Improving Strategic and Operational Planning
But operational and strategic planning are not easy to do. Midsized companies don’t have the months of time or seven-figure budgets to do strategic planning exercises designed by big consulting firms for much bigger companies. And with all the changes that surrounds midsized companies – new competitors, customer demands, technological shifts, and more – you have to be able to change your strategy when necessary, yet resist the urge to tinker too much.
Just as importantly, midsized company CEOs can’t afford anyone on the team losing focus on day-to-day operational excellence. If their company gets sloppy about running the core business, it is likely to have a cost.
That’s why midsized companies must do both operational and strategic planning, but never mix the two. Blending them distracts the team from day-to-day execution and produces superficial plans.
What We Can Do
CEO to CEO helps companies create rigorous and competitively distinctive strategic and operational plans. We get your leadership team aligned on the basics and the details of your strategy: target customers, core products and services, and the basis on which to compete (e.g., price, value-added service, innovation, etc.). After articulating what is too often unarticulated, we help you turn that strategy into concrete operational plans.
We then make your operating plan come alive. We help your people monitor progress and adjust course to achieve business objectives. To make that happen, we set up what we call the leadership operating system. You can implement this tried-and-true process in four to six weeks, then monitor it to keep the operational plan on track.
The process ensures that every executive in your company understands his or her specific operational objectives, the time frame for achieving them, and how to share progress updates. This is the essence of business planning and monthly/weekly reviews. It ensures all parties progress toward key business goals.
How We Do It
Our consultants conduct three types of activities to create sound strategic and operational plans for clients:
- Getting leaders on the same page. Once the business leadership operating system is implemented, the CEO, CFO and other top managers are given access to continually updated dashboard data on progress against operational objectives. CEOs don’t have to waste time requesting reports. The entire leadership and management team has access to data to make daily decisions nimbly.
- Making operational progress happen without nudges from the CEO. Leadership teams will learn to move the ball forward without prompting from the CEO. For example, if an operational goal is increasing business development activity, progress will be transparent to the whole team. That encourages leaders to step up their performance. Additionally, supporting teams such as HR can identify areas where the company may need to apply extra resources to meet goals.
- Keeping strategic planning distinct from operational planning to avoid distractions. While the operational plan focuses on executing current business strategy, strategic planning focuses on what your business should be doing for the next three to five years as business conditions change.We help midsize businesses create strong but realistic growth strategies, with a methodology sized right for their companies. We use zero-based thinking, setting aside any presumptions about the current strategy and considering all the options and realities without regard to past investments. We help companies identify the strengths, weaknesses, opportunities, threats and trends (SWOTT) of the present, those likely in the future, and make plans to adapt.
GSC today handles in excess of 15% of the goods that come into the port, third-largest international gateway on the West Coast. The firm has come a long way from its early years shipping Gatorade to Northern California food and drug stores, and has gained a customer list that includes some of the biggest names in retailing: Target, Walgreen, JC Penney, Crate & Barrel and many more. Yet despite building GSC into a $35 million business by 2010, neither Scott (CEO) nor Andy (chairman)were satisfied with their firm’s growth. In fact, they thought GSC should have grown much faster, but by the end of 2010, their immediate concern was enabling the firm to better manage their existing business.
By December, Scott decided the management team should hold an off-site meeting to review what went well, what didn’t and – most of all — what the firm needed to do in the future to accelerate its growth. The question would be who should lead the meeting.
But Rob first had to sell himself to GSC’s two owners. Joel brought Rob in to meet Scott and Andy. After an initial discussion, Andy, who is skeptical of the value of consultants, challenged Rob: “How do you think you’ll be able to make our offsite more productive when you don’t know anything about our industry or our company?” Rob described his approach: before the offsite, he would meet one-on-one with each management team member to understand their issues and ensure they would be discussed at the offsite. The second benefit of meeting with the team in advance was that it would help Rob know far more about GSC’s challenges going in. He told Andy and Scott that letting an outsider without a vested interest run the offsite would be to their advantage – particularly an outsider with insider knowledge. All of that resonated with both owners.
The meeting went exceptionally well, bringing a number of current and future growth issues into focus. “It was a very, very effective meeting,” Scott says. “Rob found a way to solicit opinions and get everybody engaged – better than if we had tried to do it internally. He is such a good people person that he can bring the personalities together, disarm everybody, and make them feel comfortable and have equal voices. It takes somebody outside the organization to effectively lead this kind of meeting. He’s a very calming influence. Nobody feels like they better be careful about what they say. He puts you at ease.” The team came out of the offsite energized and organized, with a list of action items to work on in 2011.
Scott and Andy’s first request was for Rob to help with the firm’s sales plan. But after listening carefully and thinking about the offsite discussions, Rob suggested he help them and their management team create a three-year business plan. “At first, we didn’t see the value in that,” says Scott. “But Rob said he had a way to create a one-page business plan. We’re now knee-deep into that exercise with our top six people, both sales and operations. It’s been an extremely enlightening exercise because it has focused us and helped our team members become much more open and transparent with each other. We’re starting to see the fruits of our efforts already.”
Clients of HdL Companies may have noted an extra spring in the firm’s step recently, as it seems to have been expanding its offices, services and staffing at a steady clip. A West Coast professional group helping local governments maximize revenues through compliance audits, analytical services and software products, HdL has in the past few years established a new HQ in Brea, California, expanded operations to Texas, added cannabis consulting to help local governments manage legalization, and continued to make significant new acquisitions.
The key to this growth has been a series of excellent strategic decisions.
As CFO Jeff Schmehr, who joined HdL in 2005, recalls, “When we became a 100% ESOP, our near-retirement-aged employees lobbied hard for an ultra-conservative growth strategy. We wanted to minimize the risks, but we knew our employees were better served by supporting both the core business and developing new growth areas. Now I receive phone calls from these retirees congratulating our team on a job well done.”
The consolidation process also focused on Board transition, as it needed to move from an internal and founder-controlled body to a more professionalized strategic entity. This dialogue led to a successful mapping out of the additional skills required, recruitment of three new members, and training on new roles and responsibilities, so that the Board could work collaboratively with management.
“In the last few years, there has been significant consolidation in the legal industry,” says Andrew Giacomini, Hanson Bridgett’s managing partner. “The San Francisco Bay Area is one of the most competitive legal markets in the U.S. – both on the client side and on the talent side. That makes for very challenging economic conditions, which means people outside our firm need to know who we are. And that requires a very strong focus on building of brand in our market. For every law firm, it’s change or die.”
Robert Sher is founding principal of CEO to CEO, a consulting firm of former chief executives that improves the leadership infrastructure of midsized companies seeking to accelerate their performance. He was chief executive of Bentley Publishing Group from 1984 to 2006 and steered the firm to become a leading player in its industry (decorative art publishing).