A plan is simply charting where you want to go. As Lewis Carroll once said, “If you don’t know where you are going, then any road will get you there.” As a leader, you need to know where you want to go. Some say the term leadership was derived from the old Norse word “laed,” meaning to determine the course of a ship.
Charting involves some form of a planning process. You need a process that facilitates the journey. In my corporate strategy course, the corporate planning process taught was rather rigorous as the challenges of large corporations are complex. As a former Vice President of Corporate Planning, I can attest to that complexity and modeling. But the Silver Fox Advisors focus on entrepreneurs and small businesses which is the viewpoint this blog will take.
A planning process is a natural sequence of activities the first being envisioning the business. What business do you want to be in and why (often termed purpose)? What will that business look like in the future. i.e. what are you hoping to achieve (often termed vision)? What is the path or pathways that will lead you there (often termed mission)? You may have been operating for some time and never thought this through. It is hard to be a good leader without being able to articulate this vision.
In fact, leaders are good at visioning. Recall the Strategic Thinking strength discussed under Proficiencies in the 4 Inner Ps of Leadership blog. My experience is that many people have difficulty in expressing big picture visions. However, when presented with one, most people provide helpful feedback and commentary on whether they want to be part of that journey. Common sense is to have dialogue with others about your ideas to enhance and bring forth a common purpose for the journey.
There is an outward perspective as above, but do not forget the internal perspective of how the organization functions and behaves. I find most often that small businesses do not think through their values as an example. These behavioral rules will form one way or the other, so ensure they are positively impacting the organization by thinking them through. Think about three areas: conduct (e.g. respect), performance (e.g. accountability), and attitudes (e.g. customer centric). Again, involving your people enhances and develops buy in for your values.
As the leader, you cannot over communicate and dialogue this journey with your People. Get them engaged and excited regularly.
Opportunity Assessment (SWOT)
Will the journey be worthwhile? Said another way, what is the business opportunity? Why do you think your vision will attract customers? Leaders think positively about the future that helps inspire followers to join the ride.
The next big question is who are your competitors? Many times, small businesses answer there is no real competition for what I offer or intend to offer. That is naïve because even in the remote possibility it is true and the marketplace likes what you offer, there soon will be competitors. There is an assortment of other threats to be considered particularly having enough working capital to sustain the business and so forth.
Thus, there will be competitors. What are your strengths that you will/can leverage to attract customers? What weaknesses need to be shored up or repositioned so that you have a viable product/service in your targeted marketplace?
This is a fast-paced world so be sure get as much input from others in the dynamics of this marketplace. Be brutally honest in this assessment but positive in your game plan on how to achieve the vision.
This SWOT (strengths, weaknesses, opportunities, threats) will lead to creating your customer value proposition that differentiates your offering from the competition. How then will you make that a reality? What is the game plan that enables you to win the customer and beat the competition? In planning terminology, what are your basic strategies? Normally, there will only be a handful of these strategies that are key to your success. Don’t over strategize or you will lose focus on what is critically important.
The key is to concentrate on what really makes you different and better for your targeted customers. Do we have a better product or service and in what way (i.e. Product leadership)? Are we going to be more affordable by having some streamlined operations (i.e. Operational excellence)? Can we distribute or provide the product or service in a new way (i.e. Customer innovation)? How will we attract customers via branding and what channels will we use to reach them (i.e. Marketing)? How are we going to be more responsive to customers’ needs (i.e. Customer solutions)? How will we raise or generate sufficient cash to run the business (i.e. Financial)?
Then, you need to put your action plans together. Given these strategies, what are the most important things that need to happen now, short term, and longer horizon? Again, be extremely focused on these tactics. What is the objective to be accomplished? Who is going to do it and be responsible that it happens? When will it be done and what are your checkpoints?
Think about strength-based leadership in formulating these action plans. Get those who are going to be involved engaged in the specifics of what, why, and how. Remember that participative management leads to better performance.
Of course, the leader of a small business must be involved in the implementation of these game plans. We will address this in a future blog the Performance side of Leadership. Keep the 3 Ps of People, Planning, and Performance top of mind. Planning is the catalyst that leads People to Performance.
Performance Feedback and Course Adjustment
The planning process is circular in nature. Success rarely happens without continuously reviewing how you are Performing. Create a regular schedule to assess both your financials and action plans, monthly generally works well but at least quarterly. Live your values in these meetings without demeaning people. Think being objective. Make them more than status reports; chart out new actions as the situation dictates. Celebrate success.
As a leader, address major opportunities, threats, and problems as they occur. Be quick to react and when possible proact. Create separate sessions to address bigger picture topics or specific issues. Covid 19 is a good example. Leadership agility has become critical in this world of accelerating and chaotic change. We will share our thoughts on leadership agility and other adaptive skills in a future blog.
In summary, the small business owner or CEO needs to be sure there is a planning process to set the course of direction. Otherwise, there is just day to day fire fighting with little growth and questionable viability. My 4 Stage Growth Model for Small Businesses (blog post October 8, 2020) provides a great deal of insight into what you should focus on to progress to the next level.
Planning in small business cannot be a rigid structure. Yet, you must write down your plans even in bullet form on paper and make it evergreen. Otherwise, they just drift away.
There are those who question anything associated with planning/thinking beyond a couple months and perhaps annual arguing the world is moving too fast. Certainly, the cycle time of your business makes a difference, but for me that advice is rather naïve. Envisioning will have a longer-term horizon. You need specific plans for the here and now. But I find most business forget the mid-term. What will be our next stage to bridge to our longer-term vision? That is where the 4 Stage Growth Model can be helpful. Identify the critical success factors needed to move up the growth curve.
Even though the activities of planning have a sequential logic, think of the process as parallel processing in real time shifting focus as the situation dictates. Leadership shows forethought rather than panic.
Contributed by Lane Sloan, former Shell CFO and Silver Fox Advisor.