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.

 

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.

The 3 A’s of Sustainability

The topic of sustainability has been a source of stress since the earthday_picbeginning of humanity. Around 600 B.C, Aesop wrote the fable of The Grasshopper and The Ant. The Grasshopper was the opportunist who lived for the day and enjoyed the summer sun while the Ant industriously stored food for the winter. The Greeks understood sustainability to be obtained only through the most moral and noble virtues.  The continuity of nations, civilizations, and institutions could be preserved only through sacrifice and the acceptance of change for the common good.

Whether your concern is for the planet, your business, or family, your attitudes toward change will determine your future. While some experience the Green Movement as an unwelcome intrusion on their lifestyle, “the Ant” understands that reducing, recycling, and reusing are the keys to preserving cash, growing the bottom line, and a cleaner planet. For me it’s not so much that I want to hug trees; rather it’s just that I want to have trees. I believe there are three key elements to sustaining the institutions and world around you.

Awareness:  It is vital that leaders succeed in building a shared understanding of what’s valuable, what’s essential, and what has the potential to disrupt. Like the Greeks, it is best that value be defined outside of yourself. Successful businesses give their customers exclusive purview over value. Enduring communities look at what its members commonly hold most dear. What’s essential is that necessary to build the value and what’s disruptive is that which can destroy the value.

Accountability:  Planets and businesses are sustained when each of their members allow examination of their actions and decisions by the rest of the community. If a business wants to improve the performance of a department, there’s no better way than to have the employees measure their individual performance and report the results to the department. Accountability is built on the clear, shared goals and values described in the previous paragraph.

Adaptability: Aesop wrote about the small reed that will bend in the wind to survive the storm. For planets and business to be sustained, the members of the community must be willing to undergo constant change. After laboring hard to create something we’re really proud of, most of us will succumb to the temptation to impede change in order to preserve the status quo.  We’ve all heard the expression, “If it’s not broken, don’t fix it.” The fact is that impeding change assures failure.

This Earth Day I hope that you will all pause to think about what’s truly precious and what changes you can make in yourself to best preserve what is precious. And then tell everyone who shares that precious thing what your intentions are and request they keep you accountable to your plan. Happy Earth Day!

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.

 

 

Want to Hire Talent? Here’s 3 Ways to Fail.

Despite all the bad news that pours in over the air waves, I continue to find evidence that our economy is strengthening. The most striking evidence is the number of business owners that are looking to increase the size of their workforce. It’s also striking that the desire to hire is almost immediately followed by the complaint that you just cannot find good talent.

I’m old enough to remember the malaise the US fell into after the OPEC oil embargo and the taking of US hostages in Iran. It seems that the 2008 recession and the divisive politics that followed have had the same chilling effect. Changing the conversation from Carter’s “what to do about inflation” to Reagan’s “we are a great nation and it’s time to show it” was all it took to get the economy in high gear. Focusing positivity on hiring strategies will also bring improved results. Here are three common attitudes that can derail your hiring initiative and business:

“I need to find talent” Too often, I hear people say they need to find good talent. My response is always, “Do you want to find good talent or attract it?” If you find good talent, there’s no guarantee they’ll accept the job or not leave after a few months. Whether you’re “finding” or “attracting,” you know employees of high skill and character are in short supply. Successful companies create two or three viable reasons for why someone would want to work for them. In addition, they have a compelling story for where their business is going.

“I’ve have had problems with younger employees, so I’ll keep looking for older ones” Never mind that it’s against the law, it’s just bad business. My career has spanned…umm…several decades and I cannot remember one time that a company did not draw on the fresh ideas of youth to carry the business forward. Younger employees will bring in innovation and ideas that will position your company for the future. It is worth tackling the challenge of adapting your company culture to embrace younger employees’ work preferences.

“If it was good enough for me, it’s good enough for them” I read an article last week that half of Millennials surveyed were dissatisfied with how they were “on-boarded” at their company. For those not familiar, on-boarding refers to initial employee training and orientation. Younger employees expect companies to be more socially responsible and motivated to build relationships with their employees. A relationship includes some empathy for the reality that employees face today and a willingness to take the time to explain what is expected of them and how they will be developed to meet those expectations. Employers wanting a simple labor rental agreement will have difficulty.

Please share your thoughts on hiring. And as always, if you have questions I’m glad to help.

Three Strategies to Cope with Uncertainty

business-people-working-togetherDuring interesting times I find it best to take a break from the news to rebalance my perspective on what is truly significant. Headlines tout that states are up to their eyeballs in debt and continuing “tax and spend” policies while countries teeter on the brink of default. Thankfully, these events have an indirect impact on most US businesses. But if we let our anxiety about what might come to pass in the future cloud how we behave in the present, greater impact will be felt. A clouded mindset can paralyze an organization by overstating risk and resisting change.  Here are three suggestions for thriving when times get tough:

Don’t take your eye off the ball. There are two elements to this point. The first is to fully commit yourself to the plan you have today and be intentional about achieving your goals. Employees look to leadership during times of uncertainty. Make it clear that the goals are intact. Secondly, stay close to your customers and have clear measures for identifying a looming change that might need factoring into your plan.

Don’t lose your edge. In addition to remaining committed to the plan, keep your organization accountable. Let employees know that deadlines and objectives count and recognize efforts that support the goals.  Companies that can further differentiate themselves from the competition will thrive in difficult times. If you are uncertain about which initiatives customers will value, make finding out another aspect of staying close to them.  Foster innovation by challenging employees for ideas on how to grow these differentiators. Inviting employees to innovate keeps them involved.

Take the offensive with your legislators. We live in a time when government spending is having an increasing impact on the economy. Make it clear to legislators which appropriations should have priority and what level of spending you feel is sustainable.  If you are having difficulty finding skilled talent, raising capital for a critical, or have a new venture idea in search of funding, let them know that too.  I am working with New Haven Manufacturers Association and Connecticut Business and Industry Association to sponsor a local event where business can exchange feedback with their state representatives.  I invite you to get involved.

These points may seem obvious. Yet, most of executives I meet immerse themselves in reactive tasks and spend less than 5% of their time actually growing their business. As always, feel free to comment on tactics you use to keep your edge. Contact me if you need help getting started with these initiatives.

Top Three Questions in the CT Budget Debate

Like most business people, I have too often looked at our political process with bewilderment and Questionpassivity. So last week, I decided to change that and attended a number of events in Hartford intended to illuminate businesses’ position in the Connecticut budget debate. One of the advantages of a small state like Connecticut, is that the government is very accessible. My experience illuminated three questions that business professionals should ask themselves. (For a summary of the Appropriations Committee proposal, click Proposal Summary )

Is anybody really representing your view?  The Connecticut Mirror and CBIA have treated the state to an excellent series of panel discussions addressing the key budget issues. Last week I heard Governor Malloy, Joe Brennan (CBIA, President) and Oz Griebel (President, Metro Hartford) address a series of questions on the Connecticut business environment. What struck me the most about the discussion is that all parties seemed to infer that every Connecticut business is a C-Corporation. Most businesses are “Pass-Throughs” (i.e. S-Corporations, LLCs, and Partnerships) and are most impacted by personal taxes. Small business owners should understand that their priorities are highly underrepresented in Hartford. It is worth aligning with an association that actively lobbies your concerns.

What is the real question? Governor Malloy has successful steered the budget debate to a question of whether to raise taxes or cut social services to the most needy. When I hear Republican say that social program cuts are unacceptable and the Governor conceding that the Appropriation Committee’s revenue plan is unpassable, I conclude that these are not choices at all. I heard a representative from Yankee Group say that Connecticut public employees are compensated (wages and benefits) 42% higher than private sector employees in a position with comparable requisite skills. Connecticut’s budget problems are structural and it is striking that neither party is willing to address this issue directly for fear of retaliation. The real question is: “Do we restructure or not?”

What is at the heart of Connecticut’s business unfriendliness? Many in the business community are quick to point at taxes and regulation as the reason for Connecticut’s slow economic recovery. I agree that taxes and regulation are onerous. I observe that when businesses leave Connecticut however, they often don’t go more than 250 to 300 miles and take up shop in another high-cost state. I believe that lack of vision and leadership is a bigger culprit than cost of government. Connecticut’s economic development efforts are disjoint. While the Malloy administration has introduced some excellent programs for small business and startups, we are still willing to spend more money on keeping the jobs we already have than developing new ones. Does it make sense to spend millions of dollars to entice Jackson Labs to move here and then not surround it with a technology-based small business community to attract necessary talent?

What to do?  I suggest that in the near future, you telephone (not email) your state representatives to discuss three points: the importance of restructuring state agencies to operate in the current revenue stream, which of the proposed new taxes are most painful for you, and what you feel is most necessary for a full economic recovery.

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.