Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
“Setting a goal is not the main thing. It is deciding how you will go about achieving it and staying with that plan.”
—Tom Landry, former coach,
Dallas Cowboys
If you are like many closely held businesses, you start the year with a plan. It may just be a budget or financial forecast, or a list of desired accomplishments; it could also be a full annual business plan or an updated long-term strategy document. It may be written or may be just in your mind.
Regardless of the format, or the intended use, the majority of plans are thoughtfully created and then completely ignored. The demands of day-to-day business consume you and your grand plan for the year sits idly on the shelf or in a drawer, only to be dusted off and rewritten early next year.
Why bother taking the time to create a plan that you never execute?
It is not the quality of a business plan that matters, rather it is the execution of it. Studies reveal that companies with poorly designed business plans that are fully executed are more successful than companies with brilliant business plans that are not implemented.
In our work with a broad spectrum of clients, across all industries, we find common flaws that lead to the failure to execute on the business plan. Each is discussed below:
Unless you are a one-piece orchestra, you rely on key team members and the plan must be communicated. As an analogy, why is there is a huddle in football? It is not for discussing plans about the weekend. The intent is to call the play and set the snap count. The players need to know what is expected, especially their responsibilities, when you break huddle and get set at the line of scrimmage. Imagine the for the success of a football play when only the quarterback knows what it is and when the snap is coming.
Your plan should also be documented in writing. No conductor can effectively lead an orchestra if the members don’t have the sheet music. So, to breathe life into your business plan, get it down on paper now, and share it with your team. It is spring, and 25 percent of the calendar has already passed.
The consequences to sharing the written business plan with your team is they may not agree with it. This actually creates an opportunity to collaborate and gain buy in. The business plan with the best odds of execution is the business plan with buy in from your top management team. After all, you do need them to help execute the plan.
So, bring your management team into the process and be willing to adjust. It is your business, but you don’t own the market on good ideas. As mentioned above, companies with poorly designed business plans that are fully executed are more successful than companies with brilliant business plans that are not implemented. So, breathe some life into your business plan, now, by sharing the plan with your team and gaining buy-in.
An unrealistic business plan is a surefire recipe for disappointment and can lead to future resistance to engage in meaningful business planning. For example, if you have not exceeded 9 percent revenue growth in the past 10 years, why would you fool yourself and deflate your team by pushing a goal of 20 percent growth? If your plan sets unrealistic targets and includes no investments to change the status quo, why bother? Every business plan should have some “stretch,” but also must include time or money for your team to achieve those stretch goals.
Another failure of business planning is excessive complexity. Your business plan should not be as lengthy as one of the Bible’s gospels. A good business plan should have fewer goals, and achievable ones. We tell our clients that their objectives for the year should be fewer in number and impactful, and team members should be able to recite them every morning while looking in the mirror to shave or apply make-up.
Did you ever play HORSE on a playground basketball court? If you did, you knew who won because you kept score. In business planning, if there are no measurable goals, how do you or your team know if you’ve achieved success? Putting a goal in your plan to improve market share, without a specific target, the necessary investments to achieve it or a means to measure it, makes it a totally useless goal. Quite like setting a goal to lose weight, but the not the number of pounds or the changes in diet and exercise necessary to measure success.
So, breathe some life into your business plan by dusting it off and adding metrics, so you can monitor progress.
Speaking of monitoring, this may be the biggest downfall of plan execution. You plan your work, but you don’t work your plan. If you haven’t looked at your plan since it was created three months ago and conducted team meetings hold each accountable, you have wasted valuable time.
A well-crafted plan focuses on four or five specific areas and includes an objective (what), accompanied by goals (quantitative), strategies (how and who), and measurements (defining success). Those areas of focus should include customers, employees, products/services and financial. A fifth objective may be this year’s progress toward a multi-year long term strategic initiative. (See exhibit 1).
By using this format, or something similar, and showing the discipline to devote quality time monitoring progress, as a team, each month, can allow your business plan to become an institutionalized proven process, rather than a dusty document in a desk drawer.
It’s spring, so take some time now to breathe some life into your business plan.
