Plan B

Do You Have a Plan B?

In business, sometimes the shortest distance between two points is not always a straight line.
 
Successful CEOs and top managers understand that their best laid plans don't always pan out as expected.  However, these leaders are generally ready with
a 'Plan B'--just like a quarterback calling an 'audible' at the line of scrimmage.  When the ball is centered, the team knows the backup plan and
executes it as if it were the original play.
 
Whether bumps in the road occur as a result of business or competitive conditions, ownership or board demands, employee issues, funding or cash
flow needs, significant unforeseen circumstances, sudden reductions in sales or other reasons, management should always have a 'fail safe' in place.
Knowing where and when to take an intelligent detour should be a key component of the firm's DNA.
 
Successful strategic plans are those that involve employees, owners, boards, customers and others.  The best plans are written with fact-based,
real-time market and competitive information and are not prepared simply as an internal 'book' exercise.  This entails setting and agreeing on long-term
Vision and Mission Statements for the company, establishing top-level goals, developing comprehensive SWOT (Strengths, Weaknesses, Opportunities
and Threats) analyses and assessing the current and future competitive landscape.
 
A key end product of the plan should be the creation of appropriate business strategies to accomplish the firm's desired market, organizational and business goals, including a
contingency plan (Plan B).
 
When preparing Plan B:
 
  • Start by exhaustively listing the pot holes the company could face while executing its plans.  If possible, describe scenarios for each, with various 'what if' alternatives shown. 
  • Assign a probability of occurrence, financial and timing implications for each.  
  • Then, pare the list to a manageable number of items, force ranked based on business risk.
  • Determine the 'triggers' for actually implementing Plan B (i.e. if sales drop to a specified level, certain key initiatives are delayed, etc.).
  • Establish a specific detour route for each contingency item.
  • Identify what steps will be needed to mitigate their impact, including organizational planning, resource reallocation, critical timelines, etc.  
 
Creating and executing Plan B is not an academic exercise, nor should it be  done on the fly.  In the spirit of "In Case of Fire, Break Glass," the CEO
and management team should develop (and have approved) a Plan B before it's actually needed.  The actual implementation of Plan B (if necessary) will be
greatly assisted by this pre-planning process and will allow the company to make the best decisions going forward.
 

The Traps of Ineffective Goal Setting

Sarah, the business owner/CEO looked at her watch.  It was late on a Friday afternoon.  The company's strategic plan had just been released.  The plan had taken months to develop and she let out a deep breath of relief.  "Whew.I am glad we now have a strategic plan!" she said to herself.  But, then, it dawned on her:  the hardest part is what lies ahead-actually making the plan happen.  

Strategic plan execution requires the commitment and assistance of every employee, not only the business owner/CEO and her senior team.  CEO jawboning and baton waving may be useful at plan kick-off meetings and events, but are usually not effective in making the strategic plan actually happen.  

So why is Sarah nervous? 

We all know goal setting follows strategy.  To be successful, the strategic plan needs to be operationalized with specific goals being established, delegated and shared.  Sometimes this effort becomes too much of an individual sport and does not enroll the entire management team.  Perhaps you have you experienced dysfunctional examples like these:

  • A manager was asked to rearrange his department's priorities due to a corporate business direction change and he said he wouldn't do it because "it wasn't in (his) individual goals."
  • A  head of a company's IT department found 8 major IT projects incorporated in the goals of non-IT executives without his  prior knowledge.
  • A VP of manufacturing committed to a set of capital improvement goals without first aligning the cash requirements with the finance department.

Here are a few tips to minimize the chances these examples (or instances like them) happen again:

  • Ensure all individual employee goals be specifically aimed towards the accomplishment of the overall corporate strategic plan.  Having everyone focused on the same target increases the odds of a successful plan outcome while minimizing one-off individual exceptions.
  • Establish or modify existing incentive plans so that they can be executed with both corporate and individual goal achievement included, as they are mutually inclusive.
  • Align the goal setting process so the entire management team stays on the same page if mid-term change(s) to the plan are necessary. 

Following this recipe, a successful company will increase its odds in accomplishing its strategic, operations and process improvement goals. With the Strategic Plan as a backdrop, CEOs and business owners are responsible for ensuring the company‚Äôs goals (and their own) are achieved, on time and in line with expectations.