Planning A New Year: Is It Worth It?
As we start another fresh, exciting and unknown year, business owners and executives will get together and discuss the upcoming year through various planning exercises. It could be the AOP (annual operating plan), a strategy or business plan, or specific individual departmental plans. Most will include KPI’s (key performance indicators) that will (hopefully) make this year particularly successful. But is planning really worth the effort?
The proponents will tell you it is an essential part of running and growing a business. Without it how can an organization make essential business decisions along a common framework, and how can each department know the decisions it makes do not counteract progress made in other areas. And of course they will tell you it is essential to be able to predict the future in various degrees of detail.
Now the protagonists may likely say completely the opposite – businesses nowadays have to be lean and mean, with the ability to cut decisions in real-time based upon the seemingly infinite number of variables affecting them. They will suggest “what will be will be”, and that driving the organization hard by always making the ‘right decisions at the right time” is the smart choice. Phew! So… who’s right?
Actually there are elements in both camps that are right, and I have seen companies being successful (and unsuccessful) employing one or other models. So, if that’s the case, does it really matter whether you plan or not? For me personally, I am a planner. I like to take the time and work out the options, and then create a plan with actions that have clear accountability. I call this my SPA (Strategy, Planning, Actions) Method. It’s hierarchal in nature, forcing me to think at the highest level of strategy before I get into the weeds and start thinking actions. Once in the weeds it takes a lot of effort to get back to strategy thinking, and I find it almost impossible unless there is a significant positive or negative stimulus in my business which forces me to do this.
As I get older, I appreciate the wisdom of changing more rapidly, empowering through flexibility, making swifter business decisions, and always looking to positively change and grow as being essential elements of a healthy business. These can all be integrated into a robust and periodic planning process. Coupled with the planning effort are the periodic and timely reviews that need to happen, checking-in against the plan, making tweaks or significant changes dependent on results, and using it as a mechanism to take a pulse on the health of your business. With regular reviews and keeping an eye on the future, you take more control and in turn make better and timelier business decisions. Discipline is of paramount importance both in the timing and structure of the reviews. Imagine if you were running a nuclear generator facility – do you think you would check the dials periodically.
So what is the best-in-class in today’s ever-changing business environment when it comes to planning your business? Here are my own personal tips:
Annual strategy session: Think about building a ‘strategy-lite’ version i.e. what is the minimum strategy that is required to give all stakeholders the guidance they need to make localized, shrewd business decisions. Many companies go for a much more robust, comprehensive strategy session, the output of which often gathers dust throughout the year. Think light.
Quarterly check-in reviews: Executives and senior managers must formally review results against the plan. Do so with automated reports, a clear and consistent meeting structure that stays on time (no overruns), and when necessary agreement to take actions offline. Schedule the quarterly dates at the start of the year and eliminate scheduling conflicts.
Weekly & monthly KPI check-ins: The old saying “you manage what you measure” is bang on. Develop automated reports that don’t tie up your valuable time, develop an understanding of the key metrics which really impact your business, then track and hold the appropriate teams and individuals accountable for achieving results.
Involve the right stakeholders: You will often hear people say, “I was not consulted”. Actively involve and seek out opinions of the key stakeholders. Allow them the opportunity to have their opinions heard and debated, but ensure that everyone commits to the agreed plan to drive team performance and collaboration.
Communicate the plan: one of the biggest challenges of any Executive Team is keeping everyone properly updated. It is almost impossible to over-communicate. Perform periodic check-ins with staff to see if they are getting the information they need and want about the company that keeps them informed, motivated and knowledgeable on how they can play their part in the plan.
Communicate results: When results are good wave the flag. When results are not so good, don’t hide. It is essential to share results whether they are good, bad or indifferent. Your staff will respect you for keeping them in the loop. Resist the very natural urge of non-communication when results are off-par.
Encourage feedback: Whether at a town-hall type meeting or through the addition of a suggestions box, find multiple ways to solicit staff feedback in a non-intimidating, non-confrontational way. Remember your Staff often see things from a different perspective than you, and may hold key insights about your business. Always respond openly and honestly to feedback – transparency will build rock solid trust. Tough news communicated transparently can often galvanize a team.
Rapid market changes: After years of being in hi-tech I know how quickly markets can change. Whether you are in software, hardware, products, services, or other type of business, your market can change alarmingly quickly. If you see changes (or sense they are beginning to happen), don’t be afraid to pull key stakeholders together to discuss options. Speed of acceptance, and ability to react, can separate the winners from the losers.
Sudden competition changes: Keep your ear to the ground – if the competition make a big move with new products or technologies, new pricing strategies, expanded sales channels or anything you consider significant, meet urgently with your planning team. Oft-times fast reactions can encourage creativity, ingenuity and an effort to ward-off competitive threats.
KPIs off-track: If the key performance indicators (KPI) are off-track then arrange a meeting. Get to the bottom of it immediately. Don’t wait for three months of below-par performance to accept that you have a problem. For example, if you miss your revenues for one month, then think what urgent actions need to be taken to get back on track the following month and recover the lost revenue from the previous month. Think fast reaction and recovery.
Scheduled planning sessions, periodic check-in reviews, and a deep understanding of KPI performance should be coupled with lightning fast reflexes when change is required, a willingness to accept feedback and “see the wood from the trees” and most importantly an understanding that “the only real constant in business is change”. Accept it, and swim downstream with the current! Have a super-productive and successful year ahead.
Joe Connelly is Founder & CEO of Salesleadership.com, a worldwide Executive Sales Coaching and Consultancy company, with offices in Canada and Switzerland. Joe can be reached at [email protected]