Prioritizing the Implementation Strategy

Too many consultants help businesses develop strategic plans that fail. This is often not the fault of the business or the strategic plan. I don't really fault the consultant except that they did incomplete work. A great BIG picture is draw up, but no blueprints are made. And what we are left with is a pretty picture with no tools to implement it.

There is a way to remarkably simple way to go about prioritizing and implementing your strategic initiatives. Let's walk through it briefly and you tell me if it makes any sense. (For a PDF PowerPoint, go to http://www.marknissley.com/, click Client Access, then click Client Tools in the middle of the page.)

1. First, if all identified strategic outcomes are tied tied to bottom-line values (this means $$$), then you have to revisit them and do so. Generally all strategic goals can be tied to one or more of these three things: increase revenue, increase margins, reduce expenses. All affect the bottom line.

2. Once you've done this, you should have a list of strategic outcomes and the dollar values they will represent annually once achieved. For example, let's say we have a bakery, and we determine that a 20% increase in our birthday cake sales will reap an additional $12,000 in revenue every year. $12,000 is our Annual $ Value.

3. Next, figure out how long it will take for you to reach that outcome. Completely reach or exceed it. Let's say we know how to sell more cakes, but believe it will take us 9 months to actually achieve a 20% increase in sales. 9 is our Months value.

4. We are almost ready to go, we just have to divide these things into 4 categories.

Category A: Anything with any Annual $ Value that can be achieved in 1-3 months. If you have anything that can impact your bottom line immediately, DO IT.

Category B: Take your biggest Annual $ Value (unless is is disproportionately larger than all others, then take your second). Cut that value in half. For example: $12,000 divided by 1.8 is $6667. Anything that will bring more than $6667 to the bottom line is next. The longer the outcome takes, the higher the value must be.

Category C: Take all initiatives with your mid-Annual $ Value or lower. The longer they take the more likely they are to fall in category D.

Category D: Once you get to these projects, they are all fairly low value, so better get more strategic outcome in place fast!

(Graphic representation below.)

5. Execute the outcomes in the order of A,B,C.

You can argue with this all you like, but then you will just be arguing, not DOING, and that gets you nowhere.

(I should note I took this tool from someone, though I can not remember who. All the credit goes to them. I just use it.)

Two Styles Create Two Outcomes of Entrepreneurship

There are many different ways to become an entrepreneur and many different styles of entrepreneurship. However, entrepreneurship can be very roughly categorized into two styles. These can best be defined by their desired outcomes.

The first is a "Lifestyle Entrepreneur". This entrepreneur wants to create a good income for themselves, wants to be in complete control of that income, and wants the flexibility to make lifestyle decisions- such as take the day off to go fishing, or take three weeks off to take a family vacation. In this path, lifestyle may take precedence over overall return on investment. As long as a substantial income continues, the entrepreneur is happy. Most "mom and pop" businesses fall under this category. Most small businesses also fall here, as well as independent professionals such as doctors, dentists, accountants, and attorneys. The risk is often relatively short lived and minimal. One can make a very good living as a Lifestyle entrepreneur,and if they manage their finances smartly, can become independently wealthy. However, at times, lifestyle may trump finances. The business then runs into problems.

The second style of entrepreneurship is what I call a "Impact Entrepreneurship". The desired outcome is high-growth. This type of entrepreneur typically wants to grow from a small business to a large business. They want to either make an impact on the world or create great wealth- often a combination of both. These people are willing to undertake larger risk over an extended period of time with the vision of large returns. The organization is designed (or should be) for constant and radical growth (2-4x revenue each year). Margins are thin in the first 3-5 years. However, once high-growth has been achieved, some very attractive exit strategies materialize. A first or second round of funding can occur to take growth to the next level. Or the company for a significant profit to the owner. Both can create great wealth, the first allows the entrepreneur to continue to create an impact or "change the world".

Sometimes a lifestyle business will accidentally convert to a high-growth business. This may be driven by changing goals of the the entrepreneur. However, sometimes it just happens because the business is at the right location, in the right industry, with a rapidly growing demand. In these cases, the entrepreneur must make a choice to change personal goals and lifestyle, or to suppress the business. This decision is often be delayed because the entrepreneur is uncomfortable with the related decisions. Delay serves to suppress the business. Organizational, financial, and quality control decisions that support high growth are not made. The business can begin to crumble. Perhaps not immediately, but surely over time.

Lifestyle entrepreneurship is most often engaged to create a sense of independence, that the entrepreneur is not reliant upon anyone for income, expertise, and lifestyle decisions. It takes time to achieve this goal. Lifestyle entrepreneurs are often frustrated with slower results. Further, if presented with a high-growth opportunity, Lifestyle entrepreneurs are often reluctant to give up independence and decision-making power. Impact entrepreneurship is dependent upon many factors. Financial obligation exist to investors, banks, or both. Expertise is generally held by an employee or partner. Decisions must be delegated. The market is often more volatile. Business travel is required. Time obligations are intense. This is a much different lifestyle.

The rewards are different. Successful Lifestyle entrepreneurship creates financial freedom and a fluid lifestyle relatively quickly. It creates a "family" business that can be passed on. It creates the satisfaction of being a business owner. Successful Impact entrepreneurship creates significant personal wealth, but is delayed 5-15 years. This personal wealth creates greater freedom and can be passed on to family or charity. It creates the satisfaction of having made an impact on the world around you.

Neither is the right way. But both have distinctive requirements and a conscious decision should be made at all times to engage in one or the other. You may have to make this decision every year. Your personal goals may change. Life is like that. But we must make the decision and take responsibility for the obligations and rewards associated.

Entrepreneurship: Focusing on the RIGHT Results

Last week, our article discussed manifestation. We talked about focusing our on results to get results. What are the right results for an entrepreneur? Aren't they self apparent? Isn't to run a successful business, to make lots of money, and to create something unique? Of course. Then why is it that so few entrepreneurs are focused on these things? Maybe you are, but is it the foremost objective in your mind?

As the business gains traction, so often we are focused on the daily grind of business. The foremost thing in our mind tends to be those packages need to be shipped before lunch, or that client that wants more shirts before Tuesday, or that circuit that won't work before the prototype rolls, or.... You get the point. We are focused on small issues that are decidedly NOT as important the big picture (though we sometimes fool ourselves that they are). But more pointed, a great majority of our time is focused on obstacles. If 90% of our energy (time, money, action, and commitment) is focused on obstacles, what kind of results should we expect? That's right. Obstacles.

At worst, our obstacles grow in size and context. At best, we manifest solutions and we become a solution factory. Is that why we started the business? Perhaps. Solutions are certainly helpful, but they are not the end product. Remember success, money, and uniqueness? What happened to them?

We often leave those key things to be a two minute motivating speech at the end of staff meetings, or something to talk about at the annual planning retreat, or they are only inspirational words on your wall poster. I hear all your complaints and excuses about energy and resources, and that "its just not practical." You just get swept way in things. Hogwash. If that's what you think, quit acting like an entrepreneur and go get a job. You are short changing yourself and everyone that is counting on your achievements.

Want to really manifest entrepreneurship? First, you have to decide what success is and what idea of success you WILL go after. There are a dozen methods out there that will help you discover this- your brand, your purpose, your Hedgehog concept. The last one, presented in Good to Great by Jim Collins, is the foundation upon which every since has been based. The best selling book discusses it in terms of organizations and businesses, but it works equally well with individuals. It is particularly important for entrepreneurs, building businesses upon themselves. Find the method that works best for you.

The basic idea is this: Identify what you do best, what you are passionate about, and what economic model works best for you. At the intersection of those three things is where you should find yourself. You will have the best chance of success, have them the most fun, and will find the work most rewarding. Now doesn't that sound like a place you want to be?

Once you have figured this out and aligned your business objectives with that concept, you must make sure that those things, not the obstacles, are what stay foremost in your mind. We must remind ourselves on a constant basis why we got into the business, and what the big objectives are. Each of us will develop a unique way to do this. The method is not so important as long as it is done. You might develop a purpose statement that you frame and hang in your home or office, where you see it many times a day. You might spend 10 minutes every day reviewing those big objectives, and an hour every week reviewing your progress. You might enlist someone to hold you accountable to them.

These things may seem hokey, or too warm and fuzzy, but again the question comes into play: How committed are you to your success? How far are you willing to go? How much energy are you will to give? If you want to go all the way, it is critical to put activities in place that will not allow you to get caught up in the daily obstacles. To manifest growth, you must set aside time to focus on growth. You will be surprised how a little energy diverted in this direction will quickly create dividends of success.