“Battles are won by the power of the mind” ~Napoleon
I’ve wanted to use this quote in a blog since I discovered it about a month ago. It’s similar I believe to legendary Alabama football coach Bear Bryant’s, “It's not the will to win, but the will to prepare to win that makes the difference.”
Execution is the discipline to carry out your success plan. It’s delivering on the priorities you’ve determined are critical to your success. It requires discipline, specifically Strategic Discipline as we describe it in our Positioning Systems Winning habits formula.
We’re examining the Four Decisions Growth Tools Gazelles Coaches and Positioning Systems provide for our customers in growing your business. The decisions you must get right or risk leaving significant revenues, profits, and time on the table. These four decisions are: People, Strategy, Execution, and Cash.
Decisions Equal Success! Getting the Execution Decision right yields higher gross profit margins and above industry standard net profit.
Today we continue with Execution Growth Tools with two that particularly require the discipline of preparing to win: Annual and Quarterly Planning. You’ll find several links within these discussions that can provide more information on each including sample agendas we follow for our work with customers.
Annual Planning: Look at column 4 on the One-Page Strategic Plan. Notice the 3 sections (goals, key initiatives, critical number). The first 2 sections are similar to the 3-5 year column (column 3), with the numerical targets in the first sections and the key improvements/non-numeric goals in the second section. The plan is laid out in a manner that allows you to read it from top to bottom (all of the items in the annual plan column should fit together), and the plan can be read from left to right (the annual plan in column 4 should support the 3-5 year column).
Look at the first section where you will store the numerical targets for the year. The left column of this section of the plan contains a list of metrics that are commonly used (revenue, profit, etc.). However, there’s nothing forcing you to use these particular metrics. If there are other metrics that are of higher priority, feel free to change the list of metrics on your version of the One-Page Strategic Plan. The blank column to the right of the metric descriptions will allow you to record the numerical target that you are trying to achieve this year.
Build your top 5 annual priorities: the 5 most important things you wish to get done that make a difference in growing your business this year. You don’t have to make it five, but don’t exceed that number. Less is More. Better to choose three priorities for the year and achieve all of them then to have selected five and only achieve one or two.
The preferred methodology is: Individually, draft what you feel are the top 5 priorities (initiatives) for the year. Then, collect and post all your priorities from your leadership team, group them, and see which drafted priorities have the most energy (as determined by the number of leaders that suggested the priority). Then spend time discussing and collaborating to finalize the top 5 annual priorities. Remember, a priority is a project that you can begin and complete in the year’s timeframe, it has a clear and measurable “finish line,” and its accomplishment will be cross-departmental.
Once you’ve determined your top priorities, determine who is accountable and when, by quarter, each is to be completed. You may have some that carry through the whole year or through several quarters. Doing this preparation now you can begin to visualize the year and have a good vision in place for which quarter each priority should be attacked.
Quarterly Planning: Quarterly planning is similar in process to annual planning, but the timeframe is condensed. Quarters go by quickly when you set aggressive plans. Every quarter is a 13-week race. We all have the same amount of time, we need to maximize its use.
Having a strong quarterly plan in place before the beginning of each quarter is essential for success. During the quarter, if you do NOT view your quarter as a 13-week race, you will lose weeks and time which you will NOT get back.
Look at column 5 of your One-Page Strategic Plan. This section contains your quarterly plan. Since the format is similar to the annual plan, we will take you through it quickly. Notice the 3 sections that are consistent with the annual plan. (Download the One Page Strategic Plan to get a better view of this.) The first section that contains the numerical targets works the same, with the left column containing the metric description and the right column defining the desired numerical target. Again, there is nothing forcing you to use the metrics suggested on the plan. The metrics in the quarterly column are usually the same metrics you used in the annual column, but you can make them different if you have a good reason.
In the next section, the rocks, write a summarized description of the key improvements for the quarter. In the second column indicate the person accountable for each rock. The last section, the critical numbers, is consistent with the same section on the annual plan. The quarterly critical numbers CAN be the same as the annual critical numbers, but frequently they are different to drive a quarterly priority.
Are you clear on how to fill out this column on the plan? If not send me an email: [email protected] to request help.
Just like the annual plan, the 3 sections of the quarterly plan should all work together. Work down the column sequentially to start and then work to improve any section to fine tune the plan. Before you begin your quarterly plan, it’s a good idea to review the annual plan that you just completed because the quarterly plan should serve as the best next step to accomplishing your annual plan. Start the quarterly plan by establishing your numerical targets in the top section.
Take time to write down your numerical targets for the quarter. Make sure your team is aligned around your quarterly numbers. Remember, quarterly targets should support the company’s annual numerical targets.
Once you have established your numerical quarterly goals, begin working on your rocks, the key improvements that you want to make to the organization. Brainstorm and develop a list of priorities for the quarter (you can brainstorm as many as you can think of, then carefully select your top 3-5 – don’t just take the first 3-5 that come to mind). Many of the quarterly rocks should support your annual key initiatives. Take time to brainstorm and carefully choose your rocks for the quarter. Remember to assign an accountable person for each one.
The next step in the quarterly planning process is to think about your critical number for the quarter. Ask yourself “To achieve our numerical targets and rocks, what should be the focus for this quarter?” Then ask “How will we drive that focus?” Find the 1 number that the company needs to meet or surpass. Then apply target levels (Success Criteria: red, yellow, green, super-green) to the performance of the critical number to make it real. Let’s spend some time right now defining our critical number.
The next step is to create a counterbalancing critical number. What is likely to go off the rails if we over focus on the critical number we just selected? What do we need to measure to make sure that we stay on course? Once you have developed your counterbalancing critical number, apply target levels (Success Criteria: red, yellow, green, super-green) to the performance of the counterbalancing critical number. Make sure you take time to find a counterbalancing critical number.
The final step is to review the plan (numerical targets, rocks, critical numbers) to make sure each section supports the other sections. Take a few minutes to review and make final improvements to the quarterly plan.
In most cases, you will build a quarterly theme, reward and celebration around the quarterly critical number. There can be a few rocks that are not connected to your theme – that’s OK. However, focusing on the critical number and the key rocks help us to drive accomplishment. Things are connected and easy for people to understand. If you are getting excited about having a quarterly plan, that’s great – how can we get everyone else on your team excited? That’s where themes come it.
eNPS: According to a blog post by a Gazelles International Certified Coach, a recent McGill Institute for Health and Social Policy study published by the Harvard Business Review reports that no matter what the size of your business the way you treat employees at the lowest rungs of the company ladder can have a positive impact on your bottom line.
Results demonstrated that in most businesses, front-line employees drive 90% of the profits. By increasing employee engagement you can cut staff turnover, find cost savings, increase productivity, and increase profits.
Net Promoter Score (NPS) has been extended and used internally for companies to measure employee engagement and satisfaction too. Similar to client-facing NPS, eNPS is a simple, one-question approach and is being applied by companies worldwide. When considering your balanced metrics, using eNPS as a KPI should be considered.
To complete the Execution Decision we still have Themes, Individual Plan, and Dashboards which include Success Criteria. We’ll discover these in our next blog.