Bankruptcy and slow business growth continue to plague businesses of all sizes across North America and around the world. For example, while the number of business bankruptcy filings in the USA has remained relatively steady through 2010 when compared to 2009 numbers (58,322 for 2010 to September 30th versus 58,721 for the same period in 2009), the 2010 results at September 30th show a 151% increase over 2008 filing results (38, 651) and a 225% increase over 2007 filing results (25,925) for the same period (January 1st – September 30th) (data source: http://www.bankruptcyaction.com/USbankstats.htm).
When I talk to business leaders about their goals for their company for the upcoming year, many respond simply by saying “to still be here next year”. It may sound as though these executives are setting the bar a bit low but in a sagging economy, and in really tough industries like manufacturing, just making it successfully through another year can feel like a stretch goal. For these organizations, surviving to do business another day/month/year represents a huge victory for their leaders, their employees, their customers, and their business partners.
Is your company in the “be here next year” goal club?
If it is, here’s your dilemma: you need to do something different to achieve this goal but you don’t have the time and extra resources to embark on a complicated turnaround plan. For you, the themes for your business survival are going to be focus, effective action, efficient operations, and priority-based decision making. Bottom line? You don’t have the time or the resources to waste your organization’s effort on things that aren’t critical to producing results. What you need is a streamlined game plan that will position your company to, at minimum, still be here next year, and, at best, grow over the longer term.
Here’s the streamlined game plan you need: a four point plan, supported by five “must have” organizational capabilities, you can implement in your company to survive (and maybe even thrive) in the current economy.
Here are the five organizational capabilities, or core principles, your company must adopt today to survive and thrive moving forward. These are described here in “behavioural” terms (i.e. what they look like in action) so that (1) you and your employees have a better chance of actually implementing them; and (2) you can assess through observation whether people in your organization are putting these required capabilities into action because the successful implementation of these core principles requires every one in your organization to live them every day.
Focus: Everyone across our organization has a laser focus, bordering on obsession, on what is most critical to the success of our business. This means that we are always asking such questions as: “Is this the right thing to do (and how can we do it right - i.e. effectively, efficiently, and with excellence)?”, “Will this help us get to where we need to go?”, and “How does this decision fit with our business priorities?” Such a pervasive drive to do what will produce the business results we desire over both the short and long term is critical to our organization’s success.
Leadership: Our executives, managers, and supervisors are committed to hands on leadership. This means actively facilitating and modeling all of the organizational capabilities we are committed to adopting AND taking highly visible steps to ensure that our company implements all of the elements of the four point plan. Asking knowledgeable questions in group forums and one on one situations about the fundamentals of proposed action plans, testing their validity, probing on action plan progress, and facilitating cross-organizational dialogue are examples of the critical actions our leaders take to be dynamically involved in ensuring the success of our organization.
Engagement: We know that the success of our company relies on the participation of our people. To be successful, every one of us is involved and invested in producing great business results. One way our employees do this is by actively participating in creating our business strategy. Because of this they understand it and can see how their work links with, and contributes to, business results achievement. Everyone takes part in meaningful, two-way dialogue on our strategy, and business priorities, and what it takes to implement it. By encouraging and helping everyone to participate in the process of strategic improvement, and by supporting healthy cross-functional discussion and collaboration, we continuously build a commitment to focused business results achievement that extends right down to the front lines of our organization.
Action: We are committed to taking intelligent and disciplined but imperfect action in business situations. While we always think before we act, we don’t get caught up in “analysis paralysis”. We know that it is better to take action, implement a solution that is 80% right, and then improve it as we go than it is to wait to implement a perfect solution. We have a bias for putting our business priorities into action because we know that, at the end of the day, actually DOING what we think is right for the short and long term success of our company is the only chance we have of actually achieving our desired business results.
Accountability: Everyone in our organization is dedicated to taking action, following through, and building a record of accomplishment. This level of commitment is actively supported, valued, recognized, and rewarded by our business leaders on an ongoing basis. All of us are able to live this culture of accountability because we take the time to work together to link every action to a person who has responsibility for getting it done (right and on time), and we accept shared responsibility for results achievement.
The Four Point Plan
The essential and differentiating feature of this plan is its almost ruthless dedication to focus: a focus on the most critical elements of your business that will deliver the success you want and, once that is defined, an unrelenting focus throughout your organization on keeping all eyes on the ball and taking the most effective path to excellence and results achievement. Follow this plan and execute it in a never-ending cycle to keep your business viable over both the short and long term.
1. Focus Position and Direction
The goal of the first point in the plan is to leverage a clear understanding of your organization’s operating environment and define a razor sharp value proposition that will allow you to satisfy your customers/stakeholders and win markets.
To understand your operating environment, it is critical that you scan your roster of customers/stakeholders and create a focused list. If individual stakeholders have similar needs and expectations (which you will document and list in order from most important need/expectation on down for each stakeholder), it is often more convenient from a stakeholder management approach to think about some of these individual stakeholders as a group. Once your list has been assembled, it is important to prioritize it – that is, place your stakeholders in rank order from 1 (most important). While you will never share this information with your stakeholders, ranking stakeholders/customers provides your organization and people with an important tool for more focused decision-making moving forward.
You must also scan your market space and review the performance of others who play there to fully re-assess and understand the potential in the market. A variety of decisions will arise through this review including what market space you should/want to play in. The goal here is to be focused in identifying that market space and then defining very clearly what it takes to capture/maintain/grow your share of it.
Finally, once your target market has been established, it is essential to crystallize the value proposition your organization must adopt and deliver to achieve your market share goals. Whether you are re-focusing your value proposition or re-defining it, it is important to leverage the information learned about your stakeholders/customers, as well as performance requirements, when designing the focused value proposition required to achieve your desired business results.
2. Map Priorities
The goal of the next point in this plan is to define, in language that everyone in your organization can relate to, the value chain your organization must implement to deliver your value proposition and the components of that value chain, or relative business priorities, all parts of your organization must focus on over a defined period of time. The best approach to defining this value chain is to create a strategy map for your organization. As well as providing a visual picture of your value creation strategy (in the form of strategic objectives), the strategy map translates your strategy into clearly defined terms so that front line employees can see themselves, and their work, in it. Developing a consistent understanding of what your strategy looks like in action translates into a higher probability of business results achievement.
A weighted strategy map allows your organization to communicate the relative priority of the various strategic objectives on your strategy map. When done right, this weighting focuses the decision-making of all employees on a daily basis and helps them determine where to best target/invest the often limited resources available to them.
By helping everyone in your organization see where they fit into your value creation plan/strategy and your business priorities, you are in a better position to engage them in discovering how they can contribute to, and actually achieve, business performance success.
3. Resource & Work the Plan
Once your business strategy has been focused, the goal of this point in the plan is to focus the operational activities and actions of your organization to produce your desired business results in a way that is takes the most effective and efficient path to business performance excellence.
A critical success factor for the execution of your company’s value creating strategy is maximizing organizational alignment. Organizational alignment reduces the drag in your business operations, improving efficiency and effectiveness. One important way of doing this is to inventory your core business projects and current strategic projects and line them up with your value creating strategic objectives and key business priorities. This allows you to identify critical business performance gaps, eliminate non-contributing business activities, and free up resources for re-deployment to more business critical activities. This is an important step in effectively resourcing your business plan without adding significant additional costs. The fact is that identifying the financial and non-financial resources that are absolutely necessary for business plan implementation success is a critical step in the strategy execution process. If these resources are missing and/or are not aligned with your business priorities, you must put them in place in the most cost-effective way possible. The absolute truth is that you cannot successfully achieve your desired business results without targeted resource support.
Another critical step in ensuring successful operational execution of your business strategy involves cascading your business priorities appropriately into every employee’s work plans. Doing this will ensure that there is no doubt across the organization as to where to focus day to day work efforts. Finally, you must be sure to support successful implementation and strategy execution with: clear accountabilities at all levels of your organization for action completion and results achievement; an attention to performance feedback that helps keep employees focused on replicating activities that produce the desired business results; and good two-way communications to channel ideas that strategic and operational improvement up, down, and across your organization.
4. Make SMART Decisions
The goal here is simply to make intelligent business decisions that will directly impact and enhance the focus in, and of, your business strategy, action plans, and operations.
Face it – business is all about making decisions. Both day to day operational decisions and the big directional decisions contribute to the overall success of your organization. To help ensure that the decisions made in your company stay focused on moving you towards the business outcomes you require as effortlessly as possible, it is important to provide your people with information (i.e. data and results analysis/commentary) that tells them whether the business is moving forward. The best tool for this is still the balanced scorecard. When coupled with a dashboard of the operational measures that drive the performance of strategic indicators, the balanced scorecard helps your people learn about what is and isn’t working in your business, identify and focus on the critical strategic issues, and fix the root cause problems that are hindering positive progress on your business priorities.
When it finally comes to making decisions in your business, taking a consistent approach across your entire organization will help ensure that the actions taken as a result of these decisions remain focused on moving your organization forward according to business priorities and desired business performance outcomes. This consistent approach can be achieved by implementing a new filter or criteria into the conversation and decision-making process. Implementing the SMART criteria detailed below provides your company with the effective filter you need to ensure that all of your employees are taking a consistent approach and making business decisions that you know will support the direction and priorities of your business:
S = strategy-focused: use alignment with key business/strategic priorities as the first criteria when weighing options and making decisions – the more aligned an option is with business priorities, the better it is
M = manage the risk: managing and/or mitigating risks are important for business success so make business decisions with risk in mind – make choices that allow you to manage (or eliminate) associated risks most effectively
A = actionable: defer to options that your organization can put into action with the capabilities and resources it has today – while this can limit your options at times, taking this approach to option evaluation facilitates execution and minimizes associated costs
R = return on investment (ROI): the speed and value of the return, if any, to be gained through the implementation of certain options should play into the decision-making process – the quicker a high return is realized, the better it can be for your business
T = timely: related to the “actionability” of an option, it is important to consider how quickly your organization can implement options under consideration – the sooner options or solutions can be implemented, the sooner your organization will reap the benefits
Most organizations will use all of these criteria in a structured way to evaluate and assess choices and guide option selection. The way your organization chooses to apply the criteria will be specific to your business needs, however, the key to success is to apply them consistent across your business in decision-making situations.
So, this is your four point plan. As you can see, the plan is a cyclical system that must be implemented on a never-ending basis. Your organization must work the system by: constantly revisiting each point in the plan; checking validity, current assumptions, and learning; assessing progress; and looking for (and implementing) opportunities for improvement. Cycling through the plan in this way is a critical success factor for the survival of your business.
There is no doubt that there are many more actions you can take and management principles you can implement to ensure that your company will survive and thrive into the future. However, based on my experience working with many organizations in turnaround situations, this is the focused plan/approach required to turn the tide, make it successfully through the short term, and begin building the capacity and organizational capability required for longer term viability.
If you are concerned about whether your company will still be here next year, I encourage you to begin implementing this proven system for success today.