It’s November, and right now most companies have a pretty good idea of where they will end 2018 against their annual goals. Most are finalizing budgets, revenue and margin targets, performance management plans and capital purchasing plans for 2019. Sounds great in theory, but what I see most often is a failure to set an action plan to support next year’s goals. You know, KPIs (key performance indicators). Those wonderful buzz words that most companies can identify when asked, but struggle to identify the metrics, timelines, critical tasks and contingency plans surrounding them.
We’ve all been to management meetings where we come up with a great plan, then walk out of the room with no action plan, tracking system or follow-up plan. “Guess it wasn’t all that important,” and ends-up on the list of great ideas never implemented. Don’t expect that to happen when talking to your investors. It may be a board of directors, a bank, your partners or even your spouse. Somebody has invested a lot of money in your company’s success, and they want to know how you plan to deliver the growth you’re budgeting for, especially if its a drastic change over this year’s results.
How To Set Up An Action Plan
Some questions you may be asked:
- How are you driving market penetration and brand recognition?
- What’s you marketing plan, and how are you differentiating yourself in the industry?
- What are your competitors experiencing in the industry?
- What is your plan for increasing margins or decreasing costs?
- Why do you believe you can get those sales results, and how will you implement that plan?
- How are you tracking results?
- What is your plan each month/quarter to adjust efforts should any goals not be tracking?
Don’t assume they haven’t researched industry trends, competition, penetration and other market factors, because they probably have. Your answers should not include phrases like “I think” or “I feel.” Better to say “I’ve observed,” and “The data shows.” They’ll likely want to see/hear the action plan to implement any goal that deviates from historical performance. “You’re telling us you plan to get 12% sales growth next year, when historically you average 5%. How are you going to do it? What’s different from this year? And why do you believe it will improve?”
If you are the owner, and don’t report to a higher power, these are still positive practices to adhere yourself to, and will help your organization optimize results.