4 Steps to Interaction-led Business Planning

A couple weeks ago I shared 12 rules to lead and live by, in response to a thought-provoking question about my leadership style from one of my Villanova University Executive MBA students. My rules are truly a reflection of how I act as a person. Whether at home or in the office, the same Al shows up.

Today I have a follow up to this: My leadership style sets the stage for my interactions and my interactions are the context in which I lead the team. 170016-PB-Blog_05_22_17

For example, in only about another month I’ll begin working with my team to develop next year’s business plan. It’s a process we start in June and it iterates throughout the summer. We follow a very deliberate and focused 4-stage approach to our business planning, and I want to share it with you today.

Stage 1: Set Strategy

Everything starts with setting a strategy. Sometimes it may seem overwhelming, but it doesn’t have to be. Simply start with a conversation. I start by speaking with my team, customers and suppliers about the market. What trends are impacting the industry? Where do we see challenges? Let’s debate assumptions. What opportunities are in front of us? Are they long term or short term?

Stage 2: Create Goals and Set Them Up for Success

Based on these conversations and debates, we next set sales, revenue and profit goals together. This step has to be a group debate and exercise, and hopefully we can come to a mutual agreement. However, if we don’t agree, as the leader, I will make the final call respectfully and professionally.

We also get goals from the top executives within the corporation and there is always a delta between what we think we can achieve and what corporate thinks we can achieve. I call this the “identified gap.”  It’s all part of the process. I don’t fight the top down; I acknowledge and educate the team so we can stay focused on setting and executing our goals.

Given the goals we set for ourselves, next we ask ourselves what strategic themes will help us reach our goals in the current year — while also planting seeds for the year to follow. I am a big believer in themes. They help us drive alignment among the teams and keep us focused on the overall goal.

You should not have tons of themes. Keep the number manageable, maybe 3 to 5, so that it’s easy for the whole team to rally behind and represent them in conversations throughout the year.

With themes set, we now need to talk about resource allocation. This is all about setting priorities. We decide which is our number 1 theme versus our number 5 theme, then we allocate resources based on the agreed-upon priority. Each of my team leaders will then set their individual team goals, aligning them to our overall goal and strategy.

Stage 3: Measure and Communicate

Having a strategy, goals and pre-determined themes is only effective if we hold ourselves accountable for achieving them. That’s why measurement is so critical to the process. We determine our metrics by first examining the prior year’s results and then moving to current year trends and assumptions. Our strategy is the result of what happened in the past and our assumptions about the future.

But even more important is clear and proactive communication. We share the strategy, themes and priorities with our broader team at the beginning of the year and continually monitor and communicate our progress to annual and quarterly goals throughout the year. Once a month we share progress to goals via email and once a quarter we do it via a face-to-face town hall format. We invite not only our entire team, but the internal partners who support us. The intent is to keep everyone focused on the goals and priorities, and to communicate in a way that helps everyone see their opportunity to individually contribute to the team’s success.

Stage 4: Execute

Setting a strategy properly is a process, which is why we start 6 months early. But once it’s set, it’s time to execute. Our approach to doing this is simple:

  • We show up and we work hard.
  • We are honest about our progress.
  • We focus on what we intended to do, but openly communicate about what emerges along the way.
  • If needed (and trust me, it’s always needed), we go back and adjust the strategy based on progress to goals and what emerges throughout the year.

We celebrate wins and we learn from losses, but most importantly we have fun as a team. Everyone knows we are in it together. We lead by candor and transparency and we recognize that everyone on the team is a necessity to our collective success. I couldn’t be more proud of the process or the team that works with me to pull it off.

What is your approach to business planning?  I would love to learn from you.