If doing your annual
business plan feels like an empty gesture, then you need to re-think how you're
doing it. This yearly business ritual should be a time of serious review and a renovation
of your company's direction and goals. That's the message that Jeanne Urich,
managing director of Service Performance Insight (SPI), a global research,
consulting and training organization for professional services organizations
and Richard Curzi, vice president of operations for Collaborative Consulting
conveyed in their August 28 webinar, Business (opens in new tab)
(opens in new tab)Planning: Empty Ritual or Catalyst for Growth (opens in new tab). In their presentation, Urich
and Curzi explained the factors that go into successful annual strategy planning.
Requirement number
one for a good business planning, they advise, is effective and innovative
leadership that can communicate a clear vision with measurable goals. Leaders
set the tone for how well departments work together and how much commitment employees
should have to carry out new initiatives. SPI research found that poor
leadership creates a domino effect of failures, including a poorly understood
vision, inability to get things done, poor communication, and an employee base
that has little confidence in the leadership or future of the company.
With good leaders
at the helm, the success of a business plan depends on these three guidelines:
Evaluate
problems and opportunities.
Growth plans should identify weak spots and potential threats, and explain how
the company will address them. Examples of weaknesses might be poor customer
service caused by lack of customer service training, or out-dated sales
forecasts due to a paper-based sales entry system. A threat might be the advent
of a new technology (i.e. crowd sourcing) that could compete with a consulting
firm's expertise in setting up focus groups or conducting surveys. Likewise,
strengths and opportunities should be noted. An IT management company that has
several employees with experience in hospital IT could be a strength,
especially in the face of a corresponding opportunity – i.e. a lack of skilled
IT professionals with healthcare industry knowledge. The proposed initiatives
to respond to weak spots and opportunities should include timelines, specific
actions that will be taken, and the expected changes in key performance
indicators.
Calculate
financial impact.
Any initiative should have data and assumptions that estimate the financial
impact of implementing it. It should have an ROI and quantifiable reasons for
doing it. No business initiative should go forward without a firm knowledge of
how it will affect the bottom line.
Keep
score.
Scorecards are a key part of growth plans, says Curzi. His company uses them to
monitor the success of its five-year strategic plan and annual business plan. The
data and key performance indicators (KPIs) used in the scorecards come from
NetSuite's cloud-based SRP applications -- NetSuite financials, NetSuite CRM,
and NetSuite OpenAir PSA (Professional Services Automation).The monthly scorecard
shows how actual performance is progressing against the expected KPIs forecast
in the annual plan.
At the end of the
day, the best business plans spell out what the company will do in the coming
year in order to deal with threats, take advantage of opportunities, and
include a solid ROI analysis as well as carefully selected metrics to judge
performance. For more details on crafting a strategic growth plan for your
services business, listen to the recording of Business (opens in new tab)
(opens in new tab)Planning: Empty Ritual or Catalyst for Growth (opens in new tab).
-Ed Marshall, SVP,
GM Services Vertical at NetSuite