For a business to be successful, it needs to ensure it has effective processes in all key areas. In this article, I set out 7 such areas along with definitions of each one. I have also included some of the precursors to a business being successful as well as a tool to assist in the effective setting of goals.
The term “strategy” used in this article means “the framework which guides those choices that determine the nature and direction of an organisation and includes the art of distributing and applying business means to fulfil the ends of considered vision.”
Inherent to this approach is that the direction of the organisation is an essential precursor to setting strategy. Therefore, the 'vision' has to be set first and then strategies designed to enable the organisation to move toward that vision. I call this the ‘Statement of Intended Purpose’.
What is a Statement of Intended Purpose?
“A big picture statement, describing a desired end-state (i.e. the transformed business or post-transformation steady state) and which is general in scope, not restrictive, and more than simply the current scenario with all problems solved. It should include your intended turnover and profit figures (although these would not be made public).” Below are a couple of examples:
‘Arising out of our experiences, we intend to design, make and market a range of clothes for mothers-to-be that will make them feel they can still be fashionably dressed. We aim to serve a niche missed out by Mothercare, Marks & Spencer, etc. and so become a significant force in mail order fashion for the mothers-to-be market.’
‘Arising out of our experiences, Simplicity Coaching intends, by 2016, to design and deliver specifically created, and client focussed, Executive and Business Coaching services to professional clients (non-industry specific) across the UK who are seeking management and leadership solutions. We aim to serve a niche missed out by mainstream training, coaching, mentoring and management development providers and so become a significant provider of action based, and outcome focussed professional, personal & business building solutions.’
Once the vision is established, the organisation then assesses its position to deliver the key components of that vision. Checking the position will enable gaps within the structures and approaches to be identified and corrected/developed/maintained according to the relevant business area.
At all stages of development, the organisation has to take into account the ‘cascade effect’ – that is, if a change is made in one area you have to consider what the corresponding changes will be that occur elsewhere, either by design or as an unforeseen consequence. Changes made in different areas in parallel that have not been thought through can have potentially damaging or fatal organisational effects. Changes based on incongruent values can also be dangerous.
This occurs when the organization has reached a position where it’s nearing its maximum capacity. If it has not planned for the effects of reaching or exceeding its capacity then negative critical mass will occur – big bang and very messy. If it has planned for critical mass then it will have taken on extra resource earlier to ensure a smooth transition from one position to the next. Whilst still a big bang, it will not be a negatively messy one.
Review and Evaluation
At each stage of the organisation's move toward the vision, it has to review that vision and confirm direction (at least annually). It should review the actions it took and evaluate their effectiveness. Assessing the outcomes gives you a good idea of where your strengths are within the business as well as discovering areas that need some more work.
You need to use an effective process to deliver the outcomes. Goal planning is an essential model, which if utilised properly, will deliver success.
The most effective model uses the SMART goal formula. Any goal set by an organisation should be set in such a way as to be focussed and clear. Each individual’s job goals should be clearly aligned to those of the organisation so that they can see how their performance is adding to that of their company. The SMART mnemonic stands for: S = Specific, M = Measurable, A = Actionable, R = Realisable, T = Time-framed.
The goal of “to be profit making as soon as possible” gives no idea of when, how, what, where or why. It could be restated as: “By 2010 we intend to have a turnover of £[xxx,xxx] increasing by [x]% on a year on year basis, this will be in parallel with a profit margin of [xx]% by the same date increasing by [x]% on a year on year basis.”
This is specific in that the amounts are stated by number and percentage. It can be measured as they are clearly stated by number and percentage. It’s actionable in that you will now put the processes in place to move you toward those numbers.
It’s realisable, although stretching (a goal that does not stretch the company or person is of limited value). It is time framed in that there are definite dates set.
The next thing for you to do is to consider each of the strategies below and start setting goals in each area as you see fit.
The 7 strategies:
1. Having a consolidated view and understanding of the company's business.
What business is it the company is in?
Statement of company goals and targets in each area.
A statement of what the individual's goals are compared to those of the company and what the resultant actions are to be.
2. Having effective processes and systems in place.
Includes: HR (team, individual, development, reporting, grievance, handbook, induction, etc), H&S, energy, planning (strategy, operational, tactical, contingency & ‘what if’ scenario planning, etc), business scripts (calls, sales, networking, etc) business process documents – the system that is used to do [xxx] is [xxxx].
3. Having established purpose, goals, values, and ethics in place.
It includes Statement of Intended Purpose, strategies, goals, objectives, tasks, statement of values, and statement of ethics.
4. Having a transparent financial and resource plan in place.
Each section should incorporate cost/benefit analysis, and cover ratios (Income profitability; liquidity; working capital; bankruptcy; long-term analysis; coverage & leverage. Any staff costs should be set out showing hourly rate, pensions, etc.
5. Having effective people relationships and balance of responsibilities and accountabilities across the organisation in place.
It includes management & staff structures in place, statement of job roles, responsibilities and accountabilities (including associated manual of systems for each role), staff rotation, development, and training plans in place, reward systems, & competences.
6. Having open and dynamic communications systems in place.
How do you talk to your people (staff and customer/clients)? Team briefing structure, suggestion schemes, email/letter/report protocols, notice boards, electronic boards, plain English guide, templates, desk instructions, dress codes, SOPs, etc. Instead of email in office go talk.
7. Having an effective and dynamic marketing plan in place.
It includes product/service description, market description (segment, niche, etc) benefit description, competitor analysis, supplier analysis, clarity of activity, direct communication with sales, consistency of message and company brand.
The list above is not fully inclusive and as businesses grow and develop so will the contents of each strategic area. By reviewing and evaluating regularly, you will be able to identify necessary changes before it becomes too late.
Do you have any other suggestions for continued business excellence? Share your ideas!