Question: Why do most businesses fail?
Why do you feel businesses fail?
Read Execution Irony – Will Your Business Fail Due to Poor Execution?, Execution or Bad Choices – Why Do Businesses Fail for a quick refresher.
The Answer is: Poor Decision-Making. In our Rockefeller Habits coaching principles these can accounted for in one of Four Decisions: People, Strategy, Execution or Cash.
So what should you do if you haven’t engaged yourself and your team in annually planning yet for 2014?
Do it. Now, or just as soon as you can.
Two quotes remind me of the importance to plan and put my plan on paper, “All Great minds think on paper.” and "Until you commit your goals to paper, you have intentions that are seeds without soil." That’s not the only reason to plan and document your plan. As a Senior E-Myth Consultant for ten years from Michael Gerber quotes resonates, “Documentation is an affirmation of order.” And “Businesses that plan always do better than businesses that don’t. But business that change their plans are always more successful than businesses that plan but don’t change them.”
As we discussed in this blog previously, planning is not enough. Planning must include strategizing as well. As noted in Missing Element in Annual Planning, too many businesses plan their year, but fail to recognize the importance of strategizing as well. This includes at a minimum an updated SWOT, a review and affirming of your strategy elements in the One Page Strategic Plan, and if you desire to move from good to great - reviewing and beginning the process of identifying your Seven Strata of Strategy.
Consider hiring someone like a Gazelles/Rockefeller Habits coach to facilitate your Annual Planning meeting to ensure what you include is robust and dynamic to meet or exceed what your competition is doing.
If you don’t make the commitment to plan you will be suffocated by the Whirlwind (Without Top Priority “Whirlwind” Wins). The urgency of today always wins out over the need to plan for tomorrow.
While decision making is the number one reason your business will fail, it’s hardly the biggest reason most business fail to plan or incur challenges with the planning process. Most issues revolve around executing the plan. Why plan for another year when each year your plan disintegrates into mush. You fail to gain traction on any element you plan to achieve, resulting in disappointment, reduced motivation, and lower levels of morale. It’s excruciatingly painful to plan and flounder year after year.
It’s not just when you plan, or putting it on paper, it’s executing your plan. Having the proper attitude is critical: If you expect your outcomes to be good, your attitude will be good. If you expect your outcomes to be bad, your attitude will be bad.
While executing is secondary to decision-making for business failure, in order to have time to make good decisions, execution is essential.
Positioning Systems fundamental principles of Strategic Discipline provide the impact to succeed.
How well is your business executing? To score yourself/company download the Rockefeller Habits Checklist. Review the story of Alan Rudy and view his video.
If you wish to discover the level of discipline within your organization, Positioning Systems has an on-line form you and your team can fill out to collect your scores. We’ll send the results and average score of your team. Send me an email, include your company name (we’ll use this as a key to set up your link) and the number of team members who plan to participate. We’ll send you an Internet link to visit to enter your scores. When completed we’ll send you everyone’s individual score and the average score for your company. We promise to keep your results confidential.
Positioning Systems also has a One Page Execution Guide to help you understand and implement the principles of Strategic Discipline. Click here to download it.
Perhaps the greatest impact for developing a powerful execution plan is to determine your ONE THING. When choosing your priorities for the year and for each quarter you should always determine which of them would have the greatest impact on your business. The power of focusing on ONE THING brings powerful clarity to your people. It makes it clear what’s most critical and moves everyone in one direction collectively. Creating a theme to visually chart your progress, rewarding and celebrating achievement provides powerful forces to help keep your team concentrating at a high level.
Let me offer a testimonial from one of my clients as evidence of how powerful the ONE THING focus can be. At Fleck Sales, a beer distributing company, there One Thing was to reduce their beer return rate by 35%. Mike Schulte, Vice President of Sales, “In 2013, in addition to growing sales dollars and market share, we cut our return beer rate (ROR) by over 35%. Nearly $600,000 less beer was double handled and brought back to the warehouse by your efforts. This improvement drove the revenue and gross margin numbers up, as well as helped considerably in reducing warehouse, merchandising, and delivery costs.”
Poor decision-making leads to business failure. If you’ve not put together an annual and quarterly plan that’s poor decision making. Failing to execute on your plan can be another poor decision. There’s no reason you have to fail executing your plan. Let us know if Positioning Systems can help. An opportunity to learn how to effectively strategize and execute effectively is coming in our Four Decisions Workshop scheduled for April 29th in Cedar Rapids, Iowa. Watch for details soon.
Finally another reminder from Patrick Lencioni on the need to plan and put your plans on paper, “Without committing to a clear plan of action, even the most focused and driven people often hesitate to call their peers on actions and behaviors that seem counterproductive to the good of the team”
Part of the planning process with Positioning Systems and Gazelles coaches is to review the past year or quarter. I recently received a disappointment in a prospecting call that provided an opportunity to review what I should have done better. Do you review your business progress and mistakes frequently? We’ll discuss the value of reviewing success and failures next blog.