Exec's Program #2: Planning Part I - Long-term Planning

THE EXECUTIVE’S PROGRAM SESSION 2 PLANNING PART 1: PLANNING AND LONG-TERM PLANNING

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PURPOSE AND LEARNING OBJECTIVES Purpose: Learn why and how top performing executives develop and use their plans.

Learning Objectives: To learn…

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Why a plan is so important

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What great plans look like

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How to build great plans

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How to use plans

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AGENDA 1. Recap 2. Why top executives plan 3. What great plans look like 4. How to build your plans 5. How to use your plans 6. Summary 7. Reflection and Homework 3

Poll 4

Part 1: Recap

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RECAP: SESSION 1 Top performing executives share 5 habits.

Have a solid morning routine. And remember why…

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THE 5 HABITS Mindset Mindset

Practice Practice

Your Your morning morning routine routine

Learn Learn   do do   teach teach

Feedback Feedback

Focus Focus

Coaching Coaching

Your Your plan. plan.

Time Time Management Management Your Your calendar calendar

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SESSION #2: PLANNING

x x

x x 8

Work Done

Results 20 %

Many trivial tasks 80 %

80%

Few vital tasks

20%

Habit: Focus

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Part 2: Why do successful executives develop strategic plans?

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WHY HAVE A WRITTEN PLAN? • Writing a plan is one of the first disciplines formed by top performers.

• It increases the odds that you will achieve your goals by 50%.

• It is the main communications tool of Executives.

• It ensure Executives and their team stay focused.

• It is the starting point for all tactical planning and execution.

• It is the accountability tool for the board/shareholders to use with the executive team.

• It helps executives earn respect from their team, employees, shareholders and almost everyone else.

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Hint: It’s more about the process then it is about the plan.

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Part 3: What does a great plan look like?

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TYPES OF PLANS Strategic Plan

Business Plan

• For internal audiences.

• For external audiences; usually new or

• For new and established companies.

expanding companies.

• Covers ~5 years.

• Usually 1 year, but could be multiple.

• Provides focus and prioritizes resources

• Provides investors / lenders with a

(time, money, people).

• Defines why the company exists, where it is going, how it will get there and how it will win.

• Used as the input to all tactical plans, which guide the execution of successful companies.

fundamental understanding of the company, the market, services, how it will launch, operate, be managed, be financed, and perform financially.

• Sells the business idea or project to financiers.

• Used to raise money.

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BAD PLANS • Not written down • Too long > 30 pages • Developed by only one gender • Little substance, but a lot of words • Weak data – not specific about actual competitors or customers • Not exciting – fall asleep reading • Not clear – leaves you asking “So where are we going and what do we do?”

• Never reviewed – outdate • Never used – shelf ware

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GREAT PLANS: PRINCIPLES Simple

Used Often!

KISS 16

MAKE YOUR PLANS GENDER-SMART Purchasing Power • 65% of household purchasing decisions are made by women.

• Women control $40 trillion of global consumer spending.

(World Economic Forum)

Business Performance • Companies in the top quartile for gender diversity on executive teams are 21% more likely to outperform the national average.

(McKinsey)

Customer Insights • Female leaders can relate better to female customers’ needs.

• Their perspective is vital for product design, market strategy, and overall business planning.

(McKinsey, World Bank)

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EFFECTIVE PLANS WITH GENDER-SMART TEAMS

“Leadership behaviors more frequently adopted by women leaders are critical to naivgate the crisis and beyond” (McKinsey study)

Source: McKinsey 2009 Study

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Part 4: How to build a great strategic plan?

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THE PLANNING & EXECUTION SYSTEM 20 years Guiding Statement Vision, Mission, Strategy, Values, Business model, Operating model Used during onboarding, input to the strategic plan, to read in the morning to get you energized

5 years

Annual

Quarterly

Monthly

Weekly

Daily

Strategic Plan Annual Management Plan & Budget Quarterly Board Report, OKRs

Annual Planning Meeting All Hands Meeting

Co mm uni ca

tion s&

Quarterly Board Meetings

Monthly Mgt. KR Reports

Rep ort ing

The Weekly Legend

Monthly Mgt. KR Meetings

Daily Calendar The Monday Legend & Friday WIR Team Meetings / Activities 20

“Start with the plan to your left”

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YOUR GUIDING STATEMENTS – THE LONGESTTERM PLAN (farthest to the left) •

When to use: To refresh (develop) your strategic plan.

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Tips: – For you, your founders and your team to get motivated and not forget why you started out on this journey.

– Something that will get you up in the morning!

– Something you use during onboarding, training, and annual offsites.

– Externally, your guiding statements say who you are and what you care about.

To recruit amazing people. To sell your “brand” to customers.

Source: Can You Say What Your Strategy Is?

by David J. Collis and Michael G. Rukstad 22

TOOL: GUIDING STATEMENTS • Vision: What we will become. What we want the world to look like when we have succeeded.

• Mission: Why we exist and what we do. The value we create for our customers • Values: What we believe in and how we make decisions. What we care about.

• Strategy: How we will win and protect our position

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TOOL: STRATEGY • When to use: to take the first step in defining a true strategy. To focus you about where to invest.

• Tips: – Pick one thing. Just one.

Advantage / Resources

what is most important and Competitive range

– Never let anything fall below the bottom end of the competitive range.

Time

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USING YOUR GUIDING STATEMENT Guiding Statement Vision Mission Values Strategy

Today

5-year

5-year

Strategic Plan 2024

Strategic Plan

5-year Strategic Plan

5-year

5-year

Strategic Plan

Strategic Plan

5 Strategic Plans = Vision

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THE STRATEGIC PLAN: THE MID-TERM PLAN • Period: Covers 5 years.

• Updated: Mid-way (2.5 years in). Check in to see if anything major has changed.

• Document length: 3-7 pages or 10-15 slides. KISS! • Input: The company’s guiding statements, market information (opportunities, competition) and company data (resources).

• Tools: SWOT (company), and Porter’s 5 (market) • Elements: 1) Current state; 2) 5-year Future State; 3) 3-7 SMART goals; 4) a compelling Case for Change (why?!); and 5) clear Barriers and strategies to address; 6) Strategic Priorities to accomplish the goals (do this last) • Purpose of the strategic plan: To develop the company’s Annual Management Plan (AMP) and budget.

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TOOL: BUILDING YOUR STRATEGIC PLAN 3 2

5

4

1

How to be “strategic” when planning.

Touchstone Consulting Group 27

STEP 1: DEVELOP THE CURRENT STATE 1.

Review input from the team: 2 to 4 hours

2.

Review your past performance (TvA): 2 hours

3.

1.

What have we accomplished? Why?

2.

What haven’t we accomplished? Why?

SW(OT) / Porter’s 5 Analysis: 2 hours 1.

Management review

2.

Operations review

3.

Market review (Porter’s)

• An honest and concise half-page summary of the current state of the business.

• Builds a strong case for the strategic goals. “Why we must change.”

• Acknowledges accomplishments and challenges.

• Gives CEO very powerful talking points.

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TOOL: SWOT • When to use: When preparing your “Current State”.

• Tips: – Internal: Be very (brutally) honest about the internal. Be specific. Go department by department, manager by manager.

– External: Do your homework – don’t think you know the market. Try being a customer of your competitors. Meet with your customers and ask them to give you honest feedback. Read your Google feeds about the market – review competitors’ websites.

Maximize

Address

Internal

External

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TOOL: PORTER’S FIVE • When to use: When preparing the current state. For your discussion about the O/T in the market (External).

Michael Porter 30

STEP 2: DEVELOP THE FUTURE STATE Brainstorming (most creative) 1. Envision what it must look like 5 years from now: 1-2 hours. Write it down, go around and share. Have someone capture.

2. Cross-walk with the your guiding statements: 30 min

• States where we need to be • Provides a clear description of the future state in 5 years.

• Used to build the AMP

3. Group and prioritize future state into buckets: 3-5 hours

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STEPS 3 & 4: CASE FOR CHANGE AND BARRIERS 1. Case for change: Does this future state get me excited?

Does it get our team excited?

Does it align with our guiding statements – i.e., does it advance us 20% closer to our vision?

2. Barriers: What is going to get in our way? Because we need to

• Helps you make updates to the future state so you can get excited about it!

• Gives you some sobering realities of the road ahead – puts the barriers in front of you.

come up with initiatives to address these.

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STEPS 5: THE INITIATIVES 1. Each objective will likely have an initiative 2. Written starting with verbs. i.e., build a factory, open a new office, etc.

3. Must take into account barriers. i.e. If financing, securing financing from an

• Helps you make updates to the future state so you can actually get excited about it!

• Gives you some sobering realities of the road ahead – puts the barriers in front of you.

investor.

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SECRET: WHO IS IN THE ROOM? • Identify up-and-coming women and men in your organization. Get that balance!

• Prepare strategy gameboard questions for each gender (you want different perspectives).

• Ask them to contribute their ideas. In a big room might not get the best out of them.

• Reassure your team that their honesty will be greatly valued.

• Consider bringing on an “outside advisory board member” that is a woman, to connect with women and men.

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Part 5: How to top executives use their plans?

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USING YOUR PLANS • Start by reviewing the plan to the left. This ensures alignment.

• As the time period gets shorter, the plan gets more detailed.

• The guiding statements are your farthest-out plan. These don’t change.

• The strategic plan is the highest-level company plan – a 5-year segment to achieve the company’s vision. These are done every 5 years.

• The Annual Management Plan (AMP) is your annual plan. 5 of these accomplish your strategic plan.

• Quarterly Objectives and Key Results (OKRs) is your quarterly plan and monthly targets.

• The weekly legend is the most tactical company plan – it links to the monthly plans.

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THE PLANNING & EXECUTION SYSTEM 20 years Guiding Statement Vision, Mission, Strategy, Values, Business model, Operating model Used during onboarding, input to the strategic plan, to read in the morning to get you energized

5 years

Annual

Quarterly

Monthly

Weekly

Daily

Strategic Plan Annual Management Plan & Budget Quarterly Board Report, OKRs

Annual Planning Meeting All Hands Meeting

Co mm uni ca

tion s&

Quarterly Board Meetings

Monthly Mgt. KR Reports

Rep ort ing

The Weekly Legend

Monthly Mgt. KR Meetings

Daily Calendar The Monday Legend & Friday WIR Team Meetings / Activities 38

“TvA” The most powerful three letters in planning and execution

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TOOL

The Master Planning Tool Word Document

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BREAKOUT GROUP ACTIVITY • Question 1: What does your company look like in 20 year? (Vision) • Question 2: How are you going to get there – what do you do? (Mission) • Question 3: What are you obsessed about doing better than others? How do you win? (Strategy) • Question 4: What do you care about? What guides your decision making?

(Values)

Answer these 4 questions and…you have your guiding statements!

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Part 6: Summary

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SUMMARY  The Strategic Plan is your internal plan to win. It is the plan for all subsequent plans.  The Strategic Plan is 1/5 of the Guiding Statements (5 years).  The Strategic Plan is used to develop the Annual Management Plan (AMP) - your plan to execute throughout the year.  Writing down a plan will make you more successful. Telling people about it (i.e., your Board, management team and staff) will make you more successful. Looking at it every quarter, month and week as you set your I MUSTs and map time to your calendars make you even more successful.

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Part 7: Assignment

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ASSIGNMENT 1.

Use your calendar: Set your three I Musts for the week and map all your time to your calendar. Set one of the I Musts to work ON the business.

2.

The ON the business I Musts: Set aside 3 hours to review your guiding statements and reread these slides. Build a 5-year strategic plan (use the tools and slides).

3.

For the next session: Be prepared to share what you learned when you looked at your guiding statements and your strategic plan.

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REFLECTION TIME

Take 5 minutes to fill out your module question: –What did you learn?

–What will you immediately apply to your company?

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Thank you! www.renewstrategies.com

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THE AMP ALIGNS TO THE STRATEGIC PLAN

2019 AMP Today

2020 AMP

2021 AMP

5 AMPs

2022 AMP

2023 AMP

5-year strategic goals

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QUARTERLY OKRS ALIGNS TO THE AMP

Q1

Q2

Q3

Q4

Q1 OKRs

Q2 OKRs

Q3 OKRs

Q4 OKRs

4 Quarters

Annual Goals

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MONTHLY WORK ALIGNS WITH QUARTERLY OKRS

M1

M2

M3

KRs

KRs

KRs

3 Months

Quarterly OKRs

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WEEKLY LEGEND/I MUSTS ALIGN TO MONTHLY KRS

W1

W2

W3

I Musts

I Musts

I Musts

4 Weeks

W4 I Musts Monthly KRs

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DAILY ACTIVITIES/MEETINGS ALIGNS WITH WEEKLY I MUSTS

M

T

W

Th

F

Meeting / Activity

Meeting / Activity

Meeting / Activity

Meeting / Activity

Meeting / Activity

5 Days

Weekly I Musts

Map your I Musts to your Calendar!

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A GREAT AMP • Time period: 12 months (1 year).

• Updated: Mid-way (June / July).

• Prep time: A week. Need to be constantly assessing changes in the market, and the company.

• Development time: ~2 days by senior management team.

• Document length: 3-7 pages with the roadmap (a.k.a. project plan) • Input: The strategic plan.

• Elements: 1) Current state; 2) 12-month Future State with concise SMART goals; 3) Projects to be executed by each unit in the org structure.

• Purpose / use: To hit budget targets and advance the company towards the Strategic Plan.

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INPUTS TO THE AMP Strategic Plan Last Year’s Annual Management Plan

Last Years Financial Statements

Team and management input

Execution Battle Rhythms The TheAnnual Annual Management ManagementPlan Plan

Reviewed monthly. Updated mid-year

Execution Battle Rhythms Budget

Reviewed monthly and updated quarterly

Hit AMP targets

Hit budget targets.

Build cash!!

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