual do? This volume confronts the challenge of turning knowledge about how to improve performance into actions that produce measurable results. The authors identify the causes of this gap and explain how to close it.

According to a study published in “Chief Executive Magazine,” the most valued skill in leaders today is strategic thinking. However, more than half of all companies say that strategic thinking is the skill their senior leaders most need to improve. “Elevate” provides leaders with a framework and toolkit for developing “advanced” strategic thinking capabilities. Unlike the majority of books that focus on strategy from a corporate perspective, “Elevate” gives the individual executive practical tools and techniques to help them become a truly strategic leader. The new framework that will enable leaders to finally integrate both strategy and innovation into a strategic
approach that drives their profitable growth is the Three Disciplines of “Advanced” Strategic Thinking:
1. Coalesce: Fusing together insights to create an innovative business model.
2. Compete: Creating a system of strategy to achieve competitive advantage.
3. Champion: Leading others to think and act strategically to execute strategy.
Every leader desperately wants to be strategic – their career depends on it. “Elevate” provides the roadmap to reach the strategic leadership summit.

“Escape Velocity” offers a pragmatic plan to engage the most critical challenge that established enterprises face in the twenty-first-century economy: how to move beyond past success and drive next-generation growth from new lines of business.
As he worked with senior management teams, Moore repeatedly found that executives were trapped by short-term performance-based compensation schemes. The result was critical decision-makers overweighting their legacy commitments, an embarrassingly low success rate in new-product launches, and a widespread failure to sustain any kind of next-generation business at scale.
In “Escape Velocity”, Moore presents a cogent strategy for generating future growth within an established enterprise. Organized around a hierarchy of powers: category power, company power, market power, offer power, and execution power, this insightful work shows how each level of power can be orchestrated to achieve overall success.

In this work, noted consultant Erika Andersen helps the reader approach business and life strategically, explaining why it is important, what’s involved in doing it, and how to do it. 

For a full listing of best books in 2014, please visit http://800ceoread.com/

 

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Strategy, Motherhood, The Dog and Its Tail

Tuesday, November 4th, 2014

Do you remember that old expression “The tail’s wagging the dog”?The tail's wagging the dog or, the process is more important than the result

It was used to describe situations in which, for example, a process for doing something takes on more importance than the result it produces.

Why did I think of that now?

Simply, for many companies, this is the time of year in which they begin their strategic or business planning.

This process is often viewed as unproductive, frustrating, even pointless or a waste of time. So it may not be welcomed with enthusiasm.

Why is that?

After 13 years of working with business owners and their teams, I have a few ideas:

1.  Strategy development is a difficult, creative, iterative activity. But in many organizations the ‘planning’ process has to be completed in a predetermined period of time, in the same month or quarter, every year. That’s the tail wagging the dog.

2.  We use terms like strategic planning, business planning, and even budgeting, interchangeably as if they all refer to the same thing. They don’t.

  • Strategy development involves making well thought out choices about the future.
  • Business planning is about the activities that have to be completed in the next 12 months to execute the strategy.
  • Budgeting is estimating the financial outcomes of the activities in the annual business plan.

3.  If we’re not clear about what we’re setting out to do, everyone will expect a different outcome and no one will end up getting the result they wanted.

4.  Worse, the results we do get may not be useful. By trying to do more than one thing at a time, we end up doing none of them well. The result is a breathtaking series of ‘motherhood’ statements that are neither a strategy nor focused action plans.

5.  We begin the process with a budget, the financial targets the owner wants to achieve, and make the ‘strategy’ fit those. That, to use another metaphor, is putting the cart before the horse.

6.  Even if the results are useful, we don’t follow up. We are so busy dealing with day-to-day challenges there is simply no time. In reality, we lack discipline – not time.

Is it surprising that many business owners, executives, managers and employees are cynical about ‘planning’?

 

If you enjoyed this post you’ll also enjoy Strategy and Planning – How Business Owners Think

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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