Implementing and Sustaining Your Business Plan

It suggests how you can assemble the plan fromdifferent levels, initiate the plan, and provide sustaining activities.These are the third and fourth steps in the four-step plan see Figure

Implementing and Sustaining

Your Business Plan

This chapter describes how you implement and sustain yourbusiness plan It suggests how you can assemble the plan fromdifferent levels, initiate the plan, and provide sustaining activities.These are the third and fourth steps in the four-step plan (see Figure12-1) that began with preplanning and planning activities.Included in the implementation phase are suggestions for measur-ing the performance of your plan

323

C H A P T E R 12

One of the key steps for implementing the plan is the removal

of heat loss or organizational inefficiencies inherent to any system.This chapter provides the steps for you to successfully map and cor-rect any deficiencies

The chapter concludes with information on conducting nizational change activities, along with suggestions on leadershipand managership skills development For the plan to succeed itmust be implemented by people with the basic skills of leading andmanaging the workforce

orga-Figure 12-1 The implementing and sustaining phases must work together in a seamless flow to ensure execution of the plan.

H OW TO I MPLEMENT Y OUR P LAN

The implementing period begins with a consolidation of the ous levels of plans Once your subordinate planning teams havetaken the planning details of Level 1 down to Levels 2, 3, or 4, theymust be reassembled to ensure plan continuity To do this, schedule

vari-a one-dvari-ay conference with representvari-atives from evari-ach tevari-am wherethey present their own supporting plan and display their interpre-tation of the concepts The idea is to cross-check the viability ofplans across a single level, then roll the information upward to thenext level If the teams have properly followed the provided plan-ning templates, the plans should fit together with minimum adjust-ment If one subplan is out of alignment, that particular planningteam must go back to adjust its targets, objectives, or goals

If the plan fits together at Level 1, implementation begins with

a communication from top management to execute tasks found inthe action plan initiated according to the schedule This leads tothe most important part of implementation—the use of perfor-mance measurements

Monitoring Your Plan to Ensure Compliance

Your plan should be monitored frequently to make sure it is beingimplemented in the spirit and intent of the planning conference.Some businesses in certain situations elect to monitor their progress

or success on a weekly basis This is probably appropriate for ational levels in an organization For example, in a manufacturingenvironment you may choose to monitor daily and formally reportweekly Some organizations choose to report on a monthly basis.Tracking sales monthly is a common example The minimumlength of time allowed without formally checking your plan is aquarter Reporting results on a quarterly basis is the most acceptedbusiness practice for performance measures The framework is con-sistent with financial reporting, shareholder expectations, and pub-lic acceptance I recommend this as your minimum reportingschedule (see Figure 12-2)

oper-Implementing and Sustaining Your Business Plan 325

The fourth point of monitoring your plan is the annual report.

At the end of the fourth quarter you need to look back at the fourquarters collectively The past year is compared with the previousyear and projected out to the ten-year plan This gives you a base-line to begin planning for the next year or repeating the one-yearoperational plan The results are published in the annual report.Companies spend a lot of money and effort writing, publishing,and distributing their annual report You may make the report sim-ple or detailed, depending on your desire and intent

In establishing the next operational plan, year two of the tenyears, repeat the process of setting tasks as you did with the firstoperational plan and the related action plan list Each year you

Figure 12-2 The implementation period is characterized by quarterly reviews A full review and update of the plan is conducted in the fourth quarter.

rebuild your operational plan based on what you are trying toaccomplish in the one-year period against the ten-year goals Thismeans your plan’s time span is getting shorter each year The com-mon trap is to also extend the life of the business plan by oneyear—always keeping a ten-year time frame This is dangerousbecause you fall into the trap of strategic planning creep Allowyour plan to perform or mature for a number of years before youmove the ten-year goals My clients seem to get three or four yearscompleted on their ten-year business plan before they move theend goals This allows them to check assumptions, qualify the accu-racy of their numbers, and measure their sustained performance.The recommendation, therefore, is to let your plan run a few yearsbefore radically shifting goals Minor adjustments are necessary andacceptable, but don’t abandon your goals and plans in the first year.Tracking the performance of your plan is easy The numberscan be tallied The actions can be checked off for completion Thereal problem with performance is not measurement but ratheraccountability What do you do when the plan is not being ful-filled? Investigate the reasons for not hitting the targets carefullybefore you take action Consider these questions:

■ Is it normal statistical deviation? No one can accurately

pre-dict where your performance will fall on a projectionchart The plan may be off because of normal statisticaldeviation, or what is called the zig and zag The issue ishow far off you are from where you wanted to be Is 5 per-cent deviation (i.e., a subjective percentage you set)acceptable? Can you live with 10 percent deviation? If thedeviation is not in the end acceptable, you must go backinto your plan to look at the data Reexamine informationsuch as sales projections, costs of doing business, and prof-

it margins to find the source of plan failure Make tions accordingly Remember, shortfalls are compounded.The further you get behind the further you get behind.The efforts to catch up expand exponentially

correc-Implementing and Sustaining Your Business Plan 327

■ Is it a failure of the management team to implement? This is

the most common cause of plan deviation Repeatedly Ifind teams not fulfilling promises made in the action plan.Once the planning session is over, business as usual pre-vails The individual or team doesn’t follow through withcommitments The antidote for individual failure or non-compliance is to tie the results of the plan into your per-formance reward program People have a tendency to dothe things for which they are rewarded Consistent failure

to perform takes on a whole different meaning that beginswith coaching, progresses to performance counseling, andfinally ends with termination The sooner you legitimate-

ly get rid of nonperforming management, the greater yourchance of hitting your targets

Measuring Everyone Against a Business

Performance Model

There are three levels of performance you must consider when mally tracking your business plan (see Figure 12-3) The perfor-mance is tied specifically to the annual targets of the business plan.This standard keeps each level focused on doing mission-essentialwork, not extraneous, fun activities These levels are:

for-■ Level 1 Organizational performance (business plan track)

■ Level 2 Team performance (business plan track)

■ Level 3 Individual performance (performance review gram)

pro-Figure 12-3 There are three levels of performance that must be tracked against the business plan They are organizational, team, and individual All lead to the strategic goals.

At the first level of performance measurement the company as

a whole must be held accountable This demands commandresponsibility Managers are responsible for all that their units do orfail to do Performance measurements are not complex at that level.The question is simple: Did the company hit the plan it estab-lished? If yes, the organizational performance is acceptable If theanswer is no, then excuses are not acceptable If a company fails,then the president must be responsible and should answer to theboard of directors for his or her failure to provide appropriate lead-ership and managership of the organization and its plan It is thatsimple

Likewise at Level 2, managers are held accountable for theirteams using the same command responsibility concept The vicepresident is held accountable for making the sales figures or theresearch and development vice president is responsible andaccountable for bringing new products in on schedule Vice presi-dents answer to the president in the same fashion as the presidentanswers to the board of directors—no excuses Their appropriatebosses likewise hold other team leaders such as plant managersaccountable

Level 3 performance is the individual measure of what is doneand how well it is done The performance review items normallyfound in human resources documents must accurately reflect theactual tasks the individual does each day to accomplish the annualtargets Again, no extraneous work should be allowed The key is afully qualified individual focused on mission-essential items Thebusiness plan must include provisions for leadership and manager-ship training to fill expected skills shortfalls Don’t ask people to dojobs they are not trained to do without providing them support.This training is looped back to the performance review system Howwell were the lessons learned in training applied to perform thejob? This criterion ties any company training activities to the busi-ness plan, prevents training for training’s sake, and makes account-ability for skills integral to the individual performance review

Establishing Two Types of Standards of

Performance

To successfully implement processes at the three levels, ment must set and maintain its standards This is a stabilizing fac-tor in any organization There are certain performance levels thatmust be held constant In widely fluctuating situations it becomesdifficult to know what performance factors are satisfactory andwhat are unsatisfactory

manage-Management must improve its standards Standards are notfixed points or objectives, but rather the start points for doing a bet-ter job the next time Once performance is fixed in place with themaintenance of standards, improvement begins

Two types of standards exist: stabilized and evolving Stabilizedstandards are the standards that tell individuals how their perfor-mance is measured Goals and objectives usually contain standards.This helps provide stability to the work situation As the stabilizedstandards are met and improvements in the workflow occur, thestandards are shifted upward These standards are said to be evolv-ing as the system becomes fine-tuned There can be no improve-ment (the ultimate goal of process mapping) if there are no stan-dards, they are not disciplined, or they are not allowed to evolve Standards carry certain characteristics that help the organiza-tion form, shape, and project consistency in its story These may befound in company documents such as the Standard OperationProcedures or policy manuals Too few standards are a lack of disci-pline while too many standards could become overwhelming Seek

a working balance The standards should have the following acteristics:

char-■ They become the individual authorization and bility to carry out work

responsi-■ They are transmittal vehicles of individual experience tothe next generation of employees

■ They communicate individual experience and know-how

to the organization

Implementing and Sustaining Your Business Plan 331

■ They demonstrate an accumulation of experience withinthe organization through their evolving nature.

■ They deploy know-how from one department to another

■ They serve as a mark of discipline for the organization

H OW TO S USTAIN Y OUR P LAN : T HE F OUR

P LAN A SSURANCE A CTIVITIES

Your plan cannot be launched without support in the background.There are at least four support areas (see Figure 12-4) for the suc-cessful implementation of your plan They are:

1 Business Process Mapping

2 Organizational change management

3 Leadership development

4 Management development

First you must clean up any organizational inefficiency found

in the processes This is done through Business Process Mapping(BPM) Don’t delay the implementation of your action plan untilthe process improvements are completed because they will never befinished and must be seen as ongoing initiatives The BPM can andshould run concurrent with your plan implementation

A number of organizational change activities may also takeplace to support your plan They may include activities such asrestructuring the organization, an acquisition for growth, or restruc-turing the debt burden Strategically realigning the resources andcore competencies may be other examples of the organizationalchange necessary to support the future direction of your company.Leadership and managership behavior must also be alignedwith the plan Little is accomplished by establishing a vision if lead-ership is remiss or by setting bold goals if the skill of managerialefforts is lacking Actions for improving leadership functions andmanagement behaviors necessary to match the plan requirementsmust be carefully programmed

B USINESS P ROCESS M APPING TO I MPROVE

Y OUR B OTTOM L INE

To ensure the healthy implementation of your business plan youmust remove heat loss by conducting a series of Business ProcessMapping sessions These activities are designed specifically toremove excessive costs from your business processes through elim-inating unnecessary, overlapping, and duplicate events whileassigning responsibility and holding managers responsible for costcontrol and cost containment (see Figure 12-5)

Implementing and Sustaining Your Business Plan 333

Figure 12-4 During the sustaining phase you must pay attention to four sets of activities required to keep the planning momentum.

Figure 12-5 Business Process Mapping streamlines your internal ways of doing work That is your fastest way to increase the bottom line.

Two ways of thinking must be dovetailed for process mapping

to work First, the manager must be concerned with results Ofcourse results are ultimately the profit goal of any business Thatdoesn’t mean that profit drives all actions It simply means thatprofit and other cost issues must be accounted for in the thinkingprocess You must be results-oriented This means a concern forprofitability, cost-effectiveness, and financial goal accomplishment.The second is to think in terms of processes This means a concernfor organizational discipline and workflow effectiveness Often theresults become the focus to the exclusion of the process The suc-cessful execution of process mapping can occur only if both processand results are integrated

Process mapping is inherently difficult for American managers.This difficulty stems from a basic philosophy ingrained in us Weare taught to make great strides in actions by “thinking big,”

“stretching out,” or “going for the gold.” The dream of every neer is to make a technological breakthrough in his or her field.While this is great for advancing the field of knowledge, it goesagainst the purpose of process mapping, which is continual, incre-mental improvement This division of philosophies is so pro-nounced it is seen as a major difference between Japanese andAmerican business practices Americans pride themselves on inno-vation We like to take great leaps forward by building things first.This is a successful method of moving a business forward bybounds It is like hitting a home run in baseball It doesn’t happen

engi-in every game but when it does the results are significant On theother hand, the Japanese pride themselves on improving existingcreations They play a steady game by opting for base hits They seeincremental improvement as the best way to win the game This isalso a successful business tool When the two methods are com-pared in terms of returns on investments as business ventures, thegradual development or incremental approach historically providesthe greater return

I suggest a combination of the two approaches You are aged to look for opportunities to excel However, the real leverages

encour-in the busencour-iness are encour-in the gradual development of a fencour-ine-tuned tem This will be through process mapping and improvements ofthe system itself

sys-Levels of Processes

There are four generally accepted levels of key business processes:

1 Level 1—Macro Business Activities These are functions that

are the responsibility of the top management of the pany They are big picture or major activities that requirehigh-level decision making and significantly affect thefuture of the company An example may be the acquisi-Implementing and Sustaining Your Business Plan 335

com-tion process The process owners are the president andvice presidents

2 Level 2—Companywide Functions These are activities that

are critical to the company but cut across functionalboundaries They are owned by a high-level executive butmust be coordinated with other peer executives Salesmay be an example While this activity is the responsibil-ity of the vice president of sales, it must be fully coordi-nated with research and development, manufacturing,and shipping

3 Level 3—Functional or Departmental Processes Lower-level

processes fall within the responsibility of a departmentand have less coordination requirements across depart-mental lines For example, the process of producing a newdesign of wallpaper may be the primary responsibility ofthe creative department

4 Level 4—Unit/Work Group or Individual Processes Most

processes to carry out business are found at the lowestlevel of the organization Your business is a collage ofmany teams and individuals doing daily work These areusually routine and often overlooked as candidates for theprocess mapping Yet we know this is where some of yourgreatest inefficiencies occur They may be as simple aschecking in customers at the service department of anautomobile dealership or conducting preventive mainte-nance on a piece of machinery

The Payoffs of Process Mapping

Of all the activities that an organization can do to improve itsfinancial position, challenge employees, and produce better per-formance, process mapping takes the lead It is the fastest way Iknow to return the greatest amount of resources back into the sys-tem Those resources may be dollars on the profit and loss state-ment, hours saved on manufacturing processes, or quality improve-

ments in goods or services In any case the rewards or return forprocess mapping should be to:

■ Achieve maximum return for minimum effort

■ Achieve maximum quality with maximum efficiency

■ Eliminate unproductive hard work

■ Use resources in an effective manner

■ Make informed decisions to implement continuousimprovements or reengineering

The ability to recover inefficiencies, cut costs, and improveservice is well documented in everyday examples Many of theseactivities are tied to quality improvement programs In 1992 theRochester Institute of Technology (RIT) in Rochester, New York,

teamed with USA Today to recognize teams that have made

signifi-cant improvements in work processes The 2000 winners and ists include improvements such as the NCR EDI invoicing processimprovement team that improved invoicing from 66.8 percent to99.6 percent in just five months Consider what that will do for thecompany’s cash flow Or consider the Team of the Future at CordisCorporation, a medical device manufacturer in Miami Lakes,Florida, that eliminated waste in its manufacturing process Theywere able to save more than $152,000 yearly by eliminating excessshrinkage in the plastics-curing process That may not sound likemuch, but a little here and a little there adds up Remember, thismoney goes back to the bottom line

final-The Six Purposes of Process Mapping

The basic assumption of any organization is that it desires toimprove its business performance Improvement begins with look-ing at the way people do their work Therefore, if a company wish-

es to stay a strong, viable business it must look for leverage points

in its functions where improvements can be made at both the nizational and individual levels You should use process mappingspecifically to:

orga-Implementing and Sustaining Your Business Plan 337