Thursday, October 9, 2014

Strategic Planning

When I start working with a client we have a discussion about vision and expectations.  I want to learn where they are heading in their business.  I ask them what they want to be when they grow up?  This is not a discussion of age – rather it is a discussion of the growth and maturity in their business.  It is fun to ask a child about what they want to be when they grow up because it provides a window into their passion, interest and hopes.  As a business owner you should ask yourself this same question.  The difference between a child and a business is that as a child you don’t have a choice – you will grow up regardless of your deliberate attention.  In business, you get a choice – you can remain a child or chose to grow and develop.  Don’t get me wrong, your business will age but it does not have to mature.  With out deliberate action or plans you have made a choice to remain an adolescent and due to this decision you are not in control of your business and are the victim of outside forces.  I recommend that you take control of your business and create a destination and path for your future.  This simple but profound decision can craft the future of your business. 

When asked the question of what you want to be when your business grows up I usually get a reply based on revenue or locations or some other trivial response.  That is a good start although only a partial answer.  I ask a follow up question of “Why?”  This elicits a broad range of responses but in most cases it leads the entrepreneur to consider motivations and values.  It is surprising that most entrepreneurs do not study their motivations when creating their goals and vision.  When you know why then you may chose to change your goals since your goals drive your activities as well as indicate the amount of time that you will end up dedicating to your business.  If you value your free time and your family as well as stability then you may not want to drive for an aggressive goal.  A smaller profitable company will allow you to achieve your professional goals while tending to the things that meet your personal needs.  It is important to note that each decision you make in operating your business comes with consequences.  The founder of IBM, Thomas Watson famously said that when you start your business, you should begin with the end in mind.  In this regards you need to understand your values and personal goals when establishing your professional goals. 

A growing business with a strong purpose and direction will attract great performers.  Great performers are often driven by a compelling vision and opportunity.  If the vision becomes stale then you run the risk of losing these strong team members.  In the last paragraph we discussed the need for balancing your personal and business goals. Having driven employees may be in conflict with your personal needs and expectations.  This is both a challenge and opportunity. If you have strong employees they can lean on them for some of the additional challenges as you grow your business.  Develop a strong leadership team and bring this group into the planning process.  Several challenges to growth are financial risk, and more frequently time.  You may not get your team to participate in the financial risk but you can remove much of the extra time commitment through their participation.  This group can be incented through bonuses or profit sharing, which will keep them engaged through the process.  As you build your team you may have to reassess your goals and expectations.  This does not mean that you need to adjust your personal expectations; it does mean that you will have to depend on your team to help you achieve your goals.  That is actually a bit of a misnomer since they will no longer be “your” goals, as they will be developed and owned by the entire leadership team. 

When you develop a collaborative strategic plan you will create synergy in your business.  Proper planning will help your entire team to start working deliberately and allow you to align personal and business goals.  When you start working deliberately on your business you will not magically have more time, but you will start to focus on high impact activities rather than filling your time with busy work. Synergy is created when everyone on your team is focused on his or her own high impact activities. 

A core component of your strategic plan is to develop SMART goals for both the company and also for the key individuals.  (S)pecific (M)easurable (A)ttainable (R)ealistic and (T)imely goals will focus attention and assure that individual performance helps to support the overall corporate objectives.  When you have defined goals then you can make sure that individual activities are appropriate for goal achievement.  As the leader of a SMART organization, your job is to coach, teach and train the individuals to meet their objectives.  Without goals it is easy to get lost in busy activities and pass days and weeks without real accomplishment.  People feel they are often too busy to do anything else or anything different given the reality of limited time.  When you study your activities you will find that there are many things that you don’t need to be done and many activities that can be completed by others.  When you start to become deliberate, you will find that you are able to accomplish more and actually have more freedom in your day.

As a business owner, one of your key responsibilities is risk management.  Your strategic plan you should assess your personal and business weaknesses and risks. These exist whether you are aware of them or not.  When you identify these items, you can create a plan that covers some or many of your risks.  A good professional team is an essential resource.  It is important that you have a good attorney to help you navigate legal pitfalls, a CPA that assists with tax planning and a strong insurance agent that understands your business and the associated risks.  Your professional team needs to participate in planning, as they will be a resource to help you eliminate risk and strategically manage your opportunities. Set up routine meetings with your team and have them tour your facilities.  When they are aware of your business and your business decisions then they will become a resource not just an expense.

One of the most valuable components to a quality strategic plan is having measurement systems that allow you to track progress.  Not having a tracking program in place is similar to playing a game without a scoreboard.  Each area of your business, each activity and each business needs to have a scoreboard so your staff is clear on their performance level.  Clear benchmarks, goals and measurements are essential elements of any successful business.  There are many measurement tools available to restorers today.  Do your homework and find a solution that meets the needs of your company both today and in the future.  The programs that I am referring to include: accounting; project management; marketing management; job costing and client management.  These are essential functions to a successful company so make sure you find a dynamic program(s) that meet your needs and add value to your business. 

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