Tuesday, November 29, 2016

Are Your Strategic Planning Efforts Doomed To Failure Before You Start?


Are Your Strategic Planning Efforts Doomed To Failure Before You Start?

It’s December. Your plans for 2017 should be in place. Some organizations are scrambling to get strategic and financial plans in place before the new year. There is still time to get it right in 2017.

Before you have that deep sigh of resignation, ask yourself a few questions:
·         Does your company’s planning process ever yield real results?
·         Do you go through a long, tedious process year after year that you and your managers dread?
·         Are there barriers in your organization that now protect the status quo and prevent you from moving forward?

Perhaps the approach is flawed!
Years of either poor planning or no planning have created unintended consequences for many organizations. These organizations unintentionally have created barriers that prevent them from developing and executing a meaningful plan. It could be because of a history of unreasonable expectations and unachievable goals, a history of abandoned projects, or a lack of internal knowledge and understanding about customers, competitors, and the market.

Barriers to Planning Success
·         History of only partially developing plan
·         History of unreasonable expectations and unachievable goals
·         Lack of internal understanding about customers , competitors, and the market

In addition to barriers to planning, company teams have a lack of confidence and skepticism about their ability to execute plans. This could come from a company history of abandoning projects, a history of unclear objectives and metrics, too many strategies and plans, a history of poor communication, a history of poor delegation and leadership, gaps in management capability, or a lack of true accountability.

Barriers to Execution Success
·         Gaps in management depth
·         History of abandoning projects
·         History of lack of openness and poor communications
·         History of poor delegation and leadership development
·         Lack of true accountability

Organizations that have barriers to planning and execution have one characteristic in common: there is little or no connection between the plans they create and management behavior around execution. Most management teams quickly get swept away with the urgency of the day-to-day business and the plan is forgotten.

So what can you do to change this counterproductive cycle? Try a better approach!

Consider the following before you start
·         Examine past strategic planning and execution efforts
·         Identify the organizational barriers to success – Develop plans to fix these barriers
·         Use a new and flexible approach to strategic planning
·         Less is more – Better to have three strategies with great focus than seven with poor focus
·         Realistic and achievable – Unachievable goals end in frustration and abandonment
·         Validate plans with the market – make certain you understand how customers and competitors will react to your plans
·         Break into small bites with near-term actions – build momentum by getting some early
Successes
·         Create 90-day action plans, recheck, and re-evaluate
·         Clear and Understandable – to everyone in the organization
·         Communicate, Communicate, Communicate
·         Metrics – develop quantifiable measurements of progress
·         Track the progress– regular monitoring and adjustment
·         Adjust and Recalibrate

Understanding the barriers to planning and execution is critical. Companies that have addressed the barriers are amazed at how much more their management teams are engaged and how the process energizes the entire organization. CEOs of companies with years of poor planning and execution history find that their organizations are far more capable than they ever imagined of achieving superior results.

Wednesday, November 9, 2016

Execution- Failure to Launch: Reasons Company Strategies Don't Succeed

[Editor's Note: Almost 2/3 of all strategies fail to reach expectations. Why do so many business strategies fail? Below are some key reasons. Knowing the barriers in your organization to successful planning and execution is the first step. Clients that follow our recommendations have significantly outperformed the competition. We like to say, "A good plan, well executed, beats a great plan, poorly executed, every time." Contact us if you would like more information.             -DPM ]

 
Execution- Failure to Launch: Reasons Company Strategies Don't Succeed  
 
1. No clear definition of success  
Fuzzy goals lead to fuzzy outcomes. While it seems obvious, many organizations simply don't articulate the specific goal of a business strategy. If the goal of your customer intimacy strategy is to form deeper customer relationships, that's fuzzy. If the goal is to increase customer retention by 10 percent and increase annual revenue per customer by $10,000 and net profit by $1,000, that's clear. Here, deeper customer relationships may be the mechanism to achieve the goal.

2. Too many goals  - Too many "shiny objects" 
When everything is a priority, nothing gets accomplished. Many so-called strategic plans have too many goals, objectives, success drivers, strategies, initiatives and so on. Worse, it's not clear how these various appendages are linked. Is it any surprise these plans sit on shelves and collect dust? Choose to do fewer things much better.

3. Metrics and Alignment - Either no metrics or vague metrics 
Many plans are simply a brainstormed list of things to get done by unspecified people at indeterminate times. A plan with specifics outlines who will do what by when. It takes into account the sequencing and timing of tasks, activities and resources. Make certain that the goals of everyone in the organization are aligned to the few key objectives.

4. Visibility - Progress isn't measured and managed 
Ever notice how plans placed in the spotlight flourish while those left in the dark shrivel? Any plan worth executing is worth tracking. A monthly meeting with a tight agenda can quickly determine what actions have been taken; what progress has been made; what will be accomplished over the next month and by whom, and what, if any, challenges have emerged. This builds commitment, accountability and confidence in the process.

5. You lack the right people 
Some of those nice people who work for you may not be the right people to get the job done. That statement makes you uncomfortable, doesn't it? Many have been loyal, are committed to the culture, and may be friends and family. However, If you are truly committed to winning, or achieving success - however you define it - then at some point you have to take a long, hard, honest look at the capabilities of your people. Point them in the right direction, support them, develop them - give them a fair chance to succeed. But if they can't get it done, then your responsibility is to get people who can.

6. Flexibility - Failure to update the plan to stay real  
Reserve the right to do what makes sense. Plans are based on assumptions that can change over time. If they do change, then the plan may need to change. A quarterly "recalibration" meeting is a good forum to test your assumptions and determine which, if any, have changed. The meeting may result in either a re-validation or redesign of the plan. It ensures the plan stays real and relevant.

7. Reaction to Failure - Failure is met with indifference or an inquisition 
Is your team serious about its definition of success? Your response to failure sends a clear message about your commitment to winning. Just as importantly, it sends a message about your credibility. Do you ignore a failed initiative and move on to the next big thing (which conveys that you really weren't that committed and you shouldn't be taken seriously)? Do you look for scapegoats (which communicates that you don't take personal responsibility and can't be trusted)? Or do you first look in the mirror, take responsibility, then publicly commit to getting it right, and effectively engage your people to make it happen? Your choice speaks volumes about who you are as a leader.

Where does your organization stand? Mead Consulting Group's process begins with the identification of the barriers and obstacles to successful planning and execution. These "barriers" develop in ALL companies over time. In fact, some of the very things that help a company succeed at early levels will prevent them from succeeding at the next level. The key is to address these barriers so that the path is uncluttered.
Let us your your thoughtsEmail me  or post your comments here.

Monday, March 28, 2016

Protecting your company from "mayhem"

[Editor's Note: The " protecting your company from mayhem" series received significant positive response when it first ran. So we decided to update it for 2016.                             -dpm]

In a popular series of television commercials that has run for several years for a property and casualty insurance company, there is a "Mayhem" character who causes unexpected disasters for auto/home owners. In one commercial, he's a satellite dish falling off a roof onto your car; in another he's your navigation system gone haywire causing a crash. The message behind these commercials is that since mayhem is unavoidable, you need insurance.
It struck me that companies generate their own versions of mayhem - things that occur that may on first blush seem to occur unexpectedly or just be unfortunate.  

Here are some examples:
  • Discovering that you don't have the rights to use the trade name you've been using for 15 years
  • Discovering that your employees have been plagiarizing content
  • The employees that are developing your blockbuster new product all leave at once
  • A new competitive product offering undercuts your price by 60%
  • Your customers discover that one of your key vendors has been substituting a hazardous or substandard material resulting in product malfunction or customer injuries
  • A new business model renders your product irrelevant
  • Discovering that new regulations no longer allow you to ship your product
  • Discovering that there is no liability insurance for all the products in the field that you've made for the last 10 years...and a latent defect has just been discovered
  • Discovery that a "trusted" accounting clerk has been methodically stolen $800,000 over the last 10 years
All of these are true. Some might say bad luck. Synonyms for mayhem are chaos, disorder, confusion, turmoil. The dictionary defines it as "needless damage." In truth, all of these examples of mayhem were identifiable ahead of time and most could have been avoided or significantly mitigated.
In tough economic times or in times of rapid growth, companies can be myopic and can ignore the need for strategic planning, competitive scanning, and can defer implementing business processes and controls.
Some thoughts as you enter calendar Q2:
Develop a strategic growth and execution plan (Please- not just another retreat but a meaningful plan of execution)
  • realistic assessment of where you are (strengths and weaknesses, opportunities and threats)
  • competitive scan looking at traditional competitors as well as possible disruptive threats
  • develop some scenarios of the future (including those at extremes) and actions to be taken as these play out
  • develop specific actions, metrics and accountability to shore up the weaknesses, fill the gaps, address the risks, and take advantage of the opportunities and strengths
The best time for strategic planning is during the May -September time frame so that the organization has adequate time to develop the business plan for next year.

Don't let another year go by. Neglecting the next steps in your company's growth and maturity can be very short-sighted. You need to protect your company from mayhem!
Please comment 



About The Mead Consulting Group
 Helping Companies Achieve the Next Level of Success 

The Mead Consulting Group, Inc. has been providing strategic planning & execution, execution coaching,  strategic marketing, business development and leadership development services to mid-size businesses since 1981. We specialize in working directly with owners and CEOs to help their companies reach the next level of success.  Our clients have achieved superior results and consistently out-performed their peers. 

 It's All About Results!

We've stood in your shoes,
worn your hats and
walked your talk

Like no one else, we can help you successfully navigate through
  •    Strategic Growth and Execution
  •    Increasing Profitability and Cash Flow
  •    Maximizing Value for Exit
But, don't just take our word for it. Ask our clients.

For more information, see our website www.meadconsultinggroup.com 
or  contact Dave Mead at (303) 660-8135 or meaddp@MeadConsultingGroup.com 

Tuesday, March 15, 2016

Attributes of a Lifestyle Business or an Equity Value Business



[Editor's Note: In the last Issues for Growth, "Which do you have - a Lifestyle Business or an Equity Value Business" we outlined the major differences between a lifestyle business and an equity value business and why it was important to be clear about the "purpose" or intent of your business because the way a business owners  approaches building a business must be very different depending on how you will define success. A number of you who have heard me speak about this issue asked me to publish the matrix of attributes comparing a lifestyle vs equity value business. So, here it is below. I hope you find it helpful.           - DPM]

 
 Lifestyle Vs Equity Value Attributes Matrix 
Attribute
Lifestyle
Equity Value
Focus
Short-term Lifestyle; Run for Owner's compensation
Long-term Equity Value; sacrifice short -term comp
Pace
Owner's pace
Dictated by desired outcome
Management style
Command & Control; Centralized
Decentralized; individual decision-making
Owner Management
Can tend to be viewed as inconsistent, capricious and changing
Consistent with overall strategy and core values
Expense Control/ Spending decisions
Tightly controlled at top
Managed through approved dept budgets and policies
Outside Capital
Debt; Investors not interested; Growth may be restricted due to availability of capital
Equity investors
Empowerment
Limited; Loyalty Rewarded; Small circle of trust
Expansive; Performance rewarded; Systems to enhance empowerment
Objectives
May change at owner whim
Clearly outlined; transparent
Employee Equity
No
Yes; equity awarded
Career Development
Limited upside
Significant upside
Employee Capability
"Steady Eddies" Thrive here
High performers thrive here
Sale of Business
Usually only to Employees or Family
To third-party Buyers (Strategic or Financial)

As we outlined in the last article, neither is necessarily better than the other. It is important to recognize and be clear about which type you have - and want- if you are to be successful. If you have questions about this, contact me at Mead Consulting to set up  a free appointment.

Tuesday, March 1, 2016

Which Do You Have – a Lifestyle Business or an Equity Value Business? It’s Important to Know the Difference

Which Do You Have – a Lifestyle Business or an Equity Value Business?
It’s Important to Know the Difference
In speaking to a group of business owners recently about defining their business vision, I suggested that they be clear about whether they want an "equity value business" or a "lifestyle business", because the way they approach building a business must be very different depending on how they will define success. 
The Lifestyle Business. The term “lifestyle entrepreneur” was coined in 1987 by William Wetzel, a director emeritus of the Center for Venture Research at the University of New Hampshire. Mr. Wetzel was using it then to describe ventures unlikely to generate economic returns robust enough to interest outside investors. In financial jargon, “there's no upside potential for creating wealth," he explains.
 "Lifestyle ventures are usually ventures that are run by people who like being their own bosses," Wetzel says. "But they're in it for the income as well. Indeed, lifestyle entrepreneurs offer a different...view of success than those who are mainly focused on longer-term wealth accumulation.
Lifestyle businesses are businesses that are set up and run by their founders primarily with the aim of sustaining a particular level of income and little more; or to provide a foundation from which to enjoy a particular lifestyle. Some types of enterprises are more accessible than others to the would-be lifestyle business person. Those requiring extensive capital are difficult to launch and sustain on a lifestyle basis; others such as small “creative” businesses are more practical for sole practitioners or small groups such as husband-and-wife teams.
Lifestyle businesses typically have limited scalability and potential for growthIn conventional business terms, lifestyle businesses typically have limited scalability and potential for growth because such growth would impair the lifestyle for which their owner-managers set them up. However, a lifestyle business can and do win awards and provide satisfaction to its owners and customers. These are firms that depend heavily on founder skills, personality, energy, and contacts. Often their founders create them to exercise personal talent or skills, achieve a flexible schedule, work with other family members, remain in a desired geographic area, or simply to express themselves. But without the founder’s deep personal involvement, such businesses are likely to, well, founder. Professional investors therefore rarely get involved with lifestyle businesses. A lifestyle business is also one that can allow the owner to call his/her own shots and to move at his/her own pace. It’s a business that fits his/her current way of living rather than dictating how things ought to be done. For millions of people, these sorts of small ventures are an excellent way to “do what you love.”
The Equity or Value Business. Equity can be defined as: A company's assets, less its liabilities, which are the property of the owner or shareholders.  Popularly, equities are stocks and shares which do not pay interest at fixed rates but pay dividends based on the company's performance. The value of equities tends to rise over the long term, but in the short term they are a risk investment because prices can fall as well as rise.
An equity or value business is one where the owner intends to build real assets with a grow-able, tangible value that can be bought and sold - either as shares or the entire business. Success would be defined as the increase in value of the business over time. These businesses by definition will be built to succeed without the presence of the owner(s). In many cases, current lifestyle of the founder/owner is sacrificed in order to build significant long term value. In equity value businesses, owners focus more on building value as seen by potential buyers: sustained improvements in revenue/EBITDA, strong management team that can operate and grow the business without the owner’s constant involvement,

By contrast, a lifestyle business is one where the entrepreneur seeks to generate an "adequate" income while living where s/he wants, doing what s/he loves, or having the flexibility to be around when the kids or grandkids come home from school or take long weekends in the winter to go skiing. Success would be defined as an increase in satisfaction with one's life over time.

It’s imperative to decide which one you are. These are very different scenarios. "Equity value or lifestyle" is one of those fundamental decisions you should make early in your company’s history. If you're contemplating going into business with a partner, determine if you both would answer the same way. So why is it important to decide? Businesses that do not have a clear understanding of the type of business they want – and are prepared to be suffer inferior returns. Going down a path that straddles both lifestyle and equity value camps is sure to generate both lower current cash (compensation for the owners) as well as lower growth and value potential (lower equity value). Consider one company with an innovative product in the education products space. The founder had a stated goal of building a value business. However, actions demonstrated to key employees and managers that the true motives of the founder were to facilitate lifestyle. A confused culture prevailed. Top employees and managers interested in growth left the company, leaving a cadre of lower performers, interested in maintaining the status quo. The company growth and profitability lagged and the company ceded its leadership position to more aggressive competitors. In the end this company accomplished neither growth in value nor an exceptional lifestyle for the owners.
Be honest with yourself about your appetite for risk, your need for autonomy, your desire for current compensation. In the end, neither is good or bad. It's just, which one is for you?

Monday, February 15, 2016

Forget Networking - Be a Connector

I saw this piece a few years ago in SecondAct.com by Alina Tugend. It makes great sense and I thought it worth sending again.  -dpm
                                ---------------------------------------------------------
We all know people like them, people who seem to know everyone. They're always able to help -- or if they can't, they know someone who can. You meet them for the first time and in 15 minutes, you're talking with them like you're childhood friends. They're successful, smart and funny, with a likable touch of self-deprecation. And they're interested in everything.

Who are they? Connectors. Take Maryam Banikarim, senior vice president and chief marketing officer at Gannett, publisher of USA Today. She has a perfect job for a connector -- she helps link Gannett's various newspapers and media outlets "and bring the pieces together." "I like people and am genuinely curious," says Banikarim, 42. "I like stories and want to make connections. But I didn't know the word for it until my husband read Malcolm Gladwell's The Tipping Point and said, 'I finally have a word for you -- a connector.' " As Gladwell writes, "sprinkled among every walk of life . . . are a handful of people with a truly extraordinary knack of making friends and acquaintances. They are Connectors." Gladwell describes them as having an ability to span many different worlds, subcultures and niches.

Traits such as energy, insatiable curiosity and a willingness to take chances seem to be the common thread among connectors -- as well as an insistence that connecting is not the same as networking. "Networking I see as a means to an end," says Jill Leiderman, executive producer of the late-night show Jimmy Kimmel Live. But connecting, she explains, is about using a genuine love of meeting people and making friends to engage and assist one another.

Connectors show a willingness to venture outside their comfort zones. For example, comedy writer Josh Bycel (shown top) visited a Darfur refugee camp a number of years ago, and on the way home he came up with the idea of raising money for a medical clinic for the camp. In three weeks, he had collected $50,000. That idea grew into a nonprofit called OneKid OneWorld, which aims to connect schools in the United States with those in Kenya and other developing countries to provide everything from books to clean water.
"I'm a comedy writer. I don't know anything about building schools," says Bycel, 40, who lives in Los Angeles. "But I'm interested in learning. You need to get out and make connections outside of your own world. Being interested in lots of different things by definition allows you to be a connector."

The willingness to reach out to someone you don't know is crucial to the art of connecting, and especially important in uncertain economic times. Those who are in mid-career and may have worked for one company for years should learn connecting skills before they need them.For instance, most people's natural inclination is to seek out friends at meetings and mealtimes. Banikarim says not to do that. "It's easy to sit with someone you know," she says. "It's hard, but more interesting, to sit with someone you don't know. This is not like high school. It's not just the losers who don't have somewhere to sit."

It may seem as if connectors are born, not made, but that's not necessarily true. Banikarim was forced to learn to reach out to people from an early age. She moved with her family from Iran to Paris in 1979, then to Northern California, where there wasn't an Iranian community. "I was often that new kid," she says. When she started college at Barnard, "I knew it was either sink or swim. The first week of school, I joined every club and went to every meeting. I ended up as freshman class president."

Joining clubs and organizations is a terrific way to find like-minded people, but only go when you have an interest -- and don't attend endless networking get-togethers. Keith Ferrazzi, author of Never Eat Alone, says he has never been to an official networking event. Instead, he advises, join organizations that focus on the events and activities you love."I have a friend who is the executive vice president of a large bank in Charlotte," he writes in his book. "His networking hotspot is, of all places, the YMCA. He tells me that at 5 and 6 in the morning, the place is buzzing with exercise fanatics like himself getting in a workout before they go to the office. He scouts the place for entrepreneurs, current customers and prospects." Of course, when you're walking into that first meeting or class and facing a bunch of strangers, the instinct is to flee. That's all right. The point is not to ignore the fear, but acknowledge it -- and then work through it. "I sort of just run into fear, as I run into chaos," says Banikarim, whom The New York Post named one of the 50 most powerful women in New York City in 2008 when she worked at Univision. "You breathe deep, and you have to remember that everyone is scared."

Perhaps one of the most important attributes of a connector is a willingness to help and to reach out even if there is no obvious or immediate payback. That means thinking long-term. Jen Singer is the founder of the blog Mommasaid.net, author of five books, a Pull-Ups spokeswoman and an undeniable connector. "The biggest mistake people make is they think that 'if I help this person, something will happen immediately.' We have to stop thinking in linear terms," she says.
Helping others out doesn't mean you can't hold some things back. Singer, 44, uses the word "coopetition" -- a combination of competition and cooperation -- to describe her philosophy. "I think this generation understands you share, but also protect your own interests -- you don't give a key to everything you have. It's a line you have to learn to walk."

Finally, a connector also occasionally has to disconnect. Leiderman says her boyfriend "has taken away my Smartphone so I can super-connect with him."

Four Possible Scenarios of the future: How would your company respond?



[Editor's Note: When we initially published this article, most business leaders were still expecting a "normal" recession and recovery cycle. We now know that we have seen a combination of uncertainty and slow growth. While many companies have reacted relatively passively, some are changing the dynamics. We have updated the article, but surprisingly, many of the observations  are still present.What are your thoughts? Do these possible scenarios of the future still hold true?  I hope you find this thought-provoking. - DPM]

1. Paralysis/Survival:
This describes a situation where external events will be unknown and surprising, and companies will respond to them in a predominantly passive and reactive manner.
This, clearly, is the worst-case scenario. In this situation, "unexpected and disruptive events will increase over the next several years, and companies (and/or economies) will react by pulling into a protective shell." The external shocks could include economic developments such as the nationalization of major global industries (like oil, banking, auto) and significant disruptions to global material flows. On the political front, terrorist attacks could continue to escalate in different parts of the world, and the U.S. led anti-terrorism effort could fall apart. Isolationism and protectionism may gain strength. Companies (could) react by trying to protect existing assets with layoffs, reduced R&D investment, reduced product development, and lower foreign direct investment. Consumers may compound the problem by reducing spending dramatically.
The bottom line in this scenario: A long, global recession

2. Slow Growth:
This scenario predicts a future where external events will be known and expected, but companies will respond passively to them.

This, too, is a relatively grim scenario, though not as irredeemably dismal as the previous one. In this case, "disruptive events with moderate impact continue, and while seen as normal, they result in an economic malaise." This scenario would be marked by debt and currency problems in key world economies, though a full-blown long-term global recession may be avoided. Unemployment (or Underemployment) would be higher but manageable, but consumer confidence would be low. Politically, the war against terrorism could head toward a stalemate situation. Companies would get used to the risks of terrorism and learn to cope with their losses. They would make modest investments.
The bottom line in this scenario: Life becomes an overpowering shade of gray

3. Thriving With Chaos:
Here, external events will be unknown and surprising, but companies will respond mostly in an active and opportunistic fashion.

In this scenario life is still gray, but sunlight filters through the gloom in some areas. "Unpredictable disruptive external events" would continue, but "corporate and national resolve to be successful in the face of adversity" would drive modest prosperity. While uncertainty would continue, it would be considered a cost of doing business. Companies would try to seize business opportunities amid the disruption and uncertainties, and make increasing investments in areas that seem to be potentially profitable. In the political arena, the continued global realignment of the U.S. with Russia and China would continue to open up new market opportunities, but the Islamic countries crippled by terrorism and some developing nations could be shut out of these new alliances. The war against terrorism would continue without a clear victory.
The bottom line: Life could be better, but there's money to be made if you know where to look.

4. Global Growth: In this scenario, external events will be known and expected, and companies will respond actively and aggressively.

This, clearly, is the best-case scenario, one in which "countries and peoples of the world recognize common goals and focus on economic development and peace as the route to permanent stability." The key features of this scenario would be that the business cycle would return to normal; the global "coalition" against terrorism would evolve into a coalition for peace and commerce, and the threat of terrorism would fade. Oversupply of oil would transform the role of oil in Middle Eastern politics. Consumers would feel confident about the future, increase their spending, and lay the foundations of a sustained economic recovery. Trade barriers would be lowered and the developing economies would grow in tandem with the developed ones.

If these four scenarios - or a combination of them - represent what lies ahead in the next few years, what strategies should companies put in place today to deal with them?  Clearly, though, neither these scenarios nor the strategies that follow from them will apply across the board. The scenarios will play out differently not only in different industries, but also in various regions of the world. Accordingly, the strategies that companies develop to cope with these situations will need to vary to reflect these differences.

It would be a mistake to allow the uncertainties that prevail today to put business decision making on hold. The future may be unclear, but one thing is certain: In today's circumstances, scenario planning is more than a tool. It is a weapon to combat uncertainty, and the future will belong to companies and executives that wield it well.  
     
How well is your company prepared to respond? Are you taking control of the things that you can? Are your actions strengthening your company - or weakening it? Are you building flexibility into your plans? Have you changed your approach to planning?
The Mead Consulting Group helps dozens of companies and organizations - like yours - every year with scenario planning. The process has helped our clients consistently outperform their competition.
 Please comment.   
  ¹Excerpted from 12 CEO Diseases and How to Treat Them, Dr. Robert Lawrence Kuhn, CEO Magazine, October/November.