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

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.

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Tags: action plans, assumptions, budgets, business, forecasts, goals, Jim Stewart, Planning, Process, ProfitPATH

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