03 Jan Develop a culture of planning and setting goals around your business strategy
If you operate an IT solution provider — or any type of company — consistent growth and profitability are usually byproducts of an intelligent business strategy and its successful execution. Your business strategy shows that you understand your markets and how to position your company for success, including adapting successful business models. In order to achieve your goals you need to build a company culture that routinely set goals, makes plans, and works towards those goals.
Preparing an annual performance plan is something every company should do. It helps you reach higher levels of performance because it lays out a plan to achieve your goals that are tied to your business strategy. High performance companies are not an accident: they plan, execute according to the plan, then monitor their performance and make adjustments as they go.
Most companies will focus on, and therefore measure, critical areas such as Gross Margins, Recurring Revenues, Profitability, and Sales Effectiveness. Depending on your industry you will probably have additional industry-specific key performance indicators (KPIs) to watch. For example, in the IT service industry you may also be tracking Staff Productivity, Average Revenue per User, Infrastructure Capacity Utilization, Availability Rates, and Customer Satisfaction and Retention Rates.
A smart strategic plan is only useful if it is executed properly. Besides monitoring your progress towards your goals, your compensation systems should be tied to the goals identified in the plan. Rewarding staff (and owners) for the activities and results you want to achieve is the surest way to achieve the goals you have set. And for those of you who are planning to sell your company one day, sophisticated buyers will recognize that a company with a sound business strategy coupled with a culture of planning and setting goals is a more attractive candidate for acquisition.