Want to Make ‘08 Great? Start by Testing for Strengths, Weaknesses

Posted by Greg Bustin (January 1, 2008)

Excerpted from the book, Lead The Way: Charting a Course To Win, by Greg Bustin.

You wouldn’t build a house without a blueprint. Why would you try to build your business without a written plan?

Yet as inevitably as the seasons change, thousands of companies every year shut their doors because of the leadership team’s failure to develop a written plan and then implement it. Tens of thousands of other companies fail to reach their full potential for the same reason.

It’s true that a poor planning process is a giant distraction and a huge waste of time.

Properly conceived and carried out, however, planning can help any organization become more effective. The paradox of planning is that the very act of preparing a plan will help you and your team pinpoint significant opportunities for increased effectiveness and profitability even though the chances are good you won’t implement your plan as it was developed. This is what makes planning indispensable. Other benefits of planning are examined in the first of my book’s three sections (Section Two of the book provides a toolkit along with exercises for leading an effective planning session; Section Three provides tools and approaches for the effective implementation of your written plan).

What’s stopping you?

Why don’t more companies develop a plan that they will implement?

It’s estimated that four out of five businesses don’t operate from a written plan. Most of these are small companies. Yet of those businesses that invest the time to develop a written plan, studies show that only one company in four actually integrates its plan into day-to-day operations.

Do executives believe that preparing a budget is the same thing as preparing a plan? Or are they not sure how to create a plan? Are they intimidated by the process? Or do they believe the idea of planning is a giant time-waster because no single individual really owns what’s in the plan? Are they concerned that changing marketplace conditions will render the plan obsolete within weeks of its development?

Unfortunately, my experience working with leadership teams supports the findings that the vast majority of businesses today operates without a written plan. If these reasons – excuses, really – are what’s stopping you, it’s time to take a fresh look at the power of effective planning.

Most of the CEOs of small businesses that I’ve worked with substitute some form of budgeting for a planning process. Budgeting is a form of planning, but there’s more to planning than just crunching numbers. Other CEOs haven’t committed their plans to paper. They believe everyone already knows what to do, so the mandate becomes doing more of the same thing next year.

I also see some confusion between annual planning and strategic planning.

If you’ve not planned at all or you’ve had difficultly implementing your plans, your initial approach to planning should be to develop an annual plan. This type of approach focuses on affirming values and direction, establishing priorities and translating those priorities into specific objectives with supporting action items, responsibilities and deadlines. An annual plan is fairly tactical and operational. Thought must be given to this plan, but its primary value is derived from getting all of your leaders focused on the most important operational issues that they and their teams will implement over the next 12 months to improve performance.

Once you’ve developed and implemented an annual plan, you and your team can turn your attention in Year 2 to developing and implementing a strategic plan. A strategic plan focuses on determining the new opportunities you should investigate or pursue. Where are the gaps or opportunities in our product or service offerings? What emerging patterns or trends have we identified that we may be able to capitalize upon? Are there any competitors or up-and-coming businesses that we should look at acquiring? Strategic planning should examine fresh opportunities that can increase your profitable growth.

Rate your organization’s performance

First things first. Before you can plan for the future, it’s a good idea to understand your current position.

I’ve developed a 30-question diagnostic tool that takes about four minutes to complete and allows you to assess your organization’s performance, and see for yourself where your business is doing well and where it’s most vulnerable.

Here are six of the 30 questions. Circle 5 if your organization consistently conforms to this statement, 3 if it sometimes conforms, and 1 if your organization rarely or never conforms.

1	2	3	4	5	We do what’s right for our customers, employees, suppliers and owners regardless of consequence.
1	2	3	4	5	Our organization’s mission, vision and values are clearly defined and articulated.
1	2	3	4	5	New approaches and initiatives generate excitement and enthusiasm among everyone.
1	2	3	4	5	Our organization moves forward with sound ideas, even if those ideas are unpopular.
1	2	3	4	5	Performance matters, so we use processes to measure and reward (or reprimand) performance.
1	2	3	4	5	We consistently meet our objectives within specified deadlines with no follow-up required.

If your score for these six questions is 23 or above, you likely are doing a number of important things effectively, so you’ll want to continue to maintain your strengths and examine areas where renewed focus and discipline can deliver the greatest potential to improve your performance.

If your score is 22 or below, your company’s effectiveness is being diminished significantly. Leadership issues are hampering your organization’s performance, and your score indicates you are responding to issues rather than driving toward a specific goal.

As the leader, your job is to create value for your organization. This quick diagnostic tool can help you pinpoint areas in your organization to increase effectiveness. So ask yourself: “What one action taken today will improve performance in the next 30 days?”

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