Time For a 1st Quarter Checkup
A lot can happen in three months.
The Vatican can elect a pope from Argentina. We can now carry knives through airport security. And Dennis Rodman can become BFF (best friends forever) with Kim Jong Un of North Korea.
Who in the world saw that last one coming? Which begs the question: if all this can happen in the blink of an eye, what has happened to your strategic plan during the same time period?
If you rolled out your annual strategic plan in January, it’s time for a first-quarter checkup. In fact, depending on your industry, it may already be overdue. Which means it’s time to start asking questions like:
- Are we making progress towards the goal?
- Is it still visible?
- What are we doing to stay focused on the most important initiatives?
- What (if anything) has changed in our markets or with our customers?
- How do we need to respond to those changes and by when?
- Who is responsible for implementing these changes?
In today’s markets, strategic plans can get off track faster than a speeding bullet train. If you don’t constantly monitor and measure your plan’s progress, you may end up at a very different destination than originally planned. So whether it’s once a quarter, once a month, or once a week, you need to regularly assess and update your strategic plan.
One simple way to do this is with a quarterly scorecard. This helps to clarify the strategy and goals while managing alignment across individuals, departments, and initiatives. It also provides diverse views into the business and helps to maintain focus across all the important indicators.
A scorecard makes the elements of your destination points very real by noting them in tangible, near-term, measurable ways. It also helps to further refine expectations and standards of excellence. Most important, a scorecard answers the question: “How will we know if we’re moving towards our destination?”
Start with three or four key financial metrics, such as revenue, profit margin, or operating expenses as a percentage of revenue. Then add in any others that are especially important to your business. Throw in a few leading indicators, such as number of proposals submitted, new customers signed up, or new employees hired. These forecast your future performance and provide insight into what is to come.
Next, measure what your key stakeholders (customers, employees, vendors, etc.) care most about. Product quality? On-time delivery? Your responsiveness to fixing problems? Find ways to quantify these measurements, and make sure they match up with what your stakeholders truly care about. Don’t just guess.
Another approach uses the following table to outline, by strategy, what your scorecard looks like. Answer the questions in each section to see how the pieces fit together.
- Are we focused on the right thing?
Key Initiatives & Commitments
- What will we do by when?
- Who is on the hook for results?
Key Measures (including targets and/or destination points)
- How will we know if we are making progress?
Risks & Mitigating Actions
- What are our risks?
- How can we minimize them?
This makes it easy to see the links between the strategies, initiatives and measures, and the risks or barriers. It also clarifies who needs to do what by when. It encourages accountability throughout the organization. And it develops a more proactive view by forcing you to consider and manage the risks before they become serious problems. It does not matter exactly which tool you use, just choose a tool that will work in your organization and that you will commit to sticking with.
Once you’ve created the scorecard, communicate it to employees – over and over again until everyone knows it well. You can’t over-communicate about your strategic planning framework and objectives. And your ongoing behavior in this regard will make it evident that you are steadfast in getting the company to where it needs to go.
Report progress as broadly as possible each month, including any challenges or barriers that may arise, and note how you are adjusting timelines or other elements. If you don’t communicate in these areas, people will MSU (make stuff up) and create much worse scenarios about why you’re not getting to where you need to go. The less made- up thought bubbles, the better!
I used to tell clients that “you can do it right the first time or you can go too fast and do it over.” I don’t say that too often anymore because today’s markets change so quickly that if you don’t get it right the first time, you may not get the chance for a do-over.
So get going on that scorecard, and make sure you’re still on track to reach your destination! In the meantime, I wonder which country Dennis Rodman will visit next.
Call to action: Conduct your 1st-quarter review and report the results to the organization.