Time to set next years goals – 5 steps to business planning
Well, it’s that time of year again, the Christmas songs are out and I’m already out of Whamageddon, having heard that damn song “Last Christmas” on the very first day of December! All far too early for me!
In the words of another famous singer, Mr Lennon, “Another year over and what have we done?” It’s time to take stock focus on what our objectives and targets were this time last year and to see how well we’ve done, prior to reviewing the current situation and setting objectives and targets for next year.
To my mind, all businesses and management teams should spend time thinking seriously about the objectives and targets that they wish to set for themselves and their team.
… But it always surprises me how few actually do, some go through the motions and “play” at business planning, but it’s the people that are focused and serious that get the most out of the process and, unsurprisingly, it’s these same people who usually get the better results.
So, what are the stages involved in a robust business planning process that will help you and your people define, monitor and meet your aims and ambitions? We’d say there were 5.
1) Understand the external world
If you don’t understand the external world and how changes in it might affect you, you are going to get buffeted like wheat in the wind.
Certainly, there might, from time-to-time, be Black Swan events, Covid 19 being one, but many events, even out of the blue events, can be planned for and there are a whole range of tools available for helping you to understand the external world and the impacts they might have on you and three that we usually fuse together are:
PESTEL analysis stands for Political, Economic, Sociological (or Cultural), Technological, Environmental and Legislative. There are various other versions of the model which add and adapt the tool bringing in other criteria that may sometimes be relevant. One of our clients on the South Coast added a “G” because geography was an issue for them; they tended not to find many customers in the English Channel!
The critical point about PESTEL analysis is that you personally, nor your company, can in any way influence the issue, you simply have to respond to it. You are not going to change the governor of the Bank of England’s mind when he and his team eventually decide to jack up interest rates as they inevitably will. You are not going to change the march of technology, driverless vehicles and robots. You are simply going to have to react to these things (and others) and PESTEL gives you a framework for peeking into the future in order to see if issues are likely to be a problem for you.
Porter analysis, sometimes called The Five Forces model, was invented by a guy called Michael Porter who is a professor at Harvard. He reworked a couple of economic models into his own, published it, wrote a few books on it, built a consultancy company on the back of it and made a fortune from it… who says you can’t have everything?
Porter analysis focuses on a slightly lower level of issues than PESTEL, you can affect changes in the marketplace, you can buy customers or suppliers and you can change the dynamics of the marketplace, but normally you need deep pockets and long timeframes.
SWOT analysis is a very well-known tool often applied to both projects and marketing activities, where SWOT stands for Strengths, Weaknesses, Opportunities and Threats. And both of the above tools percolate out opportunities and threats that need to be considered as part of the SWOT analysis.
The strengths and weaknesses part of the SWOT analysis is about taking a long hard look at the internal workings of your organisation and deciding what you’re good at and what needs developing.
2) Mission, vision values what’s the purpose
Having peeked at the outside world and how events there might impact you, it may well be worth dusting down your mission, vision and values statements in order to refine and polish them.
- Your mission statement should be about what you do
- Your vision statement should be about what you want to become
- Your values are about the behaviours you want your people to exhibit along the way
- And your purpose statement should be about the benefits and capabilities that your products and services deliver to your clients
3) Goal setting and planning
The above information, once collected and refined, gives you the platform on which to set your future goals which would ideally be defined in a documented business plan.
This plan should contain the “thinking” that sits around the future of the company. It will include sections for departments like sales, marketing, operations, delivery, finance and perhaps others addressing issues around key people, risk and possibly a host of other sections.
But the “thinking” doesn’t get stuff done, it’s the “doing” that gets stuff done and from the business plan you need an action plan, and that action plan needs time scales and responsibilities allocated for implementation.
We’d usually advise companies to create an annual plan with SMART (Specific, Measurable Achievable, Realistic and Timebound) objectives and targets which are then broken down into more detailed quarterly plans which are then used at an operational level to drive change and performance improvement.
4) Share the plan
With the plan complete and the objectives and targets set, you now need to share the plan.
Somebody clever once said something like “If you don’t share your plans how on earth do you expect others to help you get there?”
This isn’t a one-off process, you and your management team may have spent weeks, if not months, putting the plan together and you’re now deeply wedded to its contents. You cannot hope to present the plan once and expect everybody to know it and buy into it as well as you now do. That’s simply not gonna happen – constant repetition is the key. Perhaps organise your meetings around the key priorities of that quarters plan.
5) Implement, evaluate and control
The key to the whole process is not so much undertaking the thinking and writing the plan the key is rigorous, robust and effective implementation.
We would suggest a spreadsheet with each quarterly priority identified with any specific goals and with tasks allocated on a week-by-week basis across the 13 weeks of the quarter. All tasks being allocated to just one person who is responsible for that task and its completion. Each task can then be “ragged” as you progress through the quarter. (Example spread sheets in the download section below)
This ensures actions are undertaken, or where they’re not, it becomes very visible very quickly.
How does this fit with my management system?
All management system standards (Quality – ISO 9000, Environmental – ISO 14000, Information security – ISO 27000 and Health and Safety – ISO 45000) require companies to define their goals and ambitions and to set and monitor their goals and targets.
And where would you normally find objectives and targets but in a business plan? Admittedly, there is no specific requirement of any standard that says you must have a business plan, but, what’s the old adage; “if you fail to plan, you plan to fail”, so, we think it’s the best place for objectives and targets.
Annual business planning and the associated quarterly review process are, we believe, critical to the ongoing success of any organisation. It’s useful, productive and informative to reflect back at what has been achieved in the past year and to think about that in terms of your longer-term goals maybe 3, 5 or even 10 years.
If you look back and review there are always lessons to be learned, nuggets to be uncovered, which help you make better decisions in the future.
Business planning, honing your mission, vision, values and purpose statements provide you with a longer-term touchstone which actually helps you decide on not just what to do but, critically, given time and money is usually limited, also, what not to do.