What is the Difference?

Kids are going back to school, we are in the hot belly of late summer, and we are wrapping up summer vacations. On the business front, that means fall is around the corner. And with fall, the discussions about closing out this year strong and strengthening business performance next year begin. Like most things of value, business growth is rarely a last-minute push. It takes forethought and planning along with diligence to make it happen. To achieve a strong year requires we have a good solid plan in place, and if we want even better results next year, we need to think about what we are willing to do to make that a reality.

As you think about planning for next year, start with choosing which question you want to answer: Do you want to improve your performance? Or do you want to reach your potential? What is the difference?

Improving your performance implies that you have a solid foundation, a good strategy in place and want to see improvement in specific areas of performance leading to better overall results. Generally, it yields incremental improvements measured in percentage points year over year. Typically, the action items are tied to a budget and the budget is usually a tad higher than last year to cover inflation and perhaps a small investment the desired results will cover.  Since it is linked to budgets it is likely to be a one-year plan. It is often a list of projects submitted by each department and then priorities are set to determine what to cover. Some companies don’t do a plan before the budget but request budget submissions to identify the projects. While every company does need to do a budget, doing so outside the context of a strategic growth plan can often yield disappointing results. How do you know where to spend money if you don’t know where the business is headed long term and what capabilities, products, or services are necessary to achieve it? Essentially, this is an annual operating plan.

Identifying the potential of an organization is not an annual process but it is an important precursor to it. Hard data helps an organization consider the longer-term goals of what is possible if capabilities are leveraged and linked to market trends that provide opportunities. It requires putting aside what is “typical” and asking what the organization has the potential to be. That is followed by a clear definition of where the company is going, its strategic direction, and how that will transform the company in 3-5 years. Then, and only then, is a company able to identify how to get there in terms of resource allocation, investment, and capability development. It is harder work, but the benefit is that the result can be 2-5x growth rather than eking out percentage increases year to year with essentially the same assets. Changing the question changes the results. When leaders start asking different questions, projects become more meaningful and synergistic, and growth outpaces the current trajectory and yields profits that can be reinvested.

So, if the results are that much better why don’t more companies do it? That is the $74 million question. First, they don’t believe it is possible. Second, they don’t know how to do it. Third, they haven’t seen other companies have that kind of success. Most strategic plans fail. Yes, over 70% fail to produce intended results. Why? Because they are often mistaking an operating plan for a strategic plan. They don’t have a robust enough approach to ask the hard questions or rely on data to identify opportunities.

Here is one client’s story. This client is a manufacturer with a stable customer base and a high service component. They were doing well by industry standards. Leadership wanted to keep that going and wanted to establish a strategic plan. They shared their current plan. It was submitted by departments, as noted in the paragraph describing an operational plan. After reading their plan, we discussed why that plan was creating the kinds of issues they were experiencing. While I am not a mind reader, the challenges aren’t unique—they are symptoms of not having a clear strategy and are widely experienced. They decided to engage in GrowthDNA™ strategic planning. After the plan was complete, which was not all smooth sailing as it challenged current practices and some legacy principles, the forecast was 2x growth in three years. I didn’t create the forecast, they did.

While we chatted off and on over the ensuing three years, I received a call to meet for coffee and have a more detailed discussion almost three years to the date of the plan development. The CEO told me two things. The first is that the one thing they found the hardest to change has brought them the most success and they need to do more of it; take it to the next level. Secondly, they hit their forecast within a decimal or two from three years ago. They doubled. The CEO told me that he asked the group if anyone believed they could hit the forecast and they all replied no, including the CEO. But they did the work. And the results were achieved.

If you would be interested to know more about how to grow 2x over the next three years, there is no better time than now to get started. Here is a video that may help you ask the right questions about what to consider when hiring someone to help you.

Feel free to reach out and let’s talk more about your company, your needs and whether GrowthDNA™ strategic planning is a fit for you!

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