Implementing and Sustaining Your Business Plan T his chapter describes how you implement and sustain your business plan. It suggests how you can assemble the plan from different levels, initiate the plan, and provide sustaining activities. These are the third and fourth steps in the four-step plan (see Figure 12-1) that began with preplanning and planning activities. Included in the implementation phase are suggestions for measur- ing the performance of your plan. 323 CHAPTER 12 One of the key steps for implementing the plan is the removal of heat loss or organizational inefficiencies inherent to any system. This chapter provides the steps for you to successfully map and cor- rect any deficiencies. The chapter concludes with information on conducting orga- nizational change activities, along with suggestions on leadership and managership skills development. For the plan to succeed it must be implemented by people with the basic skills of leading and managing the workforce. Seven Steps to a Successful Business Plan 324 Figure 12-1. The implementing and sustaining phases must work together in a seamless flow to ensure execution of the plan. HOW TO IMPLEMENT YOUR PLAN The implementing period begins with a consolidation of the vari- ous levels of plans. Once your subordinate planning teams have taken the planning details of Level 1 down to Levels 2, 3, or 4, they must be reassembled to ensure plan continuity. To do this, schedule a one-day conference with representatives from each team where they present their own supporting plan and display their interpre- tation of the concepts. The idea is to cross-check the viability of plans across a single level, then roll the information upward to the next level. If the teams have properly followed the provided plan- ning templates, the plans should fit together with minimum adjust- ment. If one subplan is out of alignment, that particular planning team must go back to adjust its targets, objectives, or goals. If the plan fits together at Level 1, implementation begins with a communication from top management to execute tasks found in the action plan initiated according to the schedule. This leads to the most important part of implementation—the use of perfor- mance measurements. Monitoring Your Plan to Ensure Compliance Your plan should be monitored frequently to make sure it is being implemented in the spirit and intent of the planning conference. Some businesses in certain situations elect to monitor their progress or success on a weekly basis. This is probably appropriate for oper- ational levels in an organization. For example, in a manufacturing environment you may choose to monitor daily and formally report weekly. Some organizations choose to report on a monthly basis. Tracking sales monthly is a common example. The minimum length of time allowed without formally checking your plan is a quarter. Reporting results on a quarterly basis is the most accepted business practice for performance measures. The framework is con- sistent with financial reporting, shareholder expectations, and pub- lic acceptance. I recommend this as your minimum reporting schedule (see Figure 12-2). Implementing and Sustaining Your Business Plan 325 The fourth point of monitoring your plan is the annual report. At the end of the fourth quarter you need to look back at the four quarters collectively. The past year is compared with the previous year and projected out to the ten-year plan. This gives you a base- line to begin planning for the next year or repeating the one-year operational plan. The results are published in the annual report. Companies spend a lot of money and effort writing, publishing, and distributing their annual report. You may make the report sim- ple or detailed, depending on your desire and intent. In establishing the next operational plan, year two of the ten years, repeat the process of setting tasks as you did with the first operational plan and the related action plan list. Each year you Seven Steps to a Successful Business Plan 326 Figure 12-2. The implementation period is characterized by quarterly reviews. A full review and update of the plan is conducted in the fourth quarter. rebuild your operational plan based on what you are trying to accomplish in the one-year period against the ten-year goals. This means your plan’s time span is getting shorter each year. The com- mon trap is to also extend the life of the business plan by one year—always keeping a ten-year time frame. This is dangerous because you fall into the trap of strategic planning creep. Allow your plan to perform or mature for a number of years before you move the ten-year goals. My clients seem to get three or four years completed on their ten-year business plan before they move the end goals. This allows them to check assumptions, qualify the accu- racy of their numbers, and measure their sustained performance. The recommendation, therefore, is to let your plan run a few years before radically shifting goals. Minor adjustments are necessary and acceptable, but don’t abandon your goals and plans in the first year. Tracking the performance of your plan is easy. The numbers can be tallied. The actions can be checked off for completion. The real problem with performance is not measurement but rather accountability. What do you do when the plan is not being ful- filled? Investigate the reasons for not hitting the targets carefully before you take action. Consider these questions: ■ Is it normal statistical deviation? No one can accurately pre- dict where your performance will fall on a projection chart. The plan may be off because of normal statistical deviation, or what is called the zig and zag. The issue is how far off you are from where you wanted to be. Is 5 per- cent deviation (i.e., a subjective percentage you set) acceptable? Can you live with 10 percent deviation? If the deviation is not in the end acceptable, you must go back into your plan to look at the data. Reexamine information such as sales projections, costs of doing business, and prof- it margins to find the source of plan failure. Make correc- tions accordingly. Remember, shortfalls are compounded. The further you get behind the further you get behind. The efforts to catch up expand exponentially. Implementing and Sustaining Your Business Plan 327 ■ Is it a failure of the management team to implement? This is the most common cause of plan deviation. Repeatedly I find teams not fulfilling promises made in the action plan. Once the planning session is over, business as usual pre- vails. The individual or team doesn’t follow through with commitments. The antidote for individual failure or non- compliance is to tie the results of the plan into your per- formance reward program. People have a tendency to do the things for which they are rewarded. Consistent failure to perform takes on a whole different meaning that begins with coaching, progresses to performance counseling, and finally ends with termination. The sooner you legitimate- ly get rid of nonperforming management, the greater your chance of hitting your targets. Measuring Everyone Against a Business Performance Model There are three levels of performance you must consider when for- mally tracking your business plan (see Figure 12-3). The perfor- mance is tied specifically to the annual targets of the business plan. This standard keeps each level focused on doing mission-essential work, not extraneous, fun activities. These levels are: ■ Level 1. Organizational performance (business plan track) ■ Level 2. Team performance (business plan track) ■ Level 3. Individual performance (performance review pro- gram) Seven Steps to a Successful Business Plan 328 Figure 12-3. There are three levels of performance that must be tracked against the business plan. They are organizational, team, and individual. All lead to the strategic goals. At the first level of performance measurement the company as a whole must be held accountable. This demands command responsibility. Managers are responsible for all that their units do or fail to do. Performance measurements are not complex at that level. The question is simple: Did the company hit the plan it estab- lished? If yes, the organizational performance is acceptable. If the answer is no, then excuses are not acceptable. If a company fails, then the president must be responsible and should answer to the board of directors for his or her failure to provide appropriate lead- ership and managership of the organization and its plan. It is that simple. Likewise at Level 2, managers are held accountable for their teams using the same command responsibility concept. The vice president is held accountable for making the sales figures or the research and development vice president is responsible and accountable for bringing new products in on schedule. Vice presi- dents answer to the president in the same fashion as the president answers to the board of directors—no excuses. Their appropriate bosses likewise hold other team leaders such as plant managers accountable. Level 3 performance is the individual measure of what is done and how well it is done. The performance review items normally found in human resources documents must accurately reflect the actual tasks the individual does each day to accomplish the annual targets. Again, no extraneous work should be allowed. The key is a fully qualified individual focused on mission-essential items. The business plan must include provisions for leadership and manager- ship training to fill expected skills shortfalls. Don’t ask people to do jobs they are not trained to do without providing them support. This training is looped back to the performance review system. How well were the lessons learned in training applied to perform the job? This criterion ties any company training activities to the busi- ness plan, prevents training for training’s sake, and makes account- ability for skills integral to the individual performance review. Seven Steps to a Successful Business Plan 330 Establishing Two Types of Standards of Performance To successfully implement processes at the three levels, manage- ment must set and maintain its standards. This is a stabilizing fac- tor in any organization. There are certain performance levels that must be held constant. In widely fluctuating situations it becomes difficult to know what performance factors are satisfactory and what are unsatisfactory. Management must improve its standards. Standards are not fixed points or objectives, but rather the start points for doing a bet- ter job the next time. Once performance is fixed in place with the maintenance of standards, improvement begins. Two types of standards exist: stabilized and evolving. Stabilized standards are the standards that tell individuals how their perfor- mance is measured. Goals and objectives usually contain standards. This helps provide stability to the work situation. As the stabilized standards are met and improvements in the workflow occur, the standards are shifted upward. These standards are said to be evolv- ing as the system becomes fine-tuned. There can be no improve- ment (the ultimate goal of process mapping) if there are no stan- dards, they are not disciplined, or they are not allowed to evolve. Standards carry certain characteristics that help the organiza- tion form, shape, and project consistency in its story. These may be found in company documents such as the Standard Operation Procedures or policy manuals. Too few standards are a lack of disci- pline while too many standards could become overwhelming. Seek a working balance. The standards should have the following char- acteristics: ■ They become the individual authorization and responsi- bility to carry out work. ■ They are transmittal vehicles of individual experience to the next generation of employees. ■ They communicate individual experience and know-how to the organization. Implementing and Sustaining Your Business Plan 331 ■ They demonstrate an accumulation of experience within the organization through their evolving nature. ■ They deploy know-how from one department to another. ■ They serve as a mark of discipline for the organization. HOW TO SUSTAIN YOUR PLAN: THE FOUR PLAN ASSURANCE ACTIVITIES Your plan cannot be launched without support in the background. There are at least four support areas (see Figure 12-4) for the suc- cessful implementation of your plan. They are: 1. Business Process Mapping 2. Organizational change management 3. Leadership development 4. Management development First you must clean up any organizational inefficiency found in the processes. This is done through Business Process Mapping (BPM). Don’t delay the implementation of your action plan until the process improvements are completed because they will never be finished and must be seen as ongoing initiatives. The BPM can and should run concurrent with your plan implementation. A number of organizational change activities may also take place to support your plan. They may include activities such as restructuring the organization, an acquisition for growth, or restruc- turing the debt burden. Strategically realigning the resources and core competencies may be other examples of the organizational change necessary to support the future direction of your company. Leadership and managership behavior must also be aligned with the plan. Little is accomplished by establishing a vision if lead- ership is remiss or by setting bold goals if the skill of managerial efforts is lacking. Actions for improving leadership functions and management behaviors necessary to match the plan requirements must be carefully programmed. Seven Steps to a Successful Business Plan 332 [...]... steps: Implementing and Sustaining Your Business Plan 347 1 Make sure the business plan is complete and reaches to the lowest level of the organization Participation of all levels in the planning model eliminates misunderstanding and dampens fears 2 Make sure the final plan is communicated to the operator level A plan that goes on the shelf or is not heard from again is designed to fail The employees... So far we’ve covered two of the four plan assurance activities for the successful implementation of your plan We’ve covered business process planning and organizational change management in some detail The last two plan assurance activities are leadership development and managership development They are grouped together for discussion in this section Leadership and managership training necessary to. .. your management activities? As managers you are always taking care of other people Who is taking care of you? Get away for a few days and give thought to what you need to do to build a story that is believable to yourself first and then to others around you Build your story using the templates I provide throughout this book They were designed for a company business plan, but I have helped many managers... IMPLEMENTING AND SUSTAINING ACTIVITIES By following this suggested sequence of implementation you’ll gain an understanding of how to establish monitoring and measuring steps at required intervals Do the following five steps: 1 Consolidate the plan at Level 1 2 Distribute the plan to all levels 3 Monitor the plan on a regular time frame 4 Make corrective actions to the plan as necessary 5 Update the operational... hundred years To get a company story right you need to first get your management story together How can you lead and manage if that story is a shambles: inconsistent, incongruent, and unbelievable? 353 354 Seven Steps to a Successful Business Plan I’m not going to start suggesting new models for the millennium for two reasons First, there are already enough consultants trying to cash in on that Noticed... closer attention to suspense dates, and better planning It may be too much to carry around in your head or on a few notes in your calendar 4 Major Projects These are tasks of a very large scope and scale They are often large enough to have a full-time project manager The task may be so large that it overshadows your present duties In most cases you will be required to chart or schedule this event as part... advantages of small changes are not sufficient to warrant the continuation of the process If a major or bold improvement is needed, the decision becomes one to reengineer Implementing and Sustaining Your Business Plan 339 Process Mapping as a Motivational Tool At the individual level, process mapping takes on a more practical tone and less of a textbook meaning For decades management consultants have looked... support the business plan is not a universal or blanket program Rather, it is a 348 Seven Steps to a Successful Business Plan tailored approach to focus on the shortfalls identified either in the employee satisfaction survey or during the gap analysis of your principles, values, and philosophy The Two Techniques for Skills Training Two techniques to fill your skills shortfall are the spot approach and the... training activities SUMMARY This chapter was designed to assist you with implementing and sustaining your business plan It included the third and fourth steps of the four-step planning process 350 Seven Steps to a Successful Business Plan THE KEY QUESTIONS: IMPLEMENTING AND SUSTAINING YOUR BUSINESS PLAN Use the following ten questions when preparing to implement your business plan 1 Do you understand... resistance points for any changes you need to make? If yes, what actions have you taken to negate the negative influence of these resistance points? 10 Have you properly identified all the leadership and managership issues found in your surveys or in the gap analysis stages of your planning? Do you know how to fix the shortfalls? Implementing and Sustaining Your Business Plan 351 THE PRACTICAL APPLICATIONS: . first operational plan and the related action plan list. Each year you Seven Steps to a Successful Business Plan 326 Figure 12- 2. The implementation period. tracked against the business plan. They are organizational, team, and individual. All lead to the strategic goals. At the first level of performance measurement