Vol. 4 — No. 9
Escape
Velocity: Defying Business Gravity With a Strong Implementation Plan
Escape Velocity:
The minimum velocity an object must
have in order to escape the gravitational field of the earth
Business Gravity:
The factors that hold your business
back from accelerated growth
Deliver: The plan itself only works when put into
action. This phase of the process provides leaders with the insights and
tools to effectively implement the plan.
The biggest challenge in every
growth initiative comes with implementation. Most executives agree that the
number one reason most plans fail is that they are not properly implemented.
In fact, only 25% of investments in growth initiatives create value.
There are many things that can
derail a plan. A few of the more common reasons are under-resourced
initiatives and lack of consistent and regular communication. That can take
the form of not achieving buy-in to the plan, not communicating how employees
roles/responsibilities will change, having divisions communicate different
parts of the plan and not sharing how the components come together, or
forgetting to provide updates and encouragement on a regular basis.
There are many things an
organization can do to ensure their plan is implemented properly. The most
important is to have a plan champion
(which is usually the CEO) keep the plan visible and on the table. That
usually involves discussing progress against the plan on a regular basis
(quarterly is ideal), measuring progress against specific deliverables and
outcomes listed in the plan, and annually revising the plan to accommodate
changes in the market or new information.
Here are some tools that can aid in
the process:
1. Sequencing: One
of the most common flaws in a plan is biting off more than our resources can
chew. In other words, many five-year plans are comprised of initiatives in
which everything is to be done next month with results next year. That defeats
the purpose of a long-term plan. A five-year plan gives each company the
opportunity to reach out beyond current processes, products and personnel to
envision what might be and then build the critical path to achieve it. Not
everything can or should be done in year one. Resources have to be
practically managed, and it is often advisable to stair-step an action plan
so that the company can absorb change as it goes.
2. Communication Plan:
If effective communication is one of the most critical factors in successful
implementation, then every company needs a communication plan to accompany
their strategy.
The communication plan does two things: 1) by communicating the plan, people
are committing to it, and 2) it establishes accountability so communication
actually occurs. Since many people are likely to be involved in that
communication, it ensures that there are clear expectations and consistencies
in the message
3. Resource Planning:
Every company has their own resource planning process. The key is to link it
to the decisions and assumptions you have created in the growth plan. So far,
you have identified specific initiatives and the resources they will require.
In completing your forecast, you made decisions about what expenses will be
reduced in order to invest in these new initiatives. In the sequencing stage
above, you determined what order and pace these initiatives will follow and
that also has bearing on your resource needs. The resource planning process
should not involve a debate about what is important, as every functional area
responsible for turning in a budget should already be aware of that based on
your plan.
The key challenge here is avoiding the temptation to under-fund new
initiatives resulting in under-performance. Look for where a reduction in
resource will have relatively minor impact and invest it in your new
initiatives in ways that will have significant leverage. No department likes
to give up resources, but if they understand the benefit to the company, and
eventually to them directly as the company increases its financial health and
success, they are much more supportive of the changes.
4. Measures: We
have all heard the old adage “you get what you measure.” But, do we really
understand how to measure the right things? Reynolds Consulting uses a
dashboard system and has its clients develop measures in three key categories
that are linked to strategic objectives. To be effective, it requires the
right measures to be selected, effective communication around the measures
and the personal accountability of those required to produce the measured
outcomes.
So where do you start? You start with your overall strategy. Ask yourself,
“What actions are most critical to perform if I am to accomplish my
strategy?” If you are Nike, how often you are able to introduce a hot new
shoe style is key. So an important measure might be
% of revenue from new shoe styles. If you are a manufacturer with a fairly
stable line of product, you may need to ensure growth by driving volume with
new customers—so you choose to measure % of revenue from new customers.
Measures are not limited to top-line drivers. You will likely have strategic
measures for expense control, too. An across-the-board expense reduction,
while possibly necessary, is not usually strategic. Rather, you may want to
look at certain aspects of production that can be an enabler of your
strategy. For example, improving inventory turn by converting to a
just-in-time inventory approach may be a strategic benefit to your customer
and an improvement to your business practice that yields important
bottom-line benefits. That is a strategic measure.
With these tools in place, you
and your management team have created a plan for action that is reasonable
and achievable. The key is then communicating with your team, monitoring
performance against your dashboard and adapting to changes in your
environment. In our next newsletter, we will review the ongoing dynamics in
managing your plan.
Reynolds Consulting, LLC has
developed a number of tools and processes that help managers lead the
strategic implementation of growth. These tools are easy to use, but powerful
in achieving success! Call Reynolds Consulting, LLC today for more
information or email
Seventh in a Series of Newsletters
We all recognize that growth is an important goal for our
businesses, and while it is never easy to achieve, that is especially so in
challenging economic times.
However, by recognizing the factors that restrain us and the
opportunities that are available to us, we can beat the odds and see our
businesses grow to surpass the industry average.
This newsletter continues a series of articles on what it
takes to grow—from understanding what is currently holding you back, to
identifying the opportunities inherent in your market, to constructing a
comprehensive and winning plan, to, finally, implementing the plan you have
crafted.
This is Issue No. 7 in
a series of eight. If you missed a previous issue, please let us know and we
will be happy to send it to you.
No. 1—Escape Velocity
No. 2—Discover: Diagnostics
No. 3—Discover: Determine
No. 4—Discover: Decide
No. 5—Develop: Differentiate
No. 6— Develop: Design
No. 7— Deliver: Do It
No. 8—Deliver: Direct
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