Planning – Essential to a Vibrant, Successful Business
Profitability is affected by a variety of factors, not all of which are strictly financial. In recent months I’ve reviewed my Five Ps of Profitability – People, Product, Process, Price, and Planning – the philosophy that is at the center of the business operating model I’ve developed. I’ve discussed in detail, the Process and Price components. In this blog, we’ll take an in-depth look at Planning – a topic that is particularly relevant as we start to prepare for next year.
Vibrant, successful businesses do not exist without two vital elements – vision and execution. Solid, actionable planning is the key to bridging the gap between the two.
Gino Wickman, author of Traction: Get a Grip on Your Business, refers to the process of making your vision a reality as “gaining traction.” I’ve referred to his book often because his thinking and recommendations align closely with an approach I’ve used in business for many years, in particular how I perceive and act upon achieving my own objectives, and how I help other companies do the same.
As you’re establishing a plan that will bring about the actions to give you traction, ask yourself the following questions. These are especially important considerations as you review 2022 and set your objectives for 2023.
- Am I clear on my vision?
- What is my one-year outlook?
- What do I need to accomplish in the next year to move my business forward?
- Do I have a strategic plan for my business?
- How can I break the objectives associated with that plan into 90-day actions?
- Do I have a profit plan, as opposed to a “budget”?
- Do I have sufficient cash flow to implement my plan?
- If not, how can I improve my cash flow?
Keep the Five Ps of Business Success in mind when creating your strategic plan – it will direct your focus to those resources that are critical to your company’s success. A good strategic plan will help you prioritize and hone your attention on the important elements that can move your company forward and help you maintain positive cash flow.
Planning That Gets Results
Planning for “traction” must include built-in accountability and discipline. Wickman observes that “the ability to create accountability and discipline, and then execute, is the area of greatest weakness in most organizations.” I agree that the idea of “accountability” often has a negative connotation, makes people uncomfortable and can create fears of not measuring up.
But this discomfort can be short-lived by implementing a workable process that can actually improve communication, cultivate a greater sense of teamwork, and empower your people to elevate their performance, confidence and success.
The magic? Establishing what Wickman refers to as “Rocks” – specific, measureable priorities that can be achieved in 90 days. This concept and practice is especially useful when navigating what is still a changing economic landscape.
Establishing Your 90-Day Goals, or “Rocks”
Plans can seem less daunting and become highly achievable when you work on them in shorter, 90-day increments. When companies can hone in on what they need to accomplish in the next 90 days, they are forced to identify their true priorities. This practice breaks the cycle and ends the stress and chaos of trying to focus on too much at once and gives clarity to not only what’s most important but what is immediately achievable.
Start by identifying the three to seven most important short-term priorities for your business – based on your long-term vision – that can be accomplished in 90 days. Once you’ve established your company’s Rocks, each member of your leadership team and each employee will have their own Rocks that contribute to accomplishing those for the business. Rocks should be:
- Clearly defined in terms of associated objectives
- Assigned to a specific person
- Due and able to be accomplished within, or by the end of, the 90-day period
- Documented and reviewed weekly to track progress.
- In stone once agreed upon – no changes, deletions or additions
As the former owner of a multi-million dollar company, I’m a CFO with a CEO perspective, which provides me with a unique understanding of the Five Ps and how each contributes to a company’s overall financial picture. I’d welcome the opportunity to help you assess the role of the Five Ps in your business and incorporate the critical planning that will help you gain and maintain real traction. Contact me for a complimentary consultation.