The pressure is on!! 2018 plans have been created and everyone is now meeting to determine how they will implement activities to reach the lofty goals that have been set.
The bigger concern is if the plans are even realistic to implement. Have all facets of the business been considered before planning began? How has competition shifted in the last 6-12 months which would guide the overall strategy for sales and marketing and products/services that support the plan? Is the company prepared to make necessary investments to reach strategic goals? And is spending reduced in places to make up for incremental needs in other parts of the organization?
All of these questions (and many many more) are critical BEFORE a 2018 plan is ready to implement. But as Anne Latham recently explained in an October 29th 2017 Forbes article, many companies become confused when thinking about strategy and planning and get the two mixed up.
“A strategy is a framework for making decisions about how you will play the game of business. These decisions, which occur daily throughout the organization, include everything from capital investments to operational priorities to marketing to hiring to sales approaches to branding efforts to how each individual shuffles his To Do list every single morning. Without a strategic framework to guide these decisions, the organization will run in too many different directions, accomplish little, squander profits, and suffer enormous confusion and discord.”-- Ann Latham
Our advice: Don’t panic — just become diligent about reviewing your key business metrics against tough questions. As one example, let’s dig into a plan that has 15% revenue growth in the coming year. The question is to ask “what is attributing to that growth target” or “how are we going to achieve that”. That broad question should naturally lead to the following more detailed questions:
- Growth Opportunities — What does the market look like today for your core offerings? Will growth come from existing customers, new customers, existing markets, new markets — or all of the above? If a combination, ask yourself why and where new business comes from. Realistically what is growth possible in each area? INSIGHT: Knowing where growth can come from helps determine where realistic growth is possible overall.
- Market Voice — How has your image changed in the last year? And how steady is your market now vs. in year’s past? Are there the same number of competitors, or more/less? INSIGHT: Your position in the market is a key indicator to expectations in sales unit volume potential.
- Pricing — Is pricing stable or increasing/decreasing in the market? If pricing is increasing, what is your company’s ability to capture similar increases? If pricing is decreasing, what is causing the decline and how do your current prices hold up? INSIGHT: Your pricing strategy needs to be aligned with value compared to market pricing indicators. Strong fluctuations in these factors can have a huge impact on revenue figures.
- Investment In Sales/Marketing – what are the people/systems/promotional resources at your fingertips to help boost revenue targets? It is one thing to claim 15% growth rate, but another if market factors are flat and budgets and headcount are significantly shrinking. INSIGHT: Don’t wait for the plan to be done and budgets set before determining investment needs for growth.
The bottom line is that it is not too late to relook at your 2018 plans and ask the tough questions behind them. Much better to refresh plans now, rather than march to unrealistic goals without knowing how you are really going to win.