Posts Tagged ‘action plans’

Get Results From Your Strategy Offsites

Tuesday, March 24th, 2015

Holding a strategy offsite is like going to the dentist.Get results from strategy offsites with these tips

Doing it regularly should prevent unexpected pain and discomfort.

But going to the dentist is something that can be avoided. Why do it when everything’s going well, when it’s not necessary?

After all, a visit to the dentist can result in discomfort or even end badly.

It’s the same thing with a planning meeting.

It’s uncomfortable when, for example, people don’t want to get behind the business owner’s ‘stretch’ goals. And most people can look back on an offsite they attended and wonder why they bothered – because nothing changed.

So here are some things we’ve learned to ensure strategy offsites deliver results.

1.    Before the meeting

Set a realistic goal.

I ask clients to imagine we’re packing up after the last day of the offsite, and they’re feeling really good about what has been achieved.

Then I ask them what has to have happened for them to be feeling that way.

Sometimes, after they reply, we have to use our experience to illustrate what can, and can’t, be achieved in 1 or 2 days.

Distribute pre-work before the strategy offsite to maximize productivity in the time spent face-to-face. Any thinking that can be done in advance should be and any information required to make decisions should be distributed and studied.

2.    During the offsite

Keep people focused by:

• Announcing times for coffee and lunch breaks and insisting email and calls are dealt with then.

• Using a  ‘parking lot’ to record topics that are important, but not immediately relevant. Clear it at the end of each day.

Relieve the intensity of the discussions by using brainteasers and humorous video clips. Vary the pace, and make sure everyone’s thoughts are heard, by using sub-groups for some sessions.

Our process ends with the development of specific, measurable, time-related action plans to solve the problem that was the focus of the offsite.  Appoint Champions to coordinate the completion of the Plans.

This way everyone leaves with a sense of accomplishment and a clear plan of action.

3.    After the meeting

Capitalize on the momentum by holding regular, structured follow-up meetings.

Get everyone together at least once a quarter. Each Champion gives a progress report on his or her Action Plan and adjustments are made if necessary.

Take these tips and you’ll get results from your strategy offsites.

 

If you enjoyed this post you’ll also enjoy What’s The Best Strategy – Grow The Core Or Expand?

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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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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

6 Tips For Finding The Right Buyer

Tuesday, March 11th, 2014

Last week I was one of three speakers at the Toronto Star’s Small Business Club event, “Exit and Succession Planning”.Finding the right buyer or successor for your business

My talk included 6 things a business owner can do to ensure she/he finds the right buyer or successor.

1.  Money. The seller must be satisfied that the buyer has the funds to complete the transaction.

In a sale to a third party, for example, the seller must obtain evidence – from a bank or accountant – that the buyer can meet their commitments.

But having money isn’t enough – particularly if part of the purchase price is to be paid from future profits.

2.  Knowledge of the Industry. The better a buyer’s knowledge of the industry, the more likely the transition will succeed.

In a Management Buy Out (MBO) or family succession, the current owner knows the key players’ level of knowledge.

If the owner has been planning ahead, they will, for example, have given the players opportunities to build relationships in industry associations.

3.  Business Acumen. The purchaser or successor must have proven they know how to make money.

For example, a third-party buyer may have been a successful CEO or owned other businesses. A family member may have done well for a company in another industry or country.

4.  Appetite for Risk. When you’re watching someone else run a company it’s easy to underestimate the risks they are taking.

For example, as an MBO progresses, the management team begin to understand fully the risks that come with ownership.

That’s one reason why MBO’s collapse more frequently than sales to third parties or transfers to family members.

5.  People Skills. A seller must look for evidence that a third-party purchaser has successfully led people and built strong relationships with customers and suppliers.

By planning for an MBO or transfer to a family member, the owner can give the key players opportunities to prove their capability.

6.  Business/Strategic Plan. Regardless whose it is, a business plan has to pass 4 tests.

  • Don’t attempt too much too quickly.
  • Have clear Action Plans to ensure implementation.
  • Provide adequate resources to support the Action Plans.
  • Have a clear follow up and review process.

Hopefully they’re all common sense. If so, the transition will go well – and the party can begin!

 

If you enjoyed this post you’ll also enjoy Don’t Destroy the Long Term Value of Your Company……

Click here and automatically receive our latest blog posts.

 

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

More Heat Less Chill

Tuesday, July 26th, 2011

Although the weather’s changed a bit since my last post – Don’t Let The Summer Heat Cause A Winter Chill – we’re still in vacation season and it’s still hot.

But we’re also well into the third quarter of 2011 and heading for the annual business planning; budgeting; whatever you call it, process for 2012.

And I believe that process is the engine that drives your growth. So in the last post I talked about 2 things business owners should be thinking about now. Here are another 3……

1. The Opinion Trap.

The planning process has to be completed by a specific date. Often that’s set to enable Finance to use the output/numbers to produce projected financials for the upcoming year(s) while still completing their regular work. 

However vacations, short work weeks and long Holiday weekends and a more laid back, summer mind set can result in the focus being on doing the things that are urgent rather than the things that are important. 

So, even although the deadline is well known, the process is often started later than it need be. And that puts the value of the output at risk.

Why – because the logical thinking required to make the process effective declines in direct proportion to the increasing proximity of the deadline. It becomes more and more about getting it done on time and less and less about getting it done right.

When that happens the basis on which key assumptions are made is less likely to be well collected and considered data and more likely to be someone’s opinion. And by definition an opinion is a subjective belief, often the result of emotion.

2. Who’s Baby Is It Anyway?

The owner must take ownership of, and remain the champion of, the planning process. If the perception that anyone else is driving it is allowed to take hold, the motivation for doing it thoroughly will suffer.

If, for example, the accounting department are seen to be driving the process it will be seen only as a number crunching exercise. And people will treat it simply as something to be completed as quickly as possible and get off their desk.

The only way to get everyone involved, engaged and buying in is if the owner demonstrates the importance of the process by leading it personally.

3. Keep It Together.

I talked to an executive recently who was busy completing annual expense budgets. This at a time when many of the people who had the detailed knowledge required to complete the schedules thoroughly were on vacation.

They told me that budgeting had been separated from the creative, thinking part of the planning process so that the Finance department could meet their internal deadlines.

But I’ve also seen other variations of this in the past. A favourite with companies which have enjoyed a leadership position in their industry for some years, is to start by producing the numbers – revenue, bottom line etc. – and then develop action plans and programs to fit them.

That’s as bad as a company that completes the creative, thinking part of the process then becomes distracted by tactical issues, allowing a lengthy period of time to pass before completing the numbers. Valuable momentum is lost and the participants are left to wonder if anything is being done with their input.

4. Last Words.

It’s not enough just to have a planning process and to complete it.

Like any other engine, if you want to get maximum output from it the parts must work smoothly, without friction, and you must use a high energy, premium power source/fuel.

Otherwise it’s unlikely to carry you anywhere near to where you want to go.

3 Surprising Strategies (Or Not)

Thursday, April 14th, 2011

At the end of March we emailed our quarterly survey to over 600 people in our database (see commentary on the November survey here).

We asked them 4 things.

To describe their strategy for this fiscal year; which actions they were taking to execute it; how they had gone about planning for the year; and what they did to evaluate progress at the end of the first quarter.

The first surprise – no one’s planning to retire.

Only about 5% of the respondents described their strategy as “planning for exit”.

There have been stories in the media for some time now about the number of companies which will change hands as baby boomers retire. Many articles talk about how far in advance business owners must begin to prepare, particularly if they intend to sell their company.

As a result we were surprised at the low number of owners planning for exit. (We’re even in the process of launching a new service to help owners get the highest price and the best terms possible when they sell.)

However, this may reflect other surveys, by e.g. the banks and CFIB, which found that only a relatively small percentage of baby boomer owners are actively preparing to bow out.

The second surprise – everyone’s staying home.

Just over 70% of companies said they were pursuing a growth/ expansion strategy. But entering new domestic or overseas markets ranked 8th in a list of 9 actions being taken to increase profits.

Once again we were surprised. This time by the relatively low number of respondents who said they would be entering new markets. The North American economies are not the ones which are expected to show the most growth in the next few years. This is a good time for Canadian companies to be expanding into export markets.

But the answers to this question could be influenced by the (small) size of some of the companies responding to our survey.

By the way most companies are using a combination of increased promotional activities, new strategic alliances and improved internal systems/processes. Many said they intended to increase their prices.

And the third surprise – someone’s not planning to follow through.

As you might expect, most large companies said they held a 1-2 day planning session with their management team/key individuals before the beginning of the financial year.

So did many smaller companies. But they appear not to have used the opportunity to develop action plans/budgets or specific targets for measuring performance.

Then we asked what techniques respondents used to assess their progress at the end of the first quarter. Many of the smaller companies which used planning at the start of the year now said that they used none of the quarterly follow up techniques.

There have been a number of research studies which have tried to determine why planning fails. One of reasons given for failure is the lack of follow through by management. It is easy to assume that the owners of smaller companies are likely to be more involved in day-to-day operations than owners who have management teams in place and so find it easier to overlook quarterly follow ups.

So, to sum up……..

There’s good news and bad news.

The bad news is that some of the companies in our database – even larger ones – appear to be overlooking a number of external and internal factors which are critical to success.

The good news is that it can all be fixed – if the owners are willing to try. We’re certainly willing to help.

Too Early To Tell If It Will Be A Good Year? Think Again!

Saturday, February 26th, 2011

Do you think mid-February – only mid-way through the first quarter (Q1) of the 2011– is too early to tell if you’ll have a good year? Keep reading and in the next 3 minutes you may have an answer.

The first 2 warning signs are based on the answers to questions we asked in our November 2010 survey. Do they apply to your business?

1. A surprising warning sign. 

Feeling confident because you have a planning process in place and you completed it early enough to get your forecasts and budgets finalized and distributed?

When 50% of the respondents to the survey said they would miss their goals and expectations for last year, 2010, we were tempted to think that it was a result of poor planning. But a sample of individual responses revealed that many of them said they had a structured planning process and finished their planning before the start of each new fiscal year.

This raises some questions about the effectiveness of their process;
• How well did they know what their customers were thinking?
• Were the assumptions underpinning their goals/forecasts too optimistic?
• How well did they actually execute on their plans – by turning intentions into actions?

Clearly, you can’t assume that because you follow a planning process you’ll get the results you want.

2. A not so surprising warning sign.

Almost 38% of the respondents told us that they only finished their planning for the year during the first month or later. So, if we assume that they finish planning before they begin executing, when do they actually start taking action? It must be well into Q1.

If companies that have a structured process and plan well in advance of a new fiscal year still miss their goals – what chance do those who only finish in January have?

3. A related warning sign.

Tibor Shanto, who trains sales managers and their teams, quotes some research in his latest newsletter which suggests that how a sales team executes in Q1 will determine whether or not they will make their year. It concludes that a sales manager should know by the end of Q1 whether she/he will make their year or not.

4. What does this all mean for you?

Over 50% of our respondents expected their profits will be higher in 2011 than in 2010. We believe some of them are going to be disappointed.

Will you be amongst them?

You should know by now if your Action Plans are being implemented on schedule. Comparing your actual results/progress against them may tell you if they’re going to work. But that still leaves the question of whether they are the right ones.

By the way, if you want a quick, inexpensive objective opinion of your planning process and Action Plans, our Tune Up delivers exactly that.

6 Tips for Getting Better Results in 2011.

Monday, November 8th, 2010

In a recent blog posting I wrote that business planning has started/is starting/should have started for 2011. Then the other day I came across these 6 tips which I pulled together at the end of 2008.

At that time, you may remember, there was a deluge of bad news pouring from the newspapers, Internet and TV all day, every day. Some forecasters were saying the economy would rally in late 2009, others were saying it would take years before we saw an improvement.

I made the point then that, when so much of what is going on around you seems out of control, it’s easy to stop focussing on the things that are under your control. So, since uncertainty is still with us, I thought it was worth freshening up the Tips.

Tip #1 – Remember that we have always had to deal with uncertainty when developing plans and strategies. It may be true that there is more uncertainty now than in the past. However, don’t forget that no one has ever been able to accurately predict the future with any degree of consistency.

Three ways to deal with uncertainty are – keep digging until you find the best information available before firming up assumptions; put flexibility into plans and strategies; and think through contingency plans (e.g. plan for the best, worst, and most likely outcomes and be ready to deal with all of them). A fourth technique is to review, and adjust, goals more frequently.

Tip #2 – Make sure that you actually implement your plans and strategies. According to an Ernst & Young survey, 66% of corporate strategy is never executed.

In our experience implementation is handled just as poorly in owner managed companies – which generally have fewer employees (who are often located in the same premises) and which have fewer departments and layers. All of which should make communication and coordination easier.

There are a number of reasons why strategy implementation fails and the remaining tips will help you avoid them.

Tip #3 – Develop detailed Action Plans for execution. Involve key people when figuring out your goals for 2011 – and they’ll buy into what has to be done.

Compare the goals with the current situation and gaps will appear. Then ask them what – specifically – has to be done to close the gaps, by whom and by when. The answers to those questions will form the basis of your Action Plans for 2011.

Tip #4 – Avoid attempting too much, for 2 reasons. Firstly, there may be a long list of things to be done to close the gaps and no company has the resources to attack them all. So, prioritize the things which have the most impact on your goals and focus on them. You can go back and tackle the others later.

Secondly, you want to stay flexible enough to respond to whatever happens.

Tip #5 – Commit enough resources to completing the priorities. Business owners are inclined to tackle too much at once. They also try to do everything in the minimum amount of time – while spending as little money as possible.

Think about the priorities this way. You’ve invested time identifying reasonable goals and figuring out what has to be done to reach them. That effort will be wasted unless you commit the resources required to complete those action plans.

Even if you are allocating too many resources, you’ll complete the job ahead of schedule. Who doesn’t feel good when that happens?

Tip #6 – Follow up regularly and in a structured way. There are also 2 reasons for doing this. First, because no one can accurately predict the future you have to make time to compare what you thought would happen with what has happened and adjust for reality.

Second, what could be more important than making sure you complete the action plans that will lead to achieving your goals? Not dealing with the day-to-day problems, which always seem to be “urgent”. Prevent them getting in the way of the “important” priorities by making time to review progress toward your goals once a quarter.

The odds are that you’ve heard each one of these tips before. But the reality is that a gap exists between hearing – even knowing – the right thing to do and actually doing it. That’s why 66% of the companies surveyed wasted their time.

Winners eliminate the gap.

Physician Heal Thyself

Monday, September 13th, 2010

We’ve just finished the business planning session for our fiscal year which started 1 Jul 10, using the same tools and processes we use with our clients. But it’s so much easier when you’re telling someone else what to do.

The first thing was that we were late getting started. So we immediately broke one of our own cardinal rules – get next year’s plan in place before the end of the current fiscal year. This is something we preach relentlessly to the business owners we work with.

We had done all of the regular quarterly reviews of last year’s plan giving us, under some circumstances, a pretty good starting point for this year. For about a nano second I was tempted just to roll things forward.

But last year was our best year ever and the business had grown in some interesting new directions. Also, we hadn’t taken a look at our 5 year goals during the quarterly reviews. Rather than break another rule, we decided to do a full analysis and went through the lot – target market; competitive evaluation; product and service offering; pricing strategy etc.

So we set some dates on which we’d work through the steps – and then proceeded to change them, pushing them out. Well, I heard myself say, we can’t let day-to-day operations slip, there’s client work to be done; we can’t miss those deadlines. And a little voice asked “Hmmm, where have you heard that before?”

While we were figuring out where we had to be in 3 years’ time that voice in my head was back. At first I couldn’t believe it – that can’t be me. But it was – I’d slipped from consultant into business owner mode. I had to have a stern talk to myself – “Come on Jim, be realistic, where’s your objectivity?”

Going through the gap analysis and figuring out what had to be done was relatively easy. But when we got to prioritization and looking at the investments we had to make I actually broke into a cold sweat at one point.

Then I thought – I’ve done this dozens of times, what’s the problem; this isn’t nearly as difficult when we do it for other companies! The answer was really simple – it was my baby (I mean company); it was my future (I mean retirement plan); it was my money we were risking (for those nasty investments).

To make a long story short, we finished the planning process and identified 5 strategic initiatives I am convinced will take us to the next level. The action plans are in place and being worked on even as I write this. We made some minor adjustments but we confirmed again, from our own experience, that the process we use with other companies works.

And I promise to be more understanding with other business owners in the future!

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