So far in our series of posts aimed at helping, in a practical way, your business become more purpose-driven we’ve covered:
The clear message we hope you have in your mind by now is that purpose ought to be firmly at the core of everything that happens in your business. It should be the driving force behind what you do.
If you haven’t already, we’d encourage you to have a read of our previous two posts: parts one and two in the series.
In this post, we’ll cover business planning, (including setting of action plans) and touch - briefly - on KPIs for your team.
Business plan in context
The term “business plan” might be taken to mean a couple of different things.
First, a document that's created to attract funding from investors or lenders. This will typically be highly detailed and rightly so….anyone who’s either going to invest in, or lend money to, your business needs to know as much as possible about what you do, how you do it, the competitive landscape, the market and a whole range of other factors.
Second, and our focus in this post, is the business plan as a “live” piece of work that is ongoing and designed to give focus to the day to day activity in the business. It’s in this context that your business plan is key in embedding purpose.
We believe that for best effect and to meet its objectives, your “living, breathing business plan” need only be a couple of pages long. We’ve created a template which we’re happy for you to download and use for free in your business.
Constructing your business and action plans “on purpose"
We’ve long been fans of the balanced scorecard as a framework within which to create business plans and associated actions. It enables a focus on each of the key drivers in most businesses - people (teams), customers, operations and financials - so tends to works well.
That said, a great framework won’t do all the work for you.
The trap many businesses fall into with the balanced scorecard is to go straight to the financials quadrant to set a bunch of targets - revenue (or revenue growth), expenses (or expense reduction) and profit being the usual suspects.
To borrow a line from a previous post of ours, it’s fine to have financial targets…in fact pretty much all businesses should have them. But, financials are generally an outcome of everything else that goes on in the business.
For example, if you start the business planning process with an objective of increasing profit by 10% in the year ahead, you run the risk that this will become your key focus.
The danger here is that you’ll start building out objectives and action plans across the other three quadrants - people, customers and process - to suit an emphasis on an increase in profit...not to serve your business purpose and achieve your vision.
With a 10% increase in profit at the forefront you’ll inevitably start thinking about “doing more with less”.
This ultimately most likely means fewer people doing more, chasing down more customers who may or may not meet your ideal profile, and under-investing in technologies and other means of improving operations.
All that may be in line with your business purpose, but we doubt it.
Keep in mind the business plan should be a shorter term road map guiding your business toward achieving its longer term aspirations - its purpose - in line with the strategy you believe is appropriate.
So, for every initiative included in each of the four quadrants of the balanced scorecard, you must be able to answer a pretty simple question - does this initiative on its own contribute to your broader business purpose? If the answer is no, then you need to critically examine the initiative and consider whether it should be in the plan.
The challenge will be this: constantly questioning your plans will most likely feel a little unproductive at first. Stick with it though, because you’re not alone. A recent EY study found that while 90% of executives they polled understood the importance of purpose only 46% used purpose to drive business planning. That probably reflects the added degree of difficulty of aligning business plans to purpose.
But don’t let that stand in your way!
Why is this so important?
Your business plan is the part of the overall planning process that’s most visible to, and has most impact on, team members across your business. So if you want a team or teams more focused on purpose, this is the place to build that focus.
We’ve seen many business plans that in effect are simply a long list of things to do that become the responsibility of team members to complete. Without a clear sense of why that responsibility is being passed to them, people simply see a list of tasks and ultimately their role in the business becomes “just a job”.
And that will be reflected in engagement and productivity.
As well as being an important driver of team engagement, an “on purpose” business plan will give you crystal clarity around how best to target, engage and acquire those who meet your ideal customer profile. In turn, that facilitates a clearly targeted service proposition which will provide customers value on a basis other than price.
On the operations front, if you’re like most businesses you won’t have unlimited resources at your disposal. Creating a business plan “on purpose” adds clarity to decisions about where to allocate the resources you do have for maximum impact. It removes most of the ambiguity that can too often surround such decisions.
Get those three balanced scorecard quadrants - people, customers and operations - and the financials will be bound to follow.
A word on KPIs
There’s no doubt employees of purpose-driven businesses are more highly engaged and more productive than those in other businesses.
This comes not just from articulating a purpose but demonstrating a commitment to it across the business. A critical and high-impact part of this is ensuring KPIs for all team members truly reflect purpose.
As we suggested earlier in this post, a laundry list of things to do and results to achieve with no real link to purpose will result in a bunch of disengaged employees producing sub-optimal results for your business.
Here’s some KPI related tips:
Better yet, involve team members (or representatives of teams) in the business planning process itself (the best ideas, by the way, are often hidden in plain sight);
Focus KPIs on outcomes rather than inputs. For example, your business may encourage professional development activities for team members. Rather than measure success in terms of how many people take on such activities, relevant KPIs should instead be about how those activities relate to the individual’s development needs and to the purpose-driven requirements of the business;
Let’s be honest with one another….agreeing purpose-driven KPIs with your team is the toughest challenge in embedding purpose in your business. It’s also the step with the most potential to make a substantial contribution to the success (or otherwise) of your efforts. So shortcuts here should be avoided.
The story so far...
We’ll say it one more time….purpose-driven businesses outperform their peers on nearly every measure. We’re pretty sure that's why you’re showing an interest in this series of posts (and have persevered this far).
We’ve covered the bigger picture items of framing your purpose, your vision and setting out an enabling strategy. Those were the relatively easy bits...
But it’s here, creating your business plan, where the rubber well and truly hits the “purpose road”. It’s the point at which actions really do speak louder than words and it’s your opportunity to prove to team members, customers (and prospective customers) and other stakeholders of your commitment to becoming a purpose-driven business.
Next time we’ll provide some tips on “keeping the dream alive” so that all your initial efforts achieve the best result possible.
As you embark on this stage of the process you will most likely come up against conflicts between the big picture of purpose and the nitty gritty reality of getting things done.
And that’s normal.
It’s also why the involvement of a third party to facilitate the business planning process can make a big difference.
We'd be happy to talk with you about this stage of the process as well as embedding purpose across the board.
In fact, we can't think of a good reason not to give us a call or drop us a line to start a conversation.
At the very least, why not check out some of our previous posts? There's quite a few posts on business purpose and related issues - we're sure you'll find some gems!
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