From Working Leadership Online:

Question:
You said the first step in planning is NOT goal setting. But when we plan, we sit around the table and set goals. What did we miss?

Response:
The biggest problem in planning is the “shoot from the hip” goal setting exercise. Setting goals are important, and there are two critical steps that come first.

In my younger days, my alarm would go off at 3:30a. In a groggy stupor, I would sit up and reach for the clock. Something kept me from sailing it across the room. Something kept me moving, out of bed, lacing my shoes for a 15 mile run to the beach and back. It was NOT the goal of running 15 miles. In fact, the thought of running 15 miles at 3:30a was about as negative as I could think.

I was training for a marathon. And the one thing that moved me forward was NOT the goal of 15 miles for the day, not even the goal of completing the marathon. The only thing that moved me forward was the vision of me, crossing the finish line.

The first step in the planning process is to create a clear and compelling vision. It is the only tool, for the manager, to paint a picture of the future, to create enthusiasm and excitement in the team to go forward.

Yes, I was quite dapper, hair in the wind, tape across my chest, crowd cheering me on, slim in my running togs. Shoes laced, out the door, training for a marathon. The first step in planning is to create a clear and compelling vision. -TF
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Working Leadership Online, register now.
Mar 16 – Planning – Creating the Future
Apr 6 – Delegation – Ultimate Leverage
Apr 27 – Control Systems and Feedback Loops

Early this year, we kicked off our Working Leadership Online series. We have 15 people working their way through specific Field Work, spending time with their teams, and making progress on issues they face as managers. Here is a preview of the upcoming Subject Areas in this program.

Mar 16 – Planning – Creating the Future
Often, managers jump in and just start setting goals. When that happens, they miss two critical steps in the planning process. Have you ever wondered why you are the only person excited about your plan going forward? Planning – Creating the Future will explore the elements and proper sequence using a powerful planning model. In the Field Work assignment, participants will create and a publish a plan specific to their own situation.

Apr 6 – Delegation – Ultimate Leverage
Apr 27 – Control Systems and Feedback Loops
May 18 – Managing Time – Managing Yourself
Jun 8 – Team Problem Solving – Power of Team

To find out more about Working Leadership Online, just follow the link.

“I know we are supposed to come up with a plan for this year,” Denise explained, “but things are so uncertain, I am having trouble.”

“So, there are questions you don’t have answers for?” I asked.

Denise nodded. “I can’t imagine what things will be like a year from now.”

“Okay, so there are things we don’t know. What things do we know?”

“Well, we’re not like GM or Chrysler, those guys are really in trouble. Our company is solid, doesn’t have a lot of debt, it’s just that our business is really tough right now.”

“So, a year from now, your doors will be open and you will be doing some level of business. And you know your business volume in 2008?”

“Yes, and based on what we know from our customers, we think our volume will be down another 20 percent in 2009,” Denise replied.

“I know it’s difficult to think that business could be down another 20 percent, but that is where you have to start. You have to be prepared. It’s not the plan you want. But remember, your company cannot be bigger than the market. Plans never survive a train wreck with reality.
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Working Leadership Online Schedule
January 26 – Orientation
February 2 – Goal Setting and Time
February 16 – Decision Making
March 2 – Planning
March 16 – Delegation

To find out more about this program and to pre-register, visit www.workingleadership.com.

“I truly think we could multiply this business five times over,” Synthia described. “If someone bought our company, now, with the right investment, things would take off.”

“In this economy?” I asked.

“Yes, in this economy. Some sectors are taking it on the chin, but we made a decision to stick in this part of the market,” she replied.

“If that is what you think, why don’t you do it?”

“Well, we don’t, I mean, there is risk, after all,” Synthia backed off.

“When I ask, why don’t you do it? it’s not a dare. I am really looking for the reasons. Let’s say there are six reasons why you don’t want to take the risk. I will bet a dollar, three of the reasons are real and three of the reasons are head trash. I am here to help you identify the head trash, so we can get down to the real reasons to go forward or hold back. When we get the head trash out of the way, we can begin to make progress on stuff that is real.” -TF
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Working Leadership Online Schedule
January 26 – Orientation
February 2 – Goal Setting and Time
February 16 – Decision Making
March 2 – Planning
March 16 – Delegation
To find out more about this program and to pre-register, visit www.workingleadership.com.

“I know how to say NO to new things coming up, but most of our troubles are from decisions we have already made,” Byron confided.

“Each year, don’t you review your decisions about what you will and will not do, including the cost structure for each of those decisions?” I asked.

“You mean, our budget?”

I nodded. “Yes, your budget. When you look at each budget item, whether it is a direct cost or an indirect cost, you have to ask this question.

“Is this absolutely necessary?

“If the answer is NO, get rid of it, dismantle it, idle it.

“If the answer is YES, move to the next question. What is the absolute minimum necessary to perform this function to our spec.?” -TF
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This conversation with Byron is essential. By this time next year, the US will be in the thick of a downturn. There is still time to adequately plan your company’s scenario to adjust.

Note that if your industry is connected to residential housing, you are already in the thick of it.

Luis was not having fun. He remembered how difficult it was for the company to make payments on the third machine.

“Management is about making resources productive. This third machine is not productive. The floor space it sits on is not productive,” I said.

“But we paid a lot of money for that machine, and our company cannot get out of its lease for this space. And what are we going to do if we need the machine?” Luis objected.

“Anyone can manage an idle machine. What are you going to do?” -TF

Luis began an aggressive calling plan to get his money collected, put holds on new orders for customers who were past due and began requiring deposits on large orders. Nothing happened at first. Luis stayed off kilter for the better part of two weeks. Slowly, he calmed. Payments began to come in, not enough to have a party, but enough to breathe.

“Management is about making resources productive,” I repeated. The first thing to manage is capital. Next are your physical assets.

“Our building, our equipment?” Luis confirmed.

“The first decision is to decide what is necessary. You haven’t thought about that since this company was a start up. Back then, you thought about it a lot. You outsourced some production until you could afford your own machine. Then you bought a second machine. You moved into a new building so you could bring in a third machine.

“Now, you can’t keep the second machine busy. You tell me, what is necessary?” -TF

“Where’s the money?” I asked.

Luis looked at me and squinted. “What do you mean, where’s the money?”

“Look, you asked me to come here and help you straighten out this mess. Where’s the money?” I repeated.

“That’s the problem, there isn’t any money,” Luis replied.

“Yes, there is, there always is. Luis, the first resource a manager has to manage is capital. But before you can manage it, you have to find out where it is. Sometimes you think you know where it should be, but if that’s not where it is, you can’t manage it.

Sometimes your capital is tied up in a machine. Sometimes your capital is tied up in unbilled work in process. Sometimes your capital is tied up in Accounts Receivable. Once you find out where your capital is, only then can you manage it. So, where’s the money?”

A raw nerve had been struck. Luis shuffled some papers on his desk. “It’s here,” he said, pointing to the third column in his AR aging report. “It’s over 60.”

“Well, now we know where it is, we can manage it.” -TF

“The forecast was a bit optimistic,” Miguel observed. “We went back and looked at our sales activity. Not our sales results, because those were dismal. I gotta tell you, my guys were pounding the shoe leather. It’s funny. The same salespeople with the same customers, but not closing sales like they did three quarters ago.”

“Working harder isn’t working anymore?” I asked.

“No, I think my guys are going to have to work differently, not harder,” Miguel replied.

“And who will decide what they do differently?”

“What do you mean?”

“Whose job is it, to decide what is necessary? How to go to market? To make the efforts of your salespeople more productive?”

Miguel’s face slowly revealed a mild panic. He stared straight ahead. “It’s me.”

“It’s time,” I nodded. “It is the job of the manager to take the resources of the company and make them productive. It is only managers who make those resources productive. As a manager in this company, you are the only one who can make your sales team productive. The job of management is more important than ever. The decisions you make in the next twelve months will determine whether your company will survive.” -TF