Home > Featured Articles > Keys to Successful Strategic Planning for 2018

Keys to Successful Strategic Planning for 2018

From Here to THERE, what is your Business Optimization Plan?

By Ty Bello

Every organization is on a path. This path has been determined by a strategy developed and implemented over the years of the business. Today, an organization’s current state is the Here, and every organization has a THERE or future state of the business. To reach THERE, an organization must develop and navigate a path.

The independent outdoor power equipment dealer is facing unprecedented challenging times. The consumer is more knowledgeable than ever before, and competition with regional and big-box players continues to escalate, not to mention the imminent threat of Web-based competition. Doing your best and working harder are basic requirements to address this, but will prove to not be enough. Business leaders must identify and adopt industry best practices and then design ways to innovate their business processes to achieve business optimization and develop the path to achieve the organization’s THERE.

Challenging times demand focus and clarity, and there is no cookie cutter solution to achieve Business Optimization. The Business Optimization Process is a journey, and it is not achieved without a significant investment of time and talent. Today’s business environment demands a new, deeply analytical and visioneering process that will systematically drive results.

The following words of Henry Ford still apply to today’s organizations: “Businessmen go down with their businesses because they like the old way so well they cannot bring themselves to change. One sees them all about — men who do not know that yesterday is past, and who woke up this morning with their last year’s ideas.”

The Business Optimization Process has four navigation points on the journey from Here to THERE. The Here identifies the short term and THERE the long term, and the path is the first leg of the journey before execution.

Organizational Health – Here

The Business Optimization Process is the blueprint for business transformation. Before you embark on this journey, you need to ensure that your organization is healthy.

Patrick Lencioni, a famous author, once noted, “The single greatest advantage any company can achieve is organizational health.”

So, if you are to embark on this business transformational process, you must first make sure you have a healthy business. Healthy businesses have minimal politics and confusion, as well as teams that engage with high morale, all while being highly productive and typically experiencing very low turnover.

A healthy organization is also a smart organization, where teams learn from each other and attack critical business issues. These businesses have a cadence of handling problems and recover quickly from mistakes.

As you examine your business, you must be able to diagnose the overall health. Every business has individuals that may contribute to the overall illness of an unhealthy organization. As a leader, you must find ways to change this behavior or surgically remove this illness from the business.

You cannot transform your business if it is not healthy.

Organizational and Competitor SWOT – Here

As part of your Here, you must also understand the products and services that you provide alongside of your competition.

A tool that has been used by businesses for decades is the SWOT Analysis and will serve your purpose of knowing your Here as it relates to your products and services. To refresh your memory, the acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

To gather the most relevant information about your products and services, you should include several team members to participate in the SWOT Analysis. Each person will provide his or her view from a unique position in your business. The purchasing manager can provide a great review of cost and availability. The accounting manager can provide an excellent review of profitability. And a service technician can provide an outstanding service review. Other departments on your team also need to be included. Their collective perspective will shed light on each product and service with the ultimate goal of knowing if you should continue or discontinue a particular product or service.

The SWOT Analysis should also be used to understand your competition. Knowing who your competition is through the SWOT process will also provide information for the THERE. The information gleaned from a competitor SWOT will provide you a scouting report of sorts for your journey. It is always good to know what you are up against in the marketplace. From a competitor SWOT, you can realize products and services that the competition is currently providing and conclude if this is an opportunity for you to engage in a particular product or service or not. This will also provide you data about the competitor’s weaknesses and whether these are opportunities you should exploit or stand clear of. This overall process will help you determine these opportunities or threats.

Here too you should get multiple team members to contribute to the competitor SWOT.

Situational Analysis – Here

The Situational Analysis is the last step of understanding your Here. This is typically the easiest for most businesses to gather data and review because it is the ongoing metrics used to run the business.

You must review these metrics at greater length than typically is done in your monthly staff meetings and understand your current situation. You must perform a deep dive into:

  • Peak level performance in 2017 by month and quarter
  • Business financial review of 2017
  • The consumer sales and service component
    • Changing factors
    • Challenges and new demands
  • Business market penetration
    • By product and service offering
  • Industry analysis
    • Industry overview
    • Industry opportunities

This data will not only provide an analysis of the peaks and valleys of your year, but also begin to fuel your plan for 2018. This is a time for you to move to a different level in your business and not just settle, but you need to know your numbers and develop your plan.

As author Jim Collins stated in Good to Great, “Those who build and perpetuate mediocrity…are motivated more by the fear of being left behind.”

Defining the THERE

So where do you want your business to go? If you were to create a clear yet compelling statement that could unify your entire team and provide a defined “finish line” that as a team can be crossed, what would that be?

There have been many notable statements made by some amazing individuals in recent history that provided such a finish line for their teams. Examples include:

“This nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.”
— U.S. President John F. Kennedy

“A computer on every desk and in every home.”
— Microsoft

“Organize the world’s information, and make it universally accessible and useful.”
— Google

These compelling statements have been called mission or vision statements, but in 1994, in a groundbreaking book titled Built to Last: Successful Habits of Visionary Companies, authors James Collins and Jerry Porras named this statement as the “Big Hairy Audacious Goal” or “BHAG.”

The BHAG first made its presence felt in business conference rooms, as strategic planning processes were embarked upon, and has been at the forefront of some of the most industrious organizations on the planet.

The BHAG should be both strategic and emotionally compelling and provide a visionary goal for an organization. So, what is your BHAG? Every organization is different, but this is truly a transformational statement that moves beyond a rally cry. The BHAG becomes the statement that your entire team sees as the finish line.

This requires careful and compelling consideration and should not be done in a vacuum, but embraced by the entire leadership to include frontline managers and other team members.

In recent years, many organizations have taken the BHAG to another level, and, along with this clear visionary statement, they have also included some clear metrics that reveal an even greater vision of the finish line. This enriched BHAG has included more tactical objectives that would include sales, finance, innovation, and products and services.

To be truly “audacious,” a business must be both daring and unconventional. The addition of these tactical components to the BHAG will provide the drive for your team to quantify how to get across the finish line.

Both Collins and Porras believe that the BHAG is “a 10- to 30-year goal to progress toward an envisioned future.” For your purposes, let’s focus on the next three years.

Remember how to eat an elephant? One bite at a time.

The Path

Developing the path is a critical part of the Business Optimization Process. Too often, when organizations develop the strategic plan for the next year or more, they get started with great passion, have monthly meetings to discuss their progress, lose the passion by the fifth or sixth month, and all of that time and effort falls by the wayside.

To lead the Business Optimization Process requires a commitment from LEADERSHIP. Please don’t take this the wrong way: This is not a gym membership that you sign up for in January because you ate too much over the holidays, quit going to the gym by mid-February, and still pay your membership fee for the remainder of the year.

If this has been your experience with strategic planning in the past, you are not alone. How do you push through this process for the entire year? The three elements that will create sustainability in this process include: simplify, quantify and ratify.

First, you need to back into this process, so you can transform your business. You need to simplify by starting with metrics for the business. What will you measure, and how will this be reported? Make this as easy (simplify) as possible. Do not make this more complicated than it needs to be. You should not have multiple Excel spreadsheets that calculate and manipulate the numbers so you can view your metrics.

The metrics should be easy to find for any given period (month, quarter, year). Your business management software should provide you with best-in-class metrics that are widely adhered to by the industry.

First, simplify the metrics that you use and then quantify them in a dashboard. Here is where it is permissible to write a program or develop an Excel spreadsheet that offers these metrics in a dashboard form. By simplifying the metrics and quantifying them on a dashboard, you can review your results more fluidly. You must have the capability to drill down on the numbers.

Once the metrics and dashboard are in place, you need to set a “cadence,” so you don’t quit that “gym membership.” This is where you ratify or formalize your monthly review of your Business Optimization Plan.

Some of the top reasons business leaders state they stop having their strategic plan meetings are as follows:

  • Get busy running the business.
  • Meetings take too much time.
  • People stop coming prepared for the meetings.
  • No one leads the meetings when I (the leader) am not in attendance.

All valid points, but none are reasons to stop these meetings. When done correctly, the first three steps of defining the Here, developing the THERE, and creating the path should take 5-6 weeks. After investing all the time and resources in this process, you cannot allow these obstacles to get in your way of fulfilling the path and ultimately the execution process.

Take the time to set the metrics and cadence for the Business Optimization meetings. Doing so will produce well-attended meetings where relevant and time-sensitive information is shared, ongoing clarity of the business position is provided, and the business runs with no detractions. These meetings actually contribute to the overall day-to-day operations.

The metrics provide the measurement, and the cadence provides the rhythm and structure to report and review the metrics.

You cannot afford to table or shelf your Business Optimization meetings.

The real meat of this entire process is knowing the THERE and what this next year will hold. Understanding both strategically and tactically how you will move to THERE this year should include:

  • Core SWOT analysis critical strategies for 2018
    • Prioritize critical strategies for 2018
  • Detailing the path
    • The strategy — by product or service
    • 2018 strategic objective
    • Three previous years tactical objectives/achievements

Strategic Execution Process

When you combine the Here of your business and then navigate through the path of knowing and developing the THERE, the only thing left is Execution.

In the previous section, I touched on metrics and cadence, and you should not confuse both with execution. As previously stated, clear metrics and cadence are the measurements and rhythm for reviewing the business objectives with clarity.

As Morris Chang, CEO of Taiwanese Semiconductor Mfg. Co., once said, “Without strategy, execution is aimless. Without execution, strategy is useless.”

Execution is how your team works together to achieve the Business Optimization Plan.

Throughout this article, I have stressed that this process is not to be created in a vacuum, and you need input and alignment with all team members. So, it would make sense that you not only share your metrics, but also your cadence with your team.

How will the team members know if they are achieving the goal and crossing the finish line unless they know the path you are on and the THERE you must achieve? The metrics and cadence become part of the everyday process of your business. Every person on your team has an investment point in the overall return on the company achieving the Business Optimization Process.

With 2017 now behind you, as a business leader, you must fully quantify your THERE for 2018 and beyond. The Business Optimization Process provides a systematic approach to achieve the THERE for your business.

Ty Bello is the president and founder of Team@Work, a Registered Corporate Coach (RCC) with the Worldwide Association of Business Coaches, and a graduate of Indiana Wesleyan University. Ty served as a sergeant in the United States Air Force and was awarded the Air Force Commendation Medal for his distinguished and meritorious service. Ty is a highly sought-after speaker, and he provides relevant and best-in-class information during his energetic presentations. Team@Work is a coaching and business services organization that serves businesses as they maneuver through the everyday ebb and flow of running a highly focused organization and team. Its roots are based in business coaching and the belief that businesses and team members are not broken, but are occasionally misguided and drift slightly off course. Team@Work’s goal is to motivate and coach businesses down the correct path and lead them to even greater success and team dynamics. Team@Work provides coaching and execution strategies in sales, business optimization, organizational health, and leadership and team development. For more information, visit www.teamatworkcoaching.com or contact Team@Work at (260) 627-8938 or coach@teamatworkcoaching.com.

About snoe