Normally we start work on the detail of our strategic plan in October so that it is ready for review in December and signed off for implementation in January. However, this year, we were so focused on closing out the year with massive growth and creating a backlog for Q12012 that we decided to hold fire on our 2012 plan. Crazy? You might think so! After all, a well thought-through strategy, coupled with an achievable, measurable tactical plan has more chance of success than mere hope.
We didn’t take the decision to delay formalisation of our 2012 plan lightly.
We use the Balanced Scorecard method to plan and measure our success and it is an ongoing process so the act of formalising the plan and putting numbers to targets is less important than it first seems.
The four perspectives of our balanced scorecard that we use to plan, manage and measure our business are:
- Financial – What do our shareholders expect from the firm?
- Customer – How do we meet our customers’ expectations?
- Processes and Systems – How well do we manage our operational processes?
- Innovation and learning –How do we continue to improve and create value?
We have identified a set of simple Key Performance Indicators (KPI’s) to measure our performance:
- Financial Perspective:
- Revenue growth
- Profit ratio
- Operating cost management
- Profit growth
- Cash flow
- Sales revenue
- Growth in sales revenue
- Customer Perspective
- New customer acquisitions
- Customer retention rates
- Customer satisfaction
- Upsell/cross sell opportunities closed.
- Processes and Systems Perspective:
- Reduced waste
- Improvements in morale
- Increase in capacity utilisation/realisation
- Increased productivity
- Amount of reworking
- Innovation and Learning Perspective:
- Number of new products
- Amount of training provided
- Number of strategic skills learned.
- R&D as % of sales
- Number of employee suggestions for new products or process improvements.
- Extent of employee empowerment within the business
It is now January, we hit our 2011 targets after a very shaky start to the year and a need to refocus and reshape parts of the business that were heavily affected by the turmoil in the markets. We showed strong quarter on quarter growth throughout the year and by creating and empowering a strong, happy team, realised their potential to deliver. Now it is time to pull the team together and figure out where we can jointly take the firm in 2012.
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