By Mary Ann McLaughlin, Managing Partner 79 days to get ready
Are you ready?
Today is October 13th. 2015 arrives in 79 days. It’s highly likely that you are in the processes of budgeting for 2015 or perhaps you are waiting for your Board or executive team to communicate the budget that you will be responsible for achieving in 2015. Are you ready? Do you have a clear plan on how you will achieve the growth in revenue and profit required in 2015? Do you know what you need to do to achieve your personal goals and your company goals or do you more closely resemble the definition of insanity “doing the same thing over and over again but expect different results”?
Most of us at one time or another have been a part of an organization that creates a budget in a financial vacuum. The type of budget where the finance department has been given a revenue number and/or a profit number (or both) that is the goal for the coming year. Somehow, miraculously, they make that work – even with the input of multiple departments. Sadly, about four months into the year, there is no hope of making those numbers; managers and sales people are blaming the process, or worse, the senior leadership for being out of touch. What seemed reasonable in December seems ludicrous in April. Is it a bad budget, lack of strategy or is it poor execution?
If you are committed to growth, then you must be committed to client and talent development. If you are committed to growth, then you will find the time and the resources to work through these five planning steps as you prepare for 2015:
Step One: Diagnose the Health of your Business
Diagnosis is hard work. It requires that you step out of your daily whirlwind, gather a mass of relevant information, and perform a thorough analysis across a number of different performance areas. When done right it ensures you take a realistic look at where your business is now so you can be confident you are working with facts and trends vs. purely on assumptions. A simple example: is a recent revenue dip due to seasonality, lost clients, shift in pricing, clients buying less or something else?
Step Two: Understand your Customer
It’s important to understand why your clients buy from you. Have you ever done a thorough Voice of the Customer survey? Is it habit, your great product, your fabulous service, your pricing strategy or any number of other factors? How frequent and regularly do they purchase? Look at your product and services through the eyes of your clients (their operating reality). Be sure you are giving them what they want and need today and that you are prepared to deliver on what they will likely want tomorrow. Your clients do not buy the product or service, they buy what the product of service will do for them. Closed-loop processes around Voice of the Customer Surveys, Key Account Management and Quarterly Business Reviews are essential to consistently understanding your customer and advancing your relationships with them. Be sure to build these processes into your 2015 plans. If you are committed to growth, it should become part of your company DNA.
Step Three: Develop Your Growth Strategies
Most everyone is familiar with SWOT, a planning technique that stands for Strengths, Weaknesses, Opportunities and Threats. It’s only good if you are working with facts, which is why the diagnosis step and the Voice of the Customer survey should always come first.
Strengths are what have allowed you to achieve your success to date. What are those strengths and how can you make sure that you don’t lose sight of them? If your clients appreciate fast and cheap, don’t create a product or service that has a long delivery cycle and high end pricing and expect to achieve success without a lot of additional marketing/sales/segmentation, etc.
Weaknesses are usually found in the areas of the business that are least valued by management. Some must be addressed before growth can happen; some can be addressed as growth takes place. Some you will be able to address with your own personnel and some will need outside skills to overcome them.
Opportunities that you act on today are your strengths of tomorrow. They can be found in every aspect of your business.
Threats that you don’t address today become your weakness of tomorrow. They can include things such as competition, changing legislation or losing a key customer or employee. Mitigate threats by a relentless focus on strategies that develop your team and your client relationships.
This SWOT process allows you to create growth strategies by division, service line, department, etc. Test them against your current state diagnosis, your understanding of the customer and your
Step Four: Create a Balanced Scorecard
So, you have created strategies for growth in 2015. You have concluded that the entire company must be pulling in the same direction to achieve these plans. How do you plan to measure, communicate and make the appropriate adjustments to ensure that you stay on track? Best practice is to create a Balanced Scorecard (BSC) with 2015 initiatives and the Key Performance Indicators (KPIs) and measurement criteria for growth in the each of these four areas: Financial, Operational, Customer Satisfaction and Learning and Growth.
Step Five: Execute and Perfect your Plan
Now the real work begins. Executing on your 2015 strategy requires a culture of six components: attitude, beliefs, values, behaviors, relationships, and environment. No matter how good your plan is, strategy and culture collide, culture will always win. The strategy then becomes “shelfware.” Click here for our recent blog on culture. Why Culture Eats Strategy for Breakfast.
Butler Street is in the business of helping companies and their people grow. Our approach is to build a “system of reinforcing activities” to drive execution. That “system” starts with a diagnosis of current state of your business and your customer relationships. We can ensure that you approach 2015 with the right strategy and plan for execution. Click on CONTACT and let’s start the conversation.