Planning for Success
With the end of a quarter coming up, it is time to review progress against objectives. The discipline of carrying out a review of progress on a regular basis has three main benefits.
1. It keeps the business plan up to date and grounded in reality.
2. It provides an opportunity to identify where corrective action needs to be taken to keep the business on plan.
3. It can clarify opportunities for over performance where the business is ahead of plan.
A business is a mechanism with multiple moving parts. If one part is currently not functioning in line with expectation it will not be long before the rest of the mechanism follows suit. By way of example, a business may have a plan to recruit two engineers during the quarter to support an expected growth in demand for customer installations. If the engineers are not recruited and the expected growth materializes then the customer satisfaction index is likely to move downwards. Successful businesses always benchmark objectives against reality because when plans meet reality, reality always wins.
Reviewing objectives on a regular basis (such as quarterly) helps keep the number of issues that are badly out of line with plan to a minimum and normally there is one major area the business needs to focus on.
When reviewing a key objective where performance is not matching plan there are three factors to be considered.
First, what is the root cause. The symptoms of the problem may be obvious, but treating symptoms may mitigate the pain but it rarely solves the problem. Using why as a question is often a good way of digging down to the root cause.
Second, the size of the problem should be quantified in monetary terms. Issues such as sales performance and internal costs can easily be represented this way, however an estimate should be made of the monetary effect on the business even on less tangible items. Taking the non-recruitment of engineers in the example above this could be quantified by estimating the number of installations that will not be done and the lost revenue that would entail. The benefit of this approach is it gives an indication of what level of resource is reasonable to apply to the problem to solve it – or in the case of an opportunity to take it.
Third, answer the question what happens if you do nothing as doing nothing is always an option. This question is intended to identify the knock-on effects of the problem. Sticking with the example of the non-recruitment of engineers: doing nothing will constrain revenue growth leading to the salesforce not meeting their target (and so being demotivated by not earning their commissions) and customer satisfaction reducing because of delays in the promised delivery time. This should create a bias towards action (in this case hiring contractors to do the job in the short term) as the benefits of timely, appropriate action outweigh the cost.
Sometimes it helps to have a third party ask the questions of you to help you achieve objectivity in the review. If you think this would help, reach out to me on carl.savage@rhs-europe.co.uk.