Your Business is Not Growing Despite Achieving Goals ...?
- owen94377
- Jan 23, 2017
- 4 min read
This might be one of the biggest reasons for your your growth plateau.
To contextualize, I would like to reference a phrase from Alice in Wonderland. Alice arrives at a fork in the road and ask the Cheshire Cat, which road she must take. The following discussion takes place:
Alice: "Which road should I take?
Cat: "Where are you going?"
Alice: "I don't know".
Cat" Then the road you take doesn't matter."
The discussion above, while amusing, is possibly the most accurate diagnosis of a business going nowhere, just running like a mill day after day. Where are we going, forward. Why are we going there, to make money. How will we get there, by doing what we do. A recipe for stagnation and eventually a slow gradual business death and constant economical and market changes will leave you behind.
Where do we start?
This is something few business owners want to hear, and eve less want to do, but it is essential and there is no way around it.
Vision, Mission, Strategy, Tactics and Objectives.
I am not going to focus on what a vision and mission is, but rather on how we structure everything that supports it. Every business owner has a vision in their mind, and even a mission supporting the vision. Some might have a strategy and by the odd chance, some objectives, but in most cases, none of these are documented and none of the employees really know about it.
Instead, I am focusing as mentioned on the supporting areas, the alignment of goals. I like to call this BGGA (Business Growth Goal Alignment). In many businesses, where there are documented objectives with VP, senior management, managers and supervisors having KPA and KPA, there is still no business growth. Why is this? Misalignment of KPA / goals with the strategy, strategy with mission and mission with vision. These companies will develop incentive schemes on the achievement of goals and KPA, personnel will achieve these KPA and be rewarded but the business is not moving forward.
The owners envisages growth, but the manager sees optimisation, and in turn, the supervisor sees a leaner business and starts retrenching people. In the end, if this works, you will have a leaner, more effective organisation, but you would not have expanded you client base or market footprint. Thus, even though everyone achieved their targets, the targets did not contribute or support the vision of growth.
One of the main reasons for this misalignment, is that senior executives don't document the vision and mission correctly and just kinda adopt whatever the corporate communications people cooked up for the website and shareholders. The strategy is developed by senior management, without a vision or market view required at executive level. At the same time, they instruct all HOD to submit their functional strategies.
Once they receive this, they cut and paste a section of each, and cook it long enough to at least flow and integrate. THIS, is where the peak of the problem is. The HR Manager, Safety Manager, Procurement Manager, Productions Manager, Stores Manager, Finance Manager etc, all have their own issues that they would like to work on this year, to better their staff, department, efficacy, legal compliance and production targets. While these are admirable focus areas, they seldom contribute to where the owners want to go.
We are now in a situation where we have more of a corporate slogan and marketing phrase than a vision. We have a compressed high level broad spectrum mission, that you can apply from a mining house to a bakery. We then add some bottom-up focus areas and try to mix everything together in the middle. What is worse, is that the KPA and KPI are approved, by the same managers who asked for them, people achieve them and are incentivised, but the overall strategy is not achieved and the mission fails.
How do we fix this?
Owners need to articulate and document their vision, present and explain this to executive management.
Executive management need to take the time to develop a meaningful mission to support the vision of the owners and present this to the owners, to discuss alignment. Once approved, executive management presents both the vision and the mission to senior management.
Senior management, now needs to develop a strategy that supports the mission, and incorporates the requirements of legislation etc. (the areas that the owners don't necessarily have detailed knowledge about). Every focus area in the strategy must be able to link to a sentence, phrase or paragraph in the mission.
Senior management will present the strategy to managers and request managers to develop tactics and objectives to support the strategy, first and foremost. Managers should have their own functional strategies for their divisions, but should primarily focus on achieving the tactics and objectives that support the strategy. This is why strategic layers are required:
Corporate Strategy
Business Strategy
Functional Strategy
The above article is a drop in the bucket on what could be causing a growth plateau in your business. For more detail, feel free to contact The Compliance Group - Business Consulting at www.thecompliancegroup.co.za
Comments