Creating Effective Business Plans

As managers begin making a business plan for the coming year, it is essential for each manager to have a clear plan that aligns with the organization’s priorities, achieves the purpose of their department, and establishes clear plans for employees.

Sound business plans create a clear picture of the following:

• Why the business exists (mission).
• Where they want to go (vision).
• What they stand for and how decisions are made (values).
• How they are going to achieve their vision and purpose (strategy and objectives).
• What matters most (key priorities)?
• They are now achieving their vision, purpose, strategy, priorities, and objectives (key performance indicators or business measures).

Often the missing link in the execution of the business plan throughout the organization to each employee. Herein lies a vital responsibility of each manager/supervisor. How do they guide their department and work team to achieve business strategies and key priorities?

Manager Department Planning

First, managers have explicit knowledge of the business’s plan, strategies, objectives, and priorities. Next, operate your department like a business by answering the following questions with your team:

• Why does our team exist (department mission)?
• Where do we want to go (vision)?
• How are we going to achieve our vision and purpose (strategy and objectives)?
• What matters most (key priorities)?
• We are now achieving our department’s vision, purpose, strategies, priorities, and objectives (key performance indicators or business measures)?

Why We Exist?

In defining the “why,” push hard to find the core reason with high purpose and value that aligns with the business plan. Sometimes you have to ask “why” five times to get to the core. Avoid reasons for existence that are self-serving or that are not motivating for the team. For example, making a profit, cutting costs, and building products motivate the team, although they play an essential part in doing business. A manufacturing department that builds surge protectors might have a purpose or “why” of:

• Protecting people’s lives while they enjoy using electrical products.
• Building high-quality products effectively with zero errors or returns.
• Delivering products on time.

Where We Go from Here?

It is essential for managers to continually know what is most important to the organization to keep their team focused in these areas. Many organizations go through an annual SWOT analysis to critically review their strengths, weaknesses, opportunities, and threats, looking both at their market and within their organization. Next, they build a business plan, set priorities, and align their resources to impact the organization’s most significant impact. Department managers can do the same with their work teams:

• Understand the strengths and needs of your team members.
• Know department weaknesses and areas needing improvement.
• Look for opportunities to improve and better align with business priorities.
• Eliminate threats and solve challenges that prevent your department and team from achieving their priorities and objectives.

Department Strategy – How to Get There

Achieving your department strategy requires having a clear picture of what’s essential to the Company and how best to improve your department, set team and individual objectives, and key performance indicators. Clearly define overall plans for the year, breaking them down to quarterly and monthly objectives and milestones. Make sure each team member understands their role and expectations.

Best-made plans will fall flat if they are not effectively aligned and executed by employees. It is your people who make the most significant difference in whether plans are achieved or not. Use the following techniques to align and engage your people as you execute department business plans:

Communication:

• Communicate business strategy, showing how it will involve and impact employees. Give employees line-of-site, showing them how they fit into the plans and make a difference.

Involvement:

• Where possible, obtain employee involvement when defining actions, goals, and Key Performance Indicators (KPIs). This helps create better measurements and obtains their buy-in to bring about desired results.

Objectives:

• Establish a cascading objective system. Starting with the Company’s objectives, the department manager sets objectives that they own and impact the Company’s objectives. Have team objectives and KPIs that are tracked and reported regularly. 
• Next, employees set objectives that achieve their department leader’s objectives, job purpose (job description), and individual KPIs. Would you please make sure they identify those KPIs so that the employee’s job purpose is achieved when they’re complete? It may not be possible to roll out objectives to every organization member. Still, you can help them understand the needed behaviors and actions that best support the team and Company.

Setting SMART  Objectives

(Specific, Measurable, Achievable, Results-Oriented, and Time-Bound):

• Sometimes setting monthly or quarterly objectives are easier to manage than full-year objectives. This keeps employees focused and allows you to adjust to new changes, needs, or priorities. Avoid the tendency of setting too many KPIs or objectives. Pick the two or three that matter.

• An organization’s strategic goal is to achieve its vision. The organization achieves its strategic goals by addressing the outcomes of the vision project. Organizational goals typically don’t have specific outcomes that can be defined and measured because they are not specific. The business plan should also identify the gaps in its current strategy and implement changes that would help them to achieve its desired outcomes. The organization should also improve their existing strategies by identifying ways to be more effective in achieving the desired outcomes. The organization should also implement changes that would help it achieve its desired outcomes faster and more efficiently.

Score Keeping:

• Keep score on performance for your department, work teams, and individuals. Define and track key performance indicators that, when achieved, bring about desired results. Develop ways to communicate scores and results. Doing a formal performance review at least once a year is a good practice. Leaders will want to do informal discussions with employees as needed, at least monthly.

Recognition:

• Celebrate small wins along the way, recognizing accomplishments and behaviors by department and individual. Have formal and informal recognition efforts.

Accountability:

• Hire personally accountable people. 
• Expect people to achieve their objectives, action plans, and KPIs. 
• Confront low performers, coaching them to make needed revisions.
• Coach, reinforce, and communicate regularly to hold yourself, your team, and individuals responsible for bringing about your department’s plans for the year—no excuses, victimization, or rationalization; only results.

Effective business planning takes an organized effort, involvement from key players, and engagement and accountability by everyone to make them a reality. Align people with your plans through objectives, communication, and involvement, reinforce and hold everyone accountable for results and celebrate the wins together.