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High Performance: Getting back in the game

September 7, 2021 -  By
Stair-step blocks leading up to target (Photo: cagkansayin / iStock / Getty Images / Getty Images Plus)

Stair-step blocks leading up to target (Photo:
cagkansayin / iStock / Getty Images / Getty Images Plus)

Fall is a time to get back in the game after a season of vacations and summer leisure. More specifically, the fall season is the perfect time to update our strategic plan, clarify goals for next year and develop budgets. Getting a jump on these activities in September is essential if our goal is to have our plan in place before the end of the year.

Update strategic plan

Our strategic plan needs to be assessed and updated at least once a year. Early fall is a great time to do this work since the strategic plan naturally impacts short-term goals and budgets. When an organization has clarity about where it wants to be in (X) years, the path to get there may be established, and goals become apparent.

Best practice is for leadership teams to disconnect from day-to-day activities for a couple of days each year to update their strategic plan. Getting out of the office helps to avoid distractions and allows participants to be freed up from worrying about normal everyday tasks. A comfortable retreat location will promote inspired ideas, camaraderie and good memories.

Clarity goals

With a long-term strategy in place, goals become fairly obvious. The real work is with clarifying these goals. Take each goal and answer the following questions:

  • What specifically is the goal?
  • How will you know if the goal has been achieved or not?
  • Is this goal quantifiable? If so, what is the metric?
  • Who is taking the lead on this goal to make sure it gets accomplished?
  • Who else needs to be involved in this goal?
  • How often will we review progress toward achieving this goal?
  • What are the primary obstacles that need to be overcome?
  • What steps will be taken to address these obstacles?
  • What is the deadline for this goal?
  • What are the major components of this goal?
  • What are the deadlines for the major components?

Develop budgets

There are three budgets that most businesses need to develop. The first is the financial budget. This is a traditional profit and loss projection for the upcoming year, broken out on a monthly basis. Revenue, direct costs and gross profit budgets should be developed for each division. Overhead costs are often not broken out by division due to the complexity involved and the lack of accuracy.

A financial budget is the most important budget because it establishes a complete financial plan. Once this plan is in place, there are two other budgets to develop: sales and production.

A sales budget is a detailed plan of where the revenue is going to come from. There are three perspectives to incorporate into the sales budget. First, we need to establish sales budgets for all products or services. Second, it is helpful to also establish sales budgets for each customer segment. Third, we need to nail down sales budgets for each person with sales responsibility. All three aspects are important for bringing clarity to the overall sales budget.

A production budget is a detailed plan of how the production (operations) team is going to produce to the revenue shown in the sales budget. This budget is often overlooked but is critical to achieving our overall goals. If we do not have enough operational capacity to hit our sales goals, our entire plan is going to fail. The production budget forces us to take a hard look at our subcontracting plan, vehicles, personnel and management structure.

All three budgets should be reviewed monthly (at a bare minimum), comparing actual to goal and discussing obstacles. As the year unfolds, budgets will be modified and decisions will be made to adjust to the realities that present themselves. This is all part of the process.

Fall is here. It’s a great time to get back in the game and get ready for what’s coming. Will you be ready for 2022 with your updated strategic plan, clarified goals and budgets?

Now go forth.

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