This month marks the third installment in a series designed to help you navigate through these difficult times. In January, I suggested you visit your top 10 customers and discern how you can help them and give assurances that you are going to be working hard to make each one successful this year. Last month, I suggested that you look at trends in the industry and objectively analyze your strengths, your weaknesses, the threats to your success and the opportunities all of these presented. This process defines the current state of your company today.
The next critical step is my focus this month. You must now take the information you have gathered about your customer requirements, your industry trends and your current state, and cast a detailed vision of what your future state should be.
What Is Now
The wealth of information that you gathered and analyzed clearly illustrates where your company is now. You have invested your time in determining your customers’ requirements for success. You looked at the trends in the wood products industry and the state of the economy today.
The SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis you conducted has defined what your real strengths are. With this information you have the foundation on which to build a stronger company that is more responsive to your customers. At the same time you have identified your weaknesses that are at least inhibiting your success. Some of these are contributing to the threats to your very survival.
During this process, it behooves you to get out your financial statements and compare the results to your budget and look for trends. Hopefully your monthly operating statements contained adequate details so that you were able to spot trouble areas that were helpful in your SWOT analysis. This information will be helpful as you develop goals and objectives for the coming years.
The good news is that all of these (forecasts, trends, customer requirements and SWOT analysis) give you the information needed to determine your future state. Stated differently, it prepares you to define the way your company should be or what it should become as a result of certain changes that must be made.
What Should Be
As overwhelming as the task may seem, you now must take this information and cast a clear vision of what your company should be in order to meet the challenges during the next few years. Since the ‘50s, a popular and effective guide to goal setting is to get SMART.
Goals should be:
S – specific, significant
M – measurable, meaningful, manageable
A – attainable, appropriate, action-oriented
R – realistic, relevant, results-oriented
T – timely, time-based
Your goal-setting process must incorporate the information you have accumulated thus far. First, you should look for ways to capitalize on your strengths in order to meet your customers’ requirements. In addition, analyze your strengths to see if they mesh with industry trends. Are they contributing to your meeting the needs of customers? Would they help in meeting needs in another market segment, such as remodeling, store fixtures or some other product? Are your strengths a cause to explore different markets, here or abroad? Your true strengths are your greatest assets to employ during this weak economy.
Second, you and your team must look at your company’s weaknesses and prioritize them in order of their urgency. How are these likely to affect your performance during the next two years? Will they contribute to the loss of business? Will they diminish your company as an employer of choice in your area? Are they in direct contrast to what they should be in order to support your customers? Your weaknesses could be a step away from becoming serious threats to your survival and must be eliminated or minimized as soon as possible.
Those threats you identified should be taken as the most serious discovery during your SWOT analysis. They represent areas of vulnerability and the path of least resistance to your failure. Therefore, they should represent the most serious and urgent targets of corrective action and demand immediate attention. Prioritized strategies must be developed to eliminate these threats to your success and to remove your weaknesses.
During the SWOT process and review exercise, you developed a list of opportunities for improvement. Those that eliminate weaknesses and threats and help meet your customers’ requirements should become the outline of your change initiatives and strategy.
In order for your goals and objectives to be SMART ones, you will need to generate a revised budget that reflects the financial results your team expects from the changes that will be made. After all, you want your company to be profitable as you go forward. Cost cutting will be a critical focus area in preparing for an increasingly demanding business climate. Remember what I have written about for years regarding the elimination of all kinds of waste — this is more important now than any time in the history of your company.
On the revenue side of your income statement, you want to develop strategies to minimize or avoid a loss of business. Hopefully, your vision team has developed some good ideas on how to gain additional sales in your current or new market segments. Whatever you do, don’t let anyone tell you that there is no way you can get additional sales from customers. Let your competitors whine — you refuse to accept anything less than thinking outside the box for new opportunities and renewed or expanded profitability!
Your Plan of Action
You may know of my fondness of Yogi Berra — not because of his baseball prowess, but due to his interesting “Yogi-isms.” One that comes to mind is: “When you come to a fork in the road, take it!” When hearing this we chuckle, realizing that in reality this could lead to disaster. So it is in business today. You are facing a new fork in the road almost daily, but cannot just go aimlessly wandering down one road and then another and think that you will eventually achieve the vision you and your team have developed.
Simply stated, you will spend a lot of time and effort casting a vision and setting goals of where your company should be in order to compete in today’s market — and then it will be time to create a plan of action that will get you there. Your team must develop a logical, systematic methodology of making the changes necessary to achieve its vision for success during the next few years. There will be obvious priorities due to the critical nature of a select number of issues and because some change initiatives must serve as building blocks for others.
You may be thinking that all of this is a waste of your time and effort because the economy is still in the tank and seeming to sink further every month. The state of the economy is in constant change. My response is that you must spend the time now and continue to revise your strategies in light of any additional changes in market conditions. Hopefully you are way ahead of me in your planning and implementation and are already making the positive changes necessary to shore up your company.
You probably remember when imports threatened your very survival. Somehow you managed to survive while those who did not adapt are no longer around.
Next month, I will be writing about leveraging your leadership skills to bridge the gap between what is and what should be.
Tom Dossenbach is the president of Dossenbach Associates Inc., a Sanford, NC-based international consulting and research firm. Contact him at (919) 775-5017 or e-mail [email protected]. Visit his Web site at www.dossenbach.com. Past Management Matters columns are archived on www.iswonline.com.
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