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Strategic Planning – The Meeting: Defining Strategy

Part 7: Strategic Planning-The Meeting: Defining Strategy

Part 7 - strategic planning defining strategyBy: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is part seven of a nine-part series on strategic planning. This blog series includes identifying the need for strategic planning, setting a level playing field, defining the organization and its purpose, and selecting the initiatives, goals, and actions that will make the organization successful.

Once your organization’s mission, values, and “what do we do?” are set, we must switch our focus to creating a strategy and executing that strategy. Strategy is an interesting word that honestly can create confusion for employees, as well as management. It is important that the strategy arrived at includes buy-in from critical players throughout the organization. And, once agreed upon, the results must be fairly and contextually communicated across the organization.

STRATEGY

Setting the strategy is the most critical aspect of the strategic planning process. To set the strategy for the organization, we need to do a couple things:

  1. First, we must understand who we are as an organization (see previous installments).
  2. Then, we need to think strategically about how we as an organization will be successful in the near-term, while not ignoring the long term (see more on this below).

The strategy setting process can still be very difficult. The question that we always come back to is, “What do we do better than anyone else in our current market, our soon-to-be market, or in the market we are currently creating for our new offering?” Here’s a hint: What are our competitive advantages and what do we see them as being in the near future? Meaning, what do we do better than our competitors, both those current and those who are considering joining our market. Once we have identified our competitive advantages, we can start to understand how we will be successful both in the near future and in years to come.

COMPETITIVE ADVANTAGE AND ANALYSIS

We must focus on critical success factors such as leads generated, schedules completed, and key compliance initiatives that lead to the desired results. There is an article in the Harvard Business Review that addresses how the most successful teams bridge the strategy execution gaps. If we cannot define how we can be successful, we may not deserve to continue serving our customers or the marketplace because we may not offer anything unique or valuable. If that is true, the marketplace will tell us this soon by not increasing our revenue and maybe flatlining or decreasing our sales. If you find yourself battling with the inability to keep up with the ever-changing marketplace, we have frameworks to help identify what your competitive advantages are and how to cultivate those advantages to bring success for the long-term.

One of those frameworks includes listing everything you do as an organization and then identifying which and what items you do well. Once that is determined, we help you coalesce upon why you do those items well. This is a fun exercise that usually takes about one to two hours and really starts to show how your people think and how your people can begin to start thinking together. This is not group thinking, where everyone just agrees while anxiously watching the clock.

These frameworks also help us establish strategic pillars or anchors (the word depends on which source framework you are using). Once we have these pillars identified, typically three, we can then work on setting strategic initiatives beneath each of them, usually two to four items under each pillar. At the end of this phase, we should have no more than four pillars and, thus, no more than 12 strategic initiatives, which frankly is way too many for the first strategic planning phase.

Another framework available is a modified strengths, weaknesses, opportunities, and threats (SWOT) framework. This framework can be used to work through each strategic initiative that was determined in the prior framework in order to land on what might be best for us to pursue or further explore in your first strategic planning phase. We will help you run your team through various scenarios to hear from each of the key players as to why an idea might or might not work.  KHA Management Consultants is there to provide facilitation for your team to work through their SWOT analysis.

STRATEGIC PILLARS

The result of the combined frameworks above should be strategic pillars and two to three solidified strategic initiatives per pillar, with which the organization can march forward. For bonus points, a short-term goal can be set and used to tie the strategy together, including its pillars and initiatives. The framework is being built!

At KHA Management Consultants, we have experience working with organizations on Strategic Planning. We facilitate the process with the organization’s key constituents to ensure buy-in, ownership, and a new way of thinking about the organization and its stakeholders among all levels of employees. From a resource perspective, we primarily use our experience but also tap into the top-level resources such as those provided by Harvard Business Review and MentorPlus. Some of those materials, frameworks, and lessons have been used in writing this blog.

KHA Management Consultants, the consulting wing of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the strategic planning experts, and contact us at 972-221-2500.

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Strategic Planning – The Meeting: Defining Values and Purpose

Part 6: Strategic Planning – The Meeting: Defining Values and Purpose

Part 6 - strategic planning defining valuesBy: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is part six of a nine-part series on strategic planning. This blog series includes identifying the need for strategic planning, setting a level playing field, defining the organization and its purpose, and selecting the initiatives, goals, and actions that will make the organization successful.

Previously we reviewed mission and the ‘why’ of the organization’s existence. In order to continue to reach toward that ultimate goal of mission fulfillment, what values and purpose should our people possess? When we hire, do we consider fit by evaluating what frameworks we have deemed necessary for success in the organization? Can our people clearly state what we do and how we are different from competitors?

VALUES

Like your mission, some values are everlasting and do not change, however, other values should change as the organization matures, grows bigger, and learns how to compete in the ever-changing marketplace.

What are values? Values are an attempt to answer how the employees of X organization operate and what is core to the organization. You should ask yourself, your key leaders, and employees, “What values do we hope to have as an organization in one year, two years, five years, 10 years, etc?” “What values are currently resembling weeds in our garden that need to be plucked or doused with RoundUp?” Across your organization’s matrix of values, you must identify the values most critical to the success of your organization and its mission. Values that may sound right but are not distinct from your competitors should be re-evaluated and replaced with values that are specific to your organization.

KHA Management Consultants has frameworks for identifying and solidifying your organization’s values. These frameworks will help you across several parameters as you begin your strategic planning.

WHAT DO WE DO?

Your company provides either a tangible or an intangible product that comes with excellent customer service. All businesses should strive to provide either a tangible or intangible product with excellent customer service. I can assure you, however, that all organizations are saying this; some are doing it, perhaps even better than your organization is currently. Unless you are in a highly fractured industry where the levels of customer service offerings are opposites, answering that you provide a product with excellent customer service is not a good answer or definitive answer to give to this question.

Your answer must be brief and have the capacity to be refined over time. Answering the “what do we do” question is one of the most critical exercises to take your management team through. Everyone, including stakeholders, leaders, and all employees in your organization must truly understand and believe that what your organization does makes a difference and that your organization specifically is best equipped to meet the needs of the marketplace and consumers around it. In answering this question on what your organization does, management must balance aspiration and pragmaticism. If your organization’s “do’s” are too pragmatic, consumers and employees will not be drawn to your organization’s solution, whereas if your answer is too aspirational, people will doubt it, or worse, they will mock your solution. Your organization’s answer must anchor your team together, and when decisions are made, your decisions should all be evaluated through the lens of this answer.

THE CRITICAL NEXT STEPS

We know who we are, but how do we cross the chasm to success? What specific items should we be doing?  What should we be proactively thinking about, and how can the company benefit from our actions?

We understand our organization, its mission, values, and vision, but where do we get started to make it a successful company that will withstand generations and generations of change?

Ideas lead to success. What did the opening sentence to this paragraph make you think? Ideas do not lead to success, at least not directly. Ideas that are well thought out with economic logic and are combined with sound execution lead to success. A CEO of a Fortune 100 company once said, “I have more ideas than I know what to do with; I need people that can sell and execute them!”

Solving this problem of having too many ideas is one thing, while another more difficult problem is setting plans in motion to see that execution of the good ideas occur. Our focus areas in the next installment will be on organization strategic initiatives, goals, and actions. Using the three latter pillars of strategic planning will allow you and your team(s) to be synced at the beginning of the planning phase, during the execution of the strategic plan, and at the end of the process when a celebration is due.

At KHA Management Consultants, we have experience working with organizations on Strategic Planning. We facilitate the process with the organization’s key constituents to ensure buy-in, ownership, and a new way of thinking about the organization and its stakeholders among all levels of employees. From a resource perspective, we primarily use our experience but also tap into the top-level resources such as those provided by Harvard Business Review and MentorPlus. Some of those materials, frameworks, and lessons have been used in writing this blog.

KHA Management Consultants, the consulting wing of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the strategic planning experts, and contact us at 972-221-2500.

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Strategic Planning – The Meeting: Why are we Here?

Part 5: Strategic Planning – The Meeting: Why are we Here?

Part 5 - strategic planning team membersBy: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is part five of a nine-part series on strategic planning. This blog series includes identifying the need for strategic planning, setting a level playing field, defining the organization and its purpose, and selecting the initiatives, goals, and actions that will make the organization successful.

The right team is here, and we are cohesive; it is time to collaborate!

As an owner or executive, can you answer the following question about your organization:

Why are we here? Not in the room but as an organization, why are we here?

GETTING ON THE SAME PAGE

Maybe you can answer it, but the real question is, ‘Can your team?’ Sure, your team can answer this question, but how consistent are their replies with yours and your organizations? Likely, their responses are not in the same zip code as yours, which indicates a couple things: 1) Messaging from the top of your organization down is inconsistent, and 2) The strategy of the organization is unclear or at least muddled. An article from the Harvard Business Review highlights an organization’s strategy importance and estimates that 95% of employees are disconnected from the organization’s strategy.

Challenge: Take your leadership team and see if they can answer similarly and succinctly the question addressed above. Leadership should control the experiment by not allowing social loafing and groupthink to get the answers. If you don’t control the experiment, you will get an answer that does not accurately represent each employee. Odds are each leader has different things to say; some of that is okay, however, we will need to bring the team together to reset the stage so that your organization’s goal is clearly defined.

MESSAGING SYMMETRY

When messaging is inconsistent internally, do you think your customers, the marketplace, and your stakeholders have a clear understanding of what your organization does and how it gets accomplished? Recently, Facebook has had some issues with organizational messaging; a third-party company was allowed to mine personal data of over 50 million users and in turn, use this information, not to the benefit of the consumers but to benefit outside organizations impairing user privacy. A decade ago, Facebook said no advertising would be used on their site and that only ‘.edu’ addresses would be allowed. Then, little by little advertising trickled in along with more users and an open platform. Now, you cannot avoid seeing blatant sponsored posts and ads on your feed. Facebook like many organizations had good intentions but lacked clarity across the organization and its internal and external stakeholders.

When the strategy of any organization is unclear, it hurts stakeholders, both internal and external. The marketplace looks for value, and customers need the value that your company can bring. Your future customers are even begging for your offering, whether they know it or not; it’s your job to put the right teams, tools, and value proposition together to convince them.

Your top management team must be unified on the following items: Mission, Values, and answering ‘What do we do?’ in order to create a clear and direct message for all those involved to follow.

MISSION

Mission setting for an organization is very challenging. Your quantitative types, such as business analysts, deem this the softest of soft definitions in a business. In fact, you may be challenged to keep your employees’ interest if they do not understand how critical the mission is to everything the organization does. The mission is everlasting and must propel the team and its people forward. How do you know if you have a good mission? You have a good mission if it is cemented in both your internal teams’ actions and your external customers’ awareness that allow your organization to propel forward despite you. Your mission must make lives better; if it currently does not, I strongly encourage you to revisit your mission and your mission statement before your organization becomes irrelevant to both your employees and the marketplace. Your mission must explain the question of ‘Why are we here?’ You must create space for this thought process in your organization among the leaders and employees who carry out daily functions.

During a strategic meeting to development the mission statement, our consultants typically use colorful 5 x 8 Post-it Notes to fuel conversation around the mission. Leaders and employees tend to own what they write as we walk through each item. It also allows the teams to understand how their counterparts think across the organization. During the strategic meeting, it is critical to avoid groupthink (where decisions are made that discourage creativity or responsibility) and dominating individuals, while at the same time beginning to establish ownership in the outcomes of the strategic planning sessions. Next, we discuss values.

At KHA Management Consultants, we have experience working with organizations on Strategic Planning. We facilitate the process with the organization’s key constituents to ensure buy-in, ownership, and a new way of thinking about the organization and its stakeholders among all levels of employees. From a resource perspective, we primarily use our experience but also tap into the top-level resources such as those provided by Harvard Business Review and MentorPlus. Some of those materials, frameworks, and lessons have been used in writing this blog.

KHA Management Consultants, the consulting wing of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the strategic planning experts, and contact us at 972-221-2500.

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Strategic Planning – The Meeting: Developing Cohesion

Part 4: Strategic Planning – The Meeting: Developing Cohesion

Part 4 - strategic planning developing cohesionBy: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is part four of a nine-part series on strategic planning. This blog series will include identifying the need for strategic planning, setting a level playing field, defining the organization and its purpose, and selecting the initiatives, goals, and actions that will make the organization successful.

Trust falls anyone? Kidding. We will be doing some trust exercises but nothing that cheesy, we promise!

For this portion of strategic planning, we break the meeting into four distinct blocks or disciplines as Lencioni titles them. We have found the department or organizational leader should lead in all of these blocks by going first and setting a great example for others to follow.

BLOCK 1: ESTABLISH TRUST

Establishing trust is often a little touchy feely for some employees, and that’s okay. The first step recommended by Lencioni in The Advantage involves running the team through a personal history exercise. A personal history exercise is where each employee will say where they were born, how many siblings they have, what order they are in the siblings, and the most difficult circumstance faced as a kid. This is where people get to ‘really’ know one another. Employees have shared stories of lost siblings, lost parents, and extreme adversity.  The same kinds of stories will come out in your meeting, and you will find a new level of respect in the room for each other.

BLOCK 2: GAUGING TYPICAL CONFLICT

Proper planning can help us to gauge potential conflict between employees. If the department or organizational leader has had some lead time, they will have the opportunity to document the last month of common conflicts that have come up to bring those issues to the forefront with grace and tact during the meeting. If the leader has not had the time or context to do this, your consultant can mine for conflict during the meeting. Often conflict issues come out by asking the question to employees, ‘What concerns you the most about the direction of the company?” If this question does not pull issues out, we must take teams through modified strengths, weaknesses, opportunities, and threats analysis across each of the main departments to get feedback. Ah, nothing brings out conflict like calling an executive and their department out for perceived weaknesses. The goal of this analysis is not to create conflict but to teach the team to have and maintain an appropriate amount of healthy conflict. Many times, during these sessions, the typical conflict will start to manifest, and the leader or outside consultant running the meeting can stop, interject, and discuss each side of the conflict with the present team. See the previous reference to Harvard Business Review article, “The Best Senior Teams Thrive on Disagreement” that was discussed in Part Three of this Series. Conflict management is an ongoing effort where individuals and teams must not become siloed or self-focused but must maintain a big picture mentality that will help the whole organization thrive.

BLOCK 3: UNIFIED LEADERSHIP

Unity and alignment leadership among the leadership team is a must for the organization to succeed. Regardless of what the teams agree to or agree upon, it is all for naught if the team is not aligned together. The minute one leader comes back to their team and vents frustration with an organization initiative or another leader, the floodgates are opened to allow for all to participate in this same manner. It will be significantly more difficult for this leader to influence their team, to help them see the organization objectives before their own objectives, or to allow space for collaboration with other departments across the organization. Whatever comes out of the strategic planning room, the leadership team must be unified first and foremost to each other and to the organization’s cause. It is very important that the leaders’ people know their commitment to the other leaders and to the firm.

BLOCK 4: ACCOUNTABILITY AND CONFLICT

Leadership and employee accountability will be discussed in depth in a later installment of this series. For now ,suffice it to say that accountability is critical to the organization and that its focus is on the performance and behavior of both leaders and employees. This is where current leaders can cultivate the next generation of leaders by using tactful communication, sending clear directional signals, and identifying in a fair way when the rules are and are not being followed. Infighting and conflict among individuals will persist until leadership puts a stop to it. Every time unhealthy conflict is allowed, the values of the organization become more toxic, and an unhealthy environment is created for all employees involved.

Conflict should be allowed for issues and not people. The minute a team member is against another teammate for personal reasons, the business issue cannot be resolved. Ideas and issues must be presented and then evaluated among all those involved in the strategic planning process. This can be symbolized by team members writing down issues or ideas and physically taking them to the middle of the table. This signifies that these are the team’s issues and ideas, and they should be evaluated as such.

When we have balanced conflict focused on issues rather than employees, we can begin to make headway on the organization’s stress areas, which is the topic of the next installment.

At KHA Management Consultants, we have experience working with organizations on Strategic Planning. We facilitate the process with the organization’s key constituents to ensure buy-in, ownership, and a new way of thinking about the organization and its stakeholders among all levels of employees. From a resource perspective, we primarily use our experience but also tap into the top-level resources such as those provided by Harvard Business Review and MentorPlus. Some of those materials, frameworks, and lessons have been used in writing this blog.

KHA Management Consultants, the consulting wing of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the strategic planning experts, and contact us at 972-221-2500.

Read more

Strategic Planning – The Meeting: The Need for Cohesion

Part 3: Strategic Planning – The Meeting: The Need for Cohesion

Part 3 - strategic planning cohesionBy: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is part three of a nine-part series on strategic planning. This blog series includes identifying the need for strategic planning, setting a level playing field, defining the organization and its purpose, and selecting the initiatives, goals, and actions that will make the organization successful.

We have assembled the right team and we understand why the Strategic Planning process is so critical. Fast forward to your strategic planning session; we are in a well-lit, appropriately heated or cooled, and refreshments-laden room. We have the right teams represented, including the key players in the organization. We have sought feedback and buy-in of those not in the room and it is time to reset the organization through strategic planning.

ASSESSING YOUR TEAMS FOR COHESION

How are your teams functioning? Do they collaborate and support one another, even when times are smooth? Quantify and qualify the levels of infighting. Is there role and level confusion in your teams? What about role and responsibility confusion?

Do all of the above currently happen with your teams? Diverse teams will have diverse ideas about where to take the organization. This is a good thing for the organization as a whole. In fact, the most healthy organizations fight well at the top, according to the Harvard Business Review.  In our diverse teams, we must balance the items that bring tension and focus on the facts making issues about the underlying items for consideration instead of the person presenting them.

To accomplish cohesion, we must get the team together cohesively to eliminate the darts, both those visible and invisible. In order to show this, let me share a recent experience where KHA Management Consultants brought together the team on one of our engagements. We were working with a sales-service equipment company where two of the team just did not get along. The sales employee did not understand why the project manager was always angry with him and in-kind started to give some heat back in the form of comments and attitudes towards the project manager. During our meeting to get both sides together to eliminate the darts, the project manager extended an olive branch to the salesman and stated, ‘I respect what you do a lot. I just get frustrated with how I should handle the next steps because of the volume of work you bring in.’ The salesman looked confused for a few seconds and quipped back to the project manager, ‘I thought you just hated working with me.’ They then hugged, made up, and shared a beer. All was true except that last sentence. They do now cordially get along, and the team as a whole has started to function at a higher capacity.

THE VALUE IS IN THE PROCESS

In all truthfulness, there is something to be said about bringing the team together and allowing them to work through things in a safe environment with their counterparts. This does not always go as well as the above experience. Regardless of the outcome, bringing the team together sheds light onto what team members are feeling and holding onto, which eliminates guessing and gossiping among the team. This is different from my upbringing when my parents would make my brothers and me work together on a house project at some long-distanced hope of a newfound harmony.  Organizations should bring a team together and put infighters together on something to see if they can gain chemistry. The infighters may align eventually, at least on the thought of, ‘Get me out of this project with this person as soon as possible.’ If we are honest, hoping is not a strategy to run your organization. It is best to address these dynamic employee issues as a team, as ultimately they impact and affect the organization and its ability to function efficiently and successfully.

Patrick Lencioni, author of The Advantage: Why Organizational Health Trumps Everything Else in Business, has a remarkable framework for resolving the issue of employee infighting and misaligned teams. For this portion of strategic planning, we should break this meeting into four distinct blocks or disciplines as Lencioni titles them. We have found that the department or organizational leader should lead in all of these blocks by going first and setting a great example for others to follow. We will review these blocks in depth in the next installment.

At KHA Management Consultants, we have experience working with organizations on Strategic Planning. We facilitate the process with the organization’s key constituents to ensure buy-in, ownership, and a new way of thinking about the organization and its stakeholders among all levels of employees. From a resource perspective, we primarily use our experience but also tap into the top-level resources such as those provided by Harvard Business Review and MentorPlus. Some of those materials, frameworks, and lessons have been used in writing this blog.

KHA Management Consultants, the consulting wing of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the strategic planning experts, and contact us at 972-221-2500.

Read more

Strategic Planning – The Strategic Planning Meeting Preparation

Part 2: Strategic Planning – The Strategic Planning Meeting Preparation

Part 2 - strategic planning preparationBy: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is part two of a nine-part series on strategic planning. This blog series includes identifying the need for strategic planning, setting a level playing field, defining the organization and its purpose, and selecting the initiatives, goals, and actions that will make the organization successful.

We reviewed why Strategic Planning is necessary in the last installment. In this installment, we take it one step further in discussing who needs to be at the meeting and what everyone should expect.

Are you looking to develop cohesion but have some angst about who the right audience might be?

GETTING TO THE MEETING AND WHAT TO EXPECT

The hardest part of preparation is planning for the meeting. You may ask, ‘Who are the key players, and how many of those players should be there?’ Great question(s)!

Let’s tackle size first: We have worked with a wide-range of management teams numbering from three to 30+ individuals for a strategic planning session. We have found the most successful meetings include an audience of no less than four and no more than ten individuals. Less than four leads to someone dominating the conversation and more than ten can often lead to social loafing and again one person dominating the conversation. I’ve included another article from the Harvard Business Review on why less is more in teams.

IDENTIFYING THE RIGHT PLAYERS FROM EACH DEPARTMENT

Next, let’s evaluate which key players should be there: To identify the right players, it is critical that each department is represented. For instance, if sales, marketing, and business development teams agree on the next best step but no one from operations agrees to the initiative, get ready for a major problem. I would not expect much carry through from operations since they were not involved in the session. You also want to identify your ‘A’ players and give them a seat at the table along with a voice at that table. Here’s another great article from the Harvard Business Review on how to manage your team of all-stars.

We have answered your size and key player question but what about those left out of the strategic planning session? There are ways to involve, engage, and encourage those employees who feel left out. Employee buy-in is crucial for all steps of this process, and to get this from those employees not at the meeting is very important. Those key players representing them should solicit feedback and information to help voice their input at the session. Here is how to get bonus points with those left out; that leader representing them should circle back to let the employees know how the meeting went and what the group thought about a point they raised when solicited for feedback.

PREPARING FOR A SUCCESSFUL STRATEGIC PLANNING MEETING

For most internal ongoing meetings, it is not necessary to bring in an outside consultant to run your strategic planning meetings. However, it is highly critical that outside persons run the first meeting along with a semi-annual or annual workshop on an ongoing basis. This outside consultant needs to know your organization well enough to be impactful in these meetings but not so well that they are also swayed by the systemic biases that are weighing on the organization currently.

As to location, these workshops must be set up offsite to avoid distractions and the environment that inherently carries bias (also known as your office), and no email should be checked or sent. In the past, we typically have not asked the CEO or highest-ranking official at these sessions to collect all communication devices at the beginning of the day and to return them at the end of the session, but we are considering doing so going forward. Note to all our millennial readers out there: Calm down!; the profit is in the process and not on your iPhone. For the room, have light refreshments and windows; it may seem weird, but trust me, it makes a world of difference. Also remember to plan for breaks, people will be hydrating and will need to take stretch breaks to keep their focus.

At KHA Management Consultants, we have experience working with organizations on Strategic Planning. We facilitate the process with the organization’s key constituents to ensure buy-in, ownership, and a new way of thinking about the organization and its stakeholders among all levels of employees. From a resource perspective, we primarily use our experience but also tap into the top-level resources such as those provided by Harvard Business Review and MentorPlus. Some of those materials, frameworks, and lessons have been used in writing this blog.

KHA Management Consultants, the consulting wing of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the strategic planning experts, and contact us at 972-221-2500.

Read more

Strategic Planning – Why Strategic Planning is Needed

Part 1: Strategic Planning – Why Strategic Planning is Needed

Part 1 - strategic planningBy: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is part one of a nine-part series on strategic planning. This blog series includes identifying the need for strategic planning, setting a level playing field, defining the organization and its purpose, and selecting the initiatives, goals, and actions that will make the organization successful.

Before you begin this article, write down your current business environment – consider culture, performance, and communication.

If it sounds like this, “Everyone runs in their own direction, individual leader problems always seem to trump organization problems, and my department leaders blame each other for problems in the organization,” then your organization looks like many others out there and needs some help. It is time for you to stop playing referee and to setup your organization and its people for long-term success.

Identifying the need, setting the resources aside, and bringing the right team (both people and attitudes) to the table is critical for the success of this endeavor and, frankly, any other endeavor the organization attempts to carry out.

WHY IS STRATEGIC PLANNING NECESSARY?

Let’s think through a typical day for an employee in your organization. How much guess work is involved in your employees’ days? Guess work can include menially completing tasks without considering the big picture, having an unclear understanding of what outcome is expected, or not knowing why the task even needs to be completed. How much time do they spend wondering what should be done, trying to complete their tasks with ambiguity, and then worrying about the outcomes of the job they just finished? If you are unsure, ask them and then listen as they explain what really goes on each day.

Similarly, does your organization feel confused? Are your financials screaming, ‘Where are we going?!?’ Are there mixed messages sending one signal internally and another externally regarding what makes your organization different? All your organization’s issues can be addressed, but it will take time, attention, and a lot of hard work. “We don’t have time for strategic planning,” says the executive putting out fire after fire. Most of the time, these fire drills could be easily delegated or at least better prepared for had the right team and employees taken the time to set an organizational strategy and enforced the agreed-upon outcomes.

THOSE THAT STRATEGICALLY PLAN ARE MORE SUCCESSFUL

One key item we want to point out is those that strategically plan are more successful than those who do not, according to Harvard Business Review.

We hear executives say, “I would hate to take my employees’ time away from their work.” Your employees are begging for this type of clarity. At first, you will hear moans and complaining of always being in meetings, but they will soon see how important these strategic planning sessions are for both them and your organization as a whole.  There is only one way to stop the hamster wheel within the organization – all levels must plan strategically. All organizations must make time to gather and identify organizational strategy across all levels. If the organization as a whole does not, it likely means that the organization and its success will be tied to the few individuals responsible for execution, whether they know it or not. Once those key individuals decide to leave the organization or decide to stop bearing the daily load, the organization will begin to slip and ultimately falter.

At KHA Management Consultants, we have experience working with organizations on Strategic Planning. We facilitate the process with the organization’s key constituents to ensure buy-in, ownership, and a new way of thinking about the organization and its stakeholders among all levels of employees. From a resource perspective, we primarily use our experience but also tap into the top-level resources such as those provided by Harvard Business Review and MentorPlus. Some of those materials, frameworks, and lessons have been used in writing this blog.

KHA Management Consultants, the consulting wing of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the strategic planning experts, and contact us at 972-221-2500.

Read more

Business Process Monitoring and Continuous Improvement

By: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is part four of a four-part series on business processes, including the need for clarity, proper design, appropriate communication, and commensurate monitoring. 

Business process monitoring is often the key area of failure for organizational processes. People love to create, some people even love to communicate, but very few people love to monitor processes, and even fewer love to monitor employees. Why should we monitor business processes and our employees, especially when it comes with little to no reward and takes significant amounts of time? If you think you do not have time now, you’ll lose even more time if you don’t monitor your process and employees.  When monitoring is performed correctly, it will be much less about chasing your employees down and more about sharing in rewards with employees.

Our previous installment, part three of this series, reviewed the importance of communication to the new business process design and rollout phases. For the process change to be successful, appropriate monitoring of the actual process and those employees affected by the process must be planned, implemented, and maintained. Business owners are very good at identifying top talent from a skills perspective, but successful talent leaders also understand all three necessary process components; design, communication, and monitoring. These leaders must work to ensure all new processes are implemented appropriately without a heavy hand from upper management. This will be a hard task for those leaders, but it will be meaningful and will make a big difference in your organization and overall business functions.

CREATING A HEALTHY MONITORING ENVIRONMENT

Feeling the pressure yet? The monitoring process must be shifted from the notion of a high school principal chasing wayward students to an iterative and informative process where both management and employees can be open and honest without fearing negative ramifications. To do this, leadership must work diligently to create an environment where people are free to communicate authentically. They must be quick to reward those employees that vocalize legitimate concerns and beneficial ideas. This aspect of open communication is especially critical in the early phases of rolling out a new process change. Only by emitting encouragement, rather than admonition, will a leader be able to setup a monitoring process that will be successful long term.

IDENTIFYING THE PROCESS OWNER

The business process, no matter how perfect and well thought out, will not sprout wings and monitor itself. The process owner is the one responsible for ensuring that teams, systems, and performance follows in line with the process. Additionally, top management must identify the ultimate process owner as the individual with the authority and responsibility to enable him/her to successfully implement or monitor the process change. Similarly, if two people “own” the process, then no one really owns the it. Neither co-process owner will be setup for success, nor will the company. If your business process is too broad for just one employee to own, it may be worth revisiting in order to split it into areas where ownership is clearly defined over the separate aspects. This will allow the employees and teams affected by the process to have a clear and singular point of contact when faced with questions or concerns.

PROVIDING CLARITY AND DIRECTION

As company leaders, it is our responsibility to provide clarity and direction to our employees. A great first step towards providing this is to identify key performance indicators (KPIs) that allow management, teams, and employees to know what items will be measured. From there, dashboards and scorecards can be produced and used to identify how the process is performing against those measures. In the early phases of the new process, we often recommend that company management and leadership establish the processes for measurement, as this will lead to clarity across your company and teams. By simply defining these KPIs and agreeing upon them with the employees affected, you have created clarity and a tunnel of focus. In later iterations, we recommend adding incentives that allow your employees to benefit as the company succeeds due to the new processes implemented. This will allow the tunnel of focus to align with the rewards to follow, i.e. the carrot from our previous article part three.

THE RABBIT PRINCIPLE

One of the most important components of process management involves having big ears and a small mouth, or the rabbit principle. The rabbit principle states that management can do more by listening, asking, and coaching, rather than by stating, telling, or doing. As teams and your employees find new and more efficient ways to improve processes, management would be mistaken to not listen. If the organization can meet or exceed the initial control objectives through a reiteration to the process, leadership and employees should be open to this. As an employee, it is hard to think of a more frustrating situation than one where you are expected to bridge gaps and follow processes without a platform to voice thoughts or concerns. Good management and leadership will never put their employees in such a position where they have no voice.

REVISITING TO SAVE YOURSELF TIME

Even better, those charged with governance should monitor those monitoring. As part of this monitoring, processes and leaders monitoring those processes must be slated for review periodically. It is hard to definitively say how often processes should be reviewed. Frequency should be dependent upon how mission critical the process is to the success of your organization and, thus, should be slated for review accordingly. A rule of thumb in the business world is that no established process should be evaluated more often than every six months and no longer than every three years. If management reviews the process too often, the team won’t be able to find its rhythm. Conversely, if the review is to seldom, the business process may run rampant. If your company’s processes are outside of these loosely defined bounds, then they likely are not continual processes and will require being adjusted accordingly on your monitoring list(s). Often, we hear, “we just do not have time to monitor these processes,” but we have seen that organization executives really don’t have time not to monitor critical processes. Therefore, it is important to have process owners who manage the day-to-day aspects of the process.

KHA Management Consultants offers organizational optimization services that can help set the stage for cohesive teamwork and effective communication across your teams, both vertically and horizontally across the organization chart. We help pinpoint those key performance indicators for your entity and help develop the actions needed to review those processes to insure your company remains successful.

Thank you for reading part four of this series. We look forward to a new series on Strategic Planning next.

KHA Management Consultants, the consulting wing of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the process experts, contact us at 972-221-2500.

 

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Communicating the New Business Process

By: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is part three of a four-part series on business processes, including the need for clarity, proper design, appropriate communication, and commensurate monitoring.

Most every successful business organization we have known from the last century has ceased to exist; what steps are you taking to make sure you do not make this list? As leaders, we must communicate the bigger picture of the organization to every person, and our business processes must be connected to that goal. Otherwise, the process will fail and possibly our people and organization with it.

Previously, we discussed process design and the importance of employee buy-in. If employee buy-in is handled appropriately in the design phase, the communication and monitoring phases will be easier. To successfully communicate a business process to the organization, we must ensure the entity is ready for the communication by answering some critical questions.

These questions include:

  • Do we have answers to our organization’s key strategic questions, such as, “What do we do?” and “How will we win?” “Can our teams reiterate the answers independently?”
  • “Has buy-in been obtained from all levels?”
  • “Is communication tailored to the organization appropriately?”

FIRST THINGS FIRST – BIGGER PICTURE

Typically, company leadership is good at seeing the big picture, while employees are good at getting things done. When these two groups are disconnected, unnecessary work is created for both. As a result, the business and its people are negatively impacted. These are the types of things that take away from the bottom line, the bonus pool, and the mission of the organization. Assuming the organization has answered the primary strategic questions and has aligned organizational goals to team and individual goals, the business process simply needs to be vetted against those preestablished strategic criteria. For example: if your organizational mission is to be a health-minded purveyor of organic goods, it might not be a good idea to offer genetically modified ice cream with 672 grams of sugar. Aren’t you glad we caught that potentially costly misalignment? You are welcome!

BUY-IN FROM ALL LEVELS

Before any new business process is to be implemented, a couple items must be finalized. First, we must ensure all teams affected by the process are on board and understand the need for the change(s). Also, employees must have a clear path to success as it fits their specific role: Also known as, what’s in it for me? To accomplish these objectives contextually, a series of individual meetings may be needed to review the specifics of the business process to allow those affected to voice concerns. Conversely, these meetings may be team meetings where concerns are voiced and worked through. A combination of both individual and team meetings is likely the best practice to ensure all valuable input is obtained before moving forward. People want to know how things will affect them. We all want to know this in some way and need to answer the following questions for each employee:

  • “How will this change affect the employee?” (Translated: How much more work is this for the employee?)
  • “How will this change benefit the employee?” (Translated: Is there a carrot at the end here?)
  • “What will happen if they choose not to follow this change?” (Translated: Is there a stick involved?)
  • “What will happen if they choose to follow this change?” (Translated: They like carrots, how many can they get?)

Even if the leadership team does not completely agree with the process change and rollout, they must be unified and aligned. If one divisional leader undermines the process to his team, do not expect that division to support the business process change or even value the change process. And, why would they? Employees have been given permission to misalign with company leadership or at least the objectives the executive team agreed to support. When applied correctly, disagreement and conflict can be healthy. Healthy organizations have plenty of positive disagreement and conflict. However, negative misalignment must be ferreted out, corrected, and timely remediated. Once the leadership team has decided to support the change, leadership must be unified in its support. We should have buy-in from all key affected groups and individuals, other than that one individual out there on the periphery that will let you know they did not buy-in. , we can chat offline about ‘that’ employee. We need to have a well-documented process, both visually mapped and written in a narrative form for when ‘that’ employee and any new employee comes around. Once these are complete, we are ready to communicate the process to the organization at large.

Communication is vital to the success of any initiative. After the team has done good work, the success needs to be lauded to the teams and organization at large. This will help reinforce a culture focused on the strengthening of controls, creating opportunities for efficiency, and saving its scarce resources. After all of this, many times a change team fails in the rollout space by not giving the revised process the space, context, or emphasis it warrants.

TAILORED COMMUNICATION (to communicate the importance to the team—create that team attitude—we are making this change because it will help all of us)

We must create space and context for the revised business process to be communicated. The appropriate communication for a business process is specific to each organization. The primary method of communication for the new business process almost never involves email. When a new business process rolls out, it is very important the affected teams are involved. Equally critical, the individual responsible for monitoring the process must deliver the communication, and other teams impacted must be supportive or at least expectant. Take the 30-minutes to do this right. Why would you spend all this time to watch the business process become less and less relevant as other things compete for attention in email inboxes? During this initial 30-minute meeting, which should be held in a space large enough to accommodate key employees, we should cover:

  • Why the change is needed,
  • Where documents will be located for future reference, and
  • What supporting trainings will be held to explain the new business process.

If the initial communication is done well, it can create excitement about the business process change that does not taper off. This will lead to continuous improvement in the organization that is driven by the most key employees of all, the end-users.

The newly launched business process is ready for monitoring. Process Monitoring and Continuous Improvements will be covered in our next and final installment. Thank you for reading this third installment.

KHA Management Consultants, the consulting wing of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the process experts, contact us at 972-221-2500.

 

 

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Business Process Design

By: Jonny Baker, Senior Manager Strategic Management Consulting Services

The following is the second article of a four-part series on business process management, which includes the need for clarity, proper design, appropriate communication and commensurate monitoring.

I remember a time when a construction company missed out on a huge opportunity because their credit approval process hinged on one person with limited to no oversight. The result:  The buyer went elsewhere because they did not feel valued – all based on the credit approval process, both in its administration and expediency.

At KHA, we help our clients out of these kinds of situations by advising successful business management processes. We begin our conversation with the question, “How have you designed, communicated and monitored your processes?” Please see last month’s article about the first step in process management, [the need for process clarity], where I discussed the need for clarity first before we can focus on process design.

If business process design is done right, we can eliminate company waste, internal control weaknesses and mediocrity across the organization. Process design is perhaps the most critical phase, as it all starts here.

When entering the process design phase, you may be tempted to think it would be easier to have something to start with and turn this project into a redesign. You would be wrong. A redesign is typically more difficult due to precedent that has been well cemented into the culture of the organization. For the rest of us who can only dream of starting a process design from scratch, we fall into the redesign bucket. This is what change management is all about, and if you have gone down this road before as a driver of the process redesign or as a participant, our sincere and heartfelt apologies go out to you.

Whether the process is from scratch or a redesign, both processes have three main stages: buy-in, comprehensive consideration of the current state and a well thought out future state. A good visual example of these states is Kurt Lewin’s Change Model.

OBTAINING BUY-IN

No process can change without a sense of urgency: why do you think people are so deadline motivated? Each of these redesign phases takes time, some more than others, and all those involved will certainly experience challenge, if not pain. From the CEO to the end-user, we must strive for clarity and obtain buy-in at every level to ensure the design, communication and monitoring of the process is commensurate to what is warranted. If we do not, we will be looking back on this as a fond memory where we learned how comical the workplace and its inhabitants can be.

MEASURING THE CURRENT STATE

“If it ain’t broke, don’t fix it.” Well, we are here, so it’s broke. But, how broke is it?  Great question, and to answer it, we chart the current state. To identify what we are up against, we typically perform walkthroughs and map every step along the way. A walkthrough includes physically observing the current process being performed with the team at all levels and mapping each step. This is also a fantastic tool for obtaining buy-in, and the leader here must listen well. One of the more critical components here is the visual process map, such as those that can be drawn in Microsoft Visio. Most people learn visually, and, even those that do not, love pictures. This map also helps us physically chart suspected weak points, overlapping duties and even possible ways to rearrange the process to better suit team and company needs. Measuring the current state in such a visual manner is a key tool to use to stimulate discussion and obtain buy-in.

FUTURE STATE: MELTING THE PROCESS

We know the current state and have considered it completely; we now look to change the process and shape the future state. Yes, it is time to begin melting the process. We understand the existing process and have heard from key personnel, including those involved in performing and monitoring. The melting process helps us identify weaknesses in the process such as inefficiencies, internal control failures and bottlenecks. These deficiencies are usually impossible to pinpoint in a sea of words but tend to pop out in that visual process map tool. Who said picture books were not good for us?

FUTURE STATE: CHANGING THE PROCESS – FACILITATION

It is time to dream again. If this process could be everything we want it to be, what would it entail? We are reforming the process here, identifying the critical pieces that must be included. (Of note: a key mistake that can be made here is to design the new process without buy-in from the same teams we visited with to understand the current or preexisting process.) Collaborative whiteboard sessions here are helpful, and it is useful for the consultant or project manager to have ideas, but they must remain objective and flexible. Otherwise, the team can smell your premeditated agenda a mile away, and you will be losing credibility. This objective leader must be able to take the ideas good and bad and filter them while maintaining a feeling of involvement and inclusion from key constituents. It takes a special ability to be able to objectively arrive at the right answers, while still engaging and including key players. It is typically easier for an outside third-party to do this; they have less bias.

FUTURE STATE: REFREEZING THE NEW PROCESS

Alas, we converge on what the ideal process should be, based on the systems, people and needs involved. The new process is mapped and tested extensively. Once the team is comfortable with the new process, and they are comfortable with test results, the visual map should be used to document an accompanying narrative. This narrative provides commentary that can help solidify and clarify each intended action item; eliminate the wiggle room, you say?  Documentation must be palatable and easy to understand for the end-user.  If not, expect yourself to be back measuring the current state soon. The process has now been refrozen in the improved state. Depending on the context, it is time to get the necessary approvals and set a launch meeting.

We are ready for the next stage – to communicate the process. This will be covered in our next installment. Thank you for reading, and look forward to part three of this series on process communication next. We cannot wait!

KHA Management Consultants, the consulting wing of KHA Accountants, PLLC, based in Flower Mound, Texas, is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the process experts, contact us at 972-221-2500.

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The Necessity for Clarity in Business Process Management

By: Jonny Baker, Senior Manager, Strategic Management Consulting Services

The following is the first article of a four-part series on business process management, which includes the need for clarity, proper design, appropriate communication, and commensurate monitoring.

We meet with executives and owners of small to mid-size businesses daily, and often we hear things such as, “We have communicated the process, but it still is not being followed.” For instance, one department makes commitments without communicating to another department that is critical to customer delivery, leaving the delivery team disgruntled, overbooked, and frustrated, and the customer feeling the effects. Or, the collections process for past-due customers has continued to drag on, resulting in lost cash flow, even though management has reviewed the expedience of the issue at hand, ad nauseum.

When you work with people, you have processes not being followed. This creates inefficiencies and ineffectiveness that hit the bottom line both on the financial statements and company morale.  Some might say these issues are being driven by human behavior seeking the path of least resistance, and others might say the employee(s) should be let go. When consulting with our clients, time and again, we see that 99% of the time the problem is an operational issue and not a people problem. We have the solution: design it, state it, monitor it, and reward it.

A CLEARLY DEFINED PROCESS BRINGS THE PARTS TOGETHER

An organization is effectively made up of people, agreements, and processes. The fundamental driver of connectedness within any organization is a clearly defined process; when teams are disjointed, working in silos, or lacking clarity regarding company goals and mission, the process breaks down, and fingers start pointing.

The question we first ask our clients is, “How have you designed, communicated, and monitored your processes?” The answer proves quite informative, as it usually highlights where the process breakdown has occurred. Process breakdown is the overarching term to define a process that is not working, and the specific breakdown point can be identified within one of the three key categories–proper design, appropriate communication, and commensurate monitoring for process effectiveness.

PROPER DESIGN

The proper design requires the business process to be melted, reformed, and refrozen (Kurt Lewin Change Model- https://www.mindtools.com/pages/article/newPPM_94.htm). The initial or current process must be fully understood through performing walkthroughs with key team members and visual mapping. Both of these procedures allow us to understand where potential issues and breakdowns may occur. Next, the ideal process is identified, documented, and formalized; the new process is visually mapped looking for any potential holes created or any lingering issues from the initial evaluation that were not fully addressed. Finally, once the team(s) are comfortable with the revised process, and objectives have been met, it is time to refreeze the process in its newly minted condition. Before a process can ever be followed, scalable, or replicated by a team, it must be formally and clearly documented.  Many organizations are lacking formal documented processes, leaving the company in a high-risk situation if something were to happen to that key individual or if that key individual decides it is time to leave, possibly even for a competitor. Without formally documented processes that are referenceable, there is no hope of moving into the communication and monitoring phases effectively.

APPROPRIATE COMMUNICATION

There are other organizations that have process designs and schematics well documented and worthy of the Smithsonian museum; the problem is these processes are never followed or even respected. What went wrong? Likely, the schematic designer or process writer failed to obtain the appropriate buy-in from the team using the process, and thus ownership of the process fell to the individual who drew it, rather than to the end-user. Other times, the team has been considered and even had significant input into the design, but the communication process was mishandled. If the appropriate emphasis is not placed on the necessity for the organization and its constituents to follow the process, the best-case scenario would entail the team having had a good time meeting together. Oftentimes, the communication process is mishandled when the primary communication is handled over email, which is the worst form of communication for many things, especially for processes.

CONTINUAL MONITORING

Other times, the design is immaculate, and the communication is flawless from buy-in to rollout; but the excitement that once captivated the team wanes, and we find the team back where they started. What happened? It is likely that monitoring was lacking, or worse, non-existent. Without enforcement, including incentive, we cannot expect teams to follow processes that add internal control infrastructure, save them time in the long run that cannot be seen in the near-term, or allow their work to be easily followed. This does not have to be carrot or stick; dependent upon the company and process, the monitoring should be tailored accordingly. Sometimes the monitoring of the process necessitates daily review, other times weekly check-ins, or possibly a monthly deep dive team review; regardless, the monitoring process must be consistent and persistent so that expectations are clear for those involved.

There are many reasons processes are ineffective, and almost always the breakdown is in either the design, communication, and/or monitoring phases. It is the responsibility of leadership to take the time, allocate the resources, and set the expectations for their teams to be successful. A good start is to revisit the procedures in place for process management and ensure the proper design, appropriate communication, and commensurate monitoring components are included and followed.

We are ready to work on process design and redesign, which will be covered next. Thank you for reading. Look forward to part two of this series on process design next month.

KHA Management Consultants is a boutique consulting firm based in Flower Mound, Texas, and is always looking for key clients ready to take their business to the next level. If you have a desire to improve, take the first step toward success with the process experts, and contact us at 972-221-2500.

 

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