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How to Convert Your Business Plan Into Actionable Strategies
By Bob Prosen
Operating plans are tactical in nature.
They spell out the steps every organization must take to achieve the business plan.
This is where you begin to bridge the gap between planning and results.
An operating plan must be measurable and highlight key milestones to achieve throughout the year.
Your operating plan is a road map that tells you how you execute your business plan.
It’s an instrument that shows if you are staying on course.
Leaders responsible for delivering results must develop operating plans.
They can’t and won’t buy into these plans if others developed them.
Leaders have to lay out the specific programs, timelines, measurements, and resources required to achieve their objectives, which, in turn, are aligned with the company’s overall objectives.
Most leaders know what they want. The challenge is getting the company to execute with speed and efficiency to consistently deliver the desired results.
The key is to bridge the gap between planning and results by executing effectively.
First You Need a Budget
Once the operating plan is developed, it needs a budget.
Combining the budget with an actionable operating plan is an iterative process that enables you to prioritize projects, say no to less important initiatives, link resources, and quantify specific deliverables by individual employees.
This is powerful stuff. It’s the direct connection between objectives and results, with touch points throughout your business.
When the business plan, the operating plan, and the budget come together, you know precisely what you want to accomplish, how you’re going to do it, who is responsible, what it’s going to cost, and how you’re going to meet your financial and operating objectives.
When combined with an effective measurement and reward system, this becomes the most powerful way to establish accountability across your entire company and achieve results.
Once you bring your plan to this point, it can be translated quickly down the line into specific objectives for every individual.
Ultimately you should have a direct line of sight from individual objectives through the operational plan to the business plan and the company’s financial performance.
Everyone is Involved
Every person in your company should know exactly how his or her individual objectives tie directly to the success of the business.
The concept that everyone is part of a larger process becomes part of your holistic culture.
With this mind-set, employees can know how they impact sales, costs, quality, production, customer loyalty, and, ultimately, profitability.
Once you have accomplished this, you will be in a position to ask employees two questions:
- What are the company’s top business goals?
- What are you doing today to accomplish them?
Have all the pieces in place on January 1 or by the beginning of your company’s fiscal year.
Too many companies lock their plans down sometime during the first quarter.
Never allow this to happen to you.
Be ready on January 1 or the first day of your fiscal year.
The best-led companies start the planning process in the third quarter to build the framework for the next year.
When they come out of the gate, they have 365 days to achieve their plan.
But you’re not finished planning on December 31, because on January 31 it’s time to reevaluate.
Continuous reevaluation is part of the process.
Don’t make it difficult.
Planning reviews should be part of your company’s culture and should mainly focus on deviations from the plan.
Make certain you hold your finance team responsible for creating the planning schedule and ensuring that deadlines are met.
If you’re ahead of the plan, analyze why.
Revisit your planning assumptions.
- Did the landscape change?
- What assumptions changed, and will the trend continue?
It’s important to know the answers to these questions because too much growth can overstretch your company and negatively impact other parts of the business.
View negative deviations the same way.
- What is the deviation?
- Are the assumptions still valid?
- What specific actions will be taken immediately so the company can return to plan and maintain profitability?
With any negative deviation, regardless of size, it’s important to get back on track as quickly as possible.
Don’t wait to take corrective action, or you may never recover lost ground.
Planning reviews can be as frequent as once a month. They won’t become tedious as long as they focus on deviation and the specific action that will be taken to remain on or ahead of plan.
This is not the type of meeting in which the person with the best story or the one who best explains the deviation wins.
Focus exclusively on the source of all deviations and what you will do to get back on plan.
There is no place here for rationalization or victim mentality.
When you surround yourself with experts, you will get answers and actions, not excuses.
Your culture should create a supportive environment to help everyone stay on track by offering resources across the organization. This is only possible if company leaders understand that success is declared when the entire company reaches its goals.
In the end, it’s all about making choices and executing to plan.
It’s important to make the right choices when you launch a strategy.
Even if you execute well, if you’ve chosen the wrong things to do, ultimately you can’t be profitable.
With every business, there’s always more to accomplish than there are resources and time. So you have to stay focused on the significant few—the most important goals.