How To Increase The Bottom Line With This Big Shift In Planning

If you fail to plan your business will wither up and die.

Are you fed up with going into a new year hoping for the best? If so, the little-known information in this article comes at just the right time for you. You will learn exactly how to put a solid executable business plan in place to end your frustration once and for all.

As a mentor and coach to small to medium-sized business owners, I have seen the results of having a solid plan in place to kick off a new year. I will tell about some of those results in a bit.

BONUS — But first, if you are in a hurry to get started, get the planning checklist I have used for years. You may find it useful as you read this article as well.

You might think you know how difficult it is to plan and about all the excuses that people use to avoid planning. The truth is, most people are pretty good at planning when it comes to things like vacations and parties. Think about your own experience.

Perhaps you have a vacation scheduled in the next several months.

I’ll bet that you have already decided where you are going, how you are going to travel there, what hotel you’ll be staying in, and what various activities you are going to be participating in.

Making decisions in advance about complicated things is what planning is all about.

You can do this! To achieve this though, you will need to begin applying this hidden talent of yours on a broader scale.

All you need to do is to take that skill and apply it to the other various areas you are responsible for or that you have ownership over.

Of course, creating a business plan can seem a much more daunting task than planning a birthday party or vacation.

Let me give an illustration of a client of mine who happens to be in the construction business.

Now, before you start thinking, I don’t have a construction company, so this doesn’t apply to me, let me clarify something.

It doesn’t matter what business you have or which business I use as an example. The lesson is always the same…

Proper planning yields great results while no or poor planning produces poor results.

This particular company was a small northwestern Washington commercial construction company.

They had been going on for years with roughly the same level of revenues and the same percentage of net profit. If you think of the movie Groundhog Day, you will have a good picture of where they were.

While external observers considered the company to be very successful, the owner was dissatisfied and wanted more.

She decided to elevate her company from incremental annual increases into a dynamically growing company.

About four years ago, she scheduled what would become the first of several consecutive annual planning retreats.

She decided that they needed to bring in an expert to help them get to the next level or two—so they called me. During our work together, the management decided to apply much of what you are about to learn in this post.

She and her team decided to conduct their first-ever planning retreat right after the start of a new year and to continue the process on an annual basis thereafter.

In that initial plan, they decided to grow around 30 to 35%. After they made that decision, they put the plan in place and executed it over the next twelve months. They then repeated that same planning/execution cycle for the next several years.

Not only did they break free of the “no growth” trajectory they had been on, but they also experienced remarkable results.

Over the next 3 to 4 years, the company enjoyed a roughly 450% increase in topline revenue with about a 700% increase in net bottom-line business results—cash flow, profitability, and so on.

Even more important was their decision to transform their strategy.

In fact, they changed two times during that same period.

Why and when is a strategic change called for?

Literally right after putting that initial annual plan in place, along came a significant business downturn. In the past, their practice was to hunker down and ride it out.

The company faced two distinct choices.

  1. Act like the rest of their industry and follow the market downward.
  2. Make a change in strategy and focus on capturing new market opportunities that were materializing.

Today they are known as the number one commercial contractor in their market.

They owe it all, according to them, to adopting and continuing to employ planning as part of their core business activities.

As I mentioned above, I can give you dozens and dozens of similar examples about companies of all sizes in every segment imaginable.

So the question is, “why is there so much resistance to business planning?”

There is a long list of reasons that I’ve heard over the years for why people don’t plan, but perhaps the big three are these.

  • There isn’t enough time. Everyone’s day-to-day business activities take up a lot of time and setting aside what can be a full day or two to build a plan isn’t a priority.
  • There isn’t a real need to do it. This is particularly true if things are going well. It is most certainly the case when a business is enjoying boom times. For those that feel this way, most planning is reserved for when a need to change is apparent. Otherwise, business as usual seems to prevail.
  • Frankly, it really all comes down to one major thing—not knowing how to do it. People simply don’t know how to develop a plan and convert it into actual results.

So, let’s dive in and examine the concept of planning and the six key components of a successful business plan.

Creating the Roadmap to Success

Today, we are talking exclusively about tactical planning, sometimes called operational planning.

It is vital to understand that planning is really about establishing a roadmap or a series of directions about how to make a journey from now until some place and time in the future.

BONUS — If you have not already gotten your copy, download our planning checklist to help you both with this course and with putting your plan in place this year.

There are layers or a hierarchy of concepts that are really important.

I would like you to think about the idea this way.

At the work level, at the point where the actual activities are taking place on a moment to moment basis, is the frontline. At the other end of the spectrum is the vision.

At the bottom of the hierarchy, where the action happens, is the location of the work.

The objective is to minimize random work and to maximize work activities tied directly to the vision.

A vision is a dream or an imaginary picture of how things are going to be at a future point in time. It should be nonspecific, broad and colorful. The broader and more colorful the better. It’s not intended to be a step by step process, but instead a story about the future state.

Right below the vision is strategy.

Strategy is determining what you want to do with your business.

Right below strategy comes the tactical or operational plan.

Operational plans or tactical plans at their core are for making decisions into the future. How you are going to go about getting things done.

Think of vision as a dream, strategy as a list of what you’re going to do and tactics or operations as the specific how to get things done.

Right below tactics comes your goals. These goals need to be relatively short-term and measurable.

Then after that comes your actual day-to-day activities (aka: the work).

On the other hand, a tactical plan or any plan is not the territory. You may have heard that the map is not the territory.

This means you have to get on the road or into the actual business to get things done. The map or the plan will not get anything done.

A lot of times that apparent disconnection causes people not to plan because they say, “it’s not real.”

Well, that is true. It isn’t real. It is a document spelling out decisions about the future.

We have to actually play the game to see how good the plan is.

The map or the plan is not the current reality. It’s a mechanism or a tool you can use to increase the probability of creating that reality.

So this entire course is about fundamentally increasing the probability of success for your business.

To Plan or Not to Plan

There are six components or steps within planning that you want to take to ensure the right plan is documented, the right resources are mobilized, and the plan is carried out.

Step one is the pre-meeting setup. This is essentially homework that is completed prior to having the entire team assembled. Step two is to examine the past to determine where you’ve been. Step three is to review and analyze the current situation focusing on where you are now. Step four is to go into the future and decide where you want to go, how you’re going to get there, and the dates when you’re going to arrive. Step five is to assemble all the resources you will need to successfully complete the plan. Step six, a yearlong step, is to execute the plan on a month to month basis.

In a quick summary—setup, past, present, future, resources, and execution.

Let’s dive in and look at each of these in detail. This could be a great time to download the planning checklist I use and make notes on it.

Step one—The pre-meeting setup

To have the highest probability of conducting a super planning retreat, set up or preplanning is very important.

Preplanning is making a series of decisions, pertinent decisions, which will help you to put this tactical plan together with the highest probability of having “buy-in” from your stakeholders.

Often during preplanning, which could be a month or two before the actual planning retreat meeting itself, there are a number of key questions that need to be addressed.

Who is going to be there? Which of the stakeholders? Will every one of the stakeholders be there? Will you limit the group to one person from each department or section within the stakeholder areas?

Other decisions are: Where is it physically going to be held? How long is it going to take? Is it a day or is it two days? Are we going to go to some remote place and stay overnight? Are we going to include recreational activities surrounding this event?

Will we have food? What kind of food? Will it be a box lunch? Will people bring their own lunch? Will it be a two-hour banquet?

Are you going to use a facilitator or not? Generally, the use of an unbiased outsider as a facilitator will help make things a great deal more productive.

The next part of the setup is actually the beginning of the planning retreat itself.

There are three things that must be done.

What are the expectations of each of the individuals in the room? The best way to do this is to go around the room from person to person and ask them what they expect to get out of this day? Record all of their input on a whiteboard or a flip chart. You will want to revisit the list at the end of the meeting and verify that each person’s expectations were met.

Next, you want to have the leader give everyone their vision for the future. Hopefully, this vision has been in existence, and we’re asking our leader to say it one more time. I like to record each of the aspects of the vision to use throughout the rest of the planning retreat.

Then have the leader give an executive summary of the previous year. Encourage the leader to give the highlights and the low lights. Once again, make a record of all the key points.

At this point you would have everybody’s expectations written down, all of the key points of the vision recorded, and everything that happened last year from the leader’s standpoint. All of this sets the foundation for a high-quality meeting.

Step two—Examining the past

The next thing you want to do is to start digging into the past. What we’re looking for are the key lessons that came out of our experiences over time.

We’ve done a little of that with the executive summary which focused primarily on last year.

First, examine your existing strategy and take a look at how your business is doing with respect to it. Remember, strategic direction is really the what are we supposed to be doing.

Imagine we’ve established that we’re going to be a distributor of automotive aftermarket parts. Plus, we’re going to distribute in the central Texas geography and we’re going to have primarily enthusiast retail stores as our customers.

Those are a variety of strategic decisions that you’ve made as a company.

So what you’re doing in this strategic review section is recording the key elements of the current strategy. Much like the example or the auto parts distributor I just gave.

How well are you doing relative to your strategy. We can do this in a variety of ways. We can use simply: poor, good, better, best relative to our competition.

Or we can use numbers. This technique is essentially — 10 is great while 1 is grim.

Regardless of the technique you select, what you’re doing is using the entire room of stakeholders to determine how well you did on your strategy over the last year to three years.

After grading your results you will want to list potential actions to capitalize or to correct. High scores are indicators to capitalize on opportunities and low scores are clues to suggest corrective actions.

Potential initiatives (something that is considered a worthwhile possibility)

The reason I’m using the word “potential” is that an enormous number of ideas and concepts will be generated when you bring together a fantastic group of very fertile minds. And while many organizations try, nobody can successfully address every great idea.

All high performing, preeminent companies pick a few great initiatives and focus on getting them done.

Later on, I will give you the technique to select which of the “potential” actions you are going to go with. For now, list all the ideas the stakeholders identify.

The next thing to cover after strategy would be history. If this is the very first time you’ve ever done any formal tactical planning, the history should go way back to the inception of the organization.

I find the best way to do this exercise is to draw a timeline. Then just list and number things as people remember them. Then plot the numbers on the line. When you are finished, you will have an excellent timeline of about 15 to 20 key milestones in the proper order.

Once that is done, review the list for both lessons learned and for potential initiatives.

At this point, it is time to begin looking at the more recent past results. Specifically, last year’s goals and last year’s vital drivers.

The best way to do that is to list out all the goals and their actual results. Then score the results on a 1 to 10 basis (1 being a grim result and 10 being great).

Then look at the vital drivers and go through the same scoring routine.

Every goal and every vital driver will produce a lesson learned, a potential initiative, and/or some specific corrective action.

Of course, it is entirely possible that the company had neither goals nor vital drivers to review. That situation will also produce specific initiatives.

If one or both (goals & vital drivers) don’t exist, the stakeholder team will not really be able to determine how they did in the previous year. The lesson that comes from that realization is profound.

Going through these steps has allowed us to examine the past pretty thoroughly. We’ve harvested a long list of lessons learned and a list of potential actions, goals, projects, initiatives, etc. Now it’s time to take a look at the present.

Step three—Analyzing the present

What we are really trying to do here is to get a baseline understanding of what the organization looks at this moment.

First, take a look at the mission statement. If it doesn’t exist, it’s time to put one in place.

If it does exist though, take a look at the various elements (keywords) of the mission statement and determine how well you’re doing against them. You already know how to conduct a 1 to 10 scoring. Use it again for this exercise.

Several outcomes are possible.

First, your company may not be living up to some of the elements. Either determine what corrective action is required or modify the mission to what your company can actually deliver.

You certainly do not want to set yourself up for failure by having a mission that you are not living up to.

Do the same exercise with your values or core behaviors. How well are you doing vis-à-vis these items? Are these behavioral norms and standards being delivered at the high level you expect?

Conduct the same exercise with respect to the company philosophies towards customers, towards employees, towards owners, towards vendors, suppliers, etc.

Next realize that all organizations, including yours, have a set of philosophies, either documented or practiced. Evaluate how well the organization is doing against them.

Same concept as you used with the mission and the values. Look for items needing changing or areas where you need to keep things the same.

After that do a straightforward strengths, weaknesses, opportunities, and threats analysis—a SWOT Analysis. The simplest way to do that is to just list out all the strengths, all the weaknesses, all the opportunities, all the threats and then prioritize them.

This exercise typically produces a long list of potential initiatives. Perhaps now you will see why I mentioned keeping a list of all the “potential” initiatives, projects, actions, etc., to the side. I will give you a tool to determine the top few that will become part of your actual plan.

Another analysis involves basics and fundamentals, aka processes and procedures. I suggest starting with “big” processes like manufacturing or marketing or distribution. Use the same 1 to 10 technique I have already taught you.

Once you have identified the ones with lower scores, you can drill down into the sub-processes. Under manufacturing, for example, you could score receiving, order processing, and maintenance.

The key to this, and to each of the scans you have taken in this section, is to produce a list of potential initiatives.

Step four—Invent your future

Okay, so we now have a spent a considerable period of time getting ready, examining the past, and analyzing the present. We have produced a list of potential initiatives, projects, and corrective actions, etc., that are listed on one of our whiteboards or on several flip charts pages.

Now it’s time to look at the future with respect to determining what goals, targets, and objectives we will be implementing in the upcoming year.

There are really five sub-steps in designing the future.

The first of these five steps is to look at whether or not you need any new strategies. We looked at our current strategies at an earlier point in the retreat, and it may be we should just keep exactly what you’ve been doing in place.

But normally, slight adjustments to various strategies should be implemented.

Essentially, you’re looking at your strategic positioning in the game you are playing.

Earlier, I had you imagine we were in the automotive aftermarket distribution business. That’s our game.

We could adjust our strategy to be in a bigger geography or a smaller geography. Or, to determine how many different segments we should handle. Should we be all under the hood, or should we be only on the exterior? Should our strategy be focused inside the car or should we be everything to do with an automobile? Should we include recreational vehicles as well or stick to high-performance vehicles?

All those are strategic kinds of decisions. They need to be decided on first, and then we can drill down into tactics and goals.

After that, what long-term goals should we have to execute the strategies? Long-term goals should be typically 3 to 5 years out.

While important, this exercise should be fairing quick to complete. You may want to determine revenue, gross margins, market segment revenue, new customers, key expansion targets, geographical expansion, etc., but not in too much detail.

But more important than the long-term is working on the next year.

For our imaginary automotive company, hiring a new chief marketing officer or increasing our sales force from 9 to 14 might top the list. All of these are specific new goals you intend to accomplish in the upcoming year.

However, the most important decision for the upcoming year is determining your vital drivers.

For most organizations, a list of maybe 15 or 16 vital drivers is more than enough. The number will not change much if your business size is several hundred thousand or several hundred million dollars.

It helps to group your vital drivers into groups like financial, productivity, business development, and quality. You will typically end up with 3 or 4 vital drivers per group.

Under financial, for example, you might have revenue, gross profit, and cost of sales.

After you have determined the vital drivers by name, determine the target or goals for the year and month by month.

Then next, determine the top five initiatives.

Remember we have been accumulating a big list of potential initiatives throughout the meeting. That big list needs to be reduced to five key initiatives.

The reason is that, if you are going to be a preeminent business, you need to execute and not just create lists of ideas. Far too many organizations create big lists and get very little done.

Here’s a simple and fun way to pick the top five.

Give everyone a strip of stickies (red dots, or pink elephants or balloons) and let them vote on what they want with their stickies. You will be amazed at how quickly that process goes and how satisfied all the stakeholders are with what gets selected.

After the top five are selected, determine who will be the champion for each one and who will be on the initiative’s team. Immediately after the retreat or within a few days, each team needs to create a plan to deliver the results.

Incidentally, each of the individual departments should be tasked with producing a plan that shows how their actions will drive these same goals throughout the year.

Both of these sets of plans can be produced the following day or assigned as homework that needs to be delivered in a week or so.

Step five—Alignment: getting the resources you need

So you’ve now decided what to do. Next, you need to make sure you get them done.

Since you may not have all the resources you need, it is time to look at them.

Far too many management teams do it the other way around.

They constrict their goals because of their available resources.

It’s very limiting thinking.

What you really want to do is to figure out what you’re going to do and then go get the resources.

The first thing is… Is there anything that’s critical?

By critical, I mean vital.

Is anything that you absolutely have to have?

If you don’t have it, you will not succeed in your goal.

This is not a long list of wishes. This is not a list of all the things that would make your life easier. This is a short list of everything that is vital. Not nice to have or it would make things easier if we had.

Next, you need to work on your physical resources.

What physical resources do you need to get your goals accomplished? This includes things like capital, facilities, equipment, materials, supplies…

Next, systems and procedures.

Take a look at your marketing systems, your customer service situation, your training programs, your technology infrastructure, IT, etc. These kinds of things are typically discussed and agreed to within the systems and processes area.

Next, human resources.

Review critical new hires, promotions, star development, coaching, mentoring, and training.

Finally, look at the need for any other resources that may not fit into the groupings above. Determine what you need and how to get them.

At this point, you have your plan in place and have identified the resources you need to carry out the plan successfully.

Step six—Execution

There are a few more things to do to make sure that you actually get everything done.

One is we need to alter the philosophy or the cultural behavior of everybody within our organization.

Specifically, you must have a culture of accountability. This means the periodic, strategic execution of team meetings.

Really this is an accountability meeting based on the goals of the department, or for the company and/or for each of the top five initiatives.

All of my clients use the Business Mastery System of management to conduct these meetings.

For the entire organization, these meetings take place once a month. In most departments, divisions, branches, teams, and the top five initiatives, once a week or twice a month will usually be sufficient. Although, in teams operating on the front line, daily is not unusual.


So, you now know the exact six steps used by some of the most elite companies out there. It doesn’t matter what industry you are in; these six steps can translate into organizational transformation and success when applied consistently.

Each of the six secret steps along this roadmap is required.

The first is the setup, which includes both what you do before the actual planning retreat and what you do at the start of the actual event.

You want to do preplanning to get things optimally organized. This critical step makes sure things go off smoothly.

At the start of the meeting, go over the expectations of everyone in the room. Make sure that by the end of the meeting everybody’s expectations have been touched, and they are leaving the retreat happy and satisfied.

Look at the owner’s vision. Look at the executive summary of the past year. Examine the past, looking at the strategy, looking at the history of successes and failures.

The objective is to mine the past for lessons and potential new initiatives.

Conduct a situational analysis examining the strengths, weaknesses, opportunities, and threats.

Sometimes, much of this work could have been done as pre-work.

For example, customer, vendor, and employee surveys.

After this is done, then move into establishing what the future is going to look like.

Do we need to adjust our strategy? What are our long-term goals? What are the top-line goals for next year? What are the vital drivers we’re going to be using companywide? What’s our plan to run our strategic execution team meetings incorporating our culture of accountability?

Determine the top five key initiatives. Establish champions, establish SET team members for all of the short-term initiatives.

Then we look at our alignment area where we talk about the resources we need—critical resources, new people, new materials, new equipment, new technology, and new process and systems.

Finally, we review the final step—execution.

Execution is really the key to it all. We don’t want to have a meeting and spend our time developing a plan only to have it sit on the shelf.

That’s it. You now know the six secrets to convert your company into an elite player in your industry.

BONUS — To make it all the easier for you, download the proven planning checklist to get this year off to a fast start.

Let me know how it goes.