In Business Planning, it's not size that matters, but how you use it.

Business planning is a competency that successful companies have acquired over time.  The question is:  how should the planning function be structured within the organization to optimize resources and achieve competency? We tend to think that size matters. I suggest it is not size, but how the function is utilized. 

I have led planning departments in silo driven organizations where department functions are hived off from one another and in a shared services organization. I prefer the shared services model because it is more efficient, engaging and builds organizational competency in planning. 

The silo model is more expensive to the organization, and may not necessarily result in the ultimate goal of building organizational competency for business planning. I would suggest that the days of large internal planning departments are less effective both financially and culturally. 

Consider the following.  

 A larger organization of 500 - 1000 employees, for example, often has a 6 person executive team, covering off the competencies needed to run the business: Finance, Communications, Human Resources, Technology, Operations and Marketing. Each of these executives is responsible to lead the organization to its strategic future.  From a resource perspective, their commitment to strategic planning should be about 80% of their time.  The other 20% of time should be dedicated to providing direction to their respective departments. 

In the Corporate environment where the governance structure consists of a shareholder or owner and board of directors, the business planning function often includes a strategic and operational business planning process, reporting cycle and development of business documents such as the business plan, quarterly reports, board reports, staff communications and strategies. The business planning function must also facilitate integration with enterprise risk, finance, communications and human resources performance management processes.  

In the silo business planning department model, the staff compliment may include a director - level at $100K plus, an analyst at $65K, a manager at $75K plus, and an administrator at $45K  for a grand total of almost $285K plus benefits.  

Here is a breakdown to time for a department that runs the corporate planning and reporting process:

• Administration:  8 weeks / year.   
• Document writing and review:  12 weeks/year. 
• Research and analysis of the environment: 3 weeks 
• Balanced Scorecard development: 3 weeks 
• Facilitation of executive, board planning:  4 weeks 
• Facilitation of management planning (assuming 6 departments):  6 weeks 
• Approval process:  3 weeks (assuming board and shareholder)
• Reporting coordination, writing and review:  4 weeks 

That's a grand total of 43 weeks / year.  The average available number of weeks for each employee is 32 weeks, allowing for weekends, statutory holidays, days off and vacations.  

The price tag of $285 K plus benefits does not utilize resources well, nor does it invite integration or shared learning. The resources are not utilized to their full capacity.  If the department is staffing 4 full time equivalents (FTEs), that means the company is paying for 128 weeks of time, 85 of which are not being used effectively.   

However,  in a shared services model, it is possible for one person with senior capabilities to lead the process with support. The Office of Strategic Management Model (OSM) by Kaplan and Norton provides the structure for this approach.  

In the OSM model, the role of the business planner is to direct and facilitate the process from the board, executive and management level, as well as to develop and implement the processes for implementation within other departments. 

The business planner will need access to administrative support to coordinate the process and book meetings, etc.(about 8 weeks / year), a person with communications expertise to help with the writing and document preparation and reporting, (about 12 weeks / year) and the borrowed time of a research or policy analyst if one exists elsewhere (about 4 weeks / year).  If the organization has a project management office, then a project manager's time of 4 weeks can be useful in assisting with the development of initiative plans that will later become projects.   

The business planner works hand in hand with the executive and the various managers to facilitate the development of integrated plans.  He or she must be adept at building relationships, interpreting information and working in an integrative manner across different teams, establishing a cooperative and collaborative approach.  

Given the role as director and facilitator of board, executive and management planning, the business planner requires an outsider's view. As an employee, the functionality can be marred by internal politics or power struggles which can cloud the process.  The business planner ultimately is responsible to the CEO, and therefore should not report to an individual member of the executive, but should work with all executives. 

Therefore, in my experience, while there are benefits to being an employee, there is greater value for the organization to hire an external resource on a 3 to 5 year contract to lead and integrate the process within.

 The organization can realize the same benefit for nominally less than $285K per year by using an external resource and opening the doors to an integrative shared services environment. 

The big pay off with an OSM / shared services model  is the creation of a strategy focused organization.  The company builds competence in business planning through engagement and making it part of their jobs.  That way, the organization is more successfully able to communicate the plan and integrate it into performance management processes at the employee level.  

Culture plays a big part in the success of the shared services / OSM model, where learning and cooperation are not only preferred, but expected.  From a leadership perspective, this type of organization is more effective and engaged, thereby increasing the opportunity for success. If the executive is indeed dedicating 80% of their time to strategic and collaborative leadership, then the shared success model has a greater chance of success.  

Once an organization can bring plan, people and processes together, profitability becomes more accessible.  The organization through this process of alignment becomes nimble and able to act on opportunity and weather storms.

On the day of emancipation wear gold.

Emancipation is a rarely used word dating back to the 1630s.  Packed with emotion, it means to be freed, or to liberate.  It can also refer to freedom from inhibition and convention.  (Online Etymology Dictionary @ 2010 Douglas Harper).   

Great emancipation tends to be associated with the abolition of slavery, and political freedom. In a less formal sense, emancipation can refer to freedom from relationships that threaten the well being of the person or people.

The color gold tends to be associated with emancipation to represent the reward of freedom, and the celebration of opportunity. I am recently emancipated. 

 For the first time in my life, I am not an employee by my own choosing. I am the President of my own company - Lynear Thinking Strategy & Communications Consulting Ltd. 

 

This has been a dream of mine since 1996 when I first created my own definition of freedom for a corporate blue sky meeting.   I shared a vision about an environment that is creative, entrepreneurial and optimistic. Where there is no "no", just "how."  Where vision leads, and passion guides. Where inspiration is the breath of innovation. Where respect, honesty and integrity are the foundation.   

Throughout the past 16 years, I have been a good employee, dedicating myself every day to be good at what I do with results.  I wrote the book on annual reporting, resulting is 4 consecutive Awards of Excellence from 1996 - 2000 and then I created plans that caught the Auditor General of Canada's eye from 2000 - 2002. 

 From 2002 to 2011, I successfully designed and implemented integrated corporate performance management programs for Government, the Saskatchewan credit union system, private companies and non-profits. I established an award winning Corporate Social Responsibility framework for a gaming organization in 2010.  In 2010, I was inspired by George Reed as a great humanitarian, and dedicated myself to helping him to re-establish the George Reed Foundation.   

I believed and worked by the principle that when you do good things, good things happen from a job satisfaction perspective, as well as a monetary and security perspective. I have been very fortunate to work with great organizations and great leaders.  My former Vice Presidents are now my mentors.  My former employees are now my colleagues. 

Emancipation is impassioned by a resounding and deafening cry for change and for new directions.  This is mine. To work with and for organizations and individuals where vision leads, and passion guides. Where inspiration is the breath of innovation. Where respect, honesty and integrity are the foundation.

Business Planning: Why you should do it.

Think of it this way:  You are driving down the highway at night, with your high beams on.  You can see the road, the ditch (for about 4 car lengths).  A deer shoots out in front of you and you have to react.  During the light of day, you would have seen it coming, and in fact, you would have seen them in the field much earlier.Having no plan is driving in the dark with a limited line of sight to react.

Lack of planning is one of the big reasons for failure in business.  According to Industry Canada, 80 percent of small and medium sized enterprises will not be around in 10 years.  Those that have developed skills in planning, communications, human resources, finance, operational effectiveness and technology and information management tend to have a better chance of survival and growth.

Growth is linked to the intent to growth.  Intent is established in planning.  Many business owners and entrepreneurs can see it, but they can`t say it. Some can`t see it, say it or write it down.  Neither are effective. The inability to see it and say it immediately limits the road upon which you travel. The company may well thrive as long as the owner is alive and able to keep the dream alive, but with no shared vision, there is no legacy.

Industry Canada says that we are facing a wave of retirement in the SME market, and that succession will need to occur for these businesses to continue. Without a succession plan in place, we could see these businesses sell or close their doors as a result.  This is no different than the family farm concept.  If the business planning does not occur, quite often succession is not in place and the land and farm are sold off in whole, or in parts.

There is a misnomer that small and medium sized business do not need to engage in formal planning processes and that a budget will suffice.  Business is business. Large or small, every business must be good at  certain things: planning and executing, communicating, human resources, finance, and marketing.

Business planning is number one on the list for these reasons:
1. It creates clarity. Vision and foresight shines the light on what is ahead, including trends, opportunities and risks.  

2. It creates focus on what needs to get done and keeps the business on track. 

3. It allows for balance. It allows the organization to look at multiple perspectives at once. 

No matter the size of company, organizations that apply business planning practices reap the following rewards: 

1.  Accountability is defined, so things get done. This gives the shareholders and stakeholders confidence in the management of the company. 

2.  Clarity about the the direction and goals of the company provides a clear line of sight for employees and owners. 

3.  What matters most is defined, creating focus.  

4.  Resources are aligned and money is spent in accordance with the goals of the company. 

5. Priorities and pressures are more easily managed within a cycle, instead of adhoc reactions. 

6.  Reviewing the plan allows for adjustments as needed. 

7. Companies that plan and execute are more nimble because they have developed competency in foresight, decision making and execution. 

8.  Companies with a business plan can more easily keep their eye on multiple facets of their business including customer satisfaction with products and service, employee satisfaction and experience,  internal processes and business practices, and the financial outcomes.  

Business planning is one of those things that you don`t know that you don`t know until you know.  Sounds confusing, but it`s like seeing in the dark.  If you never knew there was daylight, you would not know what you could have seen until you experience day light. 

But when the light goes on, the `aha`moment of what is possible with a plan is worth the journey.  That`s why I do what I do. 

Lemonade 101: A Business Case for the Business Plan

Back in the days of the lemonade stand, we knew intuitively that we needed to make more money than we spent to have money left over.  But embedded in this equation are important strategic questions such as what`s alluring about your lemonade, the customer service attitude that you need to win customers, the cleanliness of your stand, and keeping the lemonade cold during the slow periods.


Many businesses get off the ground with good old fashioned entrepreneurial zeal and zest.  They are lucky or very well connected. Or both.  But there are inputs. And inputs can either save you money, cost you money, or make you money depending on how well you know them.


Profile of Firms and Owners 

A report entitled The State of Entrepreneurship in Canada , produced by Industry Canada, provides a profile of the characteristics of firms and their owners. A first basic question to ask is how business ownership is changing among Canadians. 


The Report shows that: 

• In 2003 over one in 20 working Canadians (5.5 percent) was self-employed and had an incorporated business. 
• By 2008, 6.3 percent of working Canadians were self-employed with an incorporated business, which is an increase of 15 percent. 
• While there are a lower number of women business owners compared with men, there has been a larger increase in the number of women business owners over this five-year period: an increase of 17.2 percent for women compared with an increase of 12.8 percent for men.

Here are some interesting facts: 

• Roughly one in 15 working Canadians owns an incorporated business.
• Just over one-third of Canadian SMEs are owned by women.
• Canadian SME owners are acquiring higher education levels.
• Canadian SME owners are becoming older and need to start planning for succession. We will soon see a greater transfer of businesses to next-generation family members or to outside buyers.
• Canadian SME owners have become more diverse, reflecting a greater diversity in the Canadian population.
• Owners of larger businesses are wealthier.
• Most SME owners started their business from scratch.

Source:  http://www.ic.gc.ca/eic/site/sbrp-rppe.nsf/eng/rd02475.html

Reasons for Failure 

Industry Canada`s report on Small Business Research and Statistics reveals the following reasons for failure

• Recent Statistics Canada data show that over two-thirds of micro-sized firms (less than 5 employees) and almost half of small sized firms (5-99) fail within five years of start-up. Nearly 80% of all new SMEs are gone within 10 years.
• Almost half of the firms in Canada that go bankrupt do so primarily because of their own deficiencies rather than externally generated problems. They do not develop the basic internal strengths to survive. Overall weakness in management, combined with a lack of market for their product, cause these firms to fail
• The main reason for failure is inexperienced management. Managers of bankrupt firms do not have experience, knowledge, or vision to run their businesses. Even as the firms age and management experience increases, knowledge and vision remain critical deficiencies that contribute to failure. 
• In the early stages of life, internal deficiencies are so prevalent that most bankruptcies occur for these reasons. Management must master the basic internal skills – general and financial knowledge, control, communications, supervision of staff, and market development – or it will fail solely or primarily from the weight of these problems. As a surviving business grows, a new set of problems arise that are associated with the increased complexity of running an older and often larger firm.
• Managerial issues such as the poor use of outside advisors, lack of emphasis on quality, and unwillingness to delegate responsibilities, departure of key personnel, and personal problems associated with the owner/manager become relatively more important factors contributing to failure as a firm ages. (From Baldwin et al.: Failing Concerns, 1997)

Source:  http://www.ic.gc.ca/eic/site/sbrp-rppe.nsf/eng/rd00260.html

How to Succeed 

Business Planning is identified as the top skill needed for small business owners, operators and entrepreneurs, followed by marketing, sales and service, fiscal planning and human resource management. 

Box 1: Framework For Management Skills and Competency Standards and Guidelines
For Small Business Owner/Operator/Entrepreneur
Prepared for Sector Councils Steering Committee by Robert Dénommé and Associates, 1995

Competency Blocks

1. Business Planning
2. Marketing/Sales/Service
3. Fiscal Planning
4. Human Resource Management
5. Business Operations
6. Professionalism
7. Automation (Technology)
8. Industry Awareness
9. The Business Cycle
10. Entrepreneurial Values

Box 2: Small Business Owner/Operator Competency Guide
Sector Councils' Steering Committee and HRDC 1997

A. Professionalism

1. Exhibit Professional Skills
2. Communicate Effectively

B. Business Planning

1. Define Business Planning Terms
2. Evaluate Status of Business
3. Implement Business Plan
4. Describe Strategic Alliances

C. Finance

1. Prepare Budget
2. Manage Accounting and Cash Control

D. Marketing

1. Prepare Marketing Plan
2. Use Promotional Activities

E. Human Resource Management

1. Evaluate Human Resource Plan
2. Hire Employees
3. Train Employees
4. Manage Employee Performance
5. Dismiss/Lay off Employees

F. Operations

1. Manage Office Operations
3. Manage Products and Services
4. Manage Projects

G. Sales and Service

1. Maintain Positive Business Image
2. Manage Products and Services

Box 3: Core Management Competencies (Gasse 1997)

VISION:

Positioning/Adapting, Strategic Planning/ Implementations

PEOPLE:

Leadership/Involvement/Communications, Learning/Training

OPERATIONS:

Organizing, Managing/Decision-Making

RESOURCES:

Cognitive Ability/Information, Financing Capabilities

STRATEGIES:

Technical Capabilities, Entrepreneurship/Innovativeness, Shares of Markets and Export Rates

The Opportunity 


The bottom line on success is that it takes a toolbox of skills and competencies to create success.  Small business owners can access the tools and services needed by contracting and partnering with professionals in the community.  

Finding the words

I was never the popular kid in class.  I was quiet. Blending in was not my goal; disappearing was.  I didn't want anyone to notice me, or speak my name. I was terrified, of what, I do not know to this day. This fear of being noticed followed me through elementary school and into high school.

My school experience was predictable for the 70's.  I went to the elementary school in my neighborhood, and then to the high school right next door.  There was the guy who laughed all the time from Kindergarten to Grade 12 (he still does) and the guy who was smarter than everyone else. There was the guy who seemed to be misunderstood and the guy who got picked on. (In high school I remember him being "inserted" into a garbage can in the school cafeteria.) There was the girl who was, and still is, remarkably beautiful.  There was the confident girl. The quirky girl.  The girlfriend.  There was the guy nobody noticed.  And there was me. Invisible me. Frightened me.

I was married at 19 to the only person who made me fail safe and OK to be . . . me, or figure out who "me" was.  We moved away to Calgary where my husband went to school and I worked. I made friends there, and a lifelong home.  Even though we moved back to Saskatchewan in 1983, every time I go to Calgary, I feel like I somehow belong there. Like there is a piece of me still there.

Through my life travels, as a frightened child and an awkward, introverted teen, writing was my secret outlet. I wrote stories, poems, songs and imagined things on paper, where it was safe. I used to keep them in a trunk in my room.  I eventually destroyed them in case someone should find them.

Although I did not understand the meaning of my need to write, it was as natural as breathing to me.  I believe now that I was searching for my voice, or at least the words to speak out loud, some day.  Over time, writing became a powerful force in my life at every turn.  

When my husband was in University, there was a constant fight for funding. I discovered that I had a gift for writing letters that got the attention of government decision makers.  

I decided to become a writer, so I came out of the proverbial closet to study English and Journalism at University of Regina.  I was ignited by the history of writers who found freedom in the written word to express concerns in society. Their words were part of the conversations that led to the liberation of people, and installment of rights and freedoms that we enjoy today. It was like I discovered where my soul had been living all this time. 

Writing is as natural and as necessary as breathing is to me.  I use my gift of voice and my passion for the written word judiciously and with purpose. In my professional, corporate and philanthropic life, writing to create plans, reports, presentations, and other forms of communication have helped create and articulate futures that are being brought to life, thereby creating jobs, economic prosperity and social change. I continue to write poems, stories and articles in an attempt to articulate and document what I have learned along the way, and what it all means.

The writing process is one of listening, learning, feeling, and observing what is being said, and capturing what the audience needs to hear and know.  I write to instigate thought and to ignite reaction.  Sometimes I write so that others can be free of what contains them. Often times, writing is a "catch and release" experience. Once something is written, and released, there are traces of me,  but I do not recognize it as my own, because it isn't. It belongs to the world after that.

I could not chose a better time in history to be a writer of a human experience.  With the power of the Internet, blogs and a litany of social media opportunities, the mind boggles as to how many stories can be told, how much experience can be shared and how much insight we can gather about the human experience.  . . if only we would take the time to think about it.

I wonder if we squander this great gift of voice or take it for granted.  What would Shakespeare do with this opportunity if he could reach beyond the confines of single stage and audience?  What would Picasso have accomplished if he could express himself off the canvas?  Would we be further along in our understanding of each other if we could have shared in the written word earlier?  Would we have allowed the atrocities of our time to occur?

In many ways, I am still that invisible 5 year old, except that I am no longer afraid because now I understand that everyone has a story to tell, and my job is to write it down if they are willing. Writing has given me both voice and courage. It has created a passion for life long learning.

Other blogs written by yours truly . . .

http://diedofa.blogspot.com/

http://whiteshag.blogspot.com/?zx=521b0acfda8938fb

Change the "F" Word

Change.  It happens all the time.  The weather changes. The wind changes.  The economy changes.  People change.  Lives change.  We change, as we age. We change as we learn.  Change is not usually fun.

We are so fascinated by change that change management gurus have documented the change cycle, beginning with  mourning and a sense of loss, followed by anger and rejection of the change, then denial, and finally acceptance.

Change can be a good thing, and usually is, at the end of the change process.  Change is a necessary part of the time and experience continuum. Like an ocean that never stands still, so it is for all beings, organic or otherwise. Even rocks change. When change is led with purpose, it can be a very positive experience.  But when change is denied, the experience is painful.

I would suggest that most change should not be a surprise. There are signs in business and in life.

Here is a scenario that we have all seen.  A company is established that includes a way of working, the products and services, and the attitude with which it is delivered.  Competitive unique strengths that the organization or individual possesses form the foundation for success. Four elements - quality products and services, delivery system, people and resources - ensure the company delivers on its promise. Success is measured by the level of usefulness to others.  As the company's brand becomes more successful, the more secure it becomes.

When one or all of the four elements suffer, the brand begins to erode and the cracks begin to deepen. Customers might complain more about the little things. Employees are less willing to take the boss at his or her word. Processes become weakened. Eventually, the bottom line begins to erode, and then it becomes obvious that something has happened, and that something needs to happen.

In the arena of change, length of time in business or size are irrelevant.  Giants fall.  Start ups fizzle.  Companies downsize, rightsize, merge, converge or disappear.

"What happened," everyone asks.  Why didn't we see this coming?  The quick answer is, "you weren't looking."

One can point to many reasons for this, but short-sightedness, either intentional or accidental, is short-sightedness and the outcome is the same. Eventually there is a head-on collision with reality. The question is why.  What is behind this masochistic perspective. Is it the "f" word?

Designer Milton Glasser, in his video: "The fear of failure" offers an explanation.  He says that if you have something that no one else has, and you become successful, the consequence of specialization and success is that it hurts you  . . . because it doesn't aide in your development.

Dove of Peace - Pablo Picasso

He says that fear of failure may hold us back, or that failure can lead to a damaged ego.  Glasser points to the artist Pablo Picasso who abandoned something once he became good at it.  He refused to stagnate.

Glasser says that one must embrace failure and admit what is, and find out what a person is capable of doing, and not capable of doing.  Unless one subjects himself to the possibility of failure, one never tests the hypothesis of brand greatness.

Understanding failure is to understand another "f" word  - fear.  Organizations or individuals who are afraid of failure cannot learn from the situation and run the risk of being stuck in that moment of failure forever.  Lost in that moment when someone - your customer, your employee, your employer - said, "you are not meeting my needs," "You are not good enough", "You are too expensive", or the ultimate "f" word - "You are fired."

I like to think that there is one "f" word that trumps all of the other "f" words - and that is faith in the human spirit to persevere, be passionate and find a way through.  Everything with a heart beat or a DNA structure, has a natural disposition to survive.

When things change, how do we persevere?  We hold on to our passion and remember every day to do that which we are passionate about.  I do not believe that one can become complacent or afraid if one is passionate.  We learn. We pay attention to the signs and signals around us. We change on purpose, and control that which is within our control and manage that which is not.

If all fails and you feel the need to use the "f" word, choose faith over failure and fear.

Sources and other articles of interest:

Pablo Picaso

Milton Glasser )

A Day in the Life, (Borrowed)

I read the news today. Oh boy. About picket lines in sunny Saskatchewan. And though the news was rather sad, well I just had to wonder . . .

I saw the future today.  Oh boy.  We are about to be a "have" province.  The economy is growing and there is hope for the future.  We have an opportunity to redefine Saskatchewan as a place to live, work and raise a family. The question is, what does that province look like? Can it be sustainable into the future?

Home is where the heart is.  I was born in Regina, educated, and raised my children here with the exception of three life - changing years in Calgary, where I worked the key desk at Alberta Mortgage and Housing in 1981 after the market in Alberta crashed and people could not afford their homes.

It was heartbreaking and devastating to see people break down and give up their homes.  I will never forget the image of a bike left behind. That experience was one of the reasons that we decided to live in Saskatchewan and raise our family here. However, for the first time in my Saskatchewan lifetime, housing is no longer affordable for low to middle income families.

Having a job is what every family is concerned about.  With the price and availability of housing, families are working to pay mortgages beyond the measure of two full time incomes.  The price of my first house (albeit a 750 square foot duplex) was $36,000.  Today, a first house will cost approximately $200,000.

When I look at those prices, I wonder how someone starting out can afford that.  I also wonder if we have the jobs in our province to sustain this kind of price tag.  If we want people to live and thrive in Saskatchewan, we need a plan that takes us into the future, rather than one that will force people out of our province as soon as other job opportunities present themselves in other provinces.

That brings me to education and the mind trust of the next generation.  Education is not just about books and curriculum. A good teacher is one that lives in your head and heart throughout your life.  Education is about providing our children and young adults with an experience that prepares them to be our leaders, our policy makers, and our workers.

Health care is the last pillar that defines us a a province.   There are no words to express what this means to a  family or person in crisis.  It's difficult to put a price tag on compassion or a person's life.

I see the writing on the wall today. Oh boy. Crowds of people have something to say. This summer, before the fall. It is no wonder then that people have something to say.

http://www.leaderpost.com/business/summer+pickets+Saskatchewan/4897830/story.html