October 2006

Q: So why aren’t we hitting our objectives?

There are only two reasons why a company does not hit its objectives:

1.       ineffective planning; or

2.       poor performance

Effective Business Planning

The first step in effective business planning is to look inwardly and understand who you and your company are, and to accept the reality of your current position.  That doesn’t mean you have to like that reality; the desire to change and become something more than what you are is necessary to not only grow, but even to survive in any business.

Once you have an idea of who you are (i.e. as a company), then you can look outwardly and see what opportunities are available in the world around you.  Based on those opportunities, you can begin to create a vision for what you want your company to become.  I advise my clients to document that Vision Statement both in their Business Plans and throughout their organizations.  Sharing your Vision Statement throughout your company provides focus that helps coordinate your organization’s functions toward its successful fulfillment.

The next step in your business planning would be to identify goals that you would like to achieve toward that vision within the next one to three years, documenting those goals in the Business Plan.  Then, identify your existing resources, your additional resource needs in order to be able to fulfill particularly those shorter-term goals, and document those resource requirements within the Plan.  Develop strategies for procuring those resource requirements, including time-line objectives appropriate to fulfill your identified goals.  Document those strategic objectives within your Business Plan and allocate responsibilities among your staff for fulfilling the objectives.

Note that you will incorporate your staff into your business planning activities at an appropriate level.

Effective Management

Once your Business Plan has been created for the year and you have communicated responsibilities with/to your responsible staff, put the business plan in a safe deposit box or somewhere else for long-term safe-keeping.  You will not need your business plan document again until the following year.

Hold monthly meetings with your management staff, wherein your staff reports to you on performance to their objective responsibilities.  You should expect to see objectives being fulfilled; where objectives are not being met, your staff should have identified causes and countermeasures, and should make plans for reporting effectiveness of countermeasures at future meeting(s).  Verify your company’s financial health on a quarterly basis, and reassess performance to Business Plan objectives toward the end of the year when you are preparing the next year’s Business Plan.

Performance and Control

An owner and/or managing executive often has to both effectively direct the growth and manage the operations of his or her company.  From a planning standpoint, you have to understand your current and potential customer needs in order to identify opportunities, and you have to understand your competitors and competitive position in order to identify and mitigate risks.  Operationally, you have to hold staff accountable for performance and achievement of objectives, and develop staff when poor performance is detected.  And you have to do all of this with an effective balance that keeps performance from sliding out of control while avoiding the propensity to over-steer and subsequently getting too mired in the minutia of daily operations.

At Business Consulting Services by David Marsh, we use our experience in over 400 manufacturers from around the world to help you effectively navigate that terrain and achieve your goals.  We help you identify opportunities and threats, create coherent and realistic business plans, and manage performance --- including identifying and resolving potential problems before they occur.

If you’ve been having trouble with your plant hitting its objectives and you would like to improve your performance, today, then call 815-728-1710 or email (dmarsh@bcsbydm.com) to schedule a free, introductory consultation.