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Blog Post by Deb Dietz
You can’t open a newspaper or log onto your computer these days without reading something about Donald Trump, his views, his opinions or his politics. Regardless how you feel about him as our President, you can’t ignore the fact that he is an extraordinarily successful businessman. He’s written many books which have been best sellers, extolling how he became a self-made man, but many of his business principles are simple and straight-forward; principles learned from such greats as Henry Ford, Napoleon, Confucius, Oscar Wilde, Franklin D. Roosevelt, and even concepts defined in Webster’s Dictionary. Let’s discuss one of Trump’s lessons, “Tempo”. He’s yet to be inaugurated, but he is already moving quickly in starting to solve America’s problems.
“Tempo: the rate of motion or activity” – Webster’s Dictionary.
In one of Trumps discussions about leadership, he talks about the job of a CEO. He said CEOs are business leaders and must act like generals leading an army of employees. But CEOs are also conductors, ensuring the tempo and the team all work well together to ensure a wonderful performance.
This notion of tempo is of critical importance in today’s business environment. Organizations that do not move quickly, that are not agile, will get left behind in today’s competitive landscape. As a leader in your business, would you define yourself and that of your team as “moving quickly”? In conductor-speak, that would signify that your tempo is set at an ‘allegro’ pace. Mr. Trump said his team takes their cues from him, so they work at the tempo that he himself sets. He calls it his inner metronome that keeps consistent time no matter what’s going on around him and his team adjusts to his tempo. It’s also referred to as “being in the zone”. We all know the feeling, when perhaps you’ve procrastinated about a project and a deadline is approaching and all of a sudden you get a spurt of energy, get in the zone, and get the project done. Something takes over and the work evolves.
If you find yourself and your team not working “in the zone”, perhaps you need an adjustment to your tempo-meter, or your speedometer. You can’t achieve your objectives if you’re moving at an anti-allegro pace. SMB Value Partners can support your efforts to meet your business objectives. We can fill in your orchestra with our resources and ensure your team is working at the right tempo!
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Blog post by Deb Dietz
Continuing with our Strategic Planning blog series, this post provides specific steps you can take which provide the information and insight you need to develop your strategic plan. Because data analysis is so critical to business plan development, I wanted to include some additional information regarding the process of data analytics. And that’s the point; it’s a process, not a project. If you are embarking on creating a data-driven business strategy that can help steer your business in the right direction, keep these nine steps in mind:
1. Goal Identification and Project Planning. State the purpose of the analytics – what is the business problem you are trying to solve, its’ root cause and potential cost/benefit impacts. What resources are required, how will you communicate your objectives, and what is your time frame?
2. Data Requirements. What are your data/information needs? What analytics are relevant in achieving your objectives? Have you identified your current state? Have you assessed business risks and evaluated underlying business processes and internal controls? What data is needed to increase effectiveness and efficiencies of business operations?
3. Data Collection. Think internally and externally. What data do you need to extract from internal, potentially disparate, systems? Externally, do you have access to market research findings, economic indicators, market and industry trends, competitive analysis?
4. Data Processing. How do you need to mine and organize the data? Have you considered work flow management processes, and how to best optimize those processes?
5. Data Cleaning. You’re familiar with “garbage in, garbage out”. What internal processes are you/should you undertake that ensures a clean data file? Are you running your lists through de-duping, address-standardization and other data hygiene parameters?
6. Data Analytics. And, here we are. Data Analytics. You don’t just jump in and start here. You have to work through the five steps prior to getting here. This step helps you identify, design and build relevant analytics to answer the business problems you are trying to solve. Are you undertaking quantitative and/or qualitative analysis? Are you undertaking root cause analysis? Are you running analytics and performing an initial validation of results to identify data/logic flaws? Have you built a bridge that translates findings into actionable steps you can take that ultimately become your forward-thinking business objectives and strategies?
7. Communication and Reporting. This is a crucial step to taking the findings from the data analytics and making recommendations to company leadership. How are you representing these findings (tables/charts/graphs, correlations, deviations, rankings)? These findings, translated into potential business objectives and strategies, begin to create the strawman of your strategic plan.
8. Decision-Making. You are now ready to understand and make conclusions from the data. You can begin to design and execute implementation plans. This process can help you manage organizational change, integrating results into your strategic plan.
9. Data Analytics Tools, Techniques and Procedures. What statistical and reporting tools will you use to gather and analyze data? What software do you have available? What database and decision-support capabilities can you use? What are your data-mining capabilities that help you best understand your business, understand your data, and model your data? What reporting mechanisms do you need to develop that help you measure risk and performance via dashboards, scorecards, and reports? And, how will you make this process a continuous process that over time reduces errors and risk and that is refreshed every year as part of your annual strategic planning cycle?
Data analytics is not a simple business task. It is part of an integrated business intelligence process that can steer your organization in the right direction; a crucial step in your ability to develop and implement your strategic plan.
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Blog post by Deb Dietz
n our first Strategic Planning Checklist blog post, “The First Step: Analysis” we reviewed the importance of analysis as the critical first step in the planning process.
In this step, your objectives are to gather, analyze and summarize information, focusing on information relating to the organization’s value proposition, internal factors and external forces likely to impact your short and long-term success. We provided actions steps to take in conducting this review, stating this work is critical before you move into the next phase of the planning process, “Plan Formulation”. Invest your time here before jumping into the following steps which include Action Planning, Execution and Continuous Improvement. Those checklist steps will follow in subsequent blog posts.
Armed with the insights from your analysis, you are now ready to create your organization’s mission and vision statements, verify your organizations ‘sweet spot’, establish goal statements, and identify and prioritize the means by which your organization will realize short and long-term success.
What is your overarching intent as an organization? What threats and opportunities exist that your organization needs to address? What services does your organization provide or what products does your organization produce? How do you define your value proposition to your customers? What customer needs do you need to fulfill? How will you be perceived by your customers, your community, and those you do business with?
What is your vision of the future? Certainly you want to drive growth for your organization – but how do you provide focus and direction? You need to describe the function and focus on the future organization. What opportunities will you address? Which threats will you overcome? How will you ensure your employees understand their role in the future organization? How will you help customers understand the view of your future organization?
Organizational Values and Principles
In our work with clients, we often notice the lack of dialogue surrounding organizational values. Articulating the organization’s mission and vision, strengths, weaknesses, opportunities and threats seem simple in comparison. But organizational values, and principles, drive the culture of the organization, ensuring you are doing the ‘right thing for the right reasons’ when making decisions and taking actions. Some organizations we’ve worked with have provided their employees with business cards, stating the organization’s mission, vision and values on the back of their business cards. It’s a constant reminder that what you do in your daily work is driven by purpose and is shared with customers and partners.
Where do your capabilities, purpose and passion overlap? That’s your sweet spot. Your planning process must include dialogue regarding these topics so that you are able to achieve your mission and drive your organization toward your desired future state.
Of critical importance in setting organizational goals is to be able to articulate what your organization aims to do to achieve your short and long-term goals, but also to ensure how each employee/team member contributes to these goals. It’s a way of making your strategic plan personal to your employees. As consultants, we often hear from employees that they come in to work every day and do their jobs, but they don’t have a good understanding of how their jobs, the work they do on a daily basis, contributes overall to the financial health and growth of the organization. Employees want and need a sense of purpose. We find that organizations that align objectives, initiatives, targets and measures directly to employees, through the performance management process, help drive employee commitment, accountability, satisfaction and retention.
A critical outcome in any strategic planning process is the identification and prioritizing of action steps – what will you do, when you will do it, how will you do it, and who is responsible and accountable for doing it. Setting priorities involves the review of five factors:
Once your planning team has prioritized your objectives from “most” to “least” important, you can then determine your ability to fund and activate the initiatives. Those that are most important get funded and activated, while those that fall further down the priority list get “backlogged”. During the course of the year, when one initiative is completed, the next priority of the list gets activated.
We’ve now covered two steps in the Strategic Planning Checklist - The First Step: Analysis and The Second Step: Plan Formulation. When you begin next year’s planning cycle, you will begin by once again gathering the necessary data and information and going through the first step/analysis. The process becomes “evergreen”, beginning with analysis every year, and reviewing the priorities that have yet to be activated to determine if those objectives and initiatives are still relevant to the organization fulfilling its mission and positioning itself for the future.
For those of you who are already well on the way to developing your strategic plan and operating budget, I encourage you to take a step back and pause, reflecting on these checklists.
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Blog Post by Deb Dietz
Strategic Planning Checklist - The First Step: Analysis
This is the time of year when companies are working feverishly to complete their 2016 strategic plans and operating budgets.
In case you’re among those that need to jump start the process, or get ‘unstuck’, following these steps can get you where you need to go. Analysis is the critical first step in the planning process. Invest your time here before jumping into the following steps which include Plan Formulation, Action Planning, Execution, and Continuous Improvement. Those checklist steps will follow in subsequent blog posts.
In the Analysis step, your objectives are to gather, analyze, and summarize information. You focus on information relating to the organization’s value proposition, internal factors and external forces likely to impact your short and long-term success. Important questions to ask include:
Here is a checklist of possible information / data sets you should consider gathering and analyzing. The data sets will depend on your industry, your profession, or the area in which your organization specializes:
The type of information to collect for your strategic planning sessions depends on the information your team needs to draw conclusions and to make decisions. Invest the appropriate amount of time to decide on, gather and analyze these data sets. You may find that you need to gather additional information; that the above list is not sufficient. If so, consider engaging all levels of employees, via an employee survey. This effort does two things:
For those of you who are already well on the way to developing your 2016 plan and operating budget, I encourage you to take a step back and pause, reflecting on the checklist above. If you find that you have not fully reviewed the internal factors and external forces facing your organization, stop and do it now, before you move forward into the Plan Formulation process. Your diligence in the planning effort will position you well in attaining your vision and accomplishing your mission.
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Blog post by Deb Dietz
In the first blog post in our Strategic Planning Checklist series, we spoke about the importance of analysis, the critical first step in the planning process. We shared that investing your time in analysis should precede jumping into Plan Formulation, Action Planning, Execution, and Continuous Improvement.
But before you can go through all the planning steps and follow these checklists, there is a fundamental need for any organization. That need requires the development of a planning process. Without a process, you may find yourself heading towards your demise, so here are some ideas for avoiding the tombstones along your planning path.
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Blog post by Charlie Dietz
S&OP is a business process used by many organizations across many different industries, business types, organization sizes and structures (including for-profit and non-profit entities).
At its basic function, the S&OP process allows an organization to regularly review its consumer / customer / client demand, and key organization performance against these forecasts and production / execution plans. It has a tactical / strategic focus, as it generally is looking in time units of your planning cycle (generally monthly, but sometimes weekly (retail) or quarterly or longer (capital equipment)).
The key process of S&OP is the periodic, scheduled mandatory meeting of the stakeholders of the business to review the key business KPIs, at a level of detail appropriate to the business, and agree on forward plans.
A CPG company selling thousands of SKUs would typically present performance measures at a product class or sub-class level. A food processing company having few end items would review performance at the SKU level. A non-profit / association would review key operating variables against plan (membership growth/retention, conference registration, sponsorship sales, fundraising/development revenue, web visits/conversions, etc.).
For many organizations where there are ongoing sales of products that must be made or procured, one helpful tool is the S&OP Waterfall Forecast and Sales KPI display, a stylized version shown here:
For the Product sub-class: Consumer Widgets (imported from China), representing a summation of the Consumer Widgets, the time to plan, make/procure, and have a widget available for sale is 3 months. So in March of this year, our current month, we have a current proposed forecast of 200, 130, 125, 125, 100 units for March through July. We need to understand a few things:
There are also other KPIs that would be more operational (day-to-day, weekly).
Outside experts with S&OP creation and implementation experience can work with your stakeholder team to speed the design, process development and implementation of KPIs and a S&OP process customized for your organization.
The key values to the business of the S&OP process is the development of meaningful KPI measures of the business’ health, the discussion between the key stakeholders over past and current KPI results, and what can be done to continue improvements in all the operations of the business.
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Blog post by Jim Scarlata
In the first post in the SMB Value Partners’ Series on S&OP, I described the “what” of Sales and Operations Planning (S&OP), what it means and how it can be successfully deployed in any type or size of organization. Here in our second post, I’ll describe the “why you should care” about this important business discipline.
For most organizations the benefits clearly align to the firm’s financial goals and plans. In one relevant example from my personal experience, a large manufacturer focused its scrutiny on trade working capital (TWC) against financial goals. (TWC can be simply defined as the difference between current assets and current liabilities directly associated with everyday business operations).
Of course the level of finished goods and raw inventories significantly impacts this metric. In companies focused too stringently on inventory cost, reductions in inventory can negatively impact customer satisfaction (stock-outs, late or partial shipments). Many times firms under strong financial pressures are willing to accept these impacts in order to meet short-term (e.g. end of quarter or year) financial objectives. We at SMB Value Partners do not subscribe to this as an effective long-term strategy; if practiced for any significant periods of time it will greatly impact customer satisfaction, and can also increase competition for your customers’ business.
The more important reasons for implementing a rigorous S&OP discipline is quite simply to ensure customer satisfaction and make responsible business investments.
While leading the demand planning / forecasting function for former employers, I always had the above two points in mind when the forecasts were challenged by senior management. Experience showed that the quality of the forecasts and the overall S&OP process, especially when involving the proper company functional disciplines, positively affected both product inventories and resultant customer satisfaction.
In today’s marketplace, customers have many more options than in the past, and a firm that maintains a healthy S&OP process ensures meeting financial AND customer satisfaction goals. One way to assure this is to include questions related to these metrics in customer/client satisfaction surveys; e.g. “Company X always has the products I want when I need them” or “Company Y’s products are at the locations I buy from.” Examining changes in customer responses over time can identify problem areas before they occur or cause measurable damage.
Let SMB Value Partners help you examine your existing S&OP process and results, or help you set up a S&OP discipline for your business.
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Blog Post by Deb Dietz
Recently I had a CEO of an association/not-for-profit organization tell me that they had not conducted member needs research in over 7 years because they already knew what their members needed. He seemed reluctant to discuss the white elephant in the room – the fact that the revenue from membership dues, product and program sales were decreasing. The organization was unclear of the profitability associated with their products and programs, and had decided to reduce investment in the creation of new value for their membership. The status quo seemed acceptable. Yet how long can any organization go without investing in the creation of value, new products, new programs, and new services that customers/members need, and will pay for? And, don’t you need to know those answers so that you can move forward and grow top line revenue for your company?
Any growth strategy requires an understanding of your market, your customers/members, or those you serve. You need to understand the financials, what’s working and what’s not for your company, and then make the difficult decisions about eliminating products or programs that are no longer relevant to your customer-base. Yes, even the ‘sacred cows’ that you’ve sold forever. Maybe it’s time for them to be put out to pasture. You also need to understand market demand and size so that you can realistically forecast revenue, aligning human and financial resources to those initiatives that will provide the best future return on investment to your organization.
Sometimes the status quo isn’t a good thing. Ask the hard questions. Truly understand the status quo and jump start the new value creation process for your company. Fear of the unknown is not acceptable in today’s environment where competitive threats are everywhere. So, if you are noticing sales and profitability trends in your company eroding, arm yourself with insights from research and from the hard work associated with actionable financial data and trend analysis. Truly understand what you need to sell to your customers, and why, and as important, understand what you need to stop marketing and selling. You can realize cost savings by stopping investing in products and programs that aren’t profitable, and you can shift that investment to those products or services that will drive growth for your company.
Get un-stuck. Challenge the status quo. Become a champion of value creation and increase your relevancy to your customers/members. Do it now, before they find another organization that will.