Imagine it is the year 2020. The Wall Street Journal is doing a story on your business.
What is the headline?
The answer to that simple question could be the difference between you building your dream business or just being average.
What Your Article Would Say About You
How would that article answer some of these questions?
- What problems do you solve for your customers or clients?
- How big is your business?
- Who are the people that work there?
- What is your role?
In business, thinking about how to answer these types of questions is strategic work. Strategic work is considerably different than the tactical work you do day in and day out; like answering emails, serving customers, training staff, putting out fires, creating an advertisement, updating your social media, doing the books, networking, following up with people, and, on and on and on.
Dreaming about what you want your business to become is some of the most valuable work you could be doing. Unfortunately, dreaming about the future feels like you are not being productive, so you just don’t allow yourself to do it when there is “real” work to do.
A Dream Come True?
Of course just having a dream about your future is not enough to make it happen. You also need a plan. Envisioning where you want to take your business and creating a plan to make it happen is the essence of strategic planning.
You know you need a plan to run your business better. All of the business books tell you that the “most successful businesses” all have a plan. Of course, you would prefer to run your business from a plan. Many business owners embark on creating an annual strategic plan. For some it has become a habit that enables them to continue to grow year after year. For most, it becomes an annual exercise in futility. You spend your time and staff time creating your plan that frankly doesn’t get looked at again until…well, the next year this time.
Your reality is that maybe you have a rough plan of what you are suppose to do each week. The truth is very few business owners work from a plan; or spend any time articulating how they intend to run, manage and grow their business.
Business Growth by Design
Strategic planning is not as complicated as you may think and the best managed businesses treat strategic planning as a business process and not an annual event. The typical strategic planning process has these four basic steps:
- Update the plan annually
- Execute the plan weekly
- Track and monitor the results quarterly
- Making adjustments and updates as need dictates
Because your business is unique there is no one-size fits all strategic plan you can make your plan. With our business coaching clients we use a strategic planning framework that is flexible and adaptable to each client’s needs. We call our version of strategic planning the Business Design PlanTM because it will help you design, build and grow your dream business. It is both a framework to create and execute your strategic plan. It is centered on just three questions. You can get your plan started by answering these three questions:
1. Where are you now?
As you think about where your firm is now, look to see if you have the foundational elements of your strategic plan in place: your core values and core purpose. These two elements rarely change and they probably will not require a lot of time to revisit or potentially revise. Here is where you want to step back and “see how you are doing?” You can do this by:
Analyzing Key Metrics - As Jim Collins wrote in Good to Great “you need to confront the brutal facts”. Pull all of your key numbers together and understand your business’s current performance.
Conducting a SWOT Analysis - This is a traditional strategic planning tool. It helps you to understand and evaluate your company’s Strengths, Weaknesses, Opportunities, and Threats.
Together your Key Metrics plus your SWOT analysis paint a picture of where you are now.
2. Where are you going?
This is the “dreaming” part. You want to envision the most ideal future for you and your business. For many owners this is the hardest part of strategic planning, trying to envision what your organization will look like in the future. As the economy has demonstrated over the past few years, almost everything seems unstable and unpredictable. So how exactly are you supposed to predict the future of your business?
You probably can’t. But you can create your future.
It starts with envisioning what your business will look like at some future date. You may have some revenue targets and other goals you would like to achieve. Go further. Describe how your company must look, feel and act in order to become your dream business. Use the questions at the beginning of this article (the Wall Street Journal questions) to paint a picture of your dream business. The value to answering these questions is they will enable you to be more intentional about designing and building your business.
3. How will we get there?
Now that you know where you want to go, you’ll need to determine how you will get there. What are the specific strategies you will use to reach your destination? Usually there are multiple routes you may take. The path one business might choose may not be exactly right for you. Brainstorm and choose the best strategies for you. This “strategizing” will drive your strategic planning process.
Important strategic areas you will want to work on include:
- Your life design strategy
- Marketing strategy
- Client service strategy
- People strategy
- Organizational strategy
- Management strategy
- Succession and exit strategy
Actions Speak Louder than Plans
In order to reach your long term vision of your dream business you next need to covert your vision and strategies into action plans that focus on what to do in the short-term. For each strategic priority you need an action plan. Each plan will include the deliverable, action steps, responsibilities, costs and due dates.
Now is the best time to decide what your 2020 Wall Street Journal article will say about you. You still have the opportunity to intentionally design your future. It is easy to get caught up in the urgency of getting through each day. Don’t fall into that trap. Dedicate some of your time to your long term dream and strategic plan. There are multiple reasons why having a strategic plan is an imperative:
- Adding new business
- Increased revenues
- Higher profits
- Increased valuation
- Getting your team on the same page
The overlooked and more valuable role strategic planning plays in your business is that it helps you clarify your dream. Which enables you to take consistent actions toward that dream. This in turn results in a much more enjoyable business ownership experience. This work will help you design the life and business you want.
We offer Annual Strategic Plan coaching and facilitation. Contact us to get more information.Read more
Happy, motivated employees are something every business owner wants because those employees are more productive. Job performance is a function of ability plus motivation. Assuming your people have the ability, what motivates your employees? Do you know? If not, how can you motivate them?
Motivating employees is a core component of most management training. If you’ve had any type of training in management and motivation theory, it may have, in part, been based on the work of Frederick Herzberg. He was a pioneer and a thought leader on the subject of employee motivation from the 1960′s through the 1980′s. His theory asserts that the most powerful motivator in our lives isn’t money. It’s the opportunity to learn, grow in responsibilities, contribute to others and be recognized for achievements.
Can You Improve Employee Motivation?
These are important and fundamental concepts to understand if you want to improve your team’s productivity and performance. Why? Because now you know where to start when thinking about how to help motivate your people. Your first job as a manager of people is to help them be more successful. You do that by having clear goals and accountabilities, documented systems and ongoing training and development. Then, utilizing behavioral coaching, you deliver positive feedback to recognize good work and habits. In just a very short time, you’ll see your employees’ motivation and performance improve.
A contemporary, Daniel H. Pink, has written several books on the topic of motivation. One I would recommend is his book titled Drive: The Surprising Truth About What Motivates Us. You can also watch the video of his TED talk right here (about 18 minutes) to get a brief overview of this theory:
Pink’s research shows that intrinsic motivation – doing things we enjoy, things that matter, things that are interesting or part of something important – is more motivating than extrinsic motivation. Extrinsic motivation is the carrot vs. stick approach – reward or punishment. He cites the three most important intrinsic elements of motivation are autonomy, mastery and purpose.
5 Strategies to Improve Employee Motivation
Based the concepts outlined by these two experts, here are 5 strategies you can start to apply in your business to motivate your people:
- Achievement – put your people in a position to achieve their goals; nothing breeds success, like success.
- Positive feedback – recognize your people when they do things right.
- Autonomy – understand their need to direct their own work and determine how to leverage that in your business
- Mastery – provide opportunities for your people to learn and encourage their desire to improve.
- Purpose – connect your business purpose with each individual’s work and their own personal purpose and desire to contribute to something beyond just a job.
Just by employing these strategies, you have the basis of your operating system for managing and motivating employees. Now, you have to put it into practice. Make applying these five strategies part of your personal weekly goals and activities and you will see improved employee performance because your people are happy and motivated.
Most business owners do not plan very often or very effectively. You have seen more than one study which proves that companies that use a strategic plan are more successful than those that don’t. I know you already know planning works. Yet you don’t plan.
I am not trying to lecture or scold you, but rather point out the reasons why most business owners do not plan. Because when you understand the reasons you can then choose to do something about it. Here are the common reasons I hear:
- Too small to have a strategic plan
- Do not have the time to plan
- We are already successful, why do we need a strategic plan now
- Do not see the benefit of planning
- Things change too fast to have plan
- I don’t like planning
- I do not know how to do strategic planning
It doesn’t matter if you’re stuck, already in your comfort zone, or you desire additional growth, there are multiple benefits to strategic business planning. Here are four fundamental reasons why planning is not just necessary, but essential:
- Clarity – it compels you to focus on the long term.
- Working ON It – it allows you to recognize the need for and manage change.
- Prevents Commoditization – it helps you find and keep a competitive differentiation.
- Engages and Inspires – it enables you to communicate and involve your team in setting the direction and building of the business.
Planning is a Critical Strategic Process
Your strategic business plan is the plan you use as a road-map to execute your strategy and reach your envisioned future. This is not the business plan you would put together for financing. This type of plan is something you will actually use to run and grow your business.
It doesn’t matter if you prefer to call this type of plan a business plan, a strategic plan or a growth plan. Documenting your plan is extremely important, but understand the physical plan itself is not the most important part of planning. The real critical activity is the process of planning – the way you and your team create, discuss and update your strategic plan.
The real value is in the ongoing process and not the physical document. Of all the tools available to the business owner, strategic business planning is perhaps the most powerful for moving your company forward and giving you the feeling you’re in control. There is an opportunity for every business owner to grow more effectively and more strategically by making strategic business planning a standard process in your business.
The one thing that will solve all of your problems
Sometimes a small business owner will come to The Renaissance Group looking for the proverbial “magic pill”. You know that one thing that will solve all of your problems, right away. Because if you can just solve all of your current problems, then you will be happy, profitable, and have more time to do all the things you would like to do.
Unfortunately, this is not what we do…mainly because there is no one thing; there is no one book, no one coaching program, no one training session, no one piece of technology, etc. that will make you happy and solve all of your business frustrations.
A better way to approach this concept of a “magic pill” is to understand there is no magic pill.
Once you understand this, now you can actually get to the underlying cause of your challenges and begin to improve and move forward. If you study how successful companies grow their businesses you will eventually realize there is no one growth strategy they all use. Successful businesses come in all shapes and sizes. They do not have one formula, or set of steps that works every time. There is more than one way to grow a business, which in turn means you can stop searching for your “magic pill” as just one thing. Start looking for all of he things the most successful companies share.
Success does leave clues. What all of these most successful companies do have in common is that they all focus their time, energy and resources on the areas of the business that actually drives growth. There are 5 critical areas they focus on. You might think of them as ingredients in your success formula. Interestingly the companies that get stuck and reach a plateau often overlook some or all of these areas. They are the missing ingredients preventing them from sustained growth over time.
The five critical ingredients to create your own magic pill are:
- Clarity – It is hard to move forward and grow if you are not clear about what your business must look like and accomplish, in order to provide you with the lifestyle you desire.
- Strategic Work – There will be a gap between where you are today and where you want to go – your clear future. Strategic work determines how you will move forward; your clear path. It is an ongoing business practice in the best managed companies; it is a random event in the others.
- Planning – The best managed small businesses understand that planning is the habit required to implement your strategy, reach your goals and achieve your vision. Unfortunately, most companies don’t plan, or don’t plan well or consistently.
- Systems – It is difficult to replicate your success, continuously improve, and train staff without documented business systems. Standard operating procedures and documented systems are missing from the majority of small businesses. This makes it difficult to grow both effectively and efficiently.
- Leadership and Management Skills – Are required to inspire your team, create and execute your strategic plan and develop your people.
With these ingredients in place you will be astounded by the freedom, control, time and income you receive from your business. Doing the right things day-in and day-out is all the magic you will need to be a happy successful business owner. It turns out your magic pill is understanding where the most successful companies spend their time and energy and then spending your time and energy on these areas.Read more
What accounts for the fact that a small group of business owners can sustain growth over the years, while the majority of businesses reach a plateau and get stuck?
When it comes to managing their businesses, the most successful owners are clear about what they want to accomplish and act intentionally and deliberately. These “intentional” owners, who greatly outpace their peers in terms of net income, recognize that true success does not happen accidentally or haphazardly. It takes a clear vision and a plan.
They move purposely as they create and act on their plans, focusing on the activities that bring them closer to their vision; collaborating with others who can help them reach their goals and acting with consistency to provide a top-quality client experience. They succeed on purpose. Clarity is critical.
Use this checklist to become more intentional and to sustain your growth over time:
Putting these pieces together in your business is simple, but it is not always easy. You may struggle to do this type of strategic work because you are so busy just trying to keep up each day. You are spending most of your time working in your business.
Use this checklist as your framework to work on your business and do the strategic work required to sustain your business growth. This type of work will bring additional clarity and focus to your company, which will lead to continually better results.