Archive for December, 2009
In past insights, we explored the need for a tangible goal and strategies that are measurable as steps toward achievement of the goal. This insight calls to account tactics to accompany each strategy, and even suggests a number for each.
Tactics support strategies and allow your individual managers and departments to contribute to strategies in measurable ways that are more short term and procedural than are the strategies they support. Tactics change frequently as achieved and may be updated or replaced during a year when achieved, unlike strategies which often span a number of years.
Five tactics to support each strategy seem a fair, even if arbitrary number. Tactics direct each department in very specific ways. Here are several examples of tactics from my recent experience with companies where I serve as board member.
[Email readers continue here...]
Strategy Three: Expand into at least three new continents through new distribution channels.
- Sign one distributor by June of this year in each of three major geographic areas. EMEA, Asia, Latin America. Each distributor to be capable of generating $1 million in business by year two.
- Assign development manager to localize design and oversee needed enhancements to product and support materials for each new territory.
- Train and transfer technology to each new distributor within 90 days of signing.
- Assign one corporate employee to support sales and installation efforts by all distributors.
- Seed demand in each new territory with at least two corporate marketing events in partnership with each distributor.
Note that each of these tactics directly support the strategy, are measurable and assumed to be achievable, bought into by each department effected by the tactic. Note that the strategy calls for cooperation between business development, sales, marketing, product development, installation and support. This is a great way to unify departments that once may have competed for resources toward individual ends, now pointed toward a common goal supported by all levels of management up to the CEO.
In planning, the matrix, “5×5=1” is a good memory tool for management to keep from overreaching with too many strategies and too many tactics. But it is not written in stone. And development of these important elements of the plan should be made using all the resources available, from your board of directors to your senior management to departmental management. Getting all to buy into each step may not be easy, but when accomplished, is a powerful and invigorating opportunity to celebrate, then to get to work as a functional unit of the whole.
Now we’re getting organized. There are many ways to express the roadmap for your enterprise. One of the most popular was used by the U.S. Army late in World War II, and adopted by a number of high profile businesses such as Texas Instruments after the War. The structure combined the listing of the goal with a series of strategies and then tactics, each designed to support each other, each measurable and made public throughout the organization. The technique, “OST” (objective, strategies and tactics), is a very good way to organize your effort to find guideposts and then develop metrics to measure progress.
[Email readers continue here...] What is a strategy? It is a medium range process involving senior management and departmental management as well, directing resources in ways that, as accomplished, lead the company toward the goal. A typical small to medium, business finds five sweeping strategies for the current year, many cross-departmental, and some carried over from the previous year’s plan and even from years before that. Here are some example strategies from some of my companies over the recent years.
- Expand into at least three new continents through new distribution channels.
- Penetrate the Fortune 500 with at least five active accounts within two years.
- Create a hosted “software as a service” or “on demand” addition to our product line by end of (next) year.
Note that these are expansive “junior” goals that, if achieved, would certainly move the company forward toward a larger financial goal. Yet each is measurable if achieved. In fact, the degree of progress toward achievement can also be achieved, such as “We did establish and do business with two of the five Fortune 50 accounts this year.”
Measurement is the key to success. Even at the strategic level. Next we’ll look at the last major step in creating an OST plan for an entire organization.
It’s time to speak of some sort of business plan. As a professional investor in early stage companies, I have long discounted long, detailed business plans in favor of a concise “executive summary” followed by a believable spreadsheet-based financial forecast projecting three to five years into the future.
Yes, everything does change between drafting that plan and its successful execution. But flying without a map of some kind seems just plain too risky.
[Email readers continue here...] I recently joined the board of a company that was growing slowly, running beyond breakeven, but had not approved a plan for the current year, let alone attempted to develop one for the next. So the CEO had one of his own that he did not share, while the CFO had one for internal use that was never shown to the CEO or to the Board. No wonder the Board members wanted to dig in and find who was communicating with whom, and who was in charge of the map to the goal. By the way, there was no goal understood by all or agreed to by anyone. How do you compensate executives and all levels for successful accomplishments if there are no established steps toward the goal? And how do you measure a person’s contribution to an unnamed goal?
So if you have not, create a concise map for your enterprise. Start with a reasonable goal, usually expressed as a revenue number some number of years in the near future. Assess your current resources and attempt to calculate the resources needed to accomplish the goal. Do you need to raise money, focus spending upon only core projects that advance the company toward the goal, or bring in new management talent to make it happen? Write these steps down in any form for now. We’ll explore a more organized approach in the next insights.
There’s a big difference between your vision for your company, your mission and your goal. Your vision tells the world what you want to be as you contemplate in advance how you will change the world for the better. Your mission merely states who you are and what you do. It is used to limit and sift your opportunities to keep you from using resources for projects outside of your core, your mission.
But your goal is a tangible aiming point, one that should be achievable within several years if you accomplish your progressive steps planned between now and then. You can express it in terms of money, market share, influence or other measure that reflects success. An example: “To be at a $25 million run rate by the end of our fifth year in business.” That is measurable and from this you’ll be able to look backward to develop a set of steps (strategies) to achieve that goal.
[Email readers, continue here...] Once achieved, a goal is meant to be overwritten with a newer one, set to even higher standards. If achieved early, celebrate and set another goal earlier than planned.
The good thing about a goal is that it is measurable, and progress toward it can be measured as well. Unlike a mission or even a vision, neither of which may be measured, there is a satisfaction in each step toward achievement. Better yet, your employees and investors will appreciate constant attention to the goal and reports of progress toward it. A goal serves as a rallying point for all associated with your vision.
Make the goal realistic, achievable and public. You’ll find others buying into the objective and even creating better ways to achieve it because they are invested in the dream and the measure of that dream – the mutual goal.
I have a business friend, an experienced manager and teacher with a Harvard MBA, whose creativity and intelligence are admired by many. But he dilutes his effectiveness with wordy PowerPoint presentations. It has become a long running joke between us, as I often remind him that most of us have a very limited attention span and ability to recall important points from a presentation.
Note the title and tone of these insights. Short, to the point.
Mark Twain said, “I didn’t have time to write a short letter so I wrote a long one instead.” He cogently encapsulated the problem.
It is more difficult to reduce your thoughts to a few core sentences, but that is what you should do for maximum effect.