Execution: Keys to Making It Happen

(from Issues for Growth Vol. 19, No. 10)

At an initial strategic planning kick-off session for a client company, the senior vice president of marketing spoke up: “I’ve been through these strategic planning processes before at other companies. Over the course of three months, our management team spent several days together, we put together a fantastic looking plan, then it sat on the shelf and it was never looked at again.”

I looked the seasoned executive in the eye and offered this challenge: “It’s obvious to me that your CEO and management team at those companies may never have been truly committed to executing the strategic plan in the first place.”

“Oh, but we were!” he replied. “We just never converted the great strategic dialogue and consensus into strategic actions. Then we got so buried in our day-to-day duties that we never took the time to focus on executing the plan.”

A good plan well executed is better than an excellent plan poorly executed.
The point is clear. To receive value for the time and money invested in strategic planning, you must employ a well-defined continuous process, execute strategic actions and routinely update and refresh your plan. In addition, you must encourage your organization to become a RapidAdapt company.

Seven key checkpoints
The key to securing this value is a CEO and executive team disciplined enough to ensure that the organization stays focused on plan execution. Value exists in the strategic process of analyzing current strategic direction and determining future strategic focus. However, this value is greatly reduced without commitment and focus to implement the plan.

Seven key checkpoints can ensure that you place adequate focus on strategic plan execution during the planning and development process.

1. CEO commitment from the outset
The first checkpoint: determine whether the CEO and management team are truly committed not only to developing the strategic plan, but also focusing resources on executing the strategic plan. Commitment to execution is particularly challenging for entrepreneurial-minded CEOs of closely held companies who tend to be very opportunistic. These CEOs often view the strategic plan process as limiting their ability to “jump at good opportunities.” In other cases, significant company-based barriers and issues may exist that must be resolved before the CEO and management team can focus on strategic plan development and execution. Regardless, it’s critical at the outset that the organization challenge itself to ensure that it is truly committed to strategic plan execution and follow-through.

2. Overcome the Barriers to Planning and Execution
Every organization has barriers that are built over time that prevent or limit their success with strategic planning and execution. These barriers include such things as a history of unreasonable objectives and unachievable goals, too many strategies, lack of management depth, lack of delegation and accountability, etc. (See the Mead Group eLetter - Issues for Growth Vol. 19, No. 9 “Are Your Strategic Planning Efforts Doomed To Failure Before You Start?” http://davemead.blogspot.com/2010/08/are-your-strategic-planning-efforts.html. Unless these barriers are overcome BEFORE an organization proceeds, it will be disappointed with the results.

3. Fewer, but better-defined strategies
Many CEO’s want to take on more than the organization can absorb. Remember, a few key strategies well-executed are better than many initiatives that overwhelm your organization. This is a tough job for the CEO. It’s easy to identify many strategies or initiatives that the organization should pursue. It’s difficult to prioritize the three or four most important ones and remove the others from the company’s plate.

4. Validate your plans with the market
Just because you decide on a sexy new strategy does not necessarily mean that your company can be successful implementing it. It is important that you understand how customers and prospects perceive your company and that you have an honest appraisal of your strengths, weaknesses, and core competencies. Suppose the strategic planning team at Kmart were to decide to that they needed to adopt a strategy to become a high price/high service retailer like Nordstrom. Do you really think the market would accept that from Kmart?

5. Translating strategic direction to strategic action plans
Before preparing to facilitate the strategic planning process, strategic planners often ask CEOs to produce a copy of their most recent strategic plan. Usually, a direct correlation exists between how long it took the CEO to find the document and whether the strategic plan included clearly defined strategic action steps.
Many strategic plans assess the current company situation, market, industry and competitive environment. These plans may also provide a clear strategic framework for the company. However, they often fall short in translating defined strategic direction into strategic actions. Without clear strategic actions that identify who’s responsible, deadlines, strategic plan execution and follow-through, it will be difficult, if not impossible, to achieve your goals.

6. Implementing a process for strategic plan follow-up and execution
More sophisticated organizations may implement integrated strategic execution
processes. For example, the “Balanced Scorecard Approach” builds the strategic plan around key business success drivers. It links measurable corporate and business unit goals and related strategies with the performance management system. And it builds regular plan execution reporting into the process. However, many companies don’t have the resources to develop and implement an integrated approach. If you fall into this group, consider the following options:

· Hold quarterly planning update sessions to review status against plan.

· At key manager or board meetings, create a standard agenda item that requires some discussion/review of the strategic plan.

· Report and update employees on major elements of the strategic plan. A commitment to employee communication will keep execution of strategic initiatives top-of-mind with the management team.

· Assign a key member of the planning team to help the CEO keep execution of strategic initiatives foremost on the management team’s “desktop.”

· Create opportunities through strategic assessment tools that force the organization to periodically review results and performance against key strategic objectives (e.g., benchmarking, customer satisfaction surveys, etc.).

· Readjust. Expand what’s working. Adjust what’s not. Be quick to identify the strategies and actions that are getting results and to abandon those that are not working.

· Create a culture that “rapidly adapts.” These companies have a defined process that encourages managers and employees to move quickly to embrace change, new processes, new methods, new models.

7. Allow sufficient time for the process
Successful companies begin the process in June and July for the January 1st new fiscal year. It takes time to overcome barriers to success, identify the best key strategies, develop clear and detailed action plans, assign accountability, gain organization buy-in, and integrate into next year’s budget and business plan.

A valuable asset to any organization
A continual strategic planning process can be tremendously valuable to any organization. However, its ultimate value is significantly reduced if there’s a lack of commitment and focus on implementing the plan. Make certain that you can execute your plans in order to get the real benefits.

One Year Later Revisited - "Can you realistically wait until the economy comes back?"

Almost a year ago (October 8, 2009) I made a post on this blog, titled, "Can You Realistically Wait Until the Economy Comes Back?" which discussed the possibility of a long protracted period of slow growth. Now, a year later, it appears that there may be more truth in this "long, slow slog" than many would have kliked to admit. So I ask the question again: Can you realistically wait until the economy comes back? What if the predictions are true of those who say that it could be 2015 or later before we see a full recovery.

We believe that many businesses must change in some very fundamental ways. There are things that can be done to recast your business. Over the coming weeks, we'll share a number of the steps that our clients are taking to reposition their businesses to gain competitive advantage.

What are you doing to change your prodcut mix, your service mix? How has your business or delivery model changed? Share your ideas!

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

(from Issues for Growth Vol. 19, No. 9)

In recent weeks more economists are now predicting an extended period of slow growth. Slow growth does not mean the end of opportunities. It does, however, mean that the margin for error can be less. False starts may mean quarters or even years of the penalty of lost opportunity. Organizations must be prepared to be well-aligned and execute well. Successful organizations in this new market will be those that can adapt quickly to changes in the market. How agile is your organization? – DPM

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

It’s time to begin to get your plans in place. 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 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 plans
· 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!

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 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 are 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.

ECONOMIC SCENARIOS REVISITED: FOUR POSSIBLE SCENARIOS OF THE FUTURE: HOW WOULD YOUR COMPANY RESPOND?

(FROM ISSUES FOR GROWTH VOL.19, NO. 8)

In 2008 and again in early 2009, we published this piece about four possible future scenarios for future economic environment. We were advising our clients to prepare for each of these scenarios and then be ready to react as the future became more clearly known. Which of these scenarios do you see playing out in the next few years? How is your organization prepared to respond? Let us know your thoughts.

FOUR POSSIBLE SCENARIOS OF THE FUTURE: HOW WOULD YOUR COMPANY RESPOND?

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 three 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 escalate in different parts of the world, and the U.S. led anti-terrorism coalition could fall apart. Isolationism and protectionism may be revived. 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 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 is avoided. Unemployment 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 begins to filter 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 and developing nations would 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 recession proves short-lived and 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. Investments in new technologies for energy management would reduce 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 three 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? Let us know your thoughts almost two years after this initial article.

ANNUAL SURVEY: WHAT ISSUES ARE MOST CONCERNING TO YOU AND YOUR CLIENTS?

(from Issues for Growth Vol.19, No.7)

In 2010 we celebrate the 19th year for Issues for Growth


ANNUAL SURVEY: WHAT ISSUES ARE MOST CONCERNING TO YOU AND YOUR CLIENTS?
Please take 3 minutes to complete. Just jot your comments below. Your input in past years has helped us focus on the topics areas that most interest you and would be most helpful in running your business. Thank you.

1. Topics: What topics would you like to see addressed in future issues? Check as many as interest you.

a. Survival techniques for the economic downturn _____

b. Positioning for Growth _____

c. New sources of revenue ______

d. Gaining competitive advantage_____

e. Access to capital: debt or equity _____

f. Improving profitability_____

g. Improving cash flow_____

h. Management issues_____

i. Executive Leadership_____

j. Customer –centricity_____

k. Developing middle management leaders_____

l. Strategic Planning and execution_____

m. Preparing your company for your exit or sale_____

n. Other_____

2. Do you find these ISSUES FOR Growth e-LETTERS informative and thought-provoking? YES_____ NO _____

3. In the past five years, ISSUES FOR GROWTH has averaged 17 issues per year. Is this the right frequency?
YES_____ Too Often _____ Not Enough _____

4. ISSUES FOR GROWTH has had some long-running series on a given topic such as “Leadership in Uncertain Times,” “Customer Profitability,” or “From the Front Lines /CEO Success Stories”.

Would you like to see more long-running series _____ or
Individual topics per issue_____

5. Would you like to see more examples of regional success stories about companies in your backyard? YES_____ NO _____

6. Have you visited the ISSUES FOR GROWTH blog? http://davemead.blogspot.com
YES_____ NO_____

7. Do you have a colleague or client who might benefit from receiving ISSUES FOR GROWTH?
Name:___________________ Organization:_____________________
Position:_________________ Email: ___________________________

8. Other comments welcome: __________________________________
________________________________________

Best regards,

Dave Mead

Top Ten Criteria for Hiring a Consulting Firm to Help Your Small or Mid-size Business

(from Issues for Growth Vol. 19, No. 5)

In downturns such as we are experiencing, there is a proliferation of folks and firms that purport to have all the answers to issues facing small and mid-size businesses. Firms and individuals pop up with articles in local newspapers and business magazines with all the answers. New models with fancy and catchy acronyms like RED and FAST appear on the scene. Sometimes it is difficult for companies and business owners to determine who can really help them navigate the road ahead. We offer the following comments about what companies should be looking for in a partner to help them realize their potential. This is a reprise of Issues for Growth article published in February 2003. One of our long-standing clients suggested to me that it might be valuable to update it again. - DPM

Focus: Beware of “one stop shop” firms that say they do everything. These include accounting firm add-ons, or interim CFO firms. Accounting firms provide valuable services – audits, tax assistance, and compliance. CFO firms provide accounting, controller, and finance functions. The firm you engage needs to specialize in helping companies in your size range with your range of strategic and value issues … and have the track record to prove it!

Execution: Most consulting firms focus on the front end (their plan and their intellectual input). Make certain you feel comfortable with the execution and their proven ability to assist you in achieving results.

Overcoming Barriers to Success: Most consultants do not actually help organizations understand – and overcome - what is preventing them from being successful at the next level.

Value: Most consultants focus on the top line (revenue line) without understanding the key drivers of value.

Flexibility - to YOUR needs: Most firms have a “one size fits all” model and they will squeeze all clients into that same model.

Tell the Hard Truths: Most firms do not offer truly independent objective advice – they will not tell clients the difficult truths since they want the follow-on business. If it seems to good - or easy- to be true, it usually is. There are no magic pills or magic bullets. Success in business is generally the product of good direction and hard work.

Been in Your Shoes: Finally, most consulting firms will not have folks that have actually been in your shoes (as owners) – and emerged successfully. It’s very different when it’s not your capital at risk. Ask if they have ever led a company through a successful sale.

The “Temporary” Consultant: Beware of individuals or firms that sprung up during the downturn. Firms with less than 5 years experience many times exist only as long as it takes for the principals to find their next full-time job. Or to have their traditional business volumes return. That could leave your company in the lurch when they lose interest in you.

Talk with Their Clients – Present and Past: Talk with owners of client companies of the consulting firm. Ask them, in the end, what results were achieved. Did the consulting firm exceed expectations? Get specific about the numbers.

Aligning Their Interests with Yours: Will the consulting firm share in the risk /reward proposition with you? Are they willing to risk a portion of their fees based on your company’s results?

Small and mid-sized companies are typically by far the most significant asset of the owner. They are the product of many years of tireless effort and risk. Selecting a partner who will work alongside you to help your business achieve its potential is an important decision.

What are your thoughts about these key points? Share your reactions.

"Help Great People Do Great Things"

(from Issues for Growth Vol.19, No.4)

Help Great People Do Great Things

At a recent ACG Denver luncheon, the keynote speaker was Jerre Stead, President and CEO of IHS. IHS is closing in on $1Billion in revenue, and since 2005 the company has made 33 acquisitions. Since completing its IPO in 2005, the company revenues have more than doubled and EBITDA has grown by about fourfold. Impressive performance indeed.

Jerre Stead’s message to the crowd was simple: The Role of the CEO is to “Help great people do great things.” He then described five key principles with which he operates IHS.

1. People are the only sustainable competitive advantage
Treat them all with equal dignity and respect. There are no “perqs” for anyone at IHS.

2. 100% trust of every person in the company
At one point Stead ordered that the detailed IHS policy manuals (with hundreds and
hundreds of policies) be shredded. “Do we need guidelines? Absolutely! But, if you let
people use their best judgment, you never know how great they can be.”

3. Invest in Training and Development
“If I had an extra dollar, I’d spend it on training and development.”
It’s the best investment you can make and it’s the surest way to reduce involuntary
turnover.

4. Facts are our friends
a. Not masses of information, but “actionable facts

b. “Give me three important facts that will help me make a decision.”

c. One of Stead’s comments was that all proposed decisions at HIS require the generation
of a “one-pager.” On the one-pager is the summary of the proposal, what decision
you are looking for, and “three facts that will help me make the decision.”

d. You can always ask for more detail, but get the key facts and help me make the
decision.

e. You never have enough facts, but if you wait to make the decision until you have all the
facts, it typically is too late.

5. Have an intense external and internal intellectual curiosity about customers
All senior meetings start with some interaction about customers

6. Reward … Reward ... Reward
Stead said there were five, but he added a sixth very important principle. Remember to reward employees
continually for company success

What are your thoughts about Jerre Stead’s key points?