Happy New Year! I hope this blog finds you and your business poised for prosperity! This is the time of year when most of us get reflective. We look back and determine what worked, what didn’t, and what changes we are going to make. And many times when we haven’t achieved all that we wanted to we put pressure on ourselves to really achieve our goals THIS year.
Now, many of you probably think that I’m really big on setting goals and to some extent that is true. You need to generally understand what you are trying to achieve with your business whether it’s to generate rapid sustainable growth, to prepare to sell or exit, or to just maximize your profitability with your existing resources. This understanding is essential for determining the current and strategic locations for your constraint and provides the compass that will set your course. However, I’m not a big fan of the traditional SMART goals – Specific, Measurable, Achievable, Results-oriented, and time-based. These are like a detailed map of exactly what you do.
If you are going on a driving vacation and you follow a very detailed map, where’s the room for a fun detour? I find that too much detail and focus on that detail can cause you to miss opportunities that were not planned for. I believe in following a strategic compass, and in creating an implementation plan, but then being opportunistic when appropriate. [Interesting read — Goal Free Living]
What’s your strategic compass? What are you ultimately trying to achieve? Do you want to sell? Do your want to transition your business to a family member? Do you want to grow? Or, do you just want to maximize your profits with your existing resources?
Now once you answer this question for yourself, then put some parameters around it – like how much and by when. After you have that done, then we need to create a compass. What objectives would need to have been reached for your goal to be realized? Objectives are states of being as opposed to actions. What state(s) or condition(s) will need to been in place?
An alternative way to think about it, and sometimes easier, is to develop a list of obstacles to meeting your goal. What’s keeping you from the goal? Once you have the list of obstacles, you can convert it to objectives. What objective, if met, would overcome the obstacle?
Now write your goal at the top of a blank sheet of paper. Then ask – in order to achieve this goal, I must first achieve …. Put the objective(s) at the top which are closest in time to achieving your goal and work your way down the page. After you have the first objective(s) listed then asked for each of those – In order to achieve that, I must first … And so on, until you have placed all the objectives (and probably discovered a few more). The objectives at the bottom would be the first ones you would start working on.
This process is creating a PRT (that’s Goldratt Theory of Constraints speak for pre-requisite tree). This map of objectives becomes your compass, your implementation plan. You follow this compass, this path, until you have learned something that changes your direction or until an opportunity comes along that allows you to skip several levels or is just better that what your were planning.
For some examples, I recommend two Thinking Process books:
If you are struggling to develop the objectives to meet your goal, we typically recommend a Mafia Offer Boot Camp. Your mafia offer will lead you to what operational changes are necessary to support it. And if you can uncover capacity with little or no investment (certainly possible with the TOC tools) and you can then sell that capacity, you will have a dramatic effect on your bottom-line. And whether your goal is to sell your business, hand it off to a relative, or just maximize your profits – a mafia offer will provide you the specific strategy and tactics (compass) to achieve your goals.
Here’s to Maximizing YOUR Profits in 2008!
Dr Lisa Lang