The Grey Chronicles

2009.March.20

Business or Game Plans



Business Plans to Game Plans

Business Plans to Game Plans

Reading the preface of Jan B. King’s book, Business Plans to Game Plans (2004):

“According to the U.S. Department of Commerce, only one in five businesses remains open five years after its inception. The common denominator in these failures is entrepreneurs who underestimate the amount of time and money it will take to make the business succeed. On the surface, this seems to suggest that businesses fail from a lack of resources. In fact, the actual cause is the failure to plan the right resources to make the business succeed, grow, and thrive.”

I was intrigued! Can this book be what I have been looking for? King even promised that the four-part book provides the reader with the strategies and tools on how to do things right and how to do the right things. He itemized these as:

• Shift the corporate culture so employees are more accountable for their job performance.
• Better measure those areas that drive your business.
• Create an infrastructure that supports growth.
• Know what you need to grow your company: more capital, more people, or new products.
• Determine if sales are as profitable as they could be.
• Develop and launch new products while minimizing your risk.”

Each tool was afforded a short introduction, the method of making it plus a cautionary list of some sort of reality check.

During my No-Scheduled Work, I read the book. Below is a summary of the four parts. I also highlighted some of those quotable quotes.

In Part I. Create Your Vision, the book discussed translating the vision into action.

“Business plan is what you share with those outside your business, like investors, to your game plan, which is how you really run the business, and what you share with your employees. Implementing [these] plans take hard work, wisdom, discipline, courage, an eye for detail, and, most of all, persistence. It also requires an outward focus and an inward focus.”

The tools for this part, King prescribed: (1) creating the vision, (2) crafting a mission statement, (3) doing the SWOT analysis, (4) defining corporate goals and objectives, (5) action plans: turning vision into action and (6) visually representing the plan.

In Part II. Set High Standards, the book specified creating a budget everyone can use and understand; interpreting financial data; and sharing relevant and useful financial information and budget requirements with employees.

“Budgeting gives you a blueprint for action. It tells what to expect and alerts [for] trouble when the unexpected happens. . . Successful companies use budgeting to identify specific, realistic, and quantifiable goals. To benchmark success, compare numbers against competitors’ and the industry standard. . . Budget stops being accurate the moment [it is completed], and when variances occur—and they will—make sure the numbers allow opportunity for managers to act creatively. . . Remember that finance plays both operational and analytic roles. Some business owners become excessively enamored of quantitative analysis— to the detriment of qualitative analysis, which can lead to problems.” [Emphasis supplied]

Do not get in the habit of paying vendors late unless necessary. When it becomes necessary, [the company] will need the track record of a good payment history to convince them to give [it] extra time. Especially in tight industry niches, word travels about who pays on time and who doesn’t. The day may come when [the company] needs a favor from a vendor who feels ill-used or when a credit agency downgrades [the company’s] payment rating.”

“A primary goal of every business is to make enough money to stay in business. Making money can be defined in two ways: making a profit and generating cash. Profitable businesses usually generate cash, but not always. Unprofitable businesses sometimes generate cash, but not often. . . . Progressive managers make it a priority to educate staff on company finances. They make budgets widely accessible, at least within the confines of company facilities.” [Emphasis supplied]

Several tools for the two chapters for this part were itemized from budget, sales, and income projections to balance sheet, income statement, cash flows and variance reports.

In Part III. Build Long-Term Growth, the book switched from measuring the results to driving the business through the art of the sale, quality and quantity, and profitability with marketing and product development.

“If marketing is mostly theory, selling is mostly action. Selling is one-to-one contact with the customer—talking, listening, and taking the order. Customer service is about getting another order. . . In general, 80 percent of sales profits will come from 20 percent of [the] customers. . . In fact, products are generally sold on one or more of three criteria—quality, value (more useful concept than cost), and service.” [Emphasis supplied]

Sales is the big driver of a business on the revenue side, but operations is a big driver on the expense side. Doing both well is to maximize profits.

“The goal for operations is to achieve the highest possible efficiency, making the best use of equipment and human resources—in other words, to reduce costs without damaging sales. Therefore, operations is the natural choice to see to it that the business attains [the] goals for gross margin. Operations implementation entails looking at ways to constantly improve [the] process—to seek to make the time in production less and the quality higher. It means constant measuring and setting new standards. . . Process management includes both processes that create value for customers, giving [the company] a true competitive advantage, as well as those support processes that make sure [the company is] running as efficiently and effectively as possible.” [Emphasis supplied]

Marketing, stimulating future growth, and generating new products are all crucial functions related to managing operations.

“Growing a business means deepening [one’s] understanding of what drives the business, the market for product or service, planning on the fly to take advantage of significant opportunities, and continuous product innovation. In addition, delivering better products faster and more efficiently to customers requires a great deal of information. Marketing—in its broadest definition—is that information.”

The tools in the art of the sale included: sales reports, and customer service reports. Tools for quality and quantity consisted of returns analysis, backlog, inventory control and business partner (supplier) survey. Tools for marketing and product development included assessment of competition, product sales by marketing method and product development checklist.

In Part IV. Lead with Courage, consisted of the final two chapters on leadership tactics to guide the business and communicate one’s values. The book urged to drive employees to peak performance and lead the business by managing employees on a day-to-day and long-term basis, as well as one’s own growth as a leader.

“The quality of human resource management in a company determines the success or failure of most of the other goals [one] had set for oneself. If [one] manages people well in all aspects—hiring, training, coaching, reviewing, compensating, motivating, promoting, and celebrating—the impossible often becomes possible. The single biggest mistake made by CEOs and other managers is spending more time analyzing and acting on the company’s financial particulars than on its people issues. . . . A high-quality team of people working together is [its] single biggest competitive advantage. Don’t assume that [one] pays employees to come to work and that ought to be enough. . . Look at [the] payroll as an investment. . . . It’s not worth the time and expense when [the company] needs to replace high-quality employees who depart after a year or so because of subpar compensation. . . Compliance with the myriad employment laws is essential to avoiding lawsuits, fines, and even criminal prosecution. . . If [the company] had staffed correctly, temporary labor and overtime should be zero most months or reflect your seasonality.” [Emphasis supplied]

The last chapter was devoted to the action-based ways for communicating one’s vision as a leader, as well as tactics for growing one’s leadership abilities, including the intangibles of what makes for a great CEO.

“It takes both foresight and insight and the ability to look at the world at large and decide where [the] company must fit in to survive. It also takes insight, the ability to look inside oneself and others, and the willingness to grow personally to meet the ever-increasing demands of running a business. Finally, it takes courage to consistently stay the course when those around might question [one’s] decisions or actions, as well as the ability to know when outside help [is] needed.” [Emphasis supplied]

The tools in employee performance consisted of performance reviews, team feedback, management skills feedback, employee ranking system and Human Resource key indicators; while the leading tools comprised of employee opinion survey and company performance review.

King also appended two lists: The 50 Critical Management Questions to Running a Successful Business, which highlighted the pertinent questions discussed in the book, and the Top 50 Practical Business Books on planning, budgeting, finance, sales and customer service, operations, people management, personal growth, corporate change and growth, leadership, and marketing.


Notes:

King, Jan B. (2004). Business Plans to Game Plans: A Practical System for Turning Strategies to Action. Revised ed. Place: John Wiley & Sons, 2004. 291pp. back to text

Disclaimer: The posts on this site does not necessarily represent any organization’s positions, strategies or opinions; and unless otherwise expressly stated, are licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Philippines License.

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