No matter how good your strategic plan is, it will all be pointless unless it is consistently
implemented. If you have reviewed your market opportunities or challenges lately and like many
businesses are now returning to active trading, and want to “build back better”, you may have
tweaked or even completely reset your future strategy.
Today we want to address the biggest challenge to this investment in strategic planning. The fact
that so few strategies actually get consistently implemented. All too often business plans don’t
contain any ongoing link to structured implementation. And even where they do ‘Action Planning’
does not necessarily lead to ‘Action Doing’.
It’s this gulf, into which many great strategies disappear, that we will focus on next. There are two
aspects. ‘Action Planning’, which we will cover here. And ‘Action Doing’ or implementation, which
we will cover next time.
In the most recent of our “Rescue, Recovery, Reinvent” series, we covered – the “Value Chain”, we
highlighted how beneficial the Value Chain can be in identifying key activities that the business must deliver in order to fulfil the customer value offered by the Customer Value Proposition.
These “customer value-adding” activities must feature in the action plan that should result from the strategy development process. If you are to overcome the implementation challenge. You must develop an action plan that flows from your strategy. The Value Chain really helps us to do this.
Action. Turning your thinking into delivery.
However, the Value Chain challenges us to think about the whole business, the operational, and the support aspects. In doing so we inevitably identify the hundreds of activities that need to be completed. Often entering a state of hi anxiety inertia due to the sheer overwhelming mass of things to do. And so we default to the things we have always done and the strategy goes into a draw and comes out two years later as a dusty relic.
Critical Success Factors are a means of breaking down this negative pattern. Critical Success factors, or CSF’s for short, are the vital few activities that really drive success for you and your business. They may be operational, technological, strategic, or customer-related, but it is these few areas that mean you will achieve your goals. Looking over your strategy work so far and the Value Chain in-particular you may be able to identify several candidates. If so, we can test whether these areas are “critical” by asking “If I did not fully deliver this area could my business still implement this strategy and be successful due to other activities?”
If the answer is “No, my business is unlikely to be successful if we do not fully deliver this area”, then that activity may well be a critical success factor.
When CSF’s emerge, there is always a “logic chain” which runs through from the situational analysis, through your competitive strategy and into implementation. CSF’s always drive one or more Key Performance Indicators and ultimately you can see the connection to financial outcomes. Jim Collins described this in “Good to Great” as the “X-Factor”. A long time before Simon Cowell launched the game show of the same name.
Most businesses will have 1 to 3 CSF’s at most. We initially tell ourselves that everything is critical. But in truth it is not. There are one or two aspects typically that really drive success. Often these activities are important but not urgent. They can be crowded out by less important but urgent activities. We as business leaders need to ensure they do not get pushed back to next month, next quarter, next year and on into never, neverland.
We can do this by starting our action planning with our CSF or CSF’s. Using the action plan template below we can set up our implementation to focus on CSF’s from the start.
Now this bit can be quite controversial so hear me out before you move on to something else. Your action plan should focus on CSF’s almost exclusively. In short, this means our aim is that you will spend most of your time working on the things that are most important in your business.
This makes sense, right? We already decided the CSF’s are “Critical to Success”. So, you would naturally spend most of your time on them?
And yes, there are hundreds of other things you and your business must do in order to operate safely and legally. As we have said these are often urgent. However, let these activities be planned out in the action plans of others in your organisation, by your senior team for example. And I know by now you are thinking, what senior team? And if there is a senior team you are probably thinking I cannot leave them to do everything else on their own! They are not competent or experienced enough, or they do not have the right attitude. I cannot trust them to do all these things the way I do them.
Even if you don’t have anyone else in a senior to team to help you yet, create an action plan for the “Marketing Manager” or the “Financial Controller”. Then when the opportunity to recruit or delegate these activities does come along, you will be much more likely to see it and take it, if you have been thinking this way.
So, back to the action plan. Set out your one to three (maximum) CSF’s as short, bold statements. For example “Get More ‘A’ Grade Customers”, “Achieve Operational Excellence” or “Measure and Enhance Customer Impact”. These punchy statements describe actions and will link clearly with your competitive strategy statement.
They should become part of the culture of your business you should hear them being discussed on a daily basis. Everyone should know they are important to the organisation and that progress in these areas is a focus.
Once all of your CSF’s are in place we now set the Goals for each CSF. There will be one or more Goal which describes where you want to be in, typically one, two and three years’ time. Goals should be specific, stretching descriptions of the success you most want in this area. For example, linking back to our CSF of “Get More A Grade Customers you might have a Goal to “Increase A Grade customers on annual contracts from 30 to 45 by 31st March 2021.
What’s the Point of Goals?
Professors Edwin Locke and Gary Latham, two of the most recognised academic researchers on goal-setting, reviewed and summarised 35 years of research on goal setting and concluded that:
- Setting specific, difficult goals consistently leads to higher performance than just hoping or even urging people to do their best.
- High goals generate greater effort than low goals, and the highest or most difficult goals produce the greatest levels of effort and performance.
- Tight deadlines lead to a more rapid work pace than loose deadlines.
- Making a public commitment to a goal enhances personal commitment.
- Whether the goal is set by mutual agreement or by the boss alone doesn’t make a big difference in goal achievement.
(American Psychologist. 2002)
What’s the Point of Goals II?
In 1933 at the height of the ‘Great Depression’ and the ‘Dust Bowl’ US President Franklin D. Roosevelt made the following statement on goals in his “First 100 days in office” address to the nation. This followed much criticism that the goals and promises of his “New Deal”, on which he was elected, were too stretching. He said,
“Yes, we have set goals, even in the face of what seems to be overwhelming adversity, and we will stick to them. Or else why should anyone strive to achieve anything? Without these goals we might as well all go and sit in the dust together and watch our people slowly die. Our ‘New Deal’ programme is a goal for a new America.”
I’m stressing this point because the way you, as the business leader, set Goals is an important message to your team. And it directs and focuses their efforts where you want. On balance, the evidence suggests that being bold and stretching and communicating the importance of these Goals with real leadership can lead to better results.
Especially where these company level goals are “cascaded” down to the level of your teams and individuals, and even linked to rewards.
For every Goal there should be at least one Key Performance Indicator, KPI, which you will use to measure and report actual performance against this Goal over time.
Once your Goals are set out, we now determine our “Tactics”, these are the top-level approaches to achieving the goal. They might be key projects, enabling aspects or ongoing delivery of some key activity. Tactics may often relate to the work of specific teams or areas of your business. Essentially, they help us organise activities in groups or themes that make sense. These are typically simple descriptions.
“Actions” are the specific steps needed to achieve the Goal and must include: Who is responsible? When it will be completed or next reviewed? What resources or budget are allocated? And how you will measure it? (Key Performance Indicator). The resource area may include recruitment, team development, personal training or support from you as well as the more obvious financial and physical resources such as budget and machinery.
At this point we have a first draft Action Plan that integrates with our strategy. Great!
I usually do ‘Action Planning’ using this template on flip chart paper on the wall. And at this point what’s in front of you may be overwhelming?
It is important to remember to delegate down those goals or tactics and actions that other people or teams will be responsible for. And also, to move Tactics and Actions into later years depending on the resource available.
It is vital at this stage that the action plan in front of you is clearly enough to deliver your competitive strategy and the results you want from your business in the year ahead. But it must also match with the resources and budget available. Being focused often requires us to quieten our natural urge to work on many different things. Being patient and focused on the Actions that link to your CSF’s will build traction and you will see progress.
So, Job Done. Right?
Well no, you now have an Action Plan. A piece of paper?
“Making it Happen” or “Action Doing” is a whole different world.
Communication, leadership, aligning people, anticipating, identifying and resolving barriers, monitoring performance and reacting, not too soon, but not too late. Are all challenges we are about to face.
Other Articles in our Rescue, Recovery, Reinvent Series:-
Article 1 – Businesses That Plan Do Better
Article 2 – Business Strategy, Why Bother?
Article 3 – The Importance of Purpose, Vision and Values
Article 4 – How to Predict the Unpredictable
Article 5 – Sh!t Happens