Category Archives: Strategy/Planning

Your Business Plan, Business Goals, & Tactics – Where Are Yours?

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For most business plans the document is the end itself. It is such a commonplace of my practice to ask a business owner, or manager, “Do you have a business plan?”, only to have them look around in a bookcase, or in a pile of papers in the corner, in response.

A good business plan is the result of a process in which the management team comes to a common understanding of:

  • the business situation
  • the value the business provides to customers
  • strategies to achieve new business goals
  • obstacles to be overcome or avoided along the way,
  • tactics to bring the business goals to life – this includes who is responsible, resources assigned, timeline of tasks, and results expected
  • schedule of review meetings to measure results and take corrective actions

The plan also provides a common language about the business and a platform to communicate  business goals and values to everyone involved, employees, vendors, and customers.

So here we are at the key question:

If your business plan authentically identifies the business goals of your company, how can you put your management team into action to achieve that future as opposed to the future that will come willy-nilly and that almost inevitably is not the one you desire?

As Peter Drucker said about planning, “a plan is only deployed to the extent that it has devolved to day-to-day work” ((paraphrase from Drucker’s The Effective Executive: a definitive guide to getting the right things done (Harper Collins: New York, 2006) ))

Making a  Business Plan Become Day-to-Day Work

This is where you the Owner, the CEO must take the lead. Otherwise the plan is just a plan and is not converted into action. If you have done a good job of establishing the tactics, the step by step actions required, you will know:

  1. who is responsible
  2. resources assigned
  3. desired results
  4. success metrics
  5. timetable for action
These five items characterize every tactical action. Good project management practices demand them. Without these five elements, the tactics are just a plan, a bit of wishful thinking, they are not in fact in action. You cannot achieve your business goals without taking these practical steps.

By tying your business plan to your existing financial reporting system and project management tools, you will be able to measure results directly. The review sessions are not designed to be dull reports, but opportunities to understand where the difficulties lie and where new opportunities pop up. A review session brings together the management team to work on the most important strategic activities of the firm.

Let’s wrap up.  

Your business plan is converted into action through the tactics identified in the plan. These are supported by active supervision and follow up by the Owner, the CEO. Only you can provide the impetus to sustain the management team over the long haul. Without your involvement the management team will fall back to day-to-day busyness and not spend the time required to drive the tactics to reach your business goals.

Critical Element Missing from Fast Company 3M Article on Innovation

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Fast Company published an interesting article about an old story, 3M’s innovation culture yesterday, “How 3M Gave Everyone Days Off and Created an Innovation Dynamo” by Kaomi Goetz. The article repeats the well-known story of 3M’s policy of giving employees time to develop new ideas.

There is a critical element missing from this story.

Business Unit Managers at 3M are required to generate a rolling average of 20% from new products year in and year out. If they fail, their business unit is dissolved and the products rolled into someone else’s business unit. This drives business unit managers to continuously look for new ideas and invest in them. It is difficult to create new ideas, even harder to bring them to market. This policy drives the organization to make this critical step happen.

Why Should You Develop a Business Plan for Going Concern, How to Do It, and How Do You Convert the Plan Into Action?

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Why Should You Develop a Business Plan?

For every startup the development of a business plan is a  required first step. It is so obvious – business schools have course on writing the business plan and it is impossible to get funding without one. Teams coalesce around the labor. So, every startup has a business plan.

For the going concern, the ones that are now three or so more years old, the business plan (also called strategic plan -really the same thing) is forgotten, only stumbled on when a move forces someone to pick it up and wonder, “Should I just relegate this to the dumpster?”

This is not a good situation. A business without a plan is like a boat sitting in a pond just waiting to sink to the bottom for nature to compost it. Or, if it has the fate to be afloat in a stream, it will be carried along willy-nilly until it bumps into a stone or dead branch or reaches the ocean where nature will also send it to the big composter.

Every business exists in a world that is changing and filled with opportunities and threats. Your business plan is your set of oars to provide the means to pull in the direction you want to go in, to avoid the rocks. You might even row to shore and portage around the falls, to move to an entirely new river.

But, many people, even accepting the wisdom of having a plan, find it a painful exercise, all too easily avoided. This may be driven by the idea that a business plan involves dozens of pages of writing, lots of spreadsheets with numbers they really don’t believe (sometimes don’t understand). Business plans, strategic plans, these are just the exercises one does in business schools. Or it may be the folk wisdom that business plans are not a useful part of managing and they always end up on the shelf or hidden in a file cabinet only dusted off for display when in search of a bank loan.

However, shift your thinking to view the process of building a plan as a value in and of itself, and adopt a simpler more flexible business plan model you will find that building that set of oars for your little boat is fun and productive. Continue reading →

The 6 New Management Imperatives by Bruce Temkin – comments

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Bruce Temkin has published a free book on his blog ((experiencematters.wordpress.com)), The 6 New Management six management imperatives bruce tempkinImperatives – Leadership Skills for a Radically Changed Business Environment. Mr. Temkin sets out to define a “new set of skills” for managers. These are the 6 new imperatives:

  1. Invest in culture as a corporate asset
  2. Make listening an enterprisewide (sic) skill
  3. Turn innovation into a continuous process
  4. Provide a clear and compelling purpose
  5. Extend and enhance the digital fabric
  6. Practice good social citizenship

Lists like this one are very popular. I have been known to make lists of key practices and the like. But for the practicing manager lists are frequently tough to integrate into day-to-day work. Mr. Temkin’s six imperatives falls into this problem category. Overall, the six imperatives are reasonable enough as they stand. But I want to take a closer look at each and then suggest a more global approach. Continue reading →

Podcast – Delegation (Outsourcing) and Keeping a Focus on Strategy and Results

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Delegation and Outsourcing Share a Common Management Focus on What Needs To be Done, What Are the Results Required, and When?

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Delegation (Outsourcing) and Keeping a Focus on Strategy and Results

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Yesterday I was scanning through the Tweets from my friend Bruce Peters and came across a reference to a blog posting by Bernadette Doyle, “Discern Your Strengths – Delegate The Rest“. Its always good to return to these complementary concepts – strengths and delegation (outsourcing), so I read on.

Ms. Doyle’s concatenation of “delegation” and “outsourcing” is a very productive idea. Delegation is normally seen to be a personal act by a manager. A manager delegates certain tasks or responsibilities to someone else in the organization. Outsourcing is most frequently the retention of a third party, external to the company, to perform a function or tasks. Setting these two side by side provides an interesting example of the overlap between the personal skills and attributes of the manager and the larger practice and processes of the organization.

Delegation and outsourcing share many management requirements

Delegation and outsourcing share many management requirements. And they illustrate the overlap between the personal and organization spheres. Both benefit from a more nuanced use of the general management maxim, “Build on Your Strengths”. Both require a substantial understanding of what needs to be done, how it should be done, the results required, and the needed timelines. And, finally, both require ongoing management involvement to assure that those responsible for the tasks or functions, whether individuals or vendors, succeed.

Discern Your Strengths

Ms. Doyle argues that we should examine ourselves to determine our strengths as an initial step. She even provides a link to a tool to help in this adventure. I have talked about this earlier in my posting “Managing for Weakness – a mis-management myth“

“What are my strengths?”

The simplest way to answer this question is to look at the activities where you have had the most and best results. These are your strengths. You might enrich this line of thinking by asking which activities make you happy, put you into a state of flow where you really concentrate and loose track of time? An external, third party assessment can be helpful. I have used StrengthsFinder 2.0. It is good, adequate detail without overreaching. There are others.

Then ask this question:

“Am I spending most of my time working on my areas of strength?”

If we turn to the classical argument for outsourcing, companies are encouraged to define their core competencies (strengths) and strategic must do functions and outsource everything else. This quickly became reduced to a simple examination of the relative cost of doing a function in-house versus via a third party.

At this point delegation (here Ms. Doyle uses the term “outsourcing”) becomes an obvious solution to increasing the amount of time and energy spent doing work that fits into your strengths by offloading tasks.

Focusing on Strength Is Not Always a Good Idea

Although in general it makes eminent sense to focus on your strengths, this is not a rule that should be followed without some thought.

In my practice I can think of numerous examples where the business owner is doing a good job of obeying the “follow your strengths” rule, but, in fact, not achieving the results that the market opportunities are providing. For example, some business owners who are highly detail and control oriented find it easy and fulfilling to remain intimately involved in all sorts of processes that fit into their strengths profile like bookkeeping, inventory control, purchasing management, human resources administration, etc. They are happy doing this work because it feeds into their need for work that is detail and control oriented. Here is a case where I argue that even though they are comfortable following their strengths, they need to drop many of these tasks and devote their time to driving the marketing and sales efforts. For these particular owners, this is uncomfortable territory. This is work that focuses on some of their weaknesses. But, in small firms, even medium size firms, there is no replacing the impact of the owner/CEO in the mind of the customer. So, even though the owner may not be the best possible person to do this marketing and sales work, they are the resource available. And, the impact on the marketing and sales results will show the wisdom of this refocusing on weakness.

I would also note that managers do learn new skills, even in areas of weakness. though your natural bent may not be the world of sales and marketing, for instance, the approaches and skills required are not particle physics. There are plenty of learning tools and business coaches who can help you become more than competent even in fields that you might describe as weaknesses.

In an example of strength misdirecting, I recall a large size electronics firm, a Fortune 500 company, in the 1980s and 1990s. The great strength of this company was manufacturing. Almost all of the managers in the top ranks came from manufacturing functions. Manufacturing widgets was what they did really well. As the world of electronics evolved, they kept doing what they were good at and let product and market development work, activities critical to the future of the company,  take a back seat. Soon market share fell from 45% to 20% and the game was over. There were certainly managers at this firm who intellectually understood that they needed to make product development work and marketing a strength, knew that they needed to make these core competencies, but the inertia of the past strengths was too difficult to overcome.

So, one can not follow strengths blindly.

Three Questions for Success in Delegation and Outsourcing

What Needs to be Done, When, and What are the Results Required?

Once you have made decisions about what to delegate or outsource, a key to success is developing a clear statement of what needs to be done, when, and what are the results you want to achieve. The answers to these three questions arm you to select the best person or organization to perform the work and the basis for useful discussions of progress. Nothing like having a clear statement of the results expected to focus the collective minds. With a clear definition of what needs to be done and the results expected you can make the best choice for whom to delegate a task to. Has this person had success in achieving results in the task area defined, do they have the functional expertise required to produce the results? If you are looking at outsourcing, the same information arm you to ask questions about the track record of the various vendors. Do they have the capacity to deliver the results on time? And so on.

Taking Responsibility for the Results – Delegation and Outsourcing Do Not Get You Off The Hook

I wrote recently in a posting, “Outsourcing – not a strategy that is as simple as a make or buy decision“,

However, people may think that outsourcing gets you off the hook and solves all of the problems involved in the outsourced functions. The truth is that whether as a one armed paper hanger or a global giant like Boeing, outsourcing must be managed.   You can not manage functions that you do not understand. So, the executive level of any organization (back to the single entrepreneur to global giant span) must understand all of the basic functions of a business (strategy, sales, marketing, product/service development, personnel, operations, finance, information systems, and legal (these are the most important ones)) in order to decide which must be internal and which can be outsourced. Then, you have to have enough knowledge of the outsourced functions to decide on the desired results required, choose vendors, and manage for the results. This may seem to be daunting for the low end of the size scale, but most of this stuff isn’t rocket science at the basic concepts level and one can always draw on people in your network and consultants (like me obviously) to help out.

The same line of thinking applies to delegation. it is simply not acceptable to delegate a task and then not come back to the person tasked for six months to ask, “How are things going?”. Just as with new hires or promotions attentive, timely, and responsive supervision is required. The same rules of responsibility apply to delegated tasks. You made the choice of the person, defined the task and the results required and established a timeline for the results. It is your responsibility to assure that the person succeeds. You have the power and resources to assure that. Although I doubt that delegation is as fraught with failure as hiring new personnel, the failure rate is still high and you can not afford to simply through up your hand six months into the mission and say, “Why did you screw this up?” More here about this management issue, “It’s Always Your Fault – taking responsibility for personnel“.