Posts Tagged ‘growth path’

Business Growth – Hard Truths and The Way Ahead

Tuesday, February 24th, 2015

Every company runs out of momentum sooner or later.Hard truths and the way ahead - the importance of strategic planning

When it happens, it’s really frustrating and confusing for business owners who have overseen many years of steady growth. Discovering that the things that re-started growth in the past no longer work is hard to understand.

So is accepting that it’s not necessarily because of something they have not done.

When they come to terms with all of that, a bigger, harder step is waiting – realizing that they:

  • Have to do something they may never have done before – strategic planning – and they
  • May need help doing it.

Notice I say strategic planning, which is a process, not writing a strategic plan, which is a document that will lie unused from the day it’s completed.

Done well, strategic planning will help a business owner see the smartest way forward, while providing flexibility to adapt as more information becomes available.

Two things make strategic planning more important today than before.

  • The volatility, uncertainty, complexity and ambiguity (VUCA) that exists today, and
  • Accelerating technological changes, which have opened up opportunities to businesses of all sizes, in all industry sectors.

An article in Inc. magazine last year confirms the points I’ve made and reinforces 2 of the 4 things that I’ve said growing companies have to do to turn strategic planning into results.

Develop a Clear Growth Path

A good, old-fashioned SWOT analysis provides the foundation for a growth path.

It’s not something that gets people leaping around with excitement. But, done well, it helps a company get results by using its strengths to figure out the best opportunities to take.

That drives out what has to be done to close the gap between where the business is now and where the owner wants it to be in 3 years’ time.

Link it to Action

A number of things will have to be done to close the gap. They have to be prioritized so that those providing the greatest leverage for long-term success are completed first.

The top priorities are broken into very specific, measurable action/project plans and someone is made accountable for completing each one.

The action/project plans drive the goals for each of the 3 fiscal years. They are reviewed throughout each year and before the start of subsequent years – keeping flexibility in the strategic planning process.

Next time

I’ll give you some tips on how to run strategic planning off-sites.

 

If you enjoyed this post you’ll also enjoy Playing It Safe – The Enemy Of Business 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

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Strategy Execution – How You Do What You Do

Tuesday, July 8th, 2014

Twice in a week.Business strategists echo what we've been telling our clients about strategy execution

That’s how often I’ve encountered credible, experienced business strategists echoing what we’ve been telling our clients.

First, it was the Wall Street Journal (WSJ), now it’s Roger Martin.

Both of them express their points of view in a way that’s different to the other and to us. In Martin’s case, it’s through the lens of his own approach to strategy execution.

Despite that, we’re all saying the same thing.

In my last post, I explained how the WSJ’s approach dovetailed with ours. Here’s how I think Roger Martin’s does.

Martin says that:

  • “…it is absolutely critical that each person in the organization knows what it means to take actions that are consistent with the intent of the strategy as asserted.”
  • To do that every person has to think about 4 things – the strategic intent of their managers/leaders; the key choices they make in their work; how to align those choices with those above them; and how they communicate the reason for their choices to their reports.

How does that align with our approach, which says that to execute its strategy successfully, a company has to avoid 4 Risks?

•  Since a strategy has been “asserted”, then Risk #1 – No Clear Growth Path – has been removed.

•  The title of Martin’s post is “Strategy Isn’t What You Say, Its What You Do” and he talks specifically about taking “action” in the quote above and on several other occasions. Risk #2 – No Link To Action – is dealt with.

•  Risk #3 – No Buy In – means that employees are not motivated by the strategy or engaged in its execution. To get buy in, we say the strategy, the initiatives required to execute it and the actions and goals which will turn the initiatives into results, must be linked directly to the goals of each department and individual employee in the company. The 4 things that Martin says every person has to think about cover precisely that.

•  Our fourth Risk – No Accountability – isn’t discussed in Martin’s post, but I’ve seen enough of his work to believe that he considers accountability as critical as we do.

Finally, in the interests of full disclosure, I should say that I think:

  • Roger Martin’s book “Playing To Win” is one of the most logical, easy to understand and practical approaches to strategy I’ve read.
  • The WSJ’s statement of the main requirements for successfully executing a strategy is nice, clear and succinct.

 

If you enjoyed this post you’ll also enjoy 5 Reasons Why I Love Execution

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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

The Keys To Executing A Strategy And Getting Results

Tuesday, July 1st, 2014

I really liked a recent post in the Wall Street Journal (WSJ).The keys to executing a strategy and getting results

It said that the main requirements for successfully executing a strategy are:

  1. Clear goals for everyone in the organization, that support the overall strategy
  2. A way to regularly measure progress toward those goals
  3. Clear accountability for that progress.

That’s a very nice, clear, succinct way to put it.

I must admit that I was a little relieved when I saw their next sentence, which said that these 3 “are the basics”.

That clarification allows the discussion to continue, so that additional factors can be included. The authors themselves went on to say that good execution also requires facing reality and a strong culture of execution.

Those are 2 of the points made by Larry Bossidy and Ram Charan in “Execution”, one of the best books ever written on the subject.

On the other hand, I was pleased to see the 3 main requirements.

Why? Well, they correspond nicely with the 4 Risks I’ve talked about in recent posts. Here’s how.

Risk #1 – No Clear Growth Path:  The ‘overall strategy’, mentioned above, incorporates the path a company takes to grow to size in the future.

Risk #2 – No Link To Action:  A key step in linking a strategy to action is to develop clear goals. The best goals are specific, measurable, and attainable and have deadlines. They are also a result of prioritizing everything that has to be done so that limited resources can be allocated to get the best return.

Risk #3 – No Buy In:  Giving every employee clear goals, which support the overall strategy, is an important factor in getting buy in. Involving employees in developing those goals is another. A third is frequent, ongoing communication so that everyone understands how achieving their goals will help the organization achieve its goals.

Risk #4 – No Accountability:  A process for measuring progress toward goals and regular review meetings are the foundations for accountability. They enable the reasons for progress – or lack of it – to be assessed objectively. Those accountable can be recognized, paid bonuses, even promoted – or they may leave the company.

So I’m delighted that the main requirements for successfully executing a strategy, identified by the WSJ, are the same things we have been helping companies with for over 12 years.

 

If you enjoyed this post you’ll also enjoy 5 Traits Effective Business Owners Share

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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

Risks 3 and 4 to Growth – And How To Avoid Them

Tuesday, June 24th, 2014

During the last 12 years we’ve worked with well over 100 companies ranging in size from less than $1 million to over $300 million in annual revenues. They were

  • In a variety of industries, from manufacturing to software development.
  • All at different stages in their lives, for example in some, growth had stalled, while others were growing quickly – too quickly.Risks 3 and 4 to business growth and how to avoid them

In a recent post, I talked about the 4 things we’ve done for the ones that we know, with the gift of hindsight, achieved the results they wanted.

Was their success solely attributable to what we did for them?

I can’t prove that. But I can say this, ignore these 4 things and you will not get the results you want and your company will not achieve its potential.

Last week, I talked about 2 of them – having a clear growth path and linking it to action – in some detail. Here are the other two.

3.  Get Buy In

How often have we seen a team of committed people do the apparently impossible?

When people participate in the development of the growth path and understand the role they must play in making it a reality, they become fully engaged in achieving the company’s goals.

Some of the things which make that happen are:

  • The owner and management team get representatives from across the company involved in building a picture of what the company will look like in 3 years time.
  • The picture, and annual goals, is communicated throughout the company – repeatedly.
  • Departmental and individual goals are linked to the company goals.
  • Progress toward goals and targets is communicated and updated continuously.

4.  Accountability For Results

Moving a company or division along a growth path involves identifying and completing a number of initiatives, made up of specific, measurable steps or actions.

The individual who has overall responsibility for each initiative and those involved in completing the steps, must be held accountable for the success or failure of their efforts.

This is achieved by:

  • Using a process – it can be a simple Excel spreadsheet or a sophisticated, cloud-based execution management system – to track the progress of each step.
  • Holding regular, quarterly meetings to review progress and adjust plans and budgets where necessary.
  • Reflecting every individual’s performance in their compensation, promotion – or even their continued employment with the company.

So how can you tell how well your company or division is doing all 4 things? I’ll tell you more about that next time.

 

If you enjoyed this post you’ll also enjoy Sustainable Growth – How To Achieve 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

2 Risks To Business Growth – And How To Avoid Them

Tuesday, June 17th, 2014

We’ve worked with well over 100 companies since we started ProfitPATH.2 of the 4 risks that affect business growth and how to avoid them

A couple of posts ago, I commented that we did some, or all, of the same 4 things for the companies that achieved the results they wanted.

Was their success solely attributable to what we did for them? I can’t prove that with certainty.

But I can say this,

  • Ignore these 4 things and you will not get the results you want and your company will not achieve its potential. (That’s why we call them the 4 Risks.)
  • On the other hand, if a company deals with all 4 regularly, it will improve its results.

Here are the first 2 and some tips on how to deal with them.

1.  Have A Clear Growth Path

Having a clear growth path means having a picture of what you want your company to look like in 3 years’ time.

The best pictures are rich in detail and sharp in focus. In this case:

  • Detail comes from the depth of analysis that goes into building the picture.
  • Focus is a result of the choices that are made about the initiatives required to get there.

Using other language, this is your Vision, your Mission and your Strategy.

Bear in mind that we update photos of things we love – children, pets – as they grow and change. The same applies to a company.

2.  Link It To Action

The 3-year picture is what you desire. Turning it into reality takes action which yields results.

The key is to break what has to be achieved in 3 years into 3 sets of annual goals. Figuring out what has to be done in 12-month bites provides the flexibility to adapt as you learn more than you knew when you started out.

However, this requires a process and the discipline to use it every fiscal year.

  • Where must we be in 12 months? Where are we now? What’s the gap? How do we close it?
  • Prioritizing the list of “to do’s”; allocating resources to the high leverage items; and putting action plans in place to complete them.

This process drives the annual financial budgets – not the other way around.

I’ll touch on the other 2 Risks next time. For now, ask yourself this: “Where do you want your business to be in 3 years’ time?”  And, “What do you think you have to do to get there?”

 

If you enjoyed this post you’ll also enjoy A Vision – Is It Worth Investing The Time?

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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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