In the first article of a three-part series on the annual business planning process, we covered the typical challenges and failure points companies encounter. We also provided a successful approach to planning that is fact-based, encourages robust dialogue and compels the executive team to create a realistic and measurable plan. In the second article, we covered the essential elements of a successful plan rollout to the next levels of leadership and the entire company. The last step? Effectively monitoring, measuring, managing and adjusting actions in order to achieve the targeted company goals and organizational objectives.
“Nice try!” “Great effort!” “Maybe next year!” These words of encouragement are often heard at sporting events — perhaps primarily amateur, organized sports for children. While appropriate in a skills-building environment, imagine a CEO or board broadcasting these words to a company that boldly missed its annual targets, fell short of profit numbers and lost market share. Yes, it would have to be a very cold day. The point? When it comes to business planning and achieving goals, it’s about results rather than effort. To be sure, the outcomes are the final arbiters of business success.
So given that a company has diligently followed a proven approach for planning and rolling out the annual business plan, how will it execute to meet its goals and objectives? What should be done if a department, organization or company misses targets during the year?
Based on our experience, as well as our work with organizations of all sizes, we believe that three critical strategies keep a company on track to meet its annual business plan:
- Active performance management.
- Consistent communication.
- Action plan and behavior reinforcement.
Read on for details behind each of these key strategies.
1. Active performance management
Performance management includes activities that ensure that goals and objectives are consistently being achieved in an effective and efficient manner. Performance management can focus on the performance of individuals, departments, organizations, processes and the entire company.
We underscore the word “active” because we find that many companies or organizations spend time and energy implementing systems and reporting that provide performance information, but they do not consistently incorporate them into their management and review processes. Monitoring, measuring and managing performance must be a priority to prevent latent identification — and resolution — of a financial or operational problem.
In part 2, we recommended 6 steps that should be incorporated into annual planning:
- Confirm company goals and establish specific organizational objectives.
- Create measurable milestones.
- Develop a detailed plan and detailed tasks.
- Identify job-level changes.
- Identify which key performance indicators will measure progress.
- Prepare for company and organizational communications.
Steps 2, 4 and 5, in particular, form the foundation for tracking progress against the plan. The milestones, key tasks and KPIs should not only be reviewed frequently but also be priority topics in departmental, organizational and company meetings, as appropriate. This review reinforces the focus on the business plan and goals. Further, the faster issues are identified, the faster they can be resolved.
The challenge, however, might be rapidly translating these issues into actions that can actually improve performance. Leaders must analyze identified issues, determine what actions need to be taken and then communicate those actions to the appropriate people and organizations.
Realigning resources, eliminating barriers to key tasks and repurposing action plans as necessary to improve performance can provide desired results as long as the leaders are not the bottleneck to timely performance management. When instituting a performance management framework to enable rapid problem analysis, solution identification and communication, companies should include:
- Issue ownership and an escalation path.
- Issue impact assessment and prioritization.
- A corrective action implementation time frame.
- Communication protocols and a tree (distribution) based on problem and corrective action.
With a sound performance management foundation and framework, issues can be analyzed in a timely manner and recommended actions can be rapidly and effectively communicated to the right people. As a result, the department, organization and company can get back on track to meet the plan and goals.
Many companies leverage software to manage employee performance and automate tracking key metrics and measures for company performance. Properly implemented and broadly leveraged systems allow the company to get near-real-time indicators of key metrics, thus facilitating the effective delivery of strategic and operational goals.
Studies indicate that there’s a clear and immediate correlation between using performance management programs or software and improved business and organizational results. Regardless, companies must embrace monitoring, measuring and managing performance and making necessary adjustments to meet their business goals.
2. Consistent communication
Productive employees are essential to a high-performing company that tracks to its plan. Employee motivation is key to maintaining productivity. And a critical component of that is communication — consistent communication. In fact, they’re most motivated when management delivers consistent briefings on all company news with an open door for questions and more information.
So how does a company effectively communicate with its employees? And how does the company make it consistent?
No matter a company’s size or culture, a void in communication can breed rumors that are an unnecessary distraction from a positive, productive workplace. Setting up a consistent communication plan will eliminate these rumors and positively impact productivity and morale. Here are some communication forums to consider:
- Create an official annual company communication plan.
Develop a communication schedule that includes weekly, monthly and quarterly meetings and communications that align messaging for departments, organizations and the company to communicate progress against the plan. Share the communication schedule and expected topics with the entire company so everyone knows these communications will occur.
- Establish an internal leadership blog.
An internal, private blog lets leaders communicate freely with employees without blasting news to everyone on the Internet. Create a schedule for leaders to communicate their department and overall company performance news. Allow comments to build a more open and transparent community.
- Use alternative communication channels.
With many communication options available, it is wise to consider multiple channels to reach today’s virtual workforce. Add webinars (record them and make them internally available on demand), video-recorded meetings (also make them available on demand) and social enterprise software for chatting and other collaborative forums. Keep doing in-person meetings, blogs and emails.
- Host informal gatherings.
Whether it’s a new-hire meet and greet, lunch and learn, or staff meeting, leaders at different levels can rotate on a monthly basis to review what’s been posted on the blog with any new updates. Face time with employees is always meaningful, reassuring and morale-boosting.
Whatever the communication channel, the bottom line is that consistent, open dialogue shows that the company values employees, which motivates them.
3. Action plan and behavior reinforcement
Our third strategy for keeping a company on track to meet its annual business plan is the use of reinforcement to stress the importance of the action plan and influence employee behavior. We hope that reinforcement is primarily in the form of publicly recognizing and rewarding accomplishments that are key to achieving the annual plan. However, sometimes it is necessary to hold employees accountable for issues that arise. Both forms of reinforcement align the organization and actions to support the plan.
Other forms of reinforcement include optimizing incentive plans to specific goals for over achievement, not just business as usual. This tactic also improves employee engagement because employees understand how they directly contribute to the organizational and company goals. Reinforcement serves to create transparency in the business plan and achievement of goals.
Time to celebrate!
A company’s development, rollout and achievement of a solid business plan and goals warrant a celebration. Too often company leaders are so focused on pushing their teams and themselves to meet business targets that they don’t take time to celebrate successes. Celebrate when meeting major milestones and annual goals and making significant achievements. It reinforces the importance of the plan and motivates employees.
Barring macroeconomic situations that the business cannot control, our three-part series on annual planning provides the planning, rollout and management strategies to position a company to create and meet its business goals. And even in the face of significant global changes, company leaders who actively manage performance are in the best position to make the right adjustments to shift company resources and re-prioritize actions for the health of the organization.