Prism Insight
From time to time we read an interesting book or article, produce a noteworthy memo or attend an interesting presentation/seminar. On this page you will find a summary of these matters helping you digest it quickly and decide whether it is worth exploring it further. Do contact us too if you want us to review something you have seen and believe might be worth sharing with our clients and partners. Email René Moolenaar renem@prismgroup.co.uk
Strategy is OUT, Execution is IN (By René Moolenaar, Mar '11)
A bold statement you might think; and yes there is more to it, of course. Setting out what you want to achieve and how resources are applied to achieve it (strategy) is important. Without a sound strategy a business is rudderless and its success left to chance. But once this is done the focus must shift to its execution. That’s when things often go wrong.
Too many businesses, large and small, spend a significant amount of time and money on the development of a strategy, but leave its implementation to chance. The development of the strategy and related business plan is not the end goal. It’s a conduit to connect direction with actions. We applaud those owner managers and management teams who have the awareness that a well developed strategy and business plan are the cornerstones of a successful business.
But why do so few businesses devote at least an equal amount of time and money to its implementation?
Surely a faultless execution of the plan must be a priority for everybody in the business, from the MD to the person on the shop floor, from R&D to Manufacturing to Sales & Marketing, to Finance, to HR and beyond. Implementation starts with communication with everybody.
If only the management team is aware of the business goals and how resources are directed to achieve them, then it should be no surprise that the whole process takes longer, is less efficient and may not deliver the required results.
Most business plans assume a level of investment. Does the business have the required reserves or access to funding (not so easy to obtain these days!) to acquire machinery, recruit talent or deploy sales and marketing activities to manufacture the new products or access new markets as identified. Running out of money before the business plan is implemented must be avoided. A detailed financial plan is without doubt an invaluable tool to quantify the funding required and check its availability.
Does the business have the right people doing the right jobs? Does each individual have the required skills to do what is expected of them or is additional training/recruitment required? Is each team and each member motivated to perform to the best of their abilities. Charting the key required skills and available resources is a worthwhile exercise to identify gaps and how they might be plugged.
Fundamental is the development of a prioritised time plan which clearly sets out the activities, the order in which they need to be addressed, their synergy between departments and teams, when they should start and finish, who is responsible, etc... This can be developed in common spreadsheet software or bespoke project management software. Experience tells us that a business plan is a living document.
Once the process of implementation started, feedback should be solicited and the plan adjusted as a result. No plan is perfect at the start, it must be reviewed and improved as the implementation progresses.
Below is a summary checklist to help you move closer to a perfect execution.
- Has a member of the management team been appointed to lead and oversee the implementation?
- Do you have a detailed, prioritised action plan with measurable milestones and outcomes?
- Is each individual in the company clear about the wider business goals as well as their own?
- Do you have a precise understanding of what your customers need and want?
- Does your product and/or service in all its facets meet and exceed the expectations of the customer?
- Do you know what your competitors are doing and is your offering competitive?
- Do your staff have the required skills and are all conditions present for motivation to develop and thrive?
- Does your remuneration policy support your business objectives?
- Are the required financial resources quantified and available?
- Is your marketing effective, does it deliver the expected return on investment?
- Does your business culture support people’s endeavours to get things right?
- Does the management team welcome constructive feedback and suggestions?
Pensions Auto Enrolment – The Basics (Summary by Mike Oliver of Mike Oliver Associates, Feb '11)
The Pensions Act 2008 laid out the foundations for automatic enrolment however when the new coalition Government came into power, a review group was set up to examine automatic enrolment. This group presented its recommendations to the Department for Work and Pensions in October 2010. The gist is as follows:
From October 2012, employers will be required by law to:
- automatically enrol all their eligible employees not already in a good quality pension scheme into a Qualifying Workplace Pension Scheme (QWPS) within one month of becoming eligible, and
- pay contributions for every employee who does not opt-out of the QWPS.
The employer duties will be staged in over 4 years from 2012. Larger employers will have their duties imposed first, smaller employers last. Any employer with less than 50 employees will have their staging date set depending on the last two digits of their PAYE reference number.
All employees will have to be auto-enrolled unless:
- they are already in a qualifying workplace pension scheme,
- they are under the age of 22,
- they are over the State Pension Age, or
- they earn less than £7,475 a year (in 2011/2012 terms).
Employees can only ‘opt-out’ once they have been auto-enrolled. Non-eligible employees must be given the option of opting in to pension saving.
What makes great boards great (Review by René Moolenaar, Jan '11)
Over Christmas I read an interesting article about ‘What makes Great Board Great’. Whilst it was published in Harvard Business Review some 8 years ago, I believe its core findings are still relevant today regardless of whether you’re in a big corporate or a small company.
Building an effective board. The article argues that whilst regular meeting attendance, equity involvement, board member skills, independence, age and experience are all important, they do not ensure the development of an effective board. An effective board needs more, it needs a human element. It specifically highlights 5 key behaviours: create a climate of trust and candour, foster a culture of open dissent, utilise fluid portfolios of roles, ensure individual accountability and evaluate the board’s performance.ach one of them is explored in the article and it certainly made an impression on me. I did feel however that chemistry between board members is important too as well as that all members share the same objectives for the business. I guess the author has assumed that these are prerequisites for any board. If you are interested in reading the whole article on one rainy Sunday afternoon than I thoroughly recommend it to you. Click here to read the whole article.
Your are not a gadget - a manifesto (Review by René Moolenaar, Dec '10)
This book is not for the fainthearted. It is written by Jaron Lanier a philosopher and computer scientist who has spent his career pushing the transformative power of modern technology to its limits. Whilst some points he makes are very interesting, I find it hard to summarise (or recommend) this book given that I did not really enjoy reading it.
Jaron talks about the relationship between computers and human beings and about the importance of individual creativity. He poses an important question: by devaluing individuals, are we deadening creativity, endlessly rehashing past culture, risking weaker design in engineering and science, losing democracy and reducing development in every sphere? Not an easy question to answer and certainly not a black-and-white situation. As I hinted at at the beginning, this book is not on my SME-MD’s Must Read list.
Drive – The Surprising Truth About What Motivates Us (Review by René Moolenaar, Nov '10)
Daniel Pink, a New York Times bestseller, has written a book about what motivates people (young and old) drawing from four decades of research on human motivation. In his book he reveals the three elements of true motivation.
He demonstrates that while the old-fashioned carrot-and-stick approach worked successfully in the 20th century, it’s precisely the wrong way to motivate people for today’s challenges. Packaged with examples he says that the true motivation is based on people having Autonomy (the desire to direct our own lives), Mastery (the urge to get better and better at something that matters) and Purpose (the yearning to do what we do in the service of something larger than ourselves). It’s an interesting book to read with some very interesting ideas and one that will change the way we think about motivation.
