With budgets under intense pressure these days, U.S. manufacturers are challenged to find ways to do more with less. From research and work we've conducted over 15 years during up and down markets, we've learned that successful companies accomplish this by following one very important tactic: they improve the effectiveness of their senior management teams by providing them an opportunity to create -- and support -- razor-sharp strategic plans with clear-cut goals, accountabilities and action steps for the next 30, 60 and 90 days.
I personally started using this tactic as far back as 1986 when I took over a company that was losing $50,000 per month with only $100,000 left in the bank. Thanks to our strategic planning process and the involvement of each executive in developing and supporting the strategy, within two years we had created critical mass by raising venture capital, expanding the executive team and securing bank financing to acquire our next largest competitor.
For the past 20 years I've been teaching other companies how to use this same tactic effectively.
It wasn't rocket science that saved my first company in 1986; it was doing the basics with intention and clarity. For example, during our two-day strategic planning meeting we answered the basic questions:
- Where are we?
- Where do we want to be?
- What do we start doing today to get there?
It may seem strange that we stopped to do strategic planning when we were about to go under but the process helped point us in the right direction to climb out of our hole.
The second important lesson we learned is that the task required the knowledge and insights of all members of senior management -- not just some, but all senior management -- to identify, prioritize and then commit to the strategic goals and action plans.
For many mid-size manufacturing companies, the executive team is typically a million-dollar-a-year asset or more. (Ten executives averaging over $100,000 a year in salary exceeds $1,000,000.) These executives have their fingers on every aspect of the business and therefore are in the best position to know what's possible if they are given an opportunity to participate in creating the new game plan.
Today, this model is helping many companies to redirect resources and survive the recession. In fact, this approach is saving costs in an unexpected way: it has eliminated the need for them to hire high-priced consultants to help them get into shape.
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