Crafting the Roadmap: Getting from Idea to Action

In last week’s post, we reviewed the S.W.O.T. process. This mechanism, regardless of industry or size, is a crucial step in developing a short and long term strategy for success. Specifically, discussing and owning your company’s current weaknesses and failings is the type of introspection that should occur regularly, with feedback from all roles in the business – from the C-Suite to the Driver’s seat. Further, I’ve always felt that successful businesses, and their leaders, should always be a bit paranoid – in both good times, as well as bad. After you’ve gone through the S.W.O.T. process, and you’ve determined the major objectives for the business (see Part 1 of this series), it’s time to put the plan into action. In general, all well-executed plans have the following key components:

  1. The goal is well defined. Each team member understands what IS to be achieved, and the impact on the business – whether from a financial, as well as from a corporate culture point of view. Each member of the team assigned to the objective should be able to clearly communicate verbally the objective, and the key benefits to the business.
  2. A timeline is established. Execution does not happen without a deadline. Put that on the wall in every room of your business. Conversely, if you want to remain on the treadmill of mediocrity, don’t set deadlines.
  3. Make your people accountable. This part may seem like a no-brainer, however, being a fan of business, I’ve read about (and witnessed) many well-known businesses that got too comfortable. This comfort was rooted in a lack of accountability – from the Board room, all the way down to the front lines (e.g. Kodak, Sears, Toys R Us). Making specific people and teams accountable will ensure continued momentum. This step is also an important vetting process for future business leaders. The ones who step up, and want to reap the rewards (and the potential penalties) are the type of people you build your business around
  4. Incent, Incent, Incent, Succeed. All top performing companies use variable compensation to light the fire for success. Outside of asking your people to become shareholders, there are very few other tangible ways to ensure that your people have Skin in The Game, other than variable compensation. Proper variable compensation plans need to aligned with, and constantly readjusted to make sure they tie to the goals, deadlines and the overall financial impact of the individual actions and decisions made by people and teams. While contemplating these programs, ensure that the compensation program methodology is easily understood, and the objectives, variables and measurement are within the control of the individual and teams being rewarded.
  5. Review and Adjust Regularly. No explanation needed here.

In all industries, leveraging existing frameworks for the above process can vastly improve the speed of developing and executing on a strategy. Many high performing companies have implemented third-party programs such as the Four Disciplines of Execution. Using 4DX or another third-party program narrows the focus, and clearly defines the steps needed to rapidly move forward. Next week, we’ll move from the Macro to the Micro, and discuss the importance of time and task management to executing on your plan.

For your Sunday viewing pleasure, here’s a short video about the 4DX program to get you thinking about your action.

It All Starts with a SWOT

No General leads his or her army into war without knowing both the terrain he or she will face and what the strengths and weaknesses of the enemy they will face. In the current market environment, achieving profitability should not be difficult, even with pressing weaknesses. However, just like seasons change, the market will swing the other way. The smart companies know this, and are reinvesting their profits into building networks and advantages, to put themselves ahead of the their competitors when tide goes out. Knowing what your business needs to do next comes naturally to some business leaders, but for most, setting a course for the future requires equal parts Collaboration, Introspection and Honesty. An excellent way to get you started on this path is with a SWOT analysis.

SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and Weaknesses are internal business factors while Opportunities and Threats are external factors and variables. There are several different templates out there that can be found with a quick Google search and each organization will have their preferences. However, the physical form is not as important as actually doing the exercise.

This analysis is not just for use at the enterprise level. It is equally powerful when done at the division, department or even product line/customer account level. You are probably already doing a similar analysis on all your top accounts but possibly not in as formal a framework. By using this method in conjunction with being closely integrated with your large account you should be able to foresee any threats to that client and be prepared to fend off any attempts by other carriers to take over some or all of the business.

Strengths
Look at factors such as:
• What are the organization’s advantages?
• What do you do better than others?
• What unique resources can you offer (ideally ones that a customer will pay for)?
• What does the marketplace see as your strengths?
• What is your unique selling proposition?
When looking at your strengths, also look at where you are in relation to your competition. If all your competitors are achieving 98% on-time deliveries then you achieving that is not a strength, it’s a market necessity (a table stake). Also take the viewpoint of the customer as they are the ones making the buying decision!

Weaknesses
• What could you improve on?
• What should you avoid or eliminate?
• What does the marketplace see as your weaknesses?
• What does your competition do better than you do?
• What causes you to lose sales?
• Are their perceived weaknesses that you could easily overcome?
Be honest in this step as downplaying weaknesses will not allow you to move forward and address them.

Opportunities
• What are emerging trends?
• What changes in technology are coming in the near, medium and long terms that you are posed to exploit?
• What competitors are family owned and are showing signs of cash flow issues?
• What new developments are your current customers working on?
• What new businesses are coming to your marketplace?
One approach to take is to look at your strengths and ask if they open any opportunities. At the same time ask yourself if the elimination of any weaknesses could also create an opportunity.

Threats
• What obstacles do you face?
• What are your competitors doing?
• What technological game changers are coming that you are not ready to exploit?
• What is your financial position – any cash flow or debt problems?
• Are quality standards or specifications for your product or service changing?
• Are there any weaknesses that could seriously threaten your business?
• Are there any Political, Economic, Socio-Cultural or Technological (PEST) factors to consider?

Once you have made an exhaustive list for each category, it is now time to pare down the list and prioritize each item. Finally make sure that any options generated are carried through to later stages in the strategy formation process. Make certain that you follow through and create a strategy once the analysis has been done.

An important task is to measure the gap between where you are and where you want to be. This helps you create goals that can be measured and verified. It’s much better to say “achieve a 5% increase in miles per gallon” than it is to say “improve fuel efficiency”. Understanding what these gaps are will guide both you and your staff towards implementing an effective strategy to get to where you want to be.

Finally, be prepared to revisit this analysis on a periodic basis – possibly yearly for the entire enterprise, more often at the product or customer level. Look at what has changed. Did you improve or eliminate any of your weaknesses? Did your competitor find a way to close the gap on your price advantage? Did something new that has the potential to be a game changer come on the market recently? This should not be a static document and it should be one of the first things you turn to when a new threat or opportunity comes on the horizon. By understanding what is happening on the playing field means that you can make the proactive moves of a market leader instead of reacting like a follower.

Knowing vs. Doing – Part I: Setting Priorities

This post is the first in a series of five focused on narrowing or eliminating the gap between ‘Knowing’ vs. ‘Doing’. In our personal lives, we all know what we ‘should’ be doing, but our daily habits and tactics don’t always line up. Similarly, in business, a business without an achievable strategy, a business will ultimately deteriorate to the point where it’s simply a series of fires being put out.

Setting Priorities

Most senior managers are very aware of the things they need to do to reach greater levels of profitability and growth. However, many don’t have the time to come up for air to determine which actions they should take, and in what order to build momentum. .

Now, let’s stop for a moment and remind ourselves of the following quote:

“Well done” is always better than “Well said”.”

There will be a small percentage of readers who can state, with confidence, that they have a well-defined strategic plan, and have assembled a series of tactics to achieve this plan. For everyone else, it’s time to set step back, catch your breath and prioritize.

My two favorite methods/systems of prioritization are extremely simple, and are/were used by two very successful individuals – Warren Buffett and President Dwight D Eisenhower.

The Buffett Method of Prioritizing Strategies and Goals

You can read about the Buffett method here. In a quick summary here’s how it works:

  1. Write down up to 25 goals – big and small, that you have for your business. This needs to be done by both principals and senior managers.
  2. Combine all the goals you listed with those of the rest of your team
  3. Circle the top 5 goals that are achievable in the next 12-24 months. This is your ‘List A’. The remaining goals are your ‘List B’.
  4. Although it’s not technically part of the Buffett method, when it comes to execution, size and scale matters. For Large operators (e.g. over 200 buses), 5 important goals is a ‘doable’ thing in 12-24 months. However, for smaller operators, I would pare the five down to 2 – max. For mid-sized operators (50-200), 3-4 should work.
  5. Now that you have List A and List B. What’s next? Simple develop a strategy and a project plan to achieve each item on List A and adjust where necessary. Make sure every person on your team knows what is on List A, meet weekly to discuss. List A needs to become ingrained in the fabric of your team.
  6. What happens to List B? Easy, store each of those goals away and don’t consider them until you’ve completed / achieved List A. They are not given any more time!

The key difference between the Buffett Method for personal vs business is collaboration. In order to build long-term business value, the decisions on which goals make List A must be done in conjunction with those in c-suite right through to the driver’s seat. You want buy-in, and a thorough understanding of what is achievable, and what’s not. For larger companies, this typically would involve departmental goals, and strategies, for smaller companies, company wide goals and strategies.

The Eisenhower Method: Prioritizing Daily Tactics, Tasks and Habits

Everyone has the person on the team that fills their day up with ‘busy work’ that provides little or no value to the business. People always ask me what is the number one cost-saving opportunity for companies, regardless of the industry, it will always be removing those people from your businesses. The longer you wait, and the more you grow, you are tacitly telling your team this behavior is acceptable, and suddenly you have a business full of ineffective people. Cut them from the team. It will improve culture, set a new course for that role in the business, and add to your bottom line.

Each if us also has daily habits and tasks we all do that are either redundant (not needed or done by someone else), or those that are not moving the business forward. Doing an audit of your daily and weekly habits and tasks is an important one that should be done by everyone in your business. Once you have that cumulative list, it’s time to prioritize. The Eisenhower Matrix is a phenomenal way for people in all roles, and at all levels of responsibility, to do a gut-check on their daily activities. How does it work?

President Eisenhower would regularly create a matrix to properly categorize and prioritize his daily activities. This eventually turned into a mental model that his team used to decide which things they should bring to him, and which things should be immediately delegated, or perhaps eliminated. Here are sections within each matrix, and how to consider those daily tasks and habits:

1.Urgent and important (tasks you will do immediately).

2.Important, but not urgent (tasks you will schedule to do later).

3.Urgent, but not important (tasks you will delegate to someone else).

4.Neither urgent nor important (tasks that you will eliminate).

Although setting priorities can sound boring, it can be the main difference between success and failure. Hopefully the above two methods provide you with some food for thought. Are you expecting too much from your team, from yourself? Do you need to be part of that email chain? Are you going to keep allowing people to use their time ineffectively and inefficiently? Does your team know their collective priorities other than the daily ‘busy work’? Take some time, give this some thought. Take action.

Building a New Facility – Follow Up

I spent some time this week talking with Jarit Cornelius, the Vice Chairman of the TMC’s S.5 Study Group (Fleet Maintenance Management). He mentioned that the TMC has developed Recommended Practices for New Facility Development.  This was a result of many consultations among various industry experts and real-world experience.  While having been created with a truck focus, most of the recommendations are directly applicable to a bus operation.

Some of the relevant Recommended Practices (RP) when looking at a new facility include:

  • RP 510A – New Facility Development offers a great overview of what steps are needed to design a shop either from scratch or renovating an existing one. It offers guidelines on things like layout, energy efficiency, how to calculate or estimate the number of services required and much more.
  • RP 518A – Fuel Station Planning offers similar guidance for developing on site fueling stations.
  • RP 512A – Mechanic Staffing Determination – provides a formula to calculate the number of mechanics required to adequately staff a heavy-vehicle maintenance shop
  • RP 513 – Estimating Number of Service Bays – gives an analytical methodology for estimating the number of service bays required in a facility
  • RP 515 – Maintenance Shop Design Considerations – a listing of critical elements that should be considered in the design
  • RP 517 – Managing Environmental Compliance – guidance on compliance education/training, self audits and recordkeeping.

These have undergone many updates and amendments over the years as the study group constantly looks at new and upcoming technologies and how to integrate them into individual shops.

Other Recommended Practices offer guidance from the following study groups:

  • 1 – Electrical
  • 2 – Tire & Wheel
  • 3 – Engine
  • 4 – Cab & Controls
  • 6 – Chassis and Brake Systems
  • 7 – Trailers, Bodies and Material Handling
  • 8 – Cost Control Methods
  • 11 – Sustainability and Environmental Technologies
  • 12 – Onboard Vehicle Electronics
  • 14 – Light & Medium Duty and Specialty Trucks
  • 15 – Specialty Trucks
  • 16 – Service Provider
  • 22 – Onboard Data Systems

Copies of the entire Recommended Practices Manual are available at https://www.atabusinesssolutions.com/ATA-Store/ProductDetails/productid/3921373 where you have your choice of hard bound books, CD or PDF formats.  You do not need to be a member to purchase these manuals.