Now is the time to put plans in place for the coming year and to apply the lessons learned from successes and failures to chart your course. The industry as a whole weathered the year well, but not without a few casualties.
Take your team through the following process to clarify your lessons learned from the past year. The task of the team is to: 1) create a success list, 2) develop a lessons learned list with subsequent actions, 3) analyze direct competitors, 4) identify strengths. Then using these four lists, develop a priority action plan with benchmarks for the coming year. Ideally, get the team off-site, undisturbed for a full day of focused brainpower.
Create a success list. This is not the time to concentrate on reduced volumes or lack of profits. It’s acknowledging that while the seas got rough, the ship kept sailing! What did you and your team do well? Did you put new focus on credit policies and procedures that are now working smoothly? Did you focus on truck and driver efficiency that has now translated into lower cost-per-gallon delivery expense. Did you see that cash was king and reduce or eliminate debt? Did you eliminate marginally profitable sectors so you could focus on areas that were making money? Did you grow your customer base as others shrunk?
As you develop this list, be aware of whether or not your company celebrated these successes. One of the things we know about great companies is they are masters at acknowledgment and celebration. It’s likely your present staff worked harder this year and persisted through really tough times. As a company, did you take time, that momentary breather as a team to bask in the light of glory for at least a moment?
Develop a “Lessons Learned” List. I don’t think I’ve talked to one CEO who after seeing the past year hasn’t wished they were better prepared for the economic tumult we’ve all been through. One of the keys to future success is the ability of a Leadership team to “autopsy” failures without blame and then identify how to avoid future pitfalls. I must credit Jim Collins, author of Good to Great and more recently, Why Good Companies Fail, with the empirical data that proves this conclusion. As a success driven CEO with a positive attitude in your DNA, autopsying failure may seem to go against your grain, but the practice is needed in a healthy company .
So make your list of what didn’t work, and then at least 3 actions you could take to be sure you never get caught in the same situation again. For instance, one of the most common “lessons learned” I hear from the recession was we got caught in a cash pinch. Our supplier lines weren’t high enough, our bank lines got stretched, and when volumes dipped, it wasn’t much fun. So the autopsy exercise asks the question, what can we do going forward so that won’t happen again? A few possibilities are: manage our balance sheet differently now that we know what can happen. Most CEOs I know are setting much more aggressive cash targets and lower debt/leverage ratios going forward. The recession lesson was it pays to have cash.
Scope out the Competition. This past year was one of tumultuous change. It changed the competitive landscape. This is the perfect time to list your top competitors by sector and assess their strengths and weaknesses in comparison to your products and service. Are they faster or slower? Better quality or poorer? How do they price? How is their financial strength compared with yours? Remember that old quote of get close with your friends and even closer with your enemies? Nothing could be more true!
Often when doing on-site strategic work with companies I find leadership teams who know the most about their direct competitors are the ones winning in the market, even if the competitor is big and tough. The knowledge allows even the smaller players to capitalize on niches and service levels the large competitors can’t match. The smart companies not only know the differences, but market those differences.
Clearly Identify your Current Strengths. As you review your successes, your lessons learned, and the competitive landscape, just the time spent on those sections will help bring clarity to your company’s clear strengths. What are you doing well that could be leveraged? For instance, I talked with one CEO who realized they had great customers, strong relationships with the customers and a fabulous distribution system that beat the pants off of most of their competitors. That’s a good thing to know as we’ll discuss in the next section. Leveraging strengths is exactly how the most successful companies in history achieved profitable, sustainable growth.
To take this portion of the strategic work to an even higher level, consider going beyond your leadership team planning session with a customer survey. This can be as easy as each member of the executive team taking an “A” customer out to lunch and simply asking the question of them – what do we do well that is key for you? And don’t be surprised if some customers focus on relationships (we love your dispatcher – always there when we need him, takes good care of us, etc.) while others focus on speed of delivery or quality issues. The main thing is ask and listen!
Prioritize and Plan. With the hard work you’ve done of identifying your successes, blamelessly looking at failures, being brutally honest about the competition and your own strengths, your now ready for the prioritization and plan. There are many ways to tackle prioritization, but the main thing is your whole team must be in agreement and unified about the plan – the items and the priority order. And, each piece of the plan must be specific and measurable. In fact the SMART goal acronym is a great test to be sure that each step of your game plan is:
As you develop the steps and plan, including measures, accountability and timelines, also try to identify potential roadblocks or hurdles. Let’s face it – everyone starts out the year with great plans, but life happens. If we can think through the possible roadblocks, we’ll be more prepared when they come. And they will come!
And now, back to my story of the marketer who analyzed strengths and made a great move. Realizing they had loyal customers and great delivery efficiency, they decided to expand their products beyond the typical petro offerings. The result? Huge increase in profits! How did they do it? By asking key customers what else they bought, compiling lists, and figuring out what they could do well and be profitable.
Personally, I think the next twelve months is going to be really exciting. While there will still be the aftershocks rumbling through the economy, we’ve already made it through the big one. Now is the time to look to the future and build the company you want. That’s what I’ve been helping companies do for the past few years in my Hidden Profits Coaching. It’s been really exciting to see companies come to grips with their strengths, their lessons learned, their changing marketplace and competitors. If you’d like to explore the profit and cash you might be missing, I’d love to hear from you.
In the meantime, how about taking action by going to your calendar right now and scheduling the day for your leadership team planning meeting? Action equals success!