The reason strategic planning and thinking is so helpful is that it saves you an enormous amount of time and money. By thinking through the key questions and concepts of strategy, you very quickly find yourself doing more and more of the most important tasks that can move you toward your key goals. At the same time, you do fewer and fewer of those things that are not particularly helpful. You do more things right and fewer things wrong. You establish specific targets for the company and for everyone in it. You greatly improve your ability to measure and track results. You move onto the fast track in your work and in your life in general.
The purpose of corporate strategic planning is to increase return on equity. Equity is defined as the actual amount of shareholder money invested and working in the enterprise. The aim of strategic planning in business is to reorganise and restructure the activities of the corporation so as to achieve a higher quality and quantity of outputs relative to inputs. It is to improve and increase financial results. It is to achieve superior profitability.
Overall, the goal of strategic planning is to enable the company to utilise its people and resources more effectively. The company will then function better than before. It will be in a superior position relative to its competition. This improvement can be measured in terms of higher sales, greater market share, better profitability, higher returns on invested assets and better positioning for the future.
One of the foundational principles is that of Simplification. The Law of Complexity – “Every additional step in a process increases the complexity of the process geometrically.” – underscores the importance of simplifying plans and systems aimed at solving problems and achieving goals. This same principle applies in our personal and professional lives.
Essentially, there are six ways to simplify your professional life:
Focus your time and energy on your high value tasks; those that yield the greatest return. First, identify those tasks which you and only you can do. Second, identify those tasks that merit paying someone your hourly rate – or your desired hourly rate. Now concentrate on these tasks, delegating the rest.
Outsourcing is a form of delegation. If you have determined that a task should be delegated but do not have anyone on staff to whom you can delegate it, look for a company or individual that is in the business of providing this service. For example, one company outsourced it’s payroll to a company that specialises in this important aspect of business. This shields it from the responsibility of keeping abreast of the constantly changing labour laws and from performing the myriad of filings required at both the national and state level, allowing its accounting department to focus on what it does best – tracking and analysing its financial performance. Read more…
In 1958, C. Northcote Parkinson wrote a satirical book describing human behaviour. The book was entitled, Parkinson’s Law: The Pursuit of Progress and is the source of the well known maxim: “Work expands to fill the time available for its completion.” In a very short period of time, Parkinson’s Law has been incorporated into mainstream thinking.
One everyday example given in his book is that of two people writing a postcard. An elderly, retired person might spend hours choosing the right card, take great pains to craft a personal message and then walk to the post office to mail it. On the other hand, a busy entrepreneur is more apt to pick the first card he spots, jot a quick note and mail it on the way home. Same work. Different time allocation.
A more alarming example emerged from Parkinson’s study of the civil service, where he found a propensity to continue hiring more and more people to achieve the same results. What happened to the “free” time now available to those who were responsible for the results in the first place? Parkinson was surprised to discover they were just as busy as they had been before the addition of layers of assistants. The end result of all of their business was the same economic output as they had achieved before the hiring binge, but they found ways to expand the work and remain “busy.” Emails between the various layers of employees exploded. Of course, this internal correspondence had to be checked for proper spelling and grammar. And someone had to manage the escalating staff. In fact, in the specific case he describes in his book, seven officials ended up doing the same amount of work as one had done before. In short, “Officials make work for each other.” Read more…
95% of everything you do is determined by your habits. From the time you get up in the morning, to the time you go to sleep at night, your habits largely control and dictate the words you say, the things you do and the ways you react and respond. Successful, happy people have good habits that are life enhancing. Unsuccessful, unhappy people, have habits that hurt them and hold them back.
One of the most powerful positive habits you can develop is the regular practice of zero based thinking. On a regular basis, ask yourself this question:
“Is there anything in your life that, knowing what you now know, you would not get into again today, if you had it to do over?” Read more…
Generally, there are three levels of competence, and your delegation style and technique should vary according to which level the individual possesses. We refer to this principle as Task Relevant Maturity.
1. Low Task Relevant Maturity
The individual with low task relevant maturity has little experience in the requisite field. He may be a new employee, or at least new to this job, and must be managed accordingly. In such a case, you will use a directive style of delegation. Carefully explain the task being assigned, the intended outcome and the required resources, assuring the person the latter will be made available. Then outline each step in the process, asking them to take notes and ask questions. After the individual has prepared and signed the written performance agreement, you must then carefully monitor the process. In other words, you will instruct them to perform the first step and then report back to you. Next, inspect the work just accomplished to ensure it has been satisfactorily completed. Offer constructive feedback to help them learn from any mistakes they may have made. Then repeat this cycle for each of the remaining steps until the delegated task has been completed to your satisfaction. Finally, debrief the entire process with the person, offering feedback and encouragement and seeking feedback yourself as to how they experienced the process, what was learned from the experience and how they might improve at it the next time. Remember, the objective is first, to get the job done and also to develop an effective, competent and confident employee. Read more…
1. “Do what you do best; delegate or discontinue the rest.” Another way of stating this is, “Delegate any tasks that can be performed by a person earning less than your desired hourly rate of income.” If your goal is $100,000 per year, for example, delegate any tasks for which you would not be willing to pay $50 per hour, thereby freeing you up to focus your own time and energy on tasks that are worth $50 per hour or more. Any time you spend on tasks of lesser value represents an inefficient investment of your time and energy. Read more…
A London Member of Parliament and stockbroker in the early 1800’s David Ricardo was also an avid student of economics, ultimately succeeding Adam Smith as Britain’s pre-eminent economist. His influence dominated the aims and methods of the discipline throughout the nineteenth century.
Ricardo is perhaps best known for his Theory of Comparative Advantage of Nations, which suggested that specialisation leads to wealth and self-sufficiency leads to poverty. He recognised that two countries can benefit from trade even if one of them is better at producing everything than the other. The example most often cited was England and Portugal. Portugal could produce both wheat and wine cheaper than England (giving them an absolute advantage in both commodities). However, delving deeper into the economics of these two industries, Ricardo found that one unit of wine in England cost the same amount to produce as two units of wheat while in Portugal, the production cost of one unit of wine was the same as 1.5 units of wheat. In other words, Portugal had a comparative advantage in the production of wine and England had a comparative advantage in the production of wheat. Ricardo went on to show how both countries could benefit by trading these two products with each other, with Portugal focusing on the production of wine and England focusing on the production of wheat. Another perspective is that, even though Portugal could produce wheat cheaper than England, every unit of wheat it produced cost the country the opportunity to make a higher profit by producing a unit of wine. This is known as the lost opportunity cost. Read more…