September 2017


It's that time of the year when I begin planning to take our sailboat, Tango, to the Caribbean; a 1,500 mile open ocean passage.  We depart in late October but I've already been busy planning the voyage.  As the saying goes, If you fail to plan you're planning to fail.

We are also approaching the fourth quarter and this is when management should begin business planning for 2018.  We consider a well formulated business plan to be the foundation to Business Performance Improvement.

We are available to facilitate customized one-day, on-site  and entertaining Business Planning workshops to assist management teams to develop different elements of their business plans, e.g.,:  Setting Objectives and Strategy;  Operational Planning and Budgeting; and  Cash Requirements Forecasting.  Here are our thoughts on Setting Objectives and Strategy.

When setting objectives we want to see objectives that are quantifiable and measurable.  Afterall, you can't manage what you can't measure and if you can't measure it you won't know if you've achieved your objectives.  The objectives could be expressed in terms of a percent increase over last year.  Or, it could be an objective based on profitability.  In troubled companies, it could be that the loss is reduced over last year's loss by a measurable factor, thereby showing turnaround progress.  In any event, good planning dictates that objectives are set in an objectively quantifiable manner.  

Once the objectives have been established, the next step is to use a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) as input to developing a strategy for meeting the objectives.  We often see a disconnect between setting objectives, performing the SWOT analysis and using that to establish the strategy by matching: 
  • Opportunities with Strengths; 
  • Opportunities with Weaknesses; 
  • Threats with Strengths; and 
  • Threats with Weaknesses.

The results of that matching process is then summarized into the Strategy portion of the plan.  We like to keep the strategy straightforward.  We've found that most business plans fail when they are overly complicated, can't be succinctly communicated throughout the organization and don't address the business fundamentals.  Here is an example of a matrix tool that can be used to summarize the results.  The SWOT analysis is listed in the cells across the top row and left column while the Strategies are listed in the remaining four cells.  



Strengths 
(internal and controllable)
  1.  
  2.  
  Weaknesses 
(internal and controllable)
  1.  
  2.  
Opportunities
(external and 
uncontrollable)

  1.  
  2.   
Opportunity-Strength Strategies
Use strengths to leverage opportunities
  1.  
  2.  
Opportunity-Weakness Strategies
Overcome weaknesses by taking advantage of opportunities  
  1.   
  2.  
Threats
(external and 
uncontrollable)


  1.  
  2.  
Threat-Strength 
Strategies
Use Strengths to 
Avoid Threats

  1.  
  2.  
Threat-Weakness 
Strategies
Minimize Weaknesses and 
Avoid Threats

  1.  
  2.   


* * * * *

We are available to facilitate customized one-day, on-site and entertaining Business Planning workshops to assist management teams to develop different elements of their business plans, e.g.,: Setting Objectives and Strategy; Operational Planning and Budgeting; and Cash Requirements Forecasting. Please contact us for more information on how we can help.
Best regards,

Rich


Richard T. Azar                                                                                 William A. Finelli
Partner                                                                                                                    Partner
917-267-7685                                                                                              201-803-5479
razar@thefasttrackgroup.com                                 bfinelli@thefasttrackgroup.com
 


© 2017, The Fast Track Group, LLC
See what's happening on our social sites