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Perspectives on Management Planning for success Strategic planning is the vital link between today and tomorrow By Demmie Hicks When we talk with leading executives in the industry, we find that most of them have the same goals for their organizations. They want strong, sustainable, organic growth. They want to remain independent in an age where acquisitions have become increasingly common. And not surprisingly, they want a plan for perpetuation of the businesses that represent years—often decades—of their tireless work. These are all achievable goals, but reaching them requires proper planning and constant commitment. Although business goals sometimes can feel like distant dreams, we can actualize them if we translate them into clear paths with discrete steps that we can pursue. A strategic plan offers one way to formulate these steps and put them into motion. In our experience, a successful strategic plan must begin with meaningful dialogue about the organization. Key stakeholders must talk openly and authentically about their resources and challenges, as well as their hopes and fears. They must identify their top priorities and determine what actions will take them from where they are today to where they hope to be in the future. Such high-level discussions typically take place in a two- or three-day executive meeting which serves as the kickoff for continuous discussions. Effective strategic planning and execution require ongoing dialogue to address new issues and adjust to the unexpected twists and turns a company will encounter while creating new paths toward its future. At its best, this continuing dialogue reaches beyond the executive team, and even beyond the company’s management, to include people at all levels of the organization. From what we’ve seen, companies realize far greater benefit when they collaborate and share the responsibility for various elements of their strategic plan. Not only do they stay on track better with their goals, but along the way, people in all areas of the organization gain leadership experience and deepen both their understanding of and their commitment to the company’s vision, leading to enhanced performance and success. We’ve watched many companies thrive by engaging all levels of employees within the organization to actively execute their strategic plans. Let’s look at two of them. Roach Howard Smith & Barton: 13 shareholders united in a single vision Roach Howard Smith & Barton (RHSB) is a 60-year-old brokerage firm in Texas. The company’s business is centered around nine specialty practices, including technology, hospitality, manufacturing, financial institutions, public entity, nonprofit and real estate. RHSB employs about 80 people in two offices in Dallas and Fort Worth. When we began working with RHSB in 2006, the company had just completed an internal perpetuation plan by transferring 100% of the stock from the founders to 13 current shareholders. The firm also had completed several mergers during that same time frame. Things were going well in terms of the financial and operational plan, and the executives believed they were at a good place. CEO Karen Farris notes that “very few firms of this size have managed a successful internal perpetuation, and this gave us a great deal of confidence as we looked to the future.” She thought it was time to step back and start dreaming a little about where the company was headed: “I wanted to be sure that we had a common vision. With 13 shareholders, that can be a challenge.” One of the agency’s first issues to tackle was its name and identity. For the previous four years, after completing a merger, RHSB had been conducting business under two different names and had been at an impasse on consolidating into a single-name entity. Once the company had a strategic plan, it became clear to everyone that if the firm was to meet its goals, it needed to brand and become one entity. Because everyone had a clear and common vision of where they were headed, this was a logical step. As a result, key stakeholders in both Dallas and Fort Worth were willing to let go of their old stances, and the company moved forward with a single identity. This seemingly simple change was in fact a significant emotional breakthrough, and foreshadowed RHSB’s success as it made its shared vision a true priority. The strategic plan contains seven initiatives. RHSB has assigned a project team of four to six people to each initiative. This means that nearly half of the company’s employees are involved in implement-ing aspects of the strategic plan. Karen is seeing two big payoffs from having broad involvement: new ideas and renewed enthusiasm. The plan includes a monthly accountability session with a DBH Consulting coach where each team reports on its progress as well as any roadblocks the members have encountered. When issues arise—and they do—we work through them together. New ideas emerge when people have a chance to engage their expertise in areas that are outside the realm of their daily jobs. For example, the strategic plan called for more recruiting—of both producers and potential merger and acquisition partners. Previously, finding new producers was the sole responsibility of the sales manager, while targeting M&A prospects was the job of upper management. Today, the company has 30-plus people on its recruiting committee, all of whom are actively involved in the recruitment of new people and partners, exponentially increasing RHSB’s universe of qualified candidates. The renewed enthusiasm comes from a greater sense of ownership in the company. Employees at all levels feel more invested in the firm when they have the chance to weigh in on important decisions. Karen says she often hears comments from non-shareholders who are somewhat surprised that they are invited to the table to discuss critical issues and as a result feel more invested in the future of the firm. Getting more people involved in meeting the firm’s strategic goals has had another payoff for management. The strategic teams have become a valuable resource for internal operations. For example, in the past, senior management made all of the decisions about advertising and public relations, with disagreements over the decisions sometimes erupting afterwards. When the company formed a visibility committee to implement that part of its strategic plan, Karen put the group in charge of the entire advertising and public relations budget. She says the committee is doing a great job, and people have a different perspective about the budget and how the funds are allocated. “They have actually become better consumers, and I have one less thing on my plate.” RHSB management plans to grow the firm by 300% in the next 10 years. Karen notes that before the strategic plan was formulated, people had a difficult time buying into that vision and believing that such growth was possible. She says, “Now that we have our blueprint in place, you can sense that the excitement and the fear that normally surround a change of this magnitude have been eliminated.” Cobbs, Allen & Hall: Consistent follow-up yields results Bruce Denson is chairman and CEO of Cobbs, Allen & Hall (CAH), a generalist, multi-line agency established in 1887. The company has been under its current ownership since 1992, when its revenues were about $1 million per year. Today CAH employs nearly 200 people in its offices in three Southeastern states and expects revenue in 2007 of $30 million. Bruce wants to continue the company’s organic growth to reach $50 million in annual revenue by 2011 and $100 million by 2017. Three years ago, the CAH team hired DBH Consulting to facilitate its strategic planning process. CAH not only developed a strategic plan at the corporate level, but has since created complementary strategic plans for its profit centers. Bruce has left it to the division managers to decide when they’re ready to begin strategic planning for their areas. Some have waited longer than others to get on board, but as they see the positive results from strategic planning in other parts of the agency, even those who have resisted the process begin to see the value and buy in. The single most critical element in CAH’s success has been consistent follow-up and accountability. Every month, each division planning team has a brief internal meeting to report on progress and discuss next steps. Once each quarter, the entire planning team meets with a coach from DBH Consulting to review the firm’s overall goals and progress, work through roadblocks on current projects, and potentially embark on new projects. Since embarking on this new strategic planning process three years ago, CAH has completed 15 strategic initiatives. Among its achievements have been new or improved training, recruiting and intern programs. CAH also has met its goal of 15% annual organic growth. CAH also has reaped benefits that can’t be measured on a spreadsheet. Bruce says that having nearly everyone involved in planning has brought on a cultural shift in the company, from a top-down approach to a more synergistic, team-focused atmosphere. He notes that at some firms of CAH’s size, planning would be in the hands of just a few people. At CAH, more than 150 people are involved in planning at one level or another. Everyone is expected to participate in the planning process, from the file clerk right up to the division manager. Giving people input improves both their performance and their job satisfaction. “Everybody has a voice in where the agency is going,” Bruce says. “People speak up and are heard, regardless of their title or position in the company.” Making it work requires making a choice If the benefits of implementing a strategic plan are so clear, why do so many companies leave their best-laid plans to stagnate on the CEO’s shelf? Perhaps one reason is that many agency executives are busy. Many wear the hats of leader, manager and producer. It’s often all they can do to respond to the immediate demands of each day, so they push execution of the strategic plan aside for the moment, promising themselves they will get to it as soon as they have time to squeeze it in. They are so bogged down in work that a good time for strategic planning and execution never seems to come. When we encounter clients who are too busy to work at executing their strategic plan, we invite them to accept their reality, which is that they simply have too much to do, period. They can’t possibly get everything done. If a CEO believes, as we do, that long-range planning is a best practice of top organizations, and that continuous execution of a strategic plan is a vital means to reaching the company’s vision, then the CEO must choose to give the strategic initiatives higher priority and must choose to work consistently toward the strategic goals. Another way agency executives can make time for planning and execution is to spread the work out across the organization. As we can learn from the examples of RHSB and CAH, a CEO doesn’t have to tackle strategic planning and execution alone or with a select few. In fact, there’s much to be gained by sharing the process throughout the agency. Once an executive creates a collaborative effort and builds in measures of accountability, the small contributions of many players begin to add up to great strides. Finally, agency executives must let go of the idea that strategic planning is a one-time, yearly event. Planning and execution are all about process and progress. Even a little progress toward strategic initiatives can make a big impact on a company’s culture and forward movement. Regardless of how quickly we achieve our initiatives, the effort itself speaks volumes. It sends every executive, shareholder and employee a message that they all long to hear: This organization has a vision, and together we are purposefully moving in that direction every day, giving ourselves the best possible opportunity to actualize our goals. * The author |
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