5 Reasons Business Plans Fall Short

My observation is that business leaders look upon business and strategic planning with the fondness of a root canal or tetanus shot.  Nobody would suggest that planning is a bad thing to do, but many are hesitant to commit time and resource to the activity. Business plans only make sense if the leadership intends to implement change. Many executives reason that their day-to-day intuition has brought the company to exactly where it needs to be. Others will write “high-sounding” goals and never fund them to succeed. Good strategy blends what’s happening outside the walls with imaginative insight for what could be happening in the building. This is my list of reasons for why plans fall short:

Fuzzy understanding of what customers want: What customers want usually goes beyond the utility of the product and service you deliver. Customer values and preferences are constantly shifting. Regular conversations with customers regarding their intentions for the next one to two years are critical. Visioning is a trendy term in the management world. Taking time to lengthen your planning horizon and imagine how the world will change is a helpful exercise.

Fuzzy understanding of competitors and market trends: Particularly small business, often neglect taking the time to quantify the current size of their market and whether it is growing or shrinking. Another issue is not reacting to new technology and competitors when they enter the market. Customer adaptation to new ideas is rarely instantaneous and there is time for companies to react. That time, however, is precious and limited.

Weak appreciation of process: Effective change relies on clear understanding of how things are done today. For a very small operation, this can mean clear understanding of individual roles and responsibilities. For a larger operation, it requires understanding of process in operational, business development, customer service, and financial areas. Problems can arise when the process experts are excluded from business planning; or when process is understood as an operational activity. ISO quality standards have evolved over the last decade to take a more comprehensive view of how businesses deliver quality.

Failure to align mission and process: Even the largest corporations can stumble on this issue. Alignment can be purely a measurement issue. For example, if a company wants to be more responsive, the cycle time of a process and the process’ ability to support product and service variations are critical. There is, however, a larger cultural issue. Businesses must delegate implementation of the strategy to the people who drive the process. This handoff is the “secret sauce” for achievement of positive change and employee engagement.

Under investment in the human element: As businesses grow, the requirement for employees to lead change grows. Many companies will hire people with extensive corporate experience. This can be a successful strategy if the candidate has the experience and motivation to lead the change required now. Successful business plans require complete honesty in assessing the organization and making the investments that will bring change.

You may observe that to address these five points, you need an ongoing management process that continuously collects and digests information. Feel free to contact me if you want to understand more.

 

Most Critical Lesson for Success

I have found in life that there are two groups of people: the Doers and the Servers. The Doers look inside themselves to decide what action they will take. The Servers look outside themselves to decide how to act. The simple lesson is, if you want to be successful, be a Server. Learning to be of service, however, is not so simple and most people resist it.

Serving is more about attitude and focus than style.  One need not be an extrovert to serve; you can take direction from those you serve without changing your environment. Being of service is never passive; it requires action. For example: many people have complained that government is ineffective and needs to be changed; yet few have ever introduced themselves to their representative in Congress. Many people are concerned about those in society that need assistance; but few have committed themselves to a mission that extends a hand. And many people in business claim to be customer-focused while never asking for critical feedback from customers or using customers’ important problems to direct business plans. While the concept of serving is simple, putting it in action is difficult. Often people are not aware of the priorities and values that create obstacles and can benefit from a teacher, mentor, or coach to change. Here are three reasons I think it’s so difficult:

It requires maturity. We are all born with a Doer’s mindset. Being of service requires the awareness that customers or people being served are not an extension of you. I am one of many people who grew up with the parental message, “If it’s good enough for me, it’s good enough for you.” Many missteps in business have stemmed from thinking that there is some universal logic that causes customer wants and needs to be the same as the business owner’s. Service requires humility and respect for what is different.

It requires embracing ambiguity and agility. I recently heard Carnegie-Mellon’s Prof. Anita Woolley speak about Smart Teams and the importance of having Right Goals. Prof. Woolley noted there are process-oriented goals that focus on executing a process with little regard for outcomes and outcome-focused goals that focus on an outcome with no preconceived process for getting to the outcome. Both approaches are appropriate and Smart Teams correctly identify which approach is best for a circumstance. Customer-focused strategies take a desired outcome identified by customers and trust that a process can be found to achieve it. Many organizations balk when they need to stop doing what they’re comfortable doing and listen deeply to find the way forward.

It turns values upside down. People start businesses with a passion for a trade or technology and a desire to practice it independently. Focus on customers creates a dilemma that asks the business owner to cede independence for interdependence with customers. Customer-focused businesses are taken in directions that the owners never could have anticipated.

The first step in changing a business’ focus is developing Right Relationships where needs flow from the customer to the provider and not vice versa.  I am happy to be of help to businesses looking to make that first step.

 

Habits that Kill Growth

Every business leader wants to see their business grow. All too often, the business owner that launched the business relies on their intuition to sustain it. While Operations professionals study process and collect data, rarely does that practice extend to the front office. Growing skills to build relationships, implement measures, and collect relevant data are vital to growth. Here are three growth-inhibiting habits to consider:

prooduct-acceptanceAvoid what you don’t understand – Whether it is business planning, Internet marketing, or appreciating the difference between order taking and sales, it is a good bet that the skill set that helped start the business will not sustain it. Many business owners forego writing a business strategy because they do not appreciate that the underpinning of all marketing activity is built on the business strategy. If one can answer these questions, “Why are we in business?”, “Why will people buy from me rather than my competitors?”, and “How much revenue can I capture from this market over the next three years?” their business plan will be better than most of corporate America. The fundamental skill is engaging customers and prospects so to understand what they want and the trends that are driving their interest. This skill comes naturally to a small group of gifted people. The rest of us need to learn a process and practice, practice, practice.

Avoiding development of high-skill employees – The skills and traits that make managers and sales professionals successful are almost identical. The most important of those skills are leadership and interpersonal skills. When I talk to business owners about how they evaluate sales performance, the most frequent response is, “My folks are very skilll-continuumexperienced.” While this response dodges the question, interpersonal skills are usually developed with maturity and growing self-awareness. In the sales world, experience can be a two-edged sword. On-the-job experience needs to be balanced against how professionals have updated skills to remain relevant with the changing nature of sales. Skill development does follow a logical progression. A sound “on-boarding” process should engage an employee with the position and company. Skill in setting and managing goals will accelerate development of interpersonal skill. Development of interpersonal skills requires modeling of desired behaviors and coaching employees on how to achieve results. While engagement and goal management can be measured with surveys and percentage of goals achieved, evaluation of interpersonal skills and leadership require close observation to verify desired skills.

Misconception that the value is the product– Pride in company and product offerings is almost always a good thing. Customers, however, focus on what value they might gain by consuming the product rather than the product itself. Customers’ perceived value can only be fully understood by objective, yet empathetic inquiry with the customer. Again, interpersonal skills are essential for sales and marketing staff to understand current and future customer wants. Business leaders that shy away from developing interpersonal skills will shy away from gaining adequate customer focus.

Accelerated Achievements is an advocate for Marketing Quality Management (MQM). Lasting improvement is achieved through a comprehensive assessment of process, people, and skills and implementing real-time performance measurements. Please contact us, and we will be happy to share ideas on how you can upgrade your marketing capabilities.

Managing Like the State of Connecticut

connecticut-flagI cannot remember a time when government had such a deep credibility problem. The juxtaposition of reality TV actors with long-time incumbents reciting the same tired lines has energized the electorate. But, energized to do what? As one who follows Connecticut politics closely, I am exasperated with the leadership being modeled by our legislators. Ironically, I observe many businesses that mirror this style; albeit on a smaller scale. What follows, are two leadership patterns that make me cringe the most:

Murky Intentions and No Measures: Last week I studied SB 1, a huge bill titled to suggest it paves the way for Connecticut becoming an Innovation Center.  The bill talks about creating a new quasi-agency that performs functions already are performed by existing agencies, renovating communities to provide a lifestyle attractive to younger professionals, and expanding access to technical education programs. Nowhere does the bill state the results these costly changes are intended to create and the measures the State can use to evaluate success. The logic is that if we copy the activities and environment of successful innovation centers, we will become innovators. The question is whether these investments address the critical barriers to innovation.   For example, does beautifying our communities change young professionals’ behavior if they still cannot afford the cost of living in Connecticut? The lack of measures eliminates accountability and explains why government programs never die.

Businesses can also launch projects without clear intentions.  It is common for managers who are feeling strapped for cash to direct their sales force to get more sales. A sale is the result of a customer identifying a need that your product can satisfy. There are many obstacles that can prevent sales and most of them are outside the control of a salesperson.  Weak products, noncompetitive pricing, ineffective marketing, and lack of sales productivity can all be a problem. Without measures that clarify where issues lie, sales initiatives can fall flat and frustrate an organization.

Allocating Inadequate Resources to Be Successful: Connecticut has many unfunded mandates that direct agencies to take an action without identifying where the resources will come from to carry out the act. This can be an environmental regulation where the agency lacks equipment or expertise to consistently enforce a new regulation or a call center that has been tasked to deliver a new customer service without clarifying the existing services to be discontinued.

Resource allocation is the most common reason I observe for strategic plans failing in small businesses. The underlying cause is often that executives lack clarity on how their human resources are being spent. Executives will assume a staff can juggle a key initiative without delegating at least some activities tied to customer product and service delivery.  The result is that businesses miss opportunities to grow due to an inability to adequately identify the tactics that will obtain the goal.

As always, feel free to comment. Please take a deep breath and stay engaged in the electoral process.

Three Ways Executives Stumble

Intention is everything when creating strategic and business plans. Too many executives use annual plans as a “snapshot” or “State of the Enterprise” presentation rather than a dynamic instrument of changestumble. AH Maslow is credited with developing the Cycle of Change which identifies three transformations to achieving change. They are: awareness that change is necessary, identifying what needs to change, and understanding how the change can be achieved. If managers are not deliberate with each step, much can go awry. These are my top three ways to stumble:

Failure to recognize how fast customers will evolve: Companies are sustained by learning to time product introductions to a market window. A proven process to capture customers’ future preferences and strategies is a given requirement. Even the best market intelligence, however, will only render a hazy outline of how your product offerings need to evolve. Understanding key material, tool, and process trends provides more clarity on product cycles. Intuitive customer understanding and the ability to predict schedules and cost, however, is the “secret sauce” for a winning product program. And while the biggest prizes are awarded to disruptive products that leapfrog the competition, ideas cannot be so innovative that customers fail to understand their value. Apple is recognized for the graphical computer interface and personal audio player; but was not the first to market either of these products.

Reluctance to lead change: I have seen executives who desire organizational change stumble when they did not factor how they need to change. When people are presented with a new idea, over half the population will respond by rejecting the idea until it can be proven to their satisfaction that it’s a good idea. While clear communication regarding what the change is, why change is needed, and how the organization will benefit is vitally important, leading by action is equally as important. Allowing employees to participate in planning change, working to build trust, and involvement in demonstrating the changed behavior will help achieve success.

Inadequate reallocation of resources: Executives worry how change in their business might unsettle customers’ willingness to buy. Businesses will often attempt to maintain both old offerings and services while the replacements are being developed and introduced. The decisions businesses make regarding capabilities, skill development, and capital are impactful. How often have we seen?

  • Acquisition of new systems while skimping on the necessary implementation training
  • Jobs eliminated while neglecting to resolve how responsibilities will be reassigned
  • Incumbent employees assigned to master new technology while restricting ongoing education

The ability to forecast capital requirements and cash flow is an invaluable skill. The discipline to release high-skill employees from marginal product lines without disruption will lower stress on the organization.

I have seen attitudes toward strategic planning jaded by these missteps. The rewards of management team learning to be proficient at planning, however, make learning worthwhile.

 

 

One Strategy that Will Improve Profitability, Quality, Healthcare Costs…

Gallup ImageWhile perusing a digest on LinkedIn, I came across a link to a Gallup report entitled “State of the American Workplace 2013” (http://bit.ly/1RQ5Bpa to register and download.) This is an informative report that establishes a quantitative value for employee engagement. When measuring employee engagement, the companies in the top quartile reported 22% more profit, 41% fewer defects, and significantly lower healthcare costs than the bottom quartile. Of America’s roughly 100 million workers, 30 million are engaged, 50 million are not engaged, and 20 million are actively disengaged. Actively disengaged workers sabotage, obstruct, and steal to act out their unhappiness and cost the US economy $450 to $550 billion annually. Of the industry sectors measured, manufacturing has one of the lowest levels of engagement, customer service is the job function with the lowest engagement, and Connecticut has one of the highest levels of actively disengaged employees. The bottom line is that an unpopular supervisor may be costing you a lot more than you think.

I encourage all my clients to manage engagement. Per Gallup, engaged employees create most all innovations, win most new customers, and provide the most entrepreneurial energy.  So as we prepare to roll into a new year, here are my top suggestions for improving engagement:

Tie Employee Goals to Vision and Strategy: First of all, make sure you have a vision and strategy that employees can read and understand. All employees realize fulfillment by feeling connected to a mission that is valued by their community. Sense of mission is the most fundamental and necessary element of engagement.

Managers that Motivate and Measure:

It used to be common wisdom to treat all employees equally. Today, great managers recognize the diversity of their team and tailor how they approach team members to satisfy individual engagement needs. For some, a sense of belonging may be essential; for others it might be mission. The ability to connect with employees needs to be balanced, however, with an objective accounting of results and helpful feedback.

Flexible Work Rules:  Employers that accommodate employees’ needs outside of work grow employee engagement. The Gallup data shows that remote workers had higher engagement and worked more hours than in-house employees. Of note, employees who were permitted to work less than 20% of their time remotely had significantly higher engagement scores than both the in-house and 100%-remote employees.

Invest in Employee Development: Anyone under the age of 50 gauges their loyalty to an employer by the employer’s willingness to create opportunity and develop careers.  Millennials comprise over 30% of the workforce today and perceived lack of advancement opportunities is the #1 reason for changing jobs.

This is just a sampling of ideas. Please share any tactics that have worked for you or examples of employers who are great to work for.

Wish you every success in the new year!

 

Do You Confuse Vision and Mission?

Whenever I work with a group regarding strategic planning, I find the wordsvision-mission vision and mission often need definition. Perhaps some of the confusion comes from faith-based organizations using the word mission to mean what a commercial organization often calls vision. Simply put, vision is a description of how your organization expects to improve the welfare of your customers and community and mission describes how you will progress toward the vision in the short term. Let us address the two terms in detail:

Vision: The Internet has made it possible for every enterprise and individual to capture a global audience if they have a message the world finds interesting. The vision is a succinct, compelling statement describing who will benefit from the existence of this operation and how. It is the “punchline” for why people should buy from you, invest in you, and work for you. The focus is on how you want the world to perceive what your organization will become. Visions are supposed to be a bit hazy. This is because they ideally deal with qualities and character more than tangible actions. My suggestions for vision statements are:

  • Remember words of appreciation you have received from customers and integrate exactly what they appreciated in the statement
  • Prepare a list of three to five descriptors that you would like people to use in remembering your organization. Think about how they fit into your vision.
  • Include all of the relevant characters in the vision (i.e. customers, employees, surrounding community, etc.)
  • Use visual, metaphorical language and try to keep it under 25 words if possible
  • If your statement proclaims the organization to be a leader or “#1”, be sure it is evident how the world will come to that conclusion

Mission: The mission statement highlights the few areas of focus in the current planning period. Mission statements leave no doubt on what will be done and the result to be achieved. My suggestions for mission statements are:

  • Vital missions target innovation and change. Remember that customers just assume you deliver quality products and services and do not need to embark on a mission to do so.
  • Focus the organization on the critical goals and results to be achieved
  • State how the organization will be held accountable. Include measures, priorities, completion dates, and who will lead the mission
  • Mission goals should be realistic and supported by describing investment of talent and capital to involved parties.
  • Review mission progress on at least a quarterly basis

This is how I introduce these key concepts. For a leader or executive, these two elements are the most important part of a strategy. Please share your comments on best practices for vision and mission.

Avoid Costly Training Mistakes

A survey by The Economist of over 1100 Millennial employees and 150 managers revealed that 91% of Millennials felt they would spend less than three years in a job before moving on.  Noted author, David Burstein, wrote that it is possible that the Millennial generation will have had 14 jobs by the time they are 38 years of age. This attitude will challenge manufacturers and other technology organizations with extensive training programs and depend on employee retention to grow intellectual property and “know how.”

As noted in an earlier blog titled “Overcoming Obstacles to a Younger Workforce,” a clear business strategy and managerial transparency are essential for attracting younger workers. Commitment to executing the strategy, developing employees, and showing how employees support the strategy are critical to retaining them. Having spent most of their lives in a down economy, Millennials evaluate their opportunity for advancement and employer’s commitment to their development more carefully than their elders did. Communicating a clear career path strengthens employee engagement.

When developing a training strategy, it is important to consider how teaching methods have changed over the last couple decades. As a Boomer, I was very comfortable sitting in a lecture hall building a vast reservoir of knowledge before attempting to solve a real problem. Feedback on how I was doing was limited to two, perhaps three, examinations during the semester. Today learning is more focused on problem solving skills and assumes that all the knowledge details can be grabbed as needed off the Internet.  Students are accustomed to two-way feedback all through the learning process.

My suggestions for a positive employee development program include:

  • Structured Orientation – Graduates today starting their first or second job expect some training and orientation. Many organizations lack a resource to plan how an employee is brought into the company. I know from my own experience, there are costs associated with skipping or skimping on orientation.
  • Challenge – Younger workers are more schooled in critical thinking than my generation. There is value to assigning trainees a “real” problem and let them figure it out. Younger workers learn better with on-the-job training. “Spoon feeding” information risks losing the trainee’s engagement.
  • Autonomy – Self-paced training based on interactive technology has many advantages. Letting trainees control the pace assures that they won’t get bored and makes it possible to receive the instant gratification they wish for.
  • Structure the Training Path – The greater the correlation between skill proficiency and compensation, the better. Breaking training into small increments is cost effective for the employer and makes it easier to point to the next step in the employee’s development.
  • Appreciate and Encourage – Young workers are accustomed to receiving far more encouragement and monitoring than older managers are accustomed to delivering. In flat organizations, managers might want to assign peer mentors to trainees if the manager cannot allocate the time.

This may seem counterintuitive, but Don Tapscott wrote that, for managers unclear on how to best train the Millennial generation, task them with the problem. They will appreciate the collaboration and you will be pleasantly surprised by what you receive.  Please share your training successes!

Skills Managers Need for the Digital World

Digital OrgThe successful manager in the digital age will foster innovation and collaboration, respect employees’ desire for work/family balance, and guide workforce development in a rapidly changing landscape. These managers will often cede their place “at the top of the pile” and behave like another node in the organizational network. Managers that rely on authority and structure to achieve organizational goals will frustrate and flounder. Managers with the courage and compassion to lead will thrive.

Our politics, commerce, religion, and increasingly mobile lifestyles demonstrate a decline in highly-centralized institutions and a rise in flatter organizations where decision-making is distributed to gain its full knowledge and expertise. This period of powerful social and technological change are shaping business leaders to have a balanced focus on innovation and quality processes.

With the challenge of bringing change to large organizations, corporate leaders are already sensitive to this “sea change” and are well on their way to adapting. I believe leaders of small and medium-sized business will prosper by growing their skills as described below:

  • More ability to inspire and persuade and less focus on direct and control
  • More ability to extend the length of their planning horizon and less focus on reactive problem solving
  • More ability use a long-term vision and purpose to assess the importance of short-term issues and lead the organization
  • More ability design roles and incentives that foster collaboration and encourage personal leadership and initiative
  • More ability to coach and develop employees so to build their trust and confidence in carrying out responsibilities that the manager might normally hold onto for themselves
  • More ability to match employee responsibilities to their natural skills and less “pigeon-holing” employees by credentials and their entry position in the organization

While many people already associate these skills with exceptional managers, this type of skill development requires persistence and commitment. Small business leaders often have not been afforded an opportunity to develop these skills. Executive coaches can play a role in preparing small business leaders to play in the digital world. This is my vision for future business leaders. I welcome all comments, questions, and differing views.

Singular Focus Bests the Competition

DSC04155-BWe are approaching that time of year when we make and forget resolutions. Verne Harnish in “Mastering the Rockefeller Habits” wrote that effective business leaders identify just one high-priority goal to be accomplished over the next 12 to 18 months. The power of one shared goal greatly increases the likelihood that the goal will be achieved.

Goals fall short when the safety of the status quo outlasts the desire to see a change of fortune. The obvious advantage of one goal is focus; not just for you but for the organization as well. There are three areas where focus can provide the leverage to achieve change and results: innovation, priority, and accountability.

Innovation: The most dramatic change comes when organizations take a fresh look at a challenge that replaces a process; rather than doing the same thing faster or cheaper. Having a single goal fosters broader cooperation and collaboration that will break down resistance to change.

Priority: Whether you are a one-man shop or a large corporation, time spent on activity that does not support the goal threatens success. Insufficient resource in a particular skill area is the killer of many initiatives. Departments and individuals are far more likely to schedule activity or volunteer resource if they attach some urgency and importance to a single goal.

Accountability: One advantage of a single goal is that the scorecard is fairly simple. Initiative will flounder if there are no measures in place to measure progress. The common excuse is that it’s difficult to project schedules and cost for something an organization hasn’t done before. The discussion surrounding setbacks and disappointments will often reveal a new approach to the solution. (See Innovation.)

Another key success factor in achieving positive change is picking the right goal. The business leader needs a process for researching markets and technology that guarantees the goal is meaningful and realistic for the business. An experienced strategist can guide and direct a leader through an effective process.

Wishing you every success in 2015!