Tài liệu Seven Steps to a Successful Business Plan Chapter 8-9 docx

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How to Build a One-YearOperational Plan ThatImproves PerformanceIn this chapter you move from the strategic view to the opera-tional applications. Here you separate the strategic from the tac-tical, the global from the specific, and the long term from the shortterm. This is where most management energy is focused for execu-tion.The 1-Page Strategic Plan generally spells out where you intendto take the organization while the operational plan defines howyou plan to make the trip. Yet getting to a practical application of a211CHAPTER8business plan seems to always get lost in the planning process.Earlier you defined the goals, objectives, and tasks necessary to giveyou three levels of definitions. Now let’s examine your businessplan up close by defining what must happen next year. This iscalled the operational plan (see Figure 8-1). The content for theplan is developed during the initial planning conference. All theinformation for the operational plan can be extracted from theoriginal planning process. This is mostly true for the other plans aswell. The real task becomes putting the information into the rightportion of the 5-Page Business Plan. In lay language, we call this“getting it in the right bucket.”Seven Steps to a Successful Business Plan212Figure 8-1. The operational plan sets the direction into motion. It is howyou plan to work the next year.The operational plan usually extends out one year (see Figure8-2). It is always the first year of your strategic plan, which auto-matically makes it the first year of your business plan. Althoughsome companies elect to use two or three years, one year is morepractical and best fits accepted business reporting standards. Oneyear fits with the quarterly concepts and the annual budget cycle.This permits you to look at your performance on a frequent basisand make annual adjustments if necessary. One year is also aboutall the detail you can plan without becoming overwhelmed. Do notspend a lot of time, if any, trying to develop the details and num-bers for subsequent years because they will be adjusted as you workwith your plan over its life span.How to Build a One-Year Operational Plan213Figure 8-2. The operational plan is cut out of the total ten years.SITUATIONAL ANALYSIS: THE BRIDGE BETWEENTHESTRATEGIC PLAN AND THE OPERATIONALPLANTo get from the strategic view to the operational view you must dovery detailed thinking. Situational analysis is the middle or secondstep of the backPlanning process (see Chapter 3), with strategicthinking and operational execution being the first and third steps,respectively. At this stage of planning you must do a reality check.In strategic thinking you examined what you wanted to do in thelong term. Now you must carefully consider what can be done inthe short term in light of the realities of the business environmentin which you must act. To conduct a good situational analysis, you must considereight criteria:1. Analysis of company performancea. Currentb. Historical2. Analysis of competition3. Analysis of market share4. Analysis of missiona. Implied tasksb. Mission capability5. Analysis of existing resources6. Analysis of your business’s drivers—excluding, at thistime, your primary operational focus (i.e., single focus)7. Analysis of existing structure8. Analysis of reference informationa. Customer satisfaction surveyb. Employee satisfaction surveyc. Others as identifiedAnalysis of Company PerformanceAs part of the planning model you must conduct self-evaluations.This means taking a hard look at your last year’s performance anda second look at your overall performance from a historical view.Usually there is no shortage of charts and graphs depicting howwell you did financially for the past year. The analysis usuallySeven Steps to a Successful Business Plan214includes one or more previous years, depending on the size printand complexity of the chart. It always includes actual performanceagainst projected performance. Usually these are just numbersdrills.To be truly effective you need to have some lessons learned.You need to know why the numbers went up or down. Thoughtmust be given to why spikes occurred in your performance. A poorshowing cannot be written off as the result of a bad economy or anunexpected downturn. These are simply excuses for mediocre man-agement performance.This analysis is where you start to sort out the serious planningsession from the weekend at the golf resort session. Often managersare unprepared to talk specifics of the current business situation oftheir industry at a planning session. This can only mean these peo-ple came to the meeting unprepared. At your next planning sessionhave your principal attendees give a short briefing to the team onthe status of their portion of the business. This can be assigned ashomework in the preconference briefing.The best team I’ve ever seen do this is Cedarglen Homes inCalgary. The two principal players really know their business.Robert Bezemer and Scott Haggins can talk for hours about the backcorners of the industry in Calgary, Alberta, and all of Canada. Thatis because they are out every day dealing with the details of what ittakes to run a successful building company. This means they aredoing more than just building houses. Both executives are involvedand have a genuine interest in how their company fits into thesocial fabric of the community. They spend a considerable amountof time with customers, other builders, and the trades. This pays offwith a multiplier effect.Analysis of CompetitionMany planners want to start the initial planning process with aSWOT (strengths, weaknesses, opportunities, and threats) analysis.I disagree. While this is critical information to validate the plan-ning content, it is the wrong starting point. To be creative and boldHow to Build a One-Year Operational Plan215in planning the team must start with the future and work back-ward, so I advocate the backPlanning approach. This future orien-tation removes the inherent limitations placed on the thinkingprocess. Once team members decide where they want to go, theycan test the validity of their decision with the situational analysisto determine the plausibility and practicality of the plan. If you are dead set on starting your planning process with acompetitive analysis flavor, think about these two points. First, themore time you spend in competition the less time you have toaccomplish your own goals. Second, why do you care about thecompetition, anyway? If you are accomplishing your goals, whichyou freely set, why should you have more than a passing interest inthe competition? You need a healthy respect for your competitorsand should honor them as legitimate players in the market, butdon’t overdo it. What I’ve observed is that competitive strategy actually shouldbe called competitive obsession. Management consultants have ledus astray in this area by building large, complex schemas for strate-gic thinking and planning based on intricate formulas for compet-itiveness. This approach appeals to the macho tendencies oftenfound in the upper levels of management. You don’t need a lot ofcompetitiveness except toward one thing—your vision and its asso-ciated strategic goals. Analysis of Market and Market ShareWhat is your market and who is your customer? Don’t tell meeveryone! Someone once asked Willie Sutton, the famous Americanbank robber, why he robbed banks. His answer was very insightful.“Because that’s where they keep the money.” A danger is to notknow where the money is kept. Are you guilty of selling or servic-ing every customer with no real knowledge if it is a profitable saleor not? When was the last time you did a careful screening of yoursales to decide which customers should be dropped?Some companies think any sale is a good sale. That is simplynot so. You may be robbing a convenience store after-hours insteadSeven Steps to a Successful Business Plan216of a bank on payday. It’s hard to turn down an order when yourpeople are not busy or your machines are idle. The normal justifi-cation for marginal to nonprofitable sales is to exercise the equip-ment, keep the plant running, and pay for overhead. Well, that hasa downside, too. I’m not suggesting you turn down work or turnaway orders. What I am suggesting is that you look at work to seeif it is profitable.Define your market and, specifically, who is and who is notyour customer. The latter is just as important as the former. WhenEZCertify.com developed its business plan, the managementfocused like a laser on this issue. After careful market analysis theydetermined exactly who they were attempting to reach with theirproduct. By first defining the market and then the profile of theactual customer within that market they were able to develop real-istic annual targets. Without this information your operationalplanning targets are going to be guesses at best and badly skewed.Analysis of MissionGive your mission statement another look during the planningprocess. Make certain that you fully understand the implied tasks ofthe mission statement. This gives you coordination points for activ-ities that cross boundaries between staff functions. Ask these fivekey questions as a validity check:1. What am I being asked to do in the mission statementthat is not spelled out in the text?2. Are there implications of those tasks that may or maynot be fully understood and appreciated?3. What resources are going to be implicated when the hidden tasks are brought to execution?4. Have we coordinated those implied tasks among themanagement team?5. Are we fully committed to the range of tasks?How to Build a One-Year Operational Plan217Another reason to revisit the mission statement is to confirmyour mission capability. That is defined as your ability to carry outthe requirements. In the plan that means you must be able to hitthe targets you are setting for the first year. Not only is missioncapability a planning issue, it has leadership implications as well.Too often managers set targets, objectives, or goals that are beyondthe capabilities of the management team. Test your reality by ask-ing several hard questions. Start with the following six about yourteam and their ability to fulfill the mission:1. Does my team have the management maturity to com-plete the mission?2. Do they have the wisdom, experience, and judgment to besuccessful?3. Are they willing to commit the time, energy, and effort toaccomplish the mission?4. Can they complete the mission or operational tasks beingset within the time frames being established?5. Are we giving the team the right tools and equipment toget the job done?6. Will they have enough information to properly do theirjob in the spirit in which intended?Analysis of ResourcesYou must review the resources requirement from two perspectives:strategic and tactical. (Later, in Chapter 10, we look at the completeresources plan by addressing strategic resources in more detail.) For tactical or short-term existing resources supporting youroperational plan, you must be ruthlessly analytical. A great dangerof planning is to overcommit tasks and targets without adequateresources for support. Consider these ten items when looking atyour existing resources base to support the operational plan:Seven Steps to a Successful Business Plan2181. Timea. Have we distributed the tasks over the right time frame by quarter?b. Is the time frame realistic for the task at hand?2. Informationa. Do I have the right amount of information on hand to make short-term decisions?b. What additional data must I gather to support my decisions?c. How will I manage the volume of information currently flowing through the system?d. What are obstacles and barriers to overcome for effective communication of information?3. Staffing levelsa. Do I have the right amount of people in place to accomplish the tasks?b. Are the right skills represented among the workforce?c. Will I be able to find and hire against my job skills shortfall?d. Can I afford to pay for the core competencies I need?4. Facilitiesa. Do we have adequate facilities to get the work done?b. Are conditions in the offices, plants, or facilities conducive to effective work?5. Tools and equipmenta. Do we have the right items on hand to properly do the job?b. Can we afford any upgrades or replacements required?c. How soon will we be able to get the tools and equipment needed?How to Build a One-Year Operational Plan2196. Technologya. Will our existing technology be able to keep pace with the action plan?b. Can we afford to leapfrog technology?c. What will be the implications of working with outdated technology if our competitor is state-of-the-art?7. Relationshipsa. Do we have the right partnerships, alliances, and outsource partners for the mission?b. How difficult will it be to put a relationship in place to meet mission deadlines? c. Are there old relationships that must be renegotiated or dropped?8. Intellectual capitala. Do I have people with the willingness to share experiences for a synergistic effect?b. Do we have a formal database of lessons learned to draw from along the way?9. Financiala. Do we have the money to support the annual plan?b. Have budget considerations been included as an internal part of the planning process or are they an add-on feature?10. Imagea. Will our brand recognition help or hinder us from reaching the intended annual targets?b. How must marketing be cranked up to support the plan?c. Are there customer or community activities that need to be renewed or revisited?Seven Steps to a Successful Business Plan220[...]... increase your chances of meeting annual targets SUMMARY This chapter has presented the left side of the business plan, the immediate year, or the operational portion of the five plans Items 240 Seven Steps to a Successful Business Plan found in the operational plan are usually more familiar to a planning team because they are the more common elements This means an operational plan should be comfortable... were taken to plan for, or eliminate, barriers and obstacles to the operations plan? How to Build a One-Year Operational Plan 241 THE PRACTICAL APPLICATIONS: IMPROVING OPERATIONAL ACTIVITIES As a result of this chapter you should have developed the following two items: 1 A 1-Page Operational Plan 2 A set of process maps that directly improve your operational activities This Page Intentionally Left Blank... difficult to understand is how land developers have been able to bully and intimidate the building industry in Calgary Canada is one country that has no shortage of land Its population base is small compared with the acreage in the country Fly into Alberta and look at the vast stretches of land adjacent to Calgary Yet if you wish to build a house in Calgary you will pay homage to the land developers Another... spotted at the right locations? Analysis of Reference Information There is a wealth of information available to you for a situational analysis You may have a customer satisfaction survey that provides details on a range of vital items Use this information to cross-check your goals and supporting tasks The key questions to ask are as follows: ■ Are we satisfied with the current customer satisfaction rating?... will need to make allowances for those requirements Coordinate the Operational Plan You will need to be specific in your operational plan as to who must coordinate with whom Sadly, managers cannot be left to their own initiatives for coordination Spell it out Make them cross organizational boundaries and climb out of their stovepipes to coordinate a task Hold them accountable as a team for a result... run into the hundreds of millions of dollars per year For the average-size company the payoffs can mean equally important savings, especially when extrapolated over the life span of the plan Here are a few examples from a wide range of industries: How to Build a One-Year Operational Plan 239 ■ A manufacturing company saved six week of downtime for annual maintenance on its big machines By replicating... to Build a One-Year Operational Plan 231 If you want other good examples of these small, annoying, and destructive cuts, ask your employees They can probably give you dozens A young manager was asked to identify his greatest loss of efficiency His answer was almost instantaneous It was in the area of time management The manager is David W Rector, Jr., formerly the North American Operations Manager for... not, what must we change? ■ Does the plan allow for improving the customer relationship? 224 Seven Steps to a Successful Business Plan ■ How does the customer fit into the total picture of the plan? You may use an employee satisfaction survey to determine the culture temperature of your workforce The data may or may not be translated into a goal In all cases the purpose of gathering reference information... is rich in potential diamond sites with one mine in production and a number of potential sites ready for development Both Winspear Diamonds, Inc and Darnley Bay Resources Ltd are Canadian diamond forces to be dealt with Arkansas has a reportedly large diamond site, yet it was immediately placed within a national park shortly after the find was made Information also can be used as a power source For... the zigzag deviation of normal projections To oversteer the plan will cause an erratic performance To wait too many quarters before taking action can be equally dangerous because you are too close to year-end to make up the shortfall Judging how and when to make course corrections is one of the toughest calls in planning Use judgment and trust your original thinking before you change targets Make corrections . operational plan is cut out of the total ten years.SITUATIONAL ANALYSIS: THE BRIDGE BETWEENTHESTRATEGIC PLAN AND THE OPERATIONAL PLAN To get from the strategic. projections. To oversteerthe plan will cause an erratic performance. To wait too many quar-ters before taking action can be equally dangerous because you aretoo
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