| Planning FAQs |
What Successful Organizations Have in Common (Part 2)
In the last issue I identified some of the characteristics of the most successful organizations I have worked with over the last
20 years. (Go to our web site to see previous newsletters.) As promised, here are three more characteristics I see time and again
in the organizations that consistently outperform their
peers.
1. Successful organizations have the ability and willingness to change. Most organizations must be faced with a
crisis in order to overcome the natural resistance to change. Successful organizations don't wait for a crisis to develop. They
anticipate the need and reinvent themselves before things become critical.
2. Successful organizations also develop leaders at all levels of the organization. We tend to think of leadership as only
coming from the corner office. It is essential to have leadership from the top, but as the organization grows and becomes more complex,
this leadership can become a bottleneck. If leadership can be developed at all levels, the capacity of the organization expands dramatically.
People don't stand around waiting for someone to tell them what to do. Problems don't exist in full view without someone stepping up and developing solutions.
3. Finally, organizations that have a powerful vision are usually more successful. I believe if you can't see it, you can't be it.
A clear idea of what the organization is trying to accomplish and the ability to get others to share in that vision is often the top priority of the
leadership.
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Balancing Growth and Profitability
Most organizations want to grow and they want to be more profitable. Sometimes we overlook how these two goals can conflict with each other.
Growth requires investing in future revenue. Expenses must be incurred before the revenue can be generated. Capacity is expanded by buying
new equipment and adding production space. New employees are hired and trained. More inventory is generated. All of this must be accomplished
before the new revenue is generated or collected.
Growth cycles often come at the expense of profitability - at least in the short term. Once the higher level of
activity is established, revenue will catch up with expenses and profitability should return to previous levels. That is why many organizations grow in steps or
cycles rather than in a straight line. And we can't forget that growth is not a substitute for profit. Some of the fastest growing companies in the country
grew themselves into bankruptcy. I must often remind managers that very rapid growth is one of the the riskiest positions a company can take.
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| Poll Question |
The poll question last quarter asked: Who do you think will be the Democratic Nominee to run for President?
The poll results are very different from the recent Iowa caucus.
Here is the breakdown:
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| 62% | Clinton |
| 23% | Edwards |
| 8% | Obama |
| 8% | Richardson |
| 0% | Other |
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Our poll question this quarter is: What is your outlook for the economy in 2008 compared to 2007?
Much Stronger
Somewhat Stronger
Same
Somewhat Weaker
Much Weaker
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| We will report the results in the next issue.Click here to participate in our poll.
You may return to the Poll Page to monitor the results as often as you like.
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The Planning Department Pitfall |
As organizations grow and mature, they often develop specialized staff to support specific functional needs. One of those needs is planning.
One of the pitfalls of developing a staff-level planning department is the potential for the ownership of the plan to shift from the operating units
to the planning department. I have seen planning departments justify their existence by generating three-ring binders filled with complex
plans that no one reads. One planning department in a very large utility I worked with coined the term "levelized binder".
That is a binder that is so jammed with charts and graphs, when it is placed on the desk, the cover is level.
These organizations forget one of the core principles of planning - the value of planning is in the process, not the document. The
planning department can manage and support the planning process, but the people implementing the plan, must have ownership and commitment that
comes from participating in the process. No matter how thorough or insightful the plan, if it is not implemented, the organization gains nothing.
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Future Topics |
| Quarterly Reviews
Measuring Success |
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