Case Study: Lots of Great Ideas, but Lacking Focus to Execute
A newly appointed CEO believed that a strategic planning process was essential for the organization to maximize its potential in the marketplace. Yearly plans were created and the company experienced year on year growth, but the CEO had concerns:
- The executive team was too tactical – they needed to think more strategically and get out of the operational weeds.
- Accountability and follow through on plan commitments was inconsistent which meant the results were less than they could be.
- The mechanism for monitoring progress needed improvement in order to catch slippage early and make sure plans stayed on track.
- Internal systems and people weren’t as aligned as they needed to be to achieve the desired future.
- The strategy contained too many initiatives and needed more focus on a vital few executed extremely well.
- There was no shortage of great ideas, but the focus and accountability to deliver results was lacking.
- The executive team took a 3-year view and crafted a strategy clearly defining their product and service offerings including those to phase out, customers they would and would not pursue, geographic reach, unique value propositions for each customer group, and operational misalignments that could jeopardize their success.
- They identified their 3 year VFO’s with a Measure for each. They created a Dashboard of quarterly targets for the first year and set annual targets for years 2 and 3.
- 12-month Initiatives were built to support achievement of the VFO’s. Each Initiative had a detailed plan of tasks, dates, and accountabilities.
- The executive team developed a plan for engaging the whole organization and kicked it off with a company meeting to communicate the VFO’s, Targets, and Initiatives.
- They held quarterly Plan Momentum Reviews where they reported on the Dashboard and progress on each Initiative. Problems were identified and corrected early.
- They followed through on their plan for communicating regularly with the entire organization and gaining organization buy-in.
- At first, assuming new levels of accountability for Initiatives that, in some cases, were outside of people’s day-to-day jobs was challenging. Remaining focused and accountable was a learning curve. However, the regular Plan Momentum Reviews helped establish a rhythm of reporting on progress and follow through continuously improved.
- The Dashboard helped everyone see the impact Initiatives were having on the VFO’s. Measures were refined along the way to focus on the data that was most useful.
- Some tough decisions were made when the Dashboard showed that the return on effort just wasn’t there. For example, even though a lot of effort had been invested in a particular vertical, they decided to discontinue emphasis on it. They deployed those resources in more productive ways.
- The company doubled their revenue since starting the process.
- Because of their multi-year track record of exceeding revenue projections, the company decided to stretch even further, targeting a 30% year on year growth rate over the next 5 years.
- They expanded into a new geographic region.
- They restructured their organization to scale with the stretch goals and are looking at adding significant talent to position themselves for the growth push.
- Team members are successfully working cross-functionally to deliver multi-product solutions thus increasing the potential for long term, increased revenue from their clients.
Case Study: Lots of Effort, Discouraging Results
- A newly appointed Executive Director stepped into an organization with serious financial challenges. Even in its best years, the arts organization worked to meet goals and balance the budget, but there had never been a reserve. They ran harder and worked faster, but had not been able to get their heads above water. It took everything they had and over the years staff burned out, turnover was unacceptable, and new hires soon became overwhelmed and left.
- Determined to make a change, the Executive Director wanted to build a strategic plan that focused on long term sustainability.
- The Board and Staff worked with a consultant who was knowledgeable in the arts and came up with an ambitious plan. However, the team quickly realized they were challenged by the resulting thick document consisting of a laundry list of projects with no clear implementation process. The plan was overwhelming to the Staff and they weren’t able to see how it all fit together. There was no accountability tied to implementation. The Executive Director wanted a method that would address these needs and allow the staff to “own” the plan.
- The Executive Director attended a VFO Breakthrough introductory workshop and was intrigued by the built in accountability, Plan Momentum Reviews, clear outcomes measures, and software to track progress. The repeatable process of Plan-Implement-Evaluate-Improve could be key to building a discipline of focus, accountability, and execution.
- Pareto helped the leadership team whittle the laundry list of projects down to the vital few that would result in the greatest impact – and be feasible to implement.
- Getting the tactics prioritized was a breakthrough. They developed implementation plans and assigned accountability and due dates. From these, they developed VFO’s (Vital Few Objectives) – areas they needed to focus on to build a sustainable organization – and developed Measures and quarterly Targets.
- They presented their strategy and execution plan and got Board sign off. Implementation began and the quarterly Plan Momentum Reviews and outside accountability from Pareto kept everyone on track. Successes were celebrated and slippage was caught and corrected.
- They have experienced tremendous growth and progress. For the third year in row they’ve had modest surpluses, a big change from the prior, significant debt. The Regional Asset District (a county funding board, evaluating grantees on set criteria and requiring them to testify yearly on financial responsibility and fiscal practices) and other funders commended them for the impressive financial progress made in last 3 years. The planning and execution process they used and their commitment to VFO’s enhanced their credibility.
- They are achieving the “double bottom line”: delivery of their social mission AND delivery of the numbers and greater financial accountability everyone’s part. It’s very clear they need to perform in a financially responsible way and everyone shares that responsibility, not just the Executive Director. They have their metrics in front of them every day.
- Quarterly Plan Momentum Reviews provide excellent insights and learning. The outside accountability prevents the “Tyranny of the urgent” from losing focus on the VFO’s.
- All staff members can better connect the dots and understand what each other is doing and how everything fits together. They understand what’s important, and are getting better at saying “No’” when appropriate to stay focused on the prize.
- The Executive Director is now able to focus on improving the business model. Responsibilities have been reallocated with a greater focus on where to put efforts to generate income. Her courage to make needed changes has been fruitful and rewarding.