CEO Exclusive Strategic Planning Update From Soyini Coke 
May 21, 2015

Today’s businesses move at lightning speed and measure everything in real time. Technology has helped CEOs get financials at their fingertips which would have taken months just a few years ago. So, with all this information assisting in the decision-making process, are business plans obsolete? If not, what does the modern era business plan encompass?

Marc Borrelli, of Corporate Finance Associates, suggests planning your competitive strategy to stay ahead of your competition and make sure it’s sustainable. “You've got to have a sustainable competitive advantage. Most companies don’t know what it is. If you have something unique and position yourself in the market, that sets you apart and you can get higher margins for your product.” 

What Marc often sees is that people have a strategy in one hand and a budget in the other. The two never quite work together, and it’s clouded as to why they cannot complete the strategy. He says they either don’t have the financial resources, or they don’t have the human capital. Will it take lot of time to hire the right people? Where will you get the money? So the strategy should be realistic.

Listen to Marc Borrelli on SoundCloud

Marc uses a four-part, crystal-clear planning strategy. “First, solidify a strategy. Don’t be one of those companies that maybe has an idea or dream, but it’s not written down. Second, share it with key people and executives. If they don’t know what the strategy is, they cannot execute it. Third, it should look real to the staff. If it is very big then nobody will read it or understand it. Make it simple, such as a one page plan. It should be short because, in that way, you can focus on it. And, lastly, make it executable.” 

Financial Voyages CEO Pamela Robinson, a long-time, award-winning, strategic advisor, likes to step back and verify a company is going in the right direction. She guides her clients to maintain laser-like focus because it's critical to growth. If you’re a successful company and are faced with continuing growth and multiple opportunities, you’ll want to distinguish which are really worth pursuing and putting your resources towards. Having specific, measurable goals to progress towards, putting the resources behind them and then the support of processes focused on that growth, is what gets you to the finish line. 

Pamela explains that there are different types of growth. “You can have very quantitative growth, like profitability. We tend to be more focused on that versus the top line because, at the end of the day, that’s what you take home. When you start a business, you’re in survivability mode, but when you are a few years into it, you need to focus on the long-term goals and objectives, and you’ll want to fine-tune the margins because they’re critical to business success.”

Listen to Pamela Robinson on SoundCloud

A good question to ask when planning is, what is that project going to cost you? What revenue are you going to bring in and what are the associated costs? Define other costs, like the acquisition costs of bringing on additional people, of improving processes for supporting all of those new activities, and any other direct costs. You’ll also have to figure in your operating costs. If you haven't made those processes efficient enough, you’ll be watching your margins shrink.

With processes in place, you’ll always know what your gross margin is, you’ll apply the taxes and then you get your net--which is your bottom-line. “So, understand your numbers.” Pamela warns, “That bottom-line is critical. It's not how much you're bringing in from revenue, it's that less your direct cost, and then what it's going to cost for that project or that program.” Just focusing on having revenue is not enough of a business plan.

On the May 12th show, I asked Scott Peters and Keith McNulty, of WNA Limited and The Intersect Group respectively, a strategic advisory team that specializes in business turnarounds, to answer the question. According to Scott, every CEO needs a plan on their journey, or it's going to be difficult to achieve success. A CEO will have the greatest impact for improvement if he/she remains open, works with his team to define what activity will be most effective, and has a business plan. Keith, on the other hand, isn’t so concerned about what is in the plan, just that a CEO has one. He suggests for chief executives to have lots of discussions about the company, what should be prioritized for the future, and develop a plan from those meetings.

Listen to Scott Peters and Keith McNulty on SoundCloud

Keith shared a quote. “One of my favorite comments about strategic planning came from Dwight Eisenhower who said, 'Plans are useless, but planning is indispensable.' So when statistics show that two-thirds of CEOs don't actually have plans, that's not necessarily a bad thing. The question is, what kind of planning do they do? The way I read the quote, it's not so much what's in the document as long as the document reflects the thinking of the group. It's the exercise that the groups of people actually go through to understand each other, understand the business, understand how that other leader on the other side of the table is thinking about their own operation, so that when we collectively set priorities, we're doing it as a group and it is actually a team effort."

According to Scott, “We use things that are proven: process improvement, process management, strategic planning, and prioritization of things. Those components are the block and tackle that goes into success. So it's not so much about the people as it is about using proven methodologies that companies like GE use.”

To reach Marc Borrelli, go to Corporate Finance Associates. To learn more about Scott Peters, visit the WNA website HERE. To get in touch with Keith McNulty, find him on LinkedIn. To get in touch with Pamela Robinson of Financial Voyages, visit her sites: Website LinkedIn Facebook Google+ Twitter

A Note From Annona Enterprises: I hope you have been enjoying CEO Exclusive Radio. I believe learning about current trends and how other CEOs work with their teams and advisors will allow you to craft better plans and strategies for success.

A surprisingly large number of businesses begin with good ideas and funding, and they race ahead using insufficient resources and a flawed business plan. As a result, they waste thousands of dollars and immeasurable time before they realize that no amount of inspiration, passion or dedication will rescue the venture from failure. Annona Enterprises' intense, bottom-line focus from business concept through operational implementation validates and evaluates business opportunities before you commit time, staff or money.  We then work with your organization to ensure fully integrated, success-oriented results.

If you would like a free consultation, contact us today, or join the CEO Exclusive Newsletter and if you'd like to be a guest on the show email [email protected].

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