Posts Tagged ‘short term’

Remaining Competitive over the Long Road

by Guy Ralfe on November 26, 2009

long_range_targetThanksgiving marks the beginning of the 5 weeks of holiday season in the USA. For many it will be a time when people’s focus is on the near term line in the sand, marking the end of the year – this will have people working to make/protect their targets, others resigned and looking forward to seeing the back end of this tough year and hoping for a better start next year and many public companies working every angle to close the quarter with the best results they can.

Whatever the case people are suddenly driven by the appearance of a tangible situation that they can  now envision. What we need to be mindful of is that what we do now in a tactical manner is still part of fulfilling our longer term strategic plan.

I’m a subscriber of Rajesh Setty’s newsletter (you can subscribe here) where he just  shared a beautiful story about “The Daffodil Principle” read it here. What this story exposed for me was the power of a long term vision and also that we need to achieve and produce over our entire careers and not just focus on the here and now. We would all like the quick win – like winning the lottery, but statistically that is as close to impossible as you can get – don’t get me wrong people do win the lottery but there is nothing other than buying a ticket that you can control the outcome of that situation.

Ultimately most of us are going to need to produce for our full careers to meet our ambitions. We must not forget that we are also playing for a longer term game, our careers, as we approach the year end. Think carefully about the consequences of the actions you may choose today, to meet your short term objectives, that you don’t have to live with the consequences after the horizon has passed.

I see similar action taking place on projects in the same way as careers. Projects have a lifecycle that we can equate to a career, but when we get close to delivery dates, slack is gone from the system, pressure is everywhere and people make rash illogical decisions to keep a delivery date. This action is the same as what happens in the marketplace approaching the year end deadline. As in projects, the consequences of shortsighted action always surface later and the consequential cost to resolve quickly becomes far more than the cost to have acted correctly in the first instance. An example I hear at this time of year  is how sales are completed in the closing weeks of the current year, which have a significant impact on the start of the next year when the fulfillment comes into play.

My message here is very similar to the ancient story of the tortoise and the hare, just that today’s market also requires some traits of the hare mixed in with the tortoise. Whatever we do we have to act with regard for the future consequence but at the same time remaining better than our competitors.

Remaining ahead of the competition is beautifully demonstrated by this slideshow shared with our organization today in preparation for the coming year. Enjoy and wishing a happy Thanksgiving to all our American readers.

strategic planningIn a recent post discussing how to build your company into an attractive strategic candidate with a process known as ExiTrak®, we advised the following.

  1. Have a trusted advisor interview key acquisition executives in 15-25 prospective buyer companies.
  2. From these responses, put together the profile of the attractive strategic acquisition candidate from the perspective of the buying marketplace.
  3. Conduct a “gap analysis” comparing the marketplace profile with the strategic profile of your company.
  4. Based on this analysis, make decisions regarding which strategic assets to acquire and/or enhance in order to bring your company’s strategic profile as close as possible to that of the marketplace.
  5. Create a strategic plan to implement these decisions in the context of improving operational performance.

This blog will review in detail the strategic planning process.

Overview

A solid strategic planning process will take the participants from the “10,000-foot level” to the place where “the rubber meets the road.”  {No more metaphors, I promise.}  The most critical element for a successful strategic plan is the extent to which everyone in the company can see a direct link between high performance in what they do every day and the long-term prosperity of the company.  Achieve this and “the world is your oyster.”  {Man, that promise had a shorter shelf life than the average New Year’s Resolution.}

Who Should Participate?

This is both a “who” and a “how many” question.  One of the best ways to overcome resistance to change is to have those who will be implementing the changes participate in determining what those changes will be.  Therefore, if possible, everyone who can have a significant impact on the achievement of the company’s Vision, Mission and Long-Term Goals should be part of the strategic planning process.

It is, nevertheless, well established that any working group begins to lose efficiency and effectiveness when it gets bigger than 17 participants.  Depending on the size and complexity of your company, an ideal strategic planning group size is 5-15.

How Long Should This Process Take?

Some professional facilitators recommend telescoping the entire process into a single weekend.  I think this is a mistake.  My recommendation is to conduct a series of three one-day meetings, spaced about one month apart.  After a couple of weeks, the facilitator should issue a preliminary report summarizing the results to date.  At that point, each individual will be able to review this report as a “reader” rather than as a “writer” – a key factor in objectivity – and be prepared to suggest changes, if appropriate, at the next meeting.

Selection of a Facilitator

Every strategic planning process needs a facilitator.  A highly effective facilitator must possess all of the following skill sets and personal qualities.

  • Highly knowledgeable about your business and industry
  • High self-esteem
  • Not easily intimidated by higher-ups in the organization or their opinions
  • Well organized
  • Excellent listener with first-class summary skills
  • Excellent at drawing out all participants, including the wallflowers
  • Articulate
  • Clear writer
  • Not the CEO

If you are the CEO, try to avoid revealing your position on various issues for as long as possible.  You will always have the power to pursue a particular course of action.  But, when you do, you want to be certain that you have had the benefit of the broadest set of opinions and options.

Key Elements of the Strategic Plan

The strategic planning process involves the following key elements:

  • Vision
  • Mission
  • Long-range Goals
  • Short-term Objectives
  • Task Assignments
  • Action Items
  • Follow-up to compare actual performance with plan

Vision

At least 3 Years in the Future

Often at End of Accounting Year (Calendar or Fiscal)

Any worthwhile strategic planning process must begin with the Vision for the company at some specific date in the future.  What will be the company’s identity?  When customers, suppliers or professionals hear the company’s name, what image do you want them to conjure up?  What overriding quality do you want front of mind?  In other words: Who is this company?  Here are a few examples of Vision statements that speak to this identity question.

  1. We make the defense of the U.S. homeland stronger and more flexible.
  2. We help our clients’ teams to function more cohesively and effectively.
  3. We improve the quality of health care in America.
  4. We make transit passengers safer.

When your employees fully understand (intellectually and viscerally) your company’s Vision, they will be able to see how the optimum performance of their individual jobs will contribute to the fulfillment of that Vision.  This connection is critical for long-term job satisfaction, high achievement and career track progress.

Mission (Same Date)

The Mission statement describes your company’s function in concrete terms.  Using the same examples, here is a group of Mission statements that address the question “What does this company do, and for whom?

  1. We train dogs to assist Customs inspectors to locate drugs and explosives.
  2. We deliver workshops to privately held companies on verbal and written communication, listening skills and teamwork.
  3. We make timely delivery of top-quality components to medical instrumentation OEMs.
  4. We manufacture shatter-proof glass for public transit vehicles.

Marrying the Vision and Mission statements is essential, because it helps to get across to your employees how truly important each of their jobs is in the grand scheme of things.  For example, these dog trainers are obviously in support of the drug and explosive interdiction business.  But, interdiction is a means, not an end.  The end is that we are all safer in this country.  In this example, you want your employee to make the connection that “If I do my job really well, I will be saving lives.

Long-Range Goals (Same Date)

The Long-Range Goals (LRGs) cover as wide a range as you and your group deem appropriate, including such categories as:

  • Sales
  • Gross Margins
  • Overhead structure
  • Pretax profit
  • Market share
  • Market niche(s)
  • Key new customers
  • Improved product quality
  • Improved delivery times
  • Customer satisfaction
  • Geographical outreach, including additional facilities
  • Breadth and depth of management company-wide
  • Technology
  • Technology management and infrastructure
  • Reducing employee turnover

These goals should be quite specific and measurable. For example, improved customer satisfaction could be measured by two distinctly different kinds of yardsticks.

  1. Reduction of customer turnover by 30% over three years.
  2. Improvement in customer survey numerical responses by 30% over the same period.

Both provide numerical measures, but surveys rely on subjective personal judgments.  Improved delivery times are much easier to measure than, say, product quality.  However, the latter can be measured by customer returns, customer complaints or other means.  This, of course, requires that you have a system to capture these data 100% of the time.  Whatever your system, ensure that your Long-Range Goals are inextricably linked to day-to-day performance.

Short-Term Objectives

To be Achieved Within 12 Months

The successful completion of your short-term objectives should provide some tangible improvement in company operations.  However, the primary strategic payoff will be a head start on achieving the Long-Range Goals.

If you are going to make a mistake, err on the low side of commitment, not the high side.  You can always add something later, but lack of achievement in one part of the strategic plan can cause problems elsewhere and, at the same time, create morale problems for the team.

Carrying on with the example of Improved Customer Satisfaction (and assuming that progress in each of the measured categories is linear) the Short-Term Objective for customer turnover and survey results could be 10% per year.  However, inertia may preclude linear progress.  As a result, 5%, 10% and 15% in years 1, 2 and 3 respectively may be more realistic. Try to ensure that your Short-Term Objectives are achievable, and give yourself and your team enough time to get the job done.

Task Assignments (Quarterly)

The achievement of quarterly task assignments will, by definition, achieve the Short-Term Objectives.  Each task assignment is the responsibility of one or two individuals, with a deadline and standard of performance.  For example, someone will have to design the system to collect data on customer turnover, including precisely what constitutes turnover.

Similarly, someone will have to design and implement the customer survey or find and supervise a source outside the company to perform one or both of these services.  Someone will also have to analyze the data and present it to management.  The best way to avoid front-loading this part of the process is to assign tasks only one quarter at a time.

Action Items

What Do We Do Tuesday?

Action Items fall out week by week or month by month from the Task Assignments.  Unlike Long-Term Goals and Short-Term Objectives, it is best to front-load the Action Items, because that is the best way to get the job done on time.

Monthly Follow-Up

Plan the work and work the plan.  Whether it’s an individual salesperson’s call plan for the next week or the company’s strategic plan for years to come, the principle is the same.  It doesn’t matter how great the plan is if implementation is poor, excessively late or both.  In this regard, follow-up to compare actual results with plan is invaluable.

There should be a two-hour morning follow-up session, no less often than monthly, that includes all members of the original planning team.  The purpose of each meeting is two-fold.

  1. Determine the status of all active projects in the strategic plan.
  2. If any project is in trouble, determine what can be done to right that particular ship.

The most critical factor is that the strategic planning group functions as a team, providing support for one another and directing help where and when necessary.  Good luck.


PhotoPopell This article has been contributed by Steven D. Popell. Steve has been a general management consultant since 1970. Steve is a Certified Management Consultant, business valuation expert, and inventor of ExiTrak®– a process designed to assist the privately-held company owner/manager to build an attractive strategic acquisition candidate

Quality #1: Quality is a long term differentiator

by Tanmay Vora on November 9, 2009

This is the first part of a 12-part series titled ‘#QUALITYtweet – 12 Ideas to Build a Quality Culture’. This series will provide 12 relevant insights on how organizations can improve their quality culture through people, processes and leadership.

Introduction to #QUALITYtweet – 12 Ideas to Build a Quality Culture

Relentless focus on quality helps you build a sustainable organization that delivers value – to customers and people working with the organization. Quality is a long-term strategic differentiator.

Yet, most quality models heavily focus on methodologies, metrics and complex processes. This series is a collection of 12 chosen tweets from my upcoming book #QUALITYtweet – 140 Bite-Sized Ideas to Deliver Quality in Every Project” and ideas that expand 12 tweets from the book. These insights will help you frame your quality strategy by effectively leveraging processes, people and leadership to build a customer-centric organization.

Moving on to the first QUALITYtweet…

#QUALITYtweet Quality is never a

short-term goal. It is a long-term

differentiator

Quality is not a goal – it is a differentiator that can transform an organization into a remarkable one. If we study the anatomy of any process improvement or change initiative, it involves short term and long term objectives. Long term objectives generally map with organization’s vision and values while short term objectives are steps that lead to those long-term objectives. Yet, many organizations fall in a trap of setting short term improvement objectives that don’t map to any long term goals.

Here is a litmus test to identify if an organization’s quality goals are short term:

1)      Top management looks at processes as an overhead that can reduce overall efficiency of doing the “real stuff”.

2)      Quality Certification is seen purely as a tool to generate more sales, with no deliberation on how it can help improve efficiencies (and hence improve bottom-lines on a longer run).

3)      Quick and often unreasonable results are expected out of process improvement group.

4)      The question often asked is, “How can we correct this?” and not “How can we prevent this next time?”

5)      Process improvement exercise is triggered only when major problems are encountered.

It is said, “There are no shortcuts in life” – this adage aptly suits the quality improvement initiative as well. Process is a framework which people use to deliver quality products and services. Organization’s quality culture evolves when good people consistently follow a set of continually improving processes.

I have seen companies who perceive process implementation as a loss in immediate productivity because people will have to spend time in maintaining process artifacts. They miss a very important point that undefined and ad-hoc processes only lead to unpredictability of outcomes. It hurts organization’s brand. None of the process models including ISO 9001:2000 and CMM guarantees short term improvements. With a consistent effort and commitment from the top management, maturity of process happens gradually, just as we mature gradually as human beings.

Economists say that the best way to get good return from the stock market is to have an investment timeframe of a few years and not a few months. Short-term gains may be a stroke of luck – but luck is has never been a sustainable strategy! Same principles apply to your quality improvement initiative. Without a commitment to improve and long term thinking on processes, you may have successes based on individual heroism but never a sustainable model that delivers consistent quality.

Most successful organizations are built on a solid process framework. Companies that avoid power of processes soon hit the glass ceiling. People build the organizations and process helps organizations scale up smoothly.

Today’s marketplace demands that you consistently exceed customer’s expectations. You can run the organization on chaos or you can have systems that help you/your people become more effective. It is a choice that makes all the difference!