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Author: Richard Lannon

A RACI Against Time

lannon Feb11

You just never know what is going to happen in your business life. Recently I had to work like crazy to get a bunch of deadlines completed to free my schedule so I could take an unexpected trip, half way across this wonderful country of ours, Canada.

As events unfolded, an unexpected team came together with each member naturally assuming a specific role. From leader and manager to subject experts, advisors, information generators, documentation creators, and experienced friends and family members, there was a natural stakeholder relationship created that fit a RACI – responsible, accountable, consult and inform. This was a good thing.

A RACI is a powerful tool for stakeholder analysis used to identify and understand key roles of individual team members in an organization. The simplest definition of a RACI goes like this:

Those who are Responsible:

These are the doers – the people responsible for the nuts and bolts. If you and your team are reporting to a sponsor who is the final person accountable for the work, then you belong in this category.

Those who are Accountable:

The buck stops here. This is the person(s) who has the most at stake in events and happenings. They’re the ones who have the final decision or must present key recommendations to others in a final presentation. At the end of the day they sign the cheque. In most organizations this would be the sponsor, but it really can be anyone who has the final call.

Those we need to Consult: The experts.

Every task needs people with the right information at the right time onboard, subject experts and advisors who can help the team leader gain a clear perspective. You might have that person(s) in house (internal stakeholders) or need to outsource to find them (external stakeholders), but either way, they’re vital for getting the job done efficiently and effectively.

Those we need to Inform: These are all the stakeholders that need to be kept in the loop. They need to know what is going on from a logical and rational perspective with key information.

Though my recent RACI was unexpected, it’s really helpful to make RACI a formal part of your business’ planning process, particularly if you are going to be involved in any strategic, tactical or operational planning. This will help clarify the different roles and responsibilities needed to complete projects, ensuring your people are able to work with focused intent and to the best of their ability.

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Utilize Issue-Based Planning to Dig Deeper and Solve Business Problems

lannonMar11There is a lot going on in your organization, all sorts of things that you need to wrap your head around. The challenge is that you first need to truly understand the issues and determine how to address them.
This is where Issue-Based or Goal-Based strategic planning is used.

Issue-Based planning is probably the most common planning process for tactical managers to use. It starts with a review of the organization’s mission, vision, values and guiding principles; this ensures that management is practicing aligned thinking and has the right mindset to dig deeper and solve business problems.

Issue-Based Planning can be divided into ten key steps:

  1. Have the team perform a SWOT Analysis for the business area they are focused on. A SWOT is a strategic tool that can be used at an organization, department, team or individual level to understand external and internal factors that impact the business. It requires candid assessments of your Strengths, Weaknesses, Opportunities and Threats. Often teams fail at this as they lack objectivity when looking at their own organization. Consider independent help from an expert.
  2. Strategic analysis to identify and prioritize major issues and goals. This includes grouping the issues and setting key goals around them. At this point you need to avoid the knee jerk reaction of trying to hide, defend or solve the problems. It’s all about getting organized.
  3. Design major strategies or programs to address issues and goals. This is where you can start to work towards more detailed approaches to solve the key challenges that you are facing.
  4. Design and update vision, mission and values (if needed). Often this is something that you may not need to do. It just depends on the extremes of the situation. If the mission and vision are out of line with the issues or goals then there is some redefining to consider. The better thing to do is get the tactical management team to align with the mission and vision of the organization.
  5. Establish action plans, objectives, resource needs, roles and responsibilities for implementation of the plan. Do not miss this opportunity. A number of organizations miss this opportunity because they do not have an individual or team that they can assign responsibility and accountability to in order to ensure things get done.
  6. Record issues / goals and update any strategy materials including your visual action plans from your higher-level planning sessions.
  7. Consider developing a yearly Operating Plan document from year one to a multi-year plan that can be reviewed at an annual senior planning session. Issues must be addressed in this session to see how things have progressed.
  8. Have your teams develop budget for capital, project and operational expenses related to the business solutions to solve the business issues. Build in key performance indictors and an accountability model that the management team accepts and will work towards.
  9. Conduct the organization’s year-one strategic, tactical and operation review to determine your success at dealing with the issues that were defined.
  10. Monitor, review, evaluate and update any strategic and tactical planning documents including strategic road maps and visual planning aids. Do not allow your plans to sit on a shelf. Make them active documents that must be brought to all high-level meetings.

Issue-Based Planning is all about driving out the issues of the organization. It is important that the team can think in terms of real issues and have a level of confidence that their voice will be heard. This is where training in issue-based planning is important for the management team as they will be required to dig deeper into the issues and develop comprehensive solutions to business problems. It is a challenge to look at business issues, but with a little focus and a well-developed approach management can create their own success.

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Lagging vs. Leading Business Indicators – Do you know the difference?

In strategic planning it is important to discuss key performance indicators (KPI). Key business indicators are a type of measurement. They are essential for business leaders to understand what is happening in their business. The first step to determining your KPI is to understand the difference between lagging and leading indicators. The second step is to define and monitor your business indicators.

Lagging and Leading Indicators

Lagging indicators are used to measure performance and allow the business leadership team to track how things are going. Because output (performance) is always easier to measure by assessing whether your goals were achieved, lagging indicators are backward-focused or “trailing”—they measure performance data already captured. Just about anything you wish to monitor will have lagging indicators: returns on investments, a budget to plan variances, number of sick days, bags moved per day, equipment support incidents, etc.

Leading indicators, on the other hand, change quickly and are generally seen as a precursor to the direction something is going. For example, changes in building permits may affect the housing market, an increase in new business orders could lead to increased production, interest rate changes will impact spending and investments, a diminishing of demands for natural resources will often indicate work slowdowns, and aging baby boomers may indicate future stresses on the healthcare system. Because leading indicators come before a trend, they are considered business drivers. Identifying specific, focused leading indicators should be a part of each business’s strategic planning.

Consider These 7 Tips When Defining Your Indicators

  1. Though are some guidelines that can be used, there is no “one” way to define the key performance indicators for any particular business. It is as unique as your approach to strategic planning.
  2. Review your strategic planning process, in particular the assessment section of the various questionnaires and the environmental scan. Identify what you are already measuring and determine if it provides value to your business in your backward and forward thinking.
  3. Review your strategy map and roadmap to identify the key areas of focus. Identify the indicators that will tell you whether you have achieved your desired outcome(s) (lagging), as well as the indicators that tell you the direction of the market and where you should focus (leading). Be specific.
  4. Step outside your core senior management team and get additional leadership and external business stakeholders involved. An outside perspective can often help you determine what your lagging and leading indicators are, as well as help in recognizing the key leading indicators for your market that will drive your business.
  5. Always keep an eye on your lagging indicators–they will continue to provide insight into your business. Poor lagging indicators generally translate into poor leading indicators. A performance indictor survey might assist you in the process of ensuring the indicators are appropriate. The challenge is to ensure you have the correct indicators, and that your management team understands how they can be used to align your business impact zones.
  6. Choose your leading indicators carefully. The leading indicators should be unique to your business environment, originate from your key strategic initiatives and work elements, and ultimately be used to drive your business. Try not to be too ambitious. Keep focused on the business key impact zones represented in your strategic plan.
  7. Train your leadership team in understanding key indicators and how to use them to improve the business. It is important that your team can not only identify KPI’s, but also recognize the potential business impact indicated by them.

Ensuring that you have the correct indicators may be a challenge, yet is vital to the ongoing health of your business. Make sure your team’s strategic planning process includes determining your indicators and that everyone understands what they are and why they are important. Key performance indicators are either lagging or leading. They are either relevant or they are not. There should be no in-between. Remember, what gets measured gets done.

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It all Happens from the “Get Go” 7 planning steps to achieve measurable results

Business leaders need to ensure that planning and implementation is focused. A well thought-out planning and implementation approach considers linking strategy, tactics and operational needs. It includes considerations for key business impact zones (productivity, tools, people and culture) and the outcomes required for solutions to business problems.

Consider the business objectives, the process and the work approach that must be used to successfully achieve results in an organization. Results should be resource-driven beginning with shared thinking and consideration of the challenges that need to be addressed. Call them points of pain. All businesses have them and every business leader knows it.

A checklist would be handy at this point. Consider common business challenges such as issues with focus and direction, trust, communications and collaboration, productivity, effectiveness and efficiency, process and work procedures, outdated equipment and tools, people experience, skills, beliefs, values or even blame-storming. No matter the issue, they all add up to one thing – a negative impact, something a business leader seeks to avoid.

Here are 7 steps to consider when planning for measurable results:

Step 1. Understand your business priorities

What five things are on the strategic agenda of the organization? Why are they so important to the business? In what way can your team make those items happen? If you can answer these questions you are on the path to good business leadership thinking.

Step 2. Identify the challenges

What are the points of pain? What are the key challenges? How are these challenges impacting the business? Can we qualify and quantify the problem? Have we considered the impact to productivity, our tools, people and culture? What are the overall impacts and ripple effects to the organization? Write a clear and concise business problem statement that everyone understands. Share that statement and engage in shared thinking and creative solutions with your people.

Step 3. Determine key solutions

Throughout the process, encourage teams to assist you in solving the business problems. Be careful here, as coming up with ideas on how to solve business problems does not mean implementing solutions. Provide support and insight to people whose natural approach is to roll up their sleeves and jump right in. At this point, as a business leader, you should be seeking thinking and solutions. Only after the ideas have been put forth do you seek to prove their viability.

Step 4. Choose a solution that makes sense

This is where viability comes in. It really comes down to what, why, who, how, when, where, how much and what’s in it for the organization, the benefit, risk and return factor; all the things we learned in grade school and on the playground only with more risk. The best thing is to review situations and possible impacts. Pick three solutions: the do nothing solution, the do something solution or the do something else solution. Think through the issues and make a decision.

Step 5. Implement the solution

It’s not always easy, but it must be done. As the business leader, make sure you have your team together. Establish your approach to deal with people and team dynamics across the organization. Change means push back so be prepared. Be honest about your resource abilities. Invest in their success through investing in your own development. Use a good business coach to avoid future issues. Make it part of the process so your people will embrace it. This is a preemptive approach for solution implementation. Remember, as the leader you do not need to be the sage on stage but be the guide on the side.

Step 6. Measure the results

Ensure that you have put the right items in place to measure the results. This could be at many levels. Answer the simple question: does it work? The answer needs to be a yes or no, not maybe or sort of, eh! Did you get what you expected? How long did it take? Is it over or under budget? Will you see the expected return on investment? If so, over how many years? Do we have the right people? Have you considered the impact zones and the impact? Does the solution (process, tools, people, etc) align with what is important to the business? The list of questions here is long and depends on what was set as the measurement needs earlier in the planning process.

Step 7. Capture lessons learned

This is an area that business leaders rarely engage in. Yet, it is extremely valuable at all levels in the business. A feedback loop should always exist and the business leader should explore what was learned internally and externally. This is your intellectual property that can be used for future planning and continuous improvement.

In the end, it comes down to following a planning and implementation approach that ties strategy and tactical solutions together. As the business leader your success depends on following a proven approach, engaging your people in the process and building key business skills. Planning for measurable results happens from the ‘get go’.

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How Do You Plan for the Uncontrollable?

Businesses can be impacted by many circumstances. Often these circumstances are from external forces at play that need to be understood. Recently, while working with a client we discussed a number of challenges that the company was experiencing. We talked for some time about external events that the company was aware of but could not control.

The uncontrollable business events included an aging population and workforce, the availability of self-disciplined and skilled resources, tax law adjustments, Canadian and international industry regulation changes, the happenings in the global economy in Europe and the USA, the Canadian banks’ financial treatment of midrange Canadian businesses, the natural resource market’s price volatility, access to private investments, Manitoba’s diverse economy, technological changes in the industry and the list went on and on.

To work with a midrange, successful Manitoba business and to discuss the external happenings that keep the senior team up at night was a gift. We were able to dialogue on a number of potential threats, determine if they were real and determine possible solutions. In essence, we engaged in Scenario Planning as an approach to strategic planning.

Scenario Planning is an approach that is used with other strategic planning models. It is particularly helpful to ensure that the core planning team truly engages in strategic thinking. When focused correctly, strategic issues and goals are identified.

That is a great benefit to any business.

Most literature tells us that Scenario Planning is a five step process. The key is to ensure you take the time to openly identify perceived issues, determine if they are real and decide what to do about them. 

Step one is to identify and select several external forces and think about and consider related changes which might influence and impact the business. This might include a change in regulations, demographic changes, education alterations, economic activity, etc. An environment scan of media – both traditional and new – for key headlines often suggests potential changes that might impact the business. This type of business intelligence can be automated in technology savvy workplaces.

Step two is to remember that for each change in a force there is an impact. In this case, discuss three different impact scenarios for the future business. Consider including 1) best case, 2) worst case and 3) reasonable case scenarios that might arise within the business from the resulting change. Reviewing the worst case scenario often provokes strong motivation to change the business.

Step three is to consider what the business might do. This leads to developing potential strategies for each of the three scenarios to respond to change.

Step four involves the core team indentifying common strategies that must be addressed to respond to possible external changes. This is the moment of truth as the team starts to see opportunities to deal with external forces that will impact the business.

Step five is to select the external changes most likely to affect the business. Traditionally this is done over a 3 to 5 year business planning horizon. However, depending what business you are in and the way technology works, planning horizons are collapsing to 18-36 months. You need to consider the planning horizon that makes sense to your business and identify reasonable strategies that can be leveraged to deal with rapid change.

If used correctly, scenario-based planning is extremely powerful. It allows for a guided dialogue on realistic events that can have a dramatic impact on a business and its people. All businesses need to keep a keen eye on the horizon and consider the events, positive or negative, that can impact their future. The key is working pre-emptively to ensure approaches are in place to deal with uncontrollable issues that may arise.

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