New Approaches

This issue is about finding different approaches to "common" business challenges.  One of the common threads that most businesses today face is how to do more with less - less time, less money, and less leeway for missteps.  In recent month's, I've met with and heard from numerous businesses spanning industries and in various stages of growth.  A significant number of these businesses are looking for expert assistance with their particular business issue, but are limited to the amount of cash to spend.

In answer to those needs, we are launching the FOCUS Implementation Teams™.  These groups will center on specific business issues that you are dealing with.  The first group is planned for October and centers on business planning - initial, funding, strategic w/ financial forecasts, operational w/ budgets, and tactical for "special" circumstances.  You can read more about the types of business plans in our feature article: 

Business Plans - Not Created Equal

Also, in this issue:

•  The True Bottom-line 
•   FOCUS Implementation Team (F.I.T.™) Programs
•   Flat Forehead Syndrome

Business Plans - Not Created Equal return to top

The term “business plan” is most often used to refer to a document which is used to obtain funding – equity or debt.  However, the term applies to a broader range of planning tools.  Business plans include documents for the following categories:

• Initial
• Funding
• Strategic
• Operational
• Tactical

Each type of plan serves a purpose, is targeted to a specific audience, and depends, in part, on the stage of business the organization is currently in and/or moving toward.  The nature of an organizations’ business is another factor that significantly influences THE type of a plan it needs.

1. An initial plan is for idea/concept stage businesses just beginning to find their way.  It may be formal or informal; however, it needs to layout the business concept, resources, operating plan, markets, planned capital structure (financing), and financial results.  These plans range from “straw man” to detailed, robust documents. Some plans may be used to seek initial seed funding from some sources.
2. A funding plan may be an initial plan, but not all initial plans are funding plans.  Funding plans are written to seek outside sources of capital – debt and/or equity.  These plans usually require substantial marketing, operating, and financial detail. They are developed and structured to convey information – concept, product/service, business model, capital required, return on investment, exit strategy, and all other aspects of the business including detailed pro forma financials.  Generally, these plans must demonstrate/build a strong case for the “unique” intellectual property, business model advantages, market potential, and management team capability. 
3. Strategic plans are three to five year “templates” of how the business purpose (mission and vision) is to be carried out - the type and timing of activities that will achieve specific strategy goals and financial results.  The strategy is spelled out, giving details regarding the organization’s ability to generate specific return on investment, profits, and growth – to be commercially successful.  The plan for each product, service, business unit, division, and opportunity is defined as to timing, activity, revenue, cost, operating expense, etc.  The non-financial aspects of the business are defined and translated into pro forma financial statements.
4. From strategic plans and forecasts come the operational plan and budgets.  Typically the first year of the strategic plan and pro forma financials is used to establish the basis of the operating plan and budget.  These plans take the single operating year and spell out the significant details, activities, and events.  These details are accompanied by the planned financial results – what is expected to be spent and acquired, whether they are balance sheet or profit and loss to determine the ability of the organization to fund itself through operations and to project cash needs throughout the operating year.
5. Tactical plans are “special use” plans.  These generally are needed to address significant or unexpected adverse events the business could not anticipate.  They are developed quickly to provide critical direction and parameters for the organization to align to address the situation.  Tactical plans may also be used when an organization is presented with an opportunity which was not anticipated, requires a “steppe function” increase in operations, or other major positive event occurs that was not anticipated.

So all plans are not created equal!  The degree of hard market data that underlies the plan, the robustness of the business model definition, scope of management experience and capability, and the correlation between market data, assumptions, and financial projections varies depending upon the purpose, stage, and other factors previously discussed.

Having the right business plan for the organization’s purpose and audience can make or break a business.  The business has limited opportunities to present and “sell” the business to investors, to recruit needed business and technical talent, and to build operational and financial success.

The audience for your plan, the reason why you are communicating with that audience and where you intend to take your business impact the plan generation process and the resulting document.  No single, static plan will take your organization from concept to commercialization.  Business plans, like the businesses they represent, are dynamic and evolving.  By incorporating business planning into your organization, you can – when the work is done properly – take your business to new levels of performance and bottom-line results.

Financial Results and Running the Business – The True Bottom-line return to top

Part of the process for reporting financial results is the ability to understand what generated the bottom-line result.  It is both a financial and operational issue - What is in the numbers?

Financial reporting processes and financial statements are often areas of the business that aren't intuitively obvious to non-financial managers and business leaders.  For many, there is an intimidation factor associated with the finance and accounting processes. The complexity of having multiple reporting methods (tax, financial, and managerial) processes within the finance and accounting activities is one of the reasons that many are reluctant to delve into the financial aspects of business.

Financial reports are different than accounting for results.  The difference between how the business operates and what external reporting reflects is part of the dilemma for many.  The advent of "managed" results for external reporting has lead many companies to create financial and accounting systems that reflect results that are "adjusted" with so many "accruals" that it takes a scorecard and a road map to keep track of what the operating results are versus what the financial reports indicate.

Performance measurement and management have come to mean adjusting the numbers and not running the business.  The ability to manage the business to achieve sound financial performance has been hindered by the recent trend in managing expectations and the demand that those expectations be exceeded to maintain business "value".

The original practice of reporting accruals was to reflect accurately the timing of events.  Some were not captured through the normal business processes because of the flow of documentation and constraints on reporting system capacity.  The accounting and finance functions were seeking to capture all of the relevant activity into the proper time period so that management could make the best decisions based upon "complete" information.

Having been a part of the finance and accounting profession for almost 20 years, I have observed the changes in the field.  At some point it became "easier" to manage the numbers than do the right thing for running the business.  The fiduciary role of finance to ensure that the financial statements were representative of operational performance and reflected the reasonable expectations of the business' performance were, in many cases, subjugated to the idols of short-term performance reporting.

Business value creation is a long-term process that requires a commitment to the development of products, services, and processes that develop market presence through the delivery of tangible returns to consumers, businesses, community, and the economy.  The impact of smoke and mirror financial returns is immeasurable.  The loss of the mandate to run and develop a business has contributed significantly to the increasing cost of doing business.  The inefficiencies that develop and are institutionalized through entitlement programs (at all levels) and through the failure to apply the sound business principles of right person, right job, right skills, etc. to business operations and decision-making processes has lead to many businesses not being competitive on several fronts:

• Cost
• Speed to market
• Speed of response to market changes
• Ability to stream-line and restructure internal processes around core processes
• Ability to control cost creep

For businesses to compete effectively, they must be able to maneuver, respond, control costs, and act.  The basics of establishing, building, and growing a business require the ability to perform all of the following:

• deliver products and services that solve a specific problem or fill a need
• price at a competitive yet profitable point
• be consistent in customer service
• respond to new opportunities
• react to process breakdowns or quality issues

What is a FOCUS Implementation Team™? return to top

FOCUS Resources is launching its newest program targeting businesses that want to take a hands-on approach to addressing business issues.  Through an innovative "virtual" program, participants will work on their business with a combination of concept and application, "homework" and peer interaction.

Participants will be challenged to work on specific issues and projects.  Through action, accountability, and concept discussions participants will generate work product and implement changes in their organizations as the team meets over the course of several months.  Each F.I.T.™ Program will consist of 12 sessions lasting 1 1/2 hours.  Each team is limited to a MAXIMUM of 12 participants.  

Applications and additional information will be available beginning in late September on the FOCUS Resources website under F.I.T.™ Programs. 

Each program will consist of resources, assignments, concept, and application tools. 

Enrollment is limited to 12 participants per group, so applications must be submitted and accepted prior to registration.

Programs:

• Business Planning and Plans
• Government Funding Compliance - Contractors and Grant Recipients
• Financial Management
• Enterprise Diagnostics - Getting the Business on Track

Capital City Club TrendSetters - Extreme Networking return to top

The TrendSetters (formerly Executive Women) will hold an EXTREME Networking event at the September 21 from 6 - 8 pm.

For more information and to register for the event:

www.capitalraleigh.com

(919) 832-5526

The Capital City Club is located in Progress Energy Buidling.

Flat Forehead Syndrome return to top

Whether working as an "intrapreneur" in large companies, as a small business owner, or as an advisor to many companies, it is likely that you have experienced "Flat Forehead Syndrome.” It is the result of beating your head against the brick wall of:

• "We've always done it this way!"
• "If it ain't broke, why fix it!"
• "But my neighbor said his dad didn't have to do this!"
• "I've been doing it this way for X years and the IRS hasn't said anything!"

As always, feel free to add your favorite response!]

Like many "syndromes" there do seem to be some common characteristics:

• resistance to change
• rigid perspectives
• reluctance to spend the pennies to save (or make) the dollars
• yesterday focus
• "not me", "someone else"

There are also some accompanying maladies while, not directly part of the core syndrome, seem to appear frequently to exacerbate the symptoms:

• single industry focus, presumption that things invented or done in another industry aren’t “applicable” to your industry
• "should"-it is, belief about how things “should be”, gets in the way of the reality of how things are
• possibility-chondria, view that all things are possible and so count as options, even if the probabilities are remote, and the capabilities of the organization are non-existent
• obsessive entitlement compulsion, mindset that the way we want to do it should be the only justification, regardless of regulations, practice, or other constraints
• better mousetrap myopia, confidence that because “we have the best, newest, most innovate product (or technology), of course they are going to by it – so what if it isn’t proven!
• short-term vision, assurance that whatever we need to do today doesn’t have to take into consideration the impact on future periods
• long-term blindness, inability to align the organizations activities, operations, and resources toward a strategic objective and action plan
• four-wall focus, conviction that happens within the business is all that is relevant;  a specific path and stay on it without taking into consideration new information, changes in economic conditions, competition, or other external factors
• tunnel vision, failure to recognize that  the light at the end of the tunnel is an oncoming train

Getting a treatment program in place for your organization, team, or self is challenging.  We all enjoy the cartoons that poke fun at “Corporate America”.  We rant and rave at “big corporations”, inadequate judicial systems, overburdened educational systems, and idiot bosses.  “They” aren’t getting it.  We seldom recognize ourselves and our role in those situations. 

[A quick aside, I remember the first time I read a Dilbert comic strip.  I was convinced it was a nom de plume of one of my co-workers getting great copy out of my misery!]

To begin treating Flat Forehead Syndrome, its underlying causes, and related maladies, we first have to recognize that we all contribute to it.  In part it can be attributed to individual differences in any or all of the following areas:

• style
  • communication
  • interpersonal
  • risk tolerance
• skills, knowledge, and abilities
• experience
• expertise
  • breadth
  • depth
• adaptability
• perspective
• security
  • personal
  • position
  • financial

It is extremely difficult and sometimes impossible to suspend judgment and gather the facts, setting aside emotion and personal interest – whether it is in being right or in control.  As business leaders and managers it is our fiduciary role to act in the best interest of the company we work for and the people we work with.  When we have an emotional and/or financial stake in the outcome of a situation, then we struggle to find the best path – that is only human.

In dealing with situations that cause Flat Foreheads, consider these points:

• encourage full disclosure of issues, attitudes, and factors
• respond to the facts and not emotions
• address the situation, not the person
• consider third party involvement to mediate the situation
• understand the options for the relationship and the business
  • do nothing
  • concede
  • withdraw
  • escalate
  • mitigate
  • delay
  • compromise
  • decide

You don’t have to spill your guts on the table.  Simply walk yourself through the process of defining your perspective and then attempt to do the same for the other perspectives.  The process of setting down your point of view – building a case, making an argument – will often be sufficient for you to begin opening the door to other views.  If you have to put down the logical points and facts of your position and then repeat the process for other options and opinions, you will probably discover strengths and weaknesses in your evaluation of the situation that you hadn’t considered.

If you are currently in the process of preparing to beat your head against a brick wall, take the time to develop your thoughts, facts, data, and opinions fully.  Take the time to anticipate what objections and obstacles may be put in your way.  Have a plan to get around those obstacles – build a bridge, take a different route, or prepare the dynamite.  The more prepared you are for the issues, the challenges, the questions, the brick wall of resistance, the more nimble you can be in how you react.

Oh how I wish I could say that the brick walls will all come tumbling down in the face of reason, logic, and clear solutions.  Unfortunately, life isn’t a television show where the script directs a positive result inside of an hour (even stopping for commercials).  Acknowledging that there will always be brick walls somewhere, we need to look for ways to tear down the ones we can, climb over the ones we can’t tear down, and walk away from the others with our foreheads in tact.

eWomen Network - Featured Speaker return to top

Lea Strickland, President of FOCUS Resources, will be the featured speaker at the August 25th meeting of the RTP Chapter of eWomen Network.  Her topic the "Business of Business" will include a hands-on activity to get meeting participants into the strategic planning mode!

To register and for more information click on the link below:

http://www.ewomennetwork.com/event/registration/event.phtml?eid=1742

or call: 

Register by phone by calling 704-331-3969

Date: Wednesday, August 25, 2004
Time: 11:30 AM - 1:30 PM (Doors open and informal networking begins at 11:00 PM)
Location: Sheraton Imperial Hotel & Convention Center, 4700 Emperor Blvd., Durham, NC 27703

@ Your Own Business - The First Step IS the Biggest return to top

To read the first of Lea Strickland's columns on starting your own business go to:

http://www.ncjournalforwomen.com/months/aug04/aug04strickland.htm

Each month NC Journal for Women will feature an article in the series.

Copyright © 2004 F.O.C.U.S. Resource, Inc.