Death of a Plan
How is it that so many well-educated business people struggle with planning?
And why do so many intelligently designed plans die a slow death?
Here's typically where the wheels fall off the wagon.
A bunch of smart executives select a gorgeous resort. They block off 3 days for a strategic planning session. Some facilitator waltzes in with the best of intentions.
People go to their happy flip chart place. They walk out with a set of goals for everyone to follow. They even give them a name: "SMART goals."
Then something happens. People get distracted. Their "crackberries" are buzzing, vibrating, and pulling them in other directions.
The plan becomes a distant memory. It dies.
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My Dad, Ed Lizotte |
The feeling of loss is not unlike my grief when I visited my Father for the last time. Two weeks ago, I traveled to his home in Naples, Florida.
After we transported him to hospice, he told me, "I'm ready to go." I must say that it wasn't a surprise. Everything leading up to his last rest stop told us this was coming. For the past six months, he lost interest in socializing. Grooming became a challenge. He stopped paying his bills.
Even though Dad had survived two bouts with cancer, a brief boxing career in the Navy, and a lengthy tour of duty during World War II, he lost the will and the strength to stay alive.
Dad passed away on May 27 at age 84.
Much like the loss of a loved one, letting go of things that no longer serve us in our lives requires a lot of courage and stamina. It requires us to make tough choices. My brother and I made the tough choice to move Dad to hospice and allow him to fulfill his wishes.
Over the last 24 years, I have seen hundreds of companies shift from high growth to slow death. And their behaviors are not much different from my Dad's.
One of the most damaging behaviors is the chronic unwillingness to "stop doing" certain activities, or to let go of resources and activities that no longer serve us.
Perhaps you have seen them in your own company during your growth spurts. They may be poor paying clients, non-performing employees whom you just can't find the time to coach or reprimand. They may be unreliable vendors or unfulfilling banking relationships. Or, you may have old assets that you keep forgetting to retire. The list goes on.
You may think to yourself, "I really like my assistant as a person. We have socialized together for years. Maybe she will turn the corner. Besides, I'm really busy focusing on more pressing matters right now." Maybe you have convinced yourself that "this bank is the oldest one in our community. It's just a hassle to change banks at this stage, even though they never offer me favorable terms and treat me like a number."
(You can learn all about ‘stuck in the mud', slow growing banks in our exclusive Special Report:
http://www.energizegrowth.com/store_new.shtml
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Lisa celebrating her "stop doing" list |
This behavior is you inviting your company's demise.
At some point, the cost of holding onto these costly resources and habits will far exceed the cost and temporary hassle of releasing them.
My client Jacque tempted her company's demise for the past few months—even though her business and client base had doubled. Jacque owns a consulting and recruiting firm that helps beauty business owners increase their profitability by reducing their time to market and increasing employee productivity. The good news spread fast. Since joining our Action Group, she began communicating those results so effectively that clients started flocking to her.
Jacque did not prepare for the onslaught of additional work and administrative burden. Her office became disorganized. Her email volume exploded. She found her new website design project demanding. Creating time for her family became more and more challenging.
Within just a few weeks, her passion for her work began eroding. Jacque quickly realized she had only a few choices. She could either: a) ignore the problems and keep moving forward, or b) slow down, take stock of what was happening, and make adjustments.
Thankfully, Jacque chose the latter.
She made a list of every activity she managed. It was a long list! In the left column, she ranked each activity on a 1-10 scale. This scale reflected which activity she liked the most (10) and the least (1). Then she determined which activities supported her values the most, and which supported her values the least.
For any activities that scored low on either scale, she would assign one of three action steps:
- Drop the activity altogether.
- Delegate the activity to someone who enjoys it, and does it well.
- Delay it for now; re-visit in 1-3 months.
Great things began to happen. When Jacque shared her list with her husband, Bill, he was fully supportive. Then she made specific requests to her business colleagues and friends. Everyone offered to help her while she recruited part time assistance. Her girlfriend agreed to come by once a week and handle housekeeping activity. And the list goes on. Within 48 hours, every low value, low passion activity was handled.
(You can learn more about Jacque now – listen to her 2 minute story):
http://energizegrowth.com/AdvancedGroup1/Jacquesuccess.mp3
This may sound like a simple task. It is. However, it's not easy to ask for help and say "no" to non essential tasks.
Most entrepreneurs pride themselves in doing virtually everything themselves. And, much like a loved one, their business dies a slow death. Often, they are not as fortunate as Jacque to catch it early, when cash flow is still positive.
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Lisa taking time to reflect in Hell's Canyon, ID |
Even business author and greatness guru Jim Collins warned us about this business malady in his timeless book, "Good to Great:"
"Most of us lead busy but undisciplined lives. We have ever-expanding ‘to do' lists, trying to build momentum by doing, doing, doing—and doing more. And it rarely works. Those who built the good-to-great companies, however, made as much use of ‘stop doing' lists as ‘to do' lists. They displayed a remarkable discipline to unplug all sorts of extraneous junk."
Delegating, delaying, and dropping non-productive and non core activities and projects are preventive medicine. They are a path to eliminating busy work and excessively lengthy "to do" lists.
Here are some low-cost steps to avoid business demise:
- Ask your CPA or bookkeeper to run an analysis of your most profitable clients and projects. Then develop a (gulp) strategy to eliminate the bottom 10 percent of your client base. Your bottom 10 percent can be defined as:
- Clients who refuse to provide you with referrals
- Clients whom you believe have initiated or participated in unethical behaviors
- Clients whose values are much different than yours
- Clients who take more than 30 days to pay—even after repeat requests
- Clients who challenge you on every request, suggestion, and recommendation
- Clients who constantly haggle on your fees
- Clients who are unwilling to contribute a testimonial or case study
- Invest in a survey that compares your company performance against your competitors. I use ProfitCents with our clients. It is an excellent tool for this analysis. You can learn more here:
http://www.energizegrowth.com/consulting.shtml
Whatever you choose, select an analysis tool that has the ability to evaluate several key areas of your business. For example, ProfitCents prompts me to enter data from my client's financial statement into the software application. The software then analyzes the financial data, and processes the data through its patented algorithm.
In less than one minute, the software generates a report in plain English. Using a five star rating system and clearly organized summaries, this report assesses my client's long term health through several lenses, including sales, liquidity, profit margins, assets, employees, and rate of borrowing.
Here's another benefit. The total time required to input your financial metrics is less than one hour. I usually require no more than two hours to review the results with you.
- Invest the next 90 days clarifying your core strengths (Jim Collins calls it your "hedgehog.") If you are a larger firm, you have multiple/global locations, or have been doing the exact same thing for decades, this may take longer. Bring your top advisors together. Some may be suppliers, business partners, team members, and clients. Gather their input. Ask them what makes you great, what makes you unique, and areas you can expand upon in the future. Be prepared to agree to stop doing unproductive, less profitable projects.
It's mid-year. Now is the time to take stock in your healthy projects and put your dying projects to rest. These steps will help.
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