The Game Plan the Difference Between Small Business Success by cmlang


									by: Jan B. King

It is an American dream to own a business. But sadly, according to the U.S. Department of
Commerce, only 1 in 5 businesses is still in business 5 years after it opens.

A business needs a great business plan, but it doesnt give management enough information to
have a successful, profitable business. You dramatically increase your chance of success with a
game plan. According to a PriceWaterhouseCoopers survey, over half of the fastest growing
firms not only have business plans, but also have separate game plans to keep them focused on
what must be done day to day.

A business plan gets you in the game. A game plan keeps you in the game. To use the sports
analogy, its easy to see how you are going to win the game in from the locker room. Most
businesses dont have a working plan that takes into account what actually happens on the field
once play starts.

A business plan is a sales brochure and a game plan is an instruction manual. You send a
business plan to potential investors and others to excite them about the business. A business plan
is about strategy. You create a business plan at a management meeting. A game plan is about
tactics and is created by and for the people on the front lines. A game plan talks openly about the
good, the bad, and the ugly in the business and is used by people in the business to make
decisions every day. It talks about what to do in a crisis.

Heres an example of what I mean:

The CEO takes a look at his balance sheet and decides that his company has too much of its cash
tied up in inventory, so he gets his managers together and creates a new corporate objective for
the year - to reduce inventory by 25%. If they do that they will all be entitled to a bonus. The
managers arent stupid they know the only way to reduce inventory is to sell what they can and
not replace it. So they put on a special promotion for their hottest selling items, they reduce the
inventory of those to almost nothing, and they get their bonus. But what has really happened
here. The CEOs company is now left with the inventory of the items that werent selling, and they
dont have adequate inventory of their best selling items. The CEO didnt really lead, the
employees cared more about their bonuses than doing what was right for the company, and there
wasnt a plan of action that was tied into a meaningful company objective.

A game plan focuses on these things: creating big goals that matter, giving individual employees
responsibility to carry out their portion of those goals, creating a budget and a reward system that
supports the goals, and tools to allow employees to measure their own progress.

Steps in the Game Plan Process

The game plan requires a series of steps, beginning with the CEO getting in touch with his or her
desires for the business. Then, the management team must delve into what is real for the business
today understanding the business model (how the company makes money), having a handle on
what is happening in the market, and finally, knowing what is happening in the company culture.
With all this background work done, the actual creation of the game plan begins. At best, it is a
facilitated process of discussions matching what is real today with what is possible tomorrow, in
the long run and in the short run.

A game plan only looks out a year at most, but within the context of a much longer period of
time. The company might decide where they want to be in five years the game plan is just the
next series of steps toward that longer-term goal. There is no point in setting objectives for which
there arent adequate resources, so objectives and budget are discussed in tandem. Another
challenge of the game planning process is to define success for each objective and decide how it
will be measured.

This is a time for healthy argument as sales wants more resources to increase revenue, product
development wants more of the objectives to be toward R&D for the companys future, and the
operations manager wants more staff to improve quality. This is also the time for managers to
consider the implications for all the decisions. And it is the time for the CEO to create a
connection between the objectives and each of the managers so that there is personal
commitment to the success of the company. If managers are not committed, they will never be
able to expect commitment from other employees.

Turning Objectives Into Actions

When the company objectives and budget are ironed out, about half the work is done. A second
series of steps takes the objectives set at a corporate level, and creates specific action items for
each employee that support the department and then company objectives. Just as the CEO and
the managers hashed out the process of give and take between what is today and where they
would like to be tomorrow, each manager must go through the same process with the
departments employees. Each employee must have a series of actions, but most importantly, each
employee should know where they stand at any time they wish to check.

For instance, if the objectives for a customer service employee are to keep call length to an
average of 2 minutes, have sales of an average of $50 per customer who calls, and to return all
calls within 24 hours, then you want that employee to be able to find the measurements for those
objectives as often as he or she wishes. The goal is for the employee to have access to just as
much information about his or her performance as the manager. An employee who can assess his
or her own progress real-time will correct performance deficiencies without a managers

The Plan Isnt a Secret

The final piece is constant communication about the plan and the companys progress to the
employees. The game plan is not only communicated initially, it must be kept alive throughout
the year with meetings focused on measuring progress toward the goals. Successes should be
celebrated frequently.

In my own company, we used something we called a Game Plan Circle to illustrate our plan each
year. It was a six-foot circle with our vision in the middle that radiated out to cover company
objectives, department and individual objectives. It served as a visual we could refer to in
meetings to keep us on track.

The Bottom Line

Dont let your business become another failure statistic. A business plan is a great first step in
starting or fundamentally changing a business. The next step is a game plan a translation of that
business plan to each employees actions every day.

This article was posted on April 06, 2004

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