Business Builders Podcast

Strategic Planning - How do we know when we've arrived?

April 03, 2022 Brenton Gowland & Ron Tomlian Season 2 Episode 17
Business Builders Podcast
Strategic Planning - How do we know when we've arrived?
Show Notes Transcript Chapter Markers

Today's episode is part five of the Demystifying Strategic Planning series. Our hosts Brenton Gowland and Ron Tomlian talk about how do we know when we've arrived in regards to achieving our strategic objectives.

The topics covered in this first part of the series are: 

  • Recap of the previous stages of strategic planning
  • What we measure gets done
  • Lead indicators and lag indicators
  • How to make our strategy part of the everyday operations of our businesses
  • Making strategic course corrections
  • Strategy is an ongoing process
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Brenton Gowland:

Welcome to part five of our series about demystifying strategic planning. In today's episode, we're talking about how do we know when we've arrived in regards to achieving our strategic objectives. Ron talks about the fact that when we put measures in place, the things we're measuring actually get done, and we discuss making our strategy part of the everyday operations of our businesses through a practice called Coat hangering. Well, welcome to the Business Builders podcast. We're your hosts. I'm Brenton Gowland.

Ron Tomlian:

And I'm Ron Tomlian.

Brenton Gowland:

And, Ron, we are staying on schedule with this series that we're running.

Ron Tomlian:

Very interested, I'm impressed.

Brenton Gowland:

This is a good precedent for the year, every two weeks we're doing a podcast.

Ron Tomlian:

Yeah, I'm enjoying the regularity.

Brenton Gowland:

Well, I gotta tell you, if you're out there, and you've done a podcast, it's really hard to get started. But when you get into a swing, it becomes quite enjoyable.

Ron Tomlian:

Oh, absolutely. So I'd say I look forward to every two weeks.

Brenton Gowland:

Correct. I wonder if our listeners are looking forward to it as well?

Ron Tomlian:

Well, let's hope so.

Brenton Gowland:

Well, we have people listening, we review the stats on this podcast fairly regularly. And and we see that there's a great bunch of listeners who as soon as we release an episode, they start downloading them. So I'm really looking forward to seeing how people respond to us in the future.

Ron Tomlian:

It's always it's nice to get some feedback. So it would be nice to hear what people were really thinking.

Brenton Gowland:

So if you want to tell us what you're thinking, there's a clue that you can contact us on LinkedIn and send us a message about what you think of the podcast. So Ron, just before we get stuck into the topic today, how have you been in what's going on in your business life?

Ron Tomlian:

Well, it's interesting. Here we are at the end of the first quarter of the year 2022. And things are just seeming to be getting back to the routine. I mean, one of the things is I'm looking forward to a couple of trips overseas in the new year.

Brenton Gowland:

Where are you going?

Ron Tomlian:

A conference in the United States for the Vistage, which is the equivalent of TEC in the United States.

Brenton Gowland:

Fantastic.

Ron Tomlian:

Potentially a conference in New Zealand. So yeah, I mean, we're starting to look beyond our own borders, which is fantastic.

Brenton Gowland:

So the conference shedule is starting up. And if you're listening to us in the United States, and you want to meet up with Ron, he's probably not going to the same place you are but.... No Nashville, were going to Nashville, Tennessee, Isn't that the jazz capital of the United States?

Ron Tomlian:

Wouldn't necessarily say jazz. That's more New Orleans. It's one of the Country Music capitals.

Brenton Gowland:

Oh, okay. My bad. Well, there you go. If you're going to be in Nashville, I think we've got...

Ron Tomlian:

End of January,

Brenton Gowland:

I think we've got like 12 listeners in the United States. And if it happens that you're in Nashville, and you want to have a coffee with Ron, we'll reach out.

Ron Tomlian:

Yeah, absolutely.

Brenton Gowland:

Okay, so we've obviously, we've been doing a series on demystifying strategic planning. And we've asked basically five questions. And Ron, I'm going to ask you to recap those questions before we get started.

Ron Tomlian:

Okay, where do where do we start? Where are we now? Where do we want to be? How are we going to get there? How will we know when we've arrived? And one we're going to tackle next time is why are we doing this anyway?

Brenton Gowland:

So today, we're looking at the question of how do we know when we've arrived and the whole time we've been using a map analogy, which Ron and I have been talking about on and off the podcast. And we've actually realised that this map analogy is quite a good example, for strategic planning. So we're running with that theme through these podcasts that we're doing with you to try and really help make this as simple as possible. And so today, Ron, on that, why is it important? Actually, you know have to skip the whole a whole thing here. We've forgotten our sponsors.

Ron Tomlian:

Yeah, we have forgotten our sponsors. So let's start off with.

Brenton Gowland:

Okay, so we've got Borough Markets who have given us this great, fantastic podcast studio that we're using at the moment. And they are an online marketing company that help you get to any person on any device with artificial intelligence. So if you want to find out more about Borough Markets, look up www.boroughmarkets.com.au. That's B-O-R-O-U-G-H-Markets.com.au. And then Ron, who else...

Ron Tomlian:

SA Business Builders, of course, and we've got our first meeting on Monday,

Brenton Gowland:

Next Monday, and I'm looking forward to it.

Ron Tomlian:

And, of course, Adapt_CO

Brenton Gowland:

Adapt_CO. Yes, that's me. So if you are looking for help with marketing, and getting your marketing issues sorted out within your business, and that requires some strategic thought and some execution of marketing strategies, well, I'm your man, come and talk to me. I'm working with a number of businesses at the moment. And my job is usually to help them get from point A to point B. Sounds very much like the strategic planning part, doesn't it?

Ron Tomlian:

Absolutely. Yes.

Brenton Gowland:

So we help them achieve their objectives. So that's our sponsors. And so now back into our topic, Ron. So the question is, why is it important to ask how do we know when we've arrived?

Ron Tomlian:

For that very reason. To have a an indication of how we're tracking. It's probably a little bit of a misnomer to really talk about how will we know when we've arrived, because we really want to know if we're on track along the way. And again, you need to have some measures. So it's important because you want to have some measures to let you know, are we on track to get to where we want to be. But you need to have a very firm understanding of where you want to be. And that means, it needs to be measurable. Now, what's interesting about all this is, if you've done your work properly, and you've developed SMART objectives, a lot of this should fall out.

Brenton Gowland:

So you're saying that when we've done the planning previously, like as we've come up to this point, that SMART objectives and of course make it much easier for us to put timestamps on all the objectives that we're kind of aiming to achieve.

Ron Tomlian:

And there's a measurable element to them. And it's not rocket science, to figure out that people often use things like how much money how much revenue will we have? How many customers will we have? And so there's measurability and all that. The difficulty comes in some of the other objectives that when people are a don't use measures, they say, We want to be the best. What does that mean? You can measure that, but you need to, you need to be able to quantify.

Brenton Gowland:

I think it'd be harder to measure being the best than it would to be able to put, you know, I want to grow by 5% by X amount of time, because that's a whole lot easier. But anyway, look what you've just said there. And I want to just come back to this, is you said, that the reason we ask the question, you know, how do we know when we've arrived is actually about keeping us on track. Because the big problem, and we've mentioned this through the series is that people do a strategic plan. And very often the implementation part is where you fall down, because you've done the great plan, everyone's ticked the box, you know, whatever time of year we're doing this. Yeah, we've got a plan, let's just go back to business as normal or, you know, whatever else. But it's that whole parable, analogy, whatever you want to call it, if you've just created a plan, and that goes and sits on the shelf. And you keep saying it's a great doorstop or a great this or a great that. This question actually seems to based on what you're saying, be part of the solution to make sure that that plan doesn't just go on the shelf?

Ron Tomlian:

Absolutely. Absolutely. You've got it in one. Because if you have measures, it helps you keep people and departments and functions within an organisation accountable for achieving the plan.

Brenton Gowland:

Well, that's interesting, because they're saying right, what you measure, you can manage. But, it almost sounds like, this is, what we measure gets done.

Ron Tomlian:

Absolutely. What you measure you do, because you know what needs to be achieved some measurement, and the whole idea of knowing how, how do we know when we've arrived? The whole idea is there had to have measures so that people can track their progress and understand, are we on track to achieve what we said we were going to do the endpoint.

Brenton Gowland:

So let's talk about this in practical terms, and what are those measures that we should be thinking about putting in place that will keep us on track?

Ron Tomlian:

Well, like I said before, if we've done the objectives, right, and they're SMART objectives, which is strategic, measurable, accountable, relevant, time oriented? That's what's SMART stands for. If we've done that, and some people say achievable, instead of accountable, but that's....

Brenton Gowland:

I say achievable.

Ron Tomlian:

If we have done that, then the measures, at least one type of measure, falls out automatically. For instance, if we say we want to increase market share by 30%. Well, then as you measure, share of market, if you say I want 1500 customers extra. There's your measure, it's definable. That's great. As long as you are satisfied with only looking at what we've achieved. And how are we going according to that.

Brenton Gowland:

So then, as you said, earlier, we had a discussion beforehand, this is lag measures.

Ron Tomlian:

These are lag indicators, lag measures.

Brenton Gowland:

Yep.

Ron Tomlian:

I'm a great advocate of saying, well, that's great. But I don't want to wait until the end of the month, or the end of the three years to know if I've achieved what I want to achieve. I think it's important to have what are called lead indicators in there as well. So for every objective, you have a lag indicator, which is the ultimate measure, have we achieved it or not, and a lead indicator, a good example of that might be in the marketing area. If you know that, for instance, in my line of business, if I get a certain contract, worth a certain amount of money, what do I have to do to get that? Well, to be able to get the contract, I have to put a proposal in. To get a proposal in I have to have had a meeting with someone. To get a meeting with someone, I have to have contacted someone and to contact someone, I have to figure it out that that's the type of business I want to work with. So working back along the line, it might be I am going to look at the number of meetings I have every month as an indicator then in three months time so much work will come out of that. And then might be if I have let's say 50% success with every step of the way, then I might have one proposal a month accepted as an example if it's a big contract, one proposal a month excepted that I might have had to put out three proposals, because I'm only 30% successful. And I might have to have had in the previous month, six different meetings with potential customers, because I'm 50% successful.

Brenton Gowland:

So you're lead indicator becomes you need to have 20 calls a day, or we're talking about sales and marketing here. And it might be that, let's say you just mentioned pipeline there, we know that we're closing 30% of our pipeline. So therefore, we need to make sure that our pipeline is always essentially three times bigger than what we need it to be. If it's not, that's not that's a lead indicator that we're not going in the right trajectory.

Ron Tomlian:

Yep, that's right. So it's an indicator of, and it needs to be an indicator, you don't just measure stuff for the sake of it. What are the things that give me some indication that in the future, this will happen as a result of this being achieved?

Brenton Gowland:

So this is an incredibly important part of strategic planning, right? Because we've done all this hard work to establish where we are, where we want to go, and...

Ron Tomlian:

And how do we get there?

Brenton Gowland:

And how do we get there? That's right. That's the strategic part. But then this part is asking this question, how do we know when we've arrived? Is really, if you're following along with this, this is the part that makes us and helps us get it done. So this lag indicator, and lead indicated that it's actually reasonably hard work. Like you've got to put a bit of science behind it, even what you've just said a minute ago, is you extrapolate in this marketing example you've given, this is what I need to achieve. And these are all the things that go into it. So therefore, I can measure this. But you can take that into an HR perspective as well.

Ron Tomlian:

Absolutely.

Brenton Gowland:

You know, if one of your strategic goals is to, I think we were talking about this earlier, is to is to bring up the skill level of your staff, one of your lead indicators could be Ron?

Ron Tomlian:

The number of people who are in training at any given time.

Brenton Gowland:

Correct.

Ron Tomlian:

You know, the number of people have done courses, that might be an indicator, it might be if you want to have a certain amount of capital equipment, what is our preparedness to raise money for capital to get the finance for it? That could be an indicator of will we achieve this capital expenditure?

Brenton Gowland:

Yes.

Ron Tomlian:

So all of the, everything you do has a process. And you need to determine at what point do we need to be measuring how we're going in that process to indicate future success?

Brenton Gowland:

Yes.

Ron Tomlian:

So what am I going to measure along the way? It's analogous, again, using the the map analogy, it's analogous to stopping somewhere along the way, and saying, Where am I along the way along the path to getting to where I want to be at the end?

Brenton Gowland:

So this is like the Roadhouse.

Ron Tomlian:

Oh, absolutely. So people do that. They say, Okay, I'm three hours into it. And I'm at this point, that means I've probably got another seven hours to go. So we do it naturally in our daily lives, we need to be bringing that discipline or that activity, that habit into our business lives as well.

Brenton Gowland:

Okay. So if we are talking about how we're going to get there. One of the really important things, just recapping is really putting on every objective, in our strategy that we have on every strategic direction, we need to have, in essence, if we can manage it, a lead indicator. So that's telling us that we're on the right path and a lag indicator that tells us when we've got there, and when we've arrived,

Ron Tomlian:

And tells us along the way, how many or are we getting towards what we want to have achieved?

Brenton Gowland:

Okay, so let's say we've got all these measures in place, Ron, how do we then take this into the everyday lives of our business?

Ron Tomlian:

Well, this helps us take that into the everyday lives of our business, because we start to make people accountable for achievement of certain things along the way. And there's a technique called Coat Hangering, I don't know if you've ever come across it? Where the plan for the organisation. Allright, we allocate certain responsibilities of that plan to people within the executive team, or the leadership team and a certain department, that department then becomes responsible for that section. And they need to determine what are their how are they going to achieve this? What are the strategies and tactics they're going to use? That flows down to the individual? Because everybody has a part to play. So it it may feel like a series of triangles or pyramids down to the individual level? What am I, what's my part in achieving this? How will what I achieve lead to the achievement of the organization's success?

Brenton Gowland:

Yeah, that's great. So in other words, if you present your plan, if the execs been involved with it, or your management team has been involved with it, this is about taking it to the next levels down, and it's about going, let's say to the to the marketing department and going this is what we need to achieve. We need to develop a plan to achieve these three objectives that board or the management have established for us. And these are what they're measuring us on. And this is how we need to be able to report. And so this is how we're going to do it and that's your Coat Hangering. So that department is then creating a plan to achieve the objectives because we were talking about strategic plan is high level, what do we need to do as a business to get to where we have established that we want to go and then you take that down to the individual where an individual's role might be, let's say there a BD a person that that person then needs to be able to talk to, as we said earlier, this amount of people per week and have this many meetings, etc, etc. And that becomes part of their established, well, how am I going to do that? How am I going to make this many people?

Ron Tomlian:

The disciplines of the everyday operations of the organisation.

Brenton Gowland:

That might go to finance people, whoever, yep, go on.

Ron Tomlian:

What's really important is the strategic plan is about how we're going to change the current situation. So it's really a change plan. So if we're going to change the operation of the everyday, we need to devote time, resources, money, energy towards that change. So a plan needs fuel.

Brenton Gowland:

Yes.

Ron Tomlian:

A plan needs fuel. And to determine how you're expending that fuel, like the fuel in the car, how you're expending that fuel, you need measures along the way. You know, we in a car, we look at the gas, the the petrol gauge, was gonna say, gas. Going back to my American origins here. But we'd look at the gauge, and we determine how we're expanding the resources of the organisation. So the indicators, and looking at those indicators, and how we're going becomes, and you would have heard this before the dashboard for the organization.

Brenton Gowland:

100%

Ron Tomlian:

The dashboard for how am I going towards achieving what I want to achieve? And we'd look at our dashboards in our car and just say, this is how many miles I've gone. This is how much fuel I've got left. This is how fast I'm going. This is how much time. It's the same sort of thing for an organisation.

Brenton Gowland:

This map analogy is really working out quite well.

Ron Tomlian:

Well, it's it's not it's not the first time it's been used. Let's be fair.

Brenton Gowland:

So just recapping, again, we want to take this into the everyday Ron, you were talking about Coat Hangering. So that's really getting everyone in the business to have a plan that relates to the strategic plan that whoever it is whether the owner the management board, has established. So that and the dashboard then filters down through the business. And it might be all different levels based on what that departments being measured by. But what we then have is basically the same language within the business, everyone's talking the same language, because you know, you were saying it's a change plan. So to have a change plan in place, you have to establish where we're going to go. Right. So we've done that through our strategic planning mechanism, but then we have to have reporting back in and people talking back in about how it's going. So you're getting everyone on the same page, which is why I love one page strategic plans, because that sits at the top, and then everything filters down and reports back into it.

Ron Tomlian:

And things will happen along the way that they're not foreseen. Nobody has a crystal ball and can tell you exactly what the future is. The plan and especially that one page plan, gives people a, if you like, a framework for making decisions, does what I'm about to do, or potentially about to do, contribute towards that achievement or not? If it doesn't, I question whether I should be doing it. If it does, easy peasy. I know that I should be doing what I'm planning to do. And so it gives people that decision framework to answer those questions. Is this going to contribute or not? If it isn't, if it isn't gonna help me probably I shouldn't be doing it.

Brenton Gowland:

Right. That's interesting. So that decision framework then also says, When do we make course corrections? So how often do you think these course corrections should be considered?

Ron Tomlian:

Okay, so, again, strategic course corrections? Probably not more than once a year. Right. And but it again, depends on the timeframe of the organisation.

Brenton Gowland:

And your lag indicators and lead indicators.

Ron Tomlian:

Yes. So they're telling you do we need to is this working? Do we need to change tack and sometimes you do change tack in terms of strategy or tactics that sit below that the actions and using the road analogy, you come across a detour in the road. Or you come across roadworks, and you have to make a decision? Do I use the original path and maybe go slower? Or do I take a course correction and go around the obstacle. Or is there a route that's opened up that's quicker and more efficient?

Brenton Gowland:

Yeah, that's interesting. Because again, you might hit roadworks along the way. So then you need to do a reconsideration along the way, but that's going to maybe happen once or twice on a long trip.

Ron Tomlian:

Yep. But again, as we found during COVID, sometimes there are major obstacles in the way, suddenly, somewhere an earthquake's happened and that a mountain pops up. Then we might need to make some big course corrections, because obstacles that were not there in the past are there now, they don't happen that often. But you need to be on a regular basis capable of making changes.

Brenton Gowland:

So as long as we've got this plan in play in the business, that everyone's on the same page that everyone's reporting that there's a dashboard in place, and we've got lead indicators and lag indicators that will then give us all the information we need to know when we're going to need to make these course corrections, you know, because if we've got lead indicators, then we go, oh, gee, there's a bit of a bumpy road on the horizon, we might need to actually make a coarse adjustment.

Ron Tomlian:

Yeah and don't forget. So we've talked about obstacles. There are also good things that happen. New systems that come into play new supply chain capabilities that suddenly opened up a new flight comes into Adelaide airport on a regular basis that I can suddenly get my produce to my markets more quickly. And that's an opportunity that happens that wasn't there before we didn't know about. So those things can be good things as well, suddenly, opportunities present themselves, which means you might be able to get to your objective more quickly because of those opportunities. They need to be taken into account as well.

Brenton Gowland:

That's an interesting thing, because you know, talking about this, we're answering the question again today, how do we know and we've arrived? The question that I want to end with is, do we ever actually arrive Ron? Because realistically, when you get to a place and you start thinking about the next place you going to. I can't imagine that we're going to go sit on our lazy boys for a year and, you know, drink, Pina Coladas and whatnot, but it'd be lovely.

Ron Tomlian:

That would be lovely. But organisations don't work like that.

Brenton Gowland:

No, they do not.

Ron Tomlian:

And markets don't sit still for long enough. And usually, by the time you know, we'll have significant confidence that the place you've identified by the time you've identified is within your grasp, you should be asking the question, where to next? And so very rarely do I see organisations or good organisations say, look, we're, we're about to achieve our strategic plan. Time's up, and we're just gonna wait for a while before we start.

Brenton Gowland:

Now everything's over, we can just some people, do they sell the business, but that's the next part of the strategic plan. Right?

Ron Tomlian:

But you know that, and this gets into the whole question of how do organisations ensure that people are on board with the plan? How do you celebrate all that sort of thing when you've achieved it? We can't get into that now. There's just not enough time. But it's important to have the next trays plotted out before you finish this.

Brenton Gowland:

Yeah, exactly. So the strategic planning process really never ends. So you're going to be constantly on the road until till your not. Which is what when you retire, sell the business, go do something else. But then you get back on the road again.

Ron Tomlian:

When I talked to the CEOs of organisations, I think it's always important to say, what's the end game? What's, where does this ultimately lead to, and for some individuals, it's I'm going to sell the business. For some individuals, I'm going to pass it on to the next generation, for some individuals, it is a perpetuating thing, because they don't own it themselves, their shareholders and so on. But it's always important to indicate, you know, what is what ultimately are we looking for? And that, to some extent flows into why are we doing this? Which is our discussion for next time.

Brenton Gowland:

Why are we doing this is really important, because sometimes, and we might talk about this next time, you might have a separate plan for the owners of the business, because telling your staff you wanting to sell the business might not be the right approach to take. It might be the right approach to take. But it says that we all have then individual plans as well, depending on what our role in this role is in the business.

Ron Tomlian:

Well you know, that Coat Hangering, that we talked about before, it's just as important for individuals in the business to understand where they are in the business and what their pay to play is.

Brenton Gowland:

So if you're listening today, I hope we've been able to effectively communicate the importance of asking the question, how do we know when we've arrived? Because just in recap, it keeps us on track. It actually ensures that we're going to implement the plans that we've put into place by having those measures that we've established to make sure we're on the road going in the right direction. And we know that we're going to arrive in the right place.

Ron Tomlian:

Yep.

Brenton Gowland:

And it's a continuous process.

Ron Tomlian:

Even if obstacles are put in our place, because we know what the endpoint looks like.

Brenton Gowland:

Exactly. So, that was good. I like that, Ron.

Ron Tomlian:

Wow, that's fantastic. I mean, to my way of thinking, all this stuff becomes critical for organisations to be able to chart the, and again, using the map analagy, chart their way through the obstacles and the unforeseen changes that happen in business.

Brenton Gowland:

See, for me, the exciting part is you do the strategic planning, but then you get into that implementation

Ron Tomlian:

And getting to into a discipline or a cadence of phase. And a lot of people get the strategic planning done and are very happy about that, and pat each other on the back getting consultants to do that. But then, that implementation part becomes the nebulous, where, you know, the consultants walked away, or we're back into the everyday business. So the exciting part is really, for me, seeing these plans come to life, and being able to actually work to these targets and goals and actually seeing them achieved. It's really exciting. regularly reminding yourself what are we doing? What Why are we doing this?

Brenton Gowland:

Yeah, well, that's next podcast two weeks time, why are we doing this anyway?

Ron Tomlian:

Yeah. But what I'm really getting to is the regularity of getting to a point where we know we are on the track, or we know we're off track and we can get back on it. It's really important to get regular to that cadence into the normal business cycles of any organisation.

Brenton Gowland:

Agreed. Okay, so if you've been listening here today, thank you for listening. We hope you've enjoyed it. We hope you got something out of it. And as we said at the start, we'd love to hear your thoughts. We've got one more episode to go on our series about demystifying strategic planning. And then we're going to go into a whole heap of new episodes, which may be related. And we'd love to hear your thoughts. If there's anything you'd like us to start looking at, please contact us on LinkedIn and let us know. Any final thoughts for today, Ron?

Ron Tomlian:

No, I think we've, we've covered it. And I'm really looking forward to having that discussion about why.

Brenton Gowland:

Yeah, me too.

Ron Tomlian:

For people who want to do a little bit of forward reading on that Simon Sinek's"Start With Why". Look up a podcast on Simon Sinek he loves talking about this, and we're going to use a lot of his ideas next week we're gonna have this discussion.

Brenton Gowland:

Two week's time, its fortnightly remember. Okay. Anyway, look, thanks for listening, and that's bye from me.

Ron Tomlian:

And bye from me.

Brenton Gowland:

We'll see you next time.

Intro
About our topic, how do we know when we've arrived?
What we measure get's done
Making our strategy part of the everyday operations of our businesses
Making strategic course corrections
Do we ever actually arrive?
Conclusion