Poking through 11+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

KG Charles-Harris sent me an article about goals, neuroscience, and “Temporal Myopia”— the inability in the decision-making process to consider the long-term consequences of an action. Good information that scientifically confirms the idea that the best way to accomplish a long-term goal is to break it down into short-term pieces that provide daily gratification.

It reminded me of this post and the real importance of planning. Rereading it I can say without reserve that the most important point you can take away is found in the final sentence.

Read other Golden Oldies here.

Plans are made and remade over and over again, so why plan at all if it’s going to keep changing? Because the most valuable part is the act of planning, not the result of it.

Planning forces you to think in depth—an often painful process that most of us would rather avoid.

For example, it is impossible to plan an upcoming product launch without considering all the things that could go wrong simultaneously with defining the steps to take and the results you seek.

The discussion (even if it’s with yourself) engendered by stating that you are going to do A forces you to consider what will happen if A doesn’t accomplish what you want or what to do if doing A becomes an impossibility for whatever reason (time, money, manpower, etc.)

It is plan-the-verb that distinguishes the winners from the also-rans and it is the verb that keeps you ahead of the competition.

Just as importantly, it is plan-the-verb that should be pushed down throughout your organization.

This is accomplished by giving the goal to the next level down and asking them to plan how they will achieve it. They, in turn, should create multiple goals from it and pass those down to their direct reports and so on down the organizational ladder all the way to the lowest level.

At each handoff the goal is divided again and again and each person has to plan how to achieve it with the help of their group.

Always plan in pencil, because plan-the-noun needs to be a living organism that grows and changes, just as a tree bends in the wind to avoid breaking—just be sure to recycle the paper on which plan-the-noun is printed.

The benefits of this process are enormous, first, because it makes plan-the-verb a part of your corporate culture, as well as a core competency, which gives your company the ability to react far more swiftly as the waves and eddies of the economy and your industry constantly change your market.

Plan-the-verb boosts initiative, encourages taking responsibility and speeds professional growth, providing you with a stronger in-house bench from which to grow.

It is always detrimental to value the noun—plan, leader, manager—more than the verb—plan, lead, manage—but in the business world it can be devastating.

Image credit: Robert Nunnally

Planning isn’t most founders’ favorite thing.

Mainly because plans are made and remade over and over again, so why plan at all if it’s going to keep changing?

Because the most valuable part is the act of planning, not the result of it.

Planning forces you to think in depth—an often painful process that most of us would rather avoid.

For example, it is impossible to plan an upcoming product launch without considering all the things that could go wrong simultaneously with defining the steps to take and the results you seek.

The discussion (even if it’s with yourself) engendered by stating that you are going to do A forces you to consider what will happen if A doesn’t accomplish what you want or what to do if doing A becomes impossible for whatever reason (time, money, manpower, etc.)

It is plan-the-verb, as opposed to plan-the-noun, that distinguishes the winners from the also-rans and it is the verb that keeps you ahead of the competition.

Just as importantly, it’s plan-the-verb that should be pushed down throughout your organization.

This is accomplished by giving the goal to the next level down and asking them to plan how they will achieve it.

They, in turn, should create multiple goals from it and pass those down to their direct reports and so on down the organizational ladder all the way to the lowest level.

At each handoff the goal is divided again and again and each person has to plan how to achieve their part with the help of their group.

Always plan in pencil, because plan-the-noun needs to be a living organism that grows and changes, just as a tree bends in the wind to avoid breaking.

The benefits of this process are enormous.

Embedding plan-the-verb in your company’s culture means it to become a core competency.

That gives your company the ability to react far more swiftly as the waves and eddies within your industry and the economy in general constantly change your market.

Plan-the-verb boosts initiative, encourages taking responsibility and speeds professional growth, providing you with a stronger in-house bench from which to grow.

It is always detrimental to value the noun—plan, leader, manager—more than the verb—plan, lead, manage.

But these days it can be devastating.

Image credit: Robert Nunnally

One of the hardest things that bosses of growing companies face is the need to stop shooting from the hip.

I frequently hear from startups, small biz and entrepreneurs that growing up would ruin their culture.

They tell me it stifles creativity. It’s for larger companies. It’s bureaucratic. It’s too time consuming.

“It” refers to the underpinnings of all successful companies. “It” includes stuff like,

• Financial controls
• Annual operating plan that includes financial planning (you can’t plan to do something if you can’t pay for it)
• Organization charts and definitions of responsibilities
• Hiring process
• Long-term planning
• Centralized information technology implementation and planning

Whether it’s just you, or one, ten, fifty or more employees, whether full time, part time or virtual, you need viable processes to keep you focused—think of it as coloring inside the lines.

Everything on this list can and should be scaled for applicability, but all are necessary in some form for any business endeavor.

You don’t have to implement them all at once, but none will happen as long as you allow your MAP to reject or begrudge them.

And don’t confuse process with bureaucracy. Process is like MAP, it gets you where you want to go, whereas bureaucracy stifles whatever it touches; process, like MAP, is ever-changing and growing, while bureaucracy is carved in stone.

It boils down to the fact that bosses can’t be cowboys, so hang up your boots and spurs and do right by your company and it’s people.

Flickr image credit: http://www.flickr.com/photos/daryl_mitchell/2814824048/

Every year I spend time with clients helping them understand the kind of planning they need to do now in order to be on the road to success the following year; I also like to share an outline of the process with you.

You have to have a plan
Anyone leading a company, even a company of one, needs to know

• what you want to do, and
• how you’re going to do it.

This brings you to the crux of the matter—how do you plan for a sustainable business?

Choose your approach

• SOP (seat of the pants): Used frequently throughout business history, and extensively in the late Nineties. The CEO (top dog) discusses her desires over lunch with other (hopefully) senior staff members. Separately, each manager prepares a budget, including headcount for his department based on
  • what he thinks is needed to accomplish what the head honcho says she wants and
  • increasing his own leverage within the company (although these two are frequently reversed).

• PBO (operating plan w/budgets and objectives): Requires more thought and effort, but is the approach of choice for well-run companies. It requires the
  • creation of a viable operating plan to achieve the objectives; and a
  • detailed budget by which to implement it.

SOP, in all its glorious variations, spells chaos (which can be accomplished with no help from me), so we’ll focus on PBO.

What’s PBO?

Three interlocked pieces—each critical to success.

1. A budget that states

• how much is available to spend during the upcoming year and
• who is responsible for spending it.

2. The specific objectives that the company needs to accomplish during the year,

• financial, e.g.,
  • increase revenues 10%
  • increase services to 25% of revenues; and the
• quantified managerial, e.g.,
  • raise productivity 8%
  • reduce turnover 15%

3. A description of how the company plans to achieve the objectives in order to move forward on accomplishing the company’s long-term twin goals of profitability and success.

The end result is a detailed business roadmap for the coming year.

Where’s the rocket science?
The three parts are interrelated and must be tightly linked, so changing one affects all.

That’s it. Simple, right? Unfortunately, many executives treat them as separate entities wreaking havoc on their subordinates. They don’t get, or don’t care, that it’s a domino effect and that when one changes they all must change.

Which are you?

• The boss who can’t be bothered to do the hard work and make the tough decisions and doesn’t worry about jerking his people around because ‘they’ll get over it’; or
• the boss who believes that with a good plan, known objectives and a viable budget all the managers—executives to the lowliest supervisor—will buy-in and execute intelligently throughout the year?

As always, it’s your choice.

Image credit: http://www.sxc.hu/photo/914885

It’s November, a time when the end of the year is suddenly much closer than you thought.

During the next two months people will be doing their best to tidy up all the loose ends, both business and personal, before the year ends.

Whether you do it yourself or have and executive team and thousands of employees, you can’t afford to focus only on wrapping up 2009; you need to plan for 2010.

The approach we use was drummed into my head since 1979 by Al Negrin, RampUp’s angel and chairman.

It’s called PBO (plans, budgets and objectives), but is very different from the old MBO (management by objective).

The critical act in PBO is to tie the plan to the objectives and to be sure that the budget, including headcount and other resources is adequate to support them.

For example, to achieve the objectives set for the marketing department requires increasing headcount by 5 people, but the budget for marketing only covers the cost of 3, so it becomes impossible for the manager to achieve the objectives.

Doing this actively sets your people up to fail—not the smartest approach for any manager.

And don’t sit quietly by if you receive an impossible set of objectives in the false hope that you can somehow protect yourself and your team.

In tight economies objectives often become more like wish lists; this is especially true after layoffs.

If your budgeting process is reality-based then there is no way to cut X% of a department’s headcount without reevaluating that department’s objectives as well as the company’s—it’s all connected.

Click these links to read a detailed explanation of PBO and how-to do it, and then tweak it to fit your own needs. If you need some help feel free to call me at 866.265.7267 or email miki@rapupsolutions.com, subject line about PBO (in case of filters).

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Image credit:  ZedBee|Zoë Power on flickr

I guess it’s pretty egotistical, but one of the links I’m giving you today is mine.

It’s is a quick read, but really useful; a guest post I did for Catch Your Limit Consulting, a strategic management and marketing firm, called Hate The Plan, Love The Planning. Let me know what you think.

The second one is an article you’ll probably be hearing a lot about. No matter what you think of the content, the question is whether John Mackey, CEO of Whole Foods, should have stepped into the political wasp nest of healthcare. After you read the article, be sure to click the comment tab at the top and scan through some of them. Interesting reading.

And please take a minute to share your favorite business OMG moments for the chance to win a copy of Jason Jenning’s Hit The Ground Running.

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Image credit: nono farahshila on flickr

When I wrote The Swamp And The Alligators: a (slightly irreverent) guide to career planning and the search process I had a chapter on career planning. Here is the first paragraph

“The world we live in is not conducive to planning in general, let alone long-term, i.e., strategic planning. There are very few good, visible role models who practice strategic planning. Elected officials don’t plan beyond the next election, while the government doesn’t seem to plan at all. Wall Street’s de facto definition of long-term is one quarter and companies are forced to accept and act on that definition or have havoc wreaked upon their stock. Even short-term planning is more reactive (fire fighting) than pro­active. When planning is done, it’s frequently approached as a project comparable to climbing Mt. Everest with the end product required to outlast the Tablets.”

That was more than 15 years ago and nothing’s changed—people still aren’t comfortable planning.

There’s a simple trick to planning, whether for your career, family or company and I’m going to share it with you. In order for it to work, you have to stay conscious of the idea behind the action all the time.

Are you ready?

PLAN IN PENCIL

It doesn’t matter if you’re using a computer, plan in pencil.

Planning in pencil means accepting at the outset that plans change as life changes and that’s OK.

No person living or dead could have predicted the current economy. Even those who saw the looming problems in derivatives and sub-prime mortgages couldn’t forecast what is happening.

Plans need to be flexible, to bend and sway with the winds of fortune and the life changes that can’t be predicted.

PLANNING IN PENCIL is a state of mind, the part of your MAP that allows you to move forward at warp speed, yet still turn on a dime.

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Image credit: idesign-er on sxc.hu

“Don’t be fooled by the calendar. There are only as many days in the year as you make use of. One man gets only a week’s value out of a year while another man gets a full year’s value out of a week.“ –Charles Richards (And it’s your choice…)

“It’s not the plan that is important, it’s the planning”. –Graeme Edwards (Unlike crosswords, plans should always be done in pencil.)

“Life is what happens when you’re busy making other plans”. –John Lennon (Which is why you should use a pencil.)

“You see things and you say, ‘Why?’ But I dream things that never were and say, ‘Why not?'” –George Bernard Shaw (One of the basics of my own plan.)

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Image credit: katphotos on flickr

Yesterday we talked about the difference between SOP (seat of the pants) and PBO (plan, budget and objectives), so I assume that you’re the manager who wants to provide a plan that will win your people’s buy-in

What PBO offers

• buy-in from every manager in the company,
• a statement of objectives incorporating the commitments of them all, a budget which reflects the agreed spending level for every person with any kind of budget responsibility—and the further down you push budgetary responsibility the faster your people grow—and
• the ability to execute the operating plan intelligently and without further direction.

Although I’ve used a full executive team in the steps, feel free to use your common sense to modify them to fit the structure and size of your company

Steps to PBO

1. The CEO details the top-level financial and managerial targets for the upcoming year. Limit the number of goals to three, definitely no more than five, because these are major goals requiring the efforts of the entire company to accomplish and most executives will have additional goals for their own departments

2. The CFO then creates an income statement based on the CEO’s targets. These include both new financial objectives as well as revenues projections based on the previous year, economic projections, health and growth of target markets, etc.

3. Distribute both documents to the senior staff.

4. Each VP analyzes the part for which they’re responsible and decides what’s required to accomplish it, e.g., additional headcount, new equipment/software, cooperation from other departments, etc. They may also add departmental objectives, e.g., a new computerized software release tracking system in engineering.

5. The senior staff then negotiates their inter-related needs. This is rarely a calm discussion. Expect feelings to run high as your execs fight for the resources that they believe necessary to accomplish the objectives. It’s also a good idea to watch for covert empire building or efforts to undercut political opponents or support allies.

6. The negotiations result in separate departmental budgets. However, if the projected revenues won’t support the budgets then the CEO needs to modify the original objectives.

7. Repeat steps one through six until the projected revenues cover the budgets required to accomplish the adjusted objectives. The result is a trial operating plan and budget, not a final version

8. The VPs take the trial plan and budget to their own staff and repeat the negotiating process with their direct reports who then do it with theirs, etc. This is not a sales function meant to overcome objections from the lower staff. Rather, it’s an effort to uncover any difficulties that would surface later, but could be addressed now, as well as a way to achieve true buy-in at all levels.

Note
Any change in any part requires a revision of the plan and a repeat of the above steps—multiple revisions are not unusual nor are the passionate discourse and heated discussions that happen before a completely acceptable operating plan is produced

Benefits

• The smartest CEOs make the overall Operating Plan and Objectives available to all knowledge workers via the company intranet (it may give your legal department ulcers) because employees at all levels are happier (read: turned-on, productive and innovative) when they know that their company knows what it’s doing, where it’s going, and how it’s going to get there.
• It enables management to execute the plan without detailed day-to-day supervision because the trade-offs have already been negotiated and established.
• Lower levels of management are empowered and motivated by their inclusion in the process.
• Micro-managers and those who believe that workers are peons to be shoved around according to the manager’s whims will either change or go away—one of the most important side benefits of the PBO process.

I would love to hear any thoughts or questions you have. You may comment here or call me at 866.265.7267.

This is the wrapping season, with everybody doing their best to tidy up all the loose ends, both business and personal, before the year ends. For bosses it’s more complicated. Whether you do it yourself or have thousands of employees, you need to master the fine art of wrapping up this year while readying for the next one.

You better have a plan
Size be damned you need to know

• what you want to do, and
• how you’re going to do it.

This brings you to the crux of the matter—how do you plan for a sustainable business?

Choose your approach

• SOP (seat of the pants): Used frequently throughout business history, and extensively in the late Nineties. The CEO (top dog) discusses her desires over lunch with other (hopefully) senior staff members. Separately, each manager prepares a budget, including headcount for his department based on
  • what he thinks is needed to accomplish what the head honcho says she wants and
  • increasing his own leverage within the company (although these two are frequently reversed).

• PBO (operating plan w/budgets and objectives): Requires more thought and effort, but is the approach of choice for well-run companies. It requires the
  • creation of a viable operating plan to achieve the objectives; and a
  • detailed budget by which to implement it.

SOP, in all its glorious variations needs no further explanation (anyway, I don’t believe in it), so we’ll focus on PBO.

What’s in a PBO?

Three interlocked pieces—each critical to success.

1. A budget that states

• how much is available to spend during the upcoming year and
• who is responsible for spending it.

2. The specific objectives that the company needs to accomplish during the year,

• financial, e.g.,
  • increase revenues 10%
  • increase services to 25% of revenues; and the
• quantified managerial, e.g.,
  • raise productivity 8%
  • reduce turnover 15%

3. A description of how the company plans to achieve the objectives in order to move forward on accomplishing the company’s long-term twin goals of profitability and success.

The end result is a detailed business roadmap for the coming year.

Where’s the rocket science?
The three parts are interrelated and must be tightly linked, so changing one affects all. That’s it. Simple, right? Unfortunately, many executives treat them as separate entities wreaking havoc on their subordinates. They don’t get that it’s a domino effect and that when one changes they all must change.

Which are you?

• The boss who can’t be bothered to do the hard work and make the tough decisions and doesn’t worry about jerking his people around because ‘they’ll get over it’; or
• the boss who believes that with a good plan, known objectives and a viable budget all the managers—executives to the lowliest supervisor—will buy-in and execute intelligently throughout the year?

If you’re the latter, come back tomorrow and learn the steps involved in creating a PBO.