Have you ever sat in a meeting discussing what to do next and the realize that you keep having the same conversation each year, yet nothing seems to get done?
There is a methodology that can ensure things get done. The methodology employs many tools such as Visioning, Grounding, Gap Analysis, Strategy Maps, Balanced Scorecard, Budget Programming, Organizational Alignment, and Performance Management.
The process always starts with Visioning. This is a highly futuristic discussion; it is all about what you want to be when you grow up. Assemble dreamers and technologists for this exercise, as it is important to create a vision that is unconstrained by the issues of today. Companies that create and work towards a strong and succinct vision, continuously enhance the value of the organization for its shareholders.
The next step, “grounding,” deals with getting back to earth, back to reality. This process step scans your organizations by undertaking a situational analysis of your current state. At a high level, it asks what is working well and what is not, and ends with analyzing your current financial state and position, and customer base.
Now that you have a vision and are well grounded in your current state of the nation, it is time to determine where the gaps are and itemize them. There will be a list of differences between where you are now, and where you want to be. You also need to assess what forces are working for you, and what forces are working against you. All of them put together; this becomes the change agenda, a high-level plan for achieving their desired state.
A strategy map describes how an organization intends to create value for its shareholders. It maps how the company’s intangible assets are used to create sustained shareholder value. Processes such as innovation, customer service, and support, can become highly differentiating as companies seek competitive advantages. The strategy map visually represents how the intangible assets of a company (Learning and Growth), through its internal goals and objectives, provide value to customers, creating a sustained financial performance which enhances shareholder value. The strategy map, in this case, emphasizes “what” is important to the organization, and what must be accomplished.
“What gets measured, gets done.” Measurements are at the root of motivation and control. The Balanced Scorecard provides a mechanism that uses the Financial, Customer, Internal, and Learning and Growth perspectives that map how strategy is translated into action using lead and lag indicators. Lead indicators are often concerned with ‘inputs,' while lag indicators are measurable (observable) ‘outcomes.' The logic is, if I get lots of ‘leads,' I will achieve my ‘lags.' When developing the balanced scorecard, a check to ensure current operations, as well as strategic objectives are achieved.
Wondering why things didn’t get done; yes, you had the vision; yes, you are well grounded; yes, you had the strategy; yes, you had the metrics; but, no, you did not allocate sufficient resources to execute. It is important to segment and identifies strategic expenses. In the book The Execution Premium (Kaplan, Norton), the concept of “StratEx” is introduced; “Strategic Expense.” There is CoS (Cost of Sales), Opex, CapEx, and now there should be StratEx.
Budget Programming maps the one-year financial goals and objectives of the company to important initiatives (strategic and operational) which are actioned by your intangible assets known as employees. By identifying key initiatives, the Capital Expenditure, Operating Expenditure, and Employee Expenditure (Intangible assets), and then labeling these Strategic Expenditures, you set the priorities of the company for the long term. Budget programming ensures cross functional, organizational alignment of spending, resources, and priorities. Budgets need to identify “’who’ needs to do ‘what,' to ‘whom’ by ‘when,' and for ‘how much.'
When determining the ‘who needs to do what, to whom, by when, and for how much,' it is important to ensure organizational alignment. The expected outcome is the right organizational structure with effective and efficient processes operated by knowledgeable and skilled employees (intangible assets).
Once the Budget Programming and the assessment and assignment of all the resources in the organization have been completed, the question is can the budget be rolled up and approved?
Business Performance Management
The most important step in the process is the business performance management aspect of running the company. The tasks, objectives, metrics identified in the budget, balanced scorecard, and strategy map all come together to create a system of performance management. In this system, daily, weekly, monthly, quarterly, and annual meetings complete with agenda and measures are delegated (not abdicated) to management teams and their staff. Reporting processes are put in place that advice management at all levels of the company on how well the strategy is being executed.
You can see how employing a compliment of many tools such as Visioning, Grounding, Gap Analysis, Strategy Maps, Balanced Scorecard, Budget Programming, Organizational Alignment, and Performance Management can guide a company’s management team to ensure “things get done.” Bypassing any of these steps can quickly become a cause for concern, since critical information may be missing, and weakened by holes in the foundation upon which the plan rests upon.
RK Fischer & Associates
Our offices are located now in Sarnia, Ontario but are able to provide services across Canada for a majority of services remotely. Our local service area for onsite services is Sarnia, London, Chatham-Kent and surrounding areas.
We will provide onsite services that require at least one full day of onsite services in Windsor, Kitchener, Woodstock, Leamington, Waterloo, Cambridge, Kitchener, Guelph, Milton, Oakville, Mississauga, Burlington, Hamilton, Toronto, Vaughan, Markham, Brampton, Richmond Hill, Newmarket, and Durham Region.
For other businesses in Canada who want service onsite and are outside our onsite area, please contact us to discuss your requirements.
SUBSCRIBE TO OUR
SMALL BUSINESS INSIGHTS NEWSLETTER