This week its the start of September. For many businesses, it’s the big revenue month and focus is on hitting or beating the year end number plan. For me, it’s the time to start refreshing the annual and medium term plans. Why now? Done well, a review takes weeks and sometimes months. Often I see businesses who confuse refreshed financial plans with business plans and they are not the same.
Where do I start?
Always start with the customers. Review your customer base with deep investigative analysis. How many? Growth rates? Who are they? What are the demographics? What is the spread? Who dominates? Who demands more than they are willing to pay? What has changed in the mix over time? Through which channels do they buy? How much money are they making you/losing you? Geography? Customers ratings, service stats.
Next, review your products.
Undertake a products portfolio review, categorise them - stars, dogs, whatever has meaning in your business. Growth rates, profitability, lifecycle, customer reviews. Undertake a marketing costs return review.
Then rip your cost base to shreds!
In every business I have worked in, cost growth creep has been a perennial challenge. Costs get added for new products, services and customers and for new ideas. Often it’s an additional layer not a substitute. Now is the time to take a long hard look. What’s adding value to customers? What is strictly necessary? Can someone else supply at lower cost? Are your people delivering good value? Any pet projects absorbing money but not delivering? Use techniques such as systems thinking to review waste in your operating model. How digital are you really?
Increasingly, IT costs are dominating cost bases. The digital agenda, storage costs, licence costs, etc all add up. Make sure every element is reviewed and it necessary tender the big spends.
Involve the whole leadership team.
Ultimately, it is the Board and the Executive who are accountable and responsible for building and delivering the business plan. Often though, the people who know the business best are not the Exec but senior managers, front line colleagues and specialist areas such as finance and HR. Involve them in the process, you will all learn something, new ideas will come to the table, product issues will come to light and there will be much greater buy-in to the process and the outcome.
and last but not least, culture and climate
This section is not an afterthought but the heart of the business review. Read the naff words on the walls - we value our people, people always come first, we are inclusive, we are open, I could go on. There is often an inverse relationship between the rubbish on walls and the reality. What‘s it like in your business? Stats will tell one story, gender splits and pay gap, D&I numbers, turnover, sickness absence etc. Add to this workshop outputs, walking the floor ‘virtual floor’ ‘teams’ coffee chats etc and you will get an holistic picture of what it’s like to work in your place.
Now the fun starts!
So you have the results, you are pleased, surprised, shocked whatever! Now build your plan. Get working teams together, have ‘off-sites’ break up the work into areas of focus and play it all back.
Now the hard part - the Exec team and Board need to decide where to place the effort, which direction etc. This is not the time for ultimate democracy but choices made on the basis of sound customer and financial logic (with a bit of magic dust to help).
The best analysis I have seen of businesses have often been at the time of a sale. The business consultants arrive and you are played back things about your own business that make your hair curl! Why wait for that moment - just do it to yourself!