Corner Office: Tactics to Effectively Reduce Risk and Achieve Desired Outcomes
May 12, 2016
This article was first published by Philly Biz.
Whether formally stated or not, most companies outline a strategic direction that identifies their end goal. Maybe it’s to reach $100 million in sales or to exit the company in five years through acquisition. Whatever the goal may be, the key to ensuring success begins with a strategic plan built on day-to-day tactics designed to achieve the desired outcome, while also mitigating risk. At NewSpring Capital, we’ve outlined six tactics to help accomplish just that.
• Start with the end goal in mind. Identify a desired outcome, write it down and state it every day and in every meeting. Also, be sure to clearly designate a time frame to achieve that goal.
• Develop five strategic imperatives that must be accomplished during that overarching period in order to be successful. In addition to those imperatives, develop five critical success factors that need to happen this year for the plan to be deemed successful.
• Create metrics and a reporting dashboard that measures progress—or lack thereof—toward achieving those goals. A set of metrics will allow you to track success, thus providing the opportunity to revise the plan accordingly.
• A company is only as effective as its employees. To drive engagement, it is beneficial to incentivize them with compensation structures that align with the plan’s short- and long-term goals and offer rewards for direct success.
• It’s vital to establish an experienced board of directors or advisors—regardless of whether a company has outside investors—who are tasked with ensuring achievement of the plan. This group can serve to keep business owners “intellectually honest” about whether their outcomes are actually aligned with reaching the desired outcome of the plan.
• Most importantly, don’t be afraid to change the plan. Some of the most accomplished companies evolve a plan multiple times before success is realized. The internal and external dynamics that play upon a company can change daily. Before each year, ask yourself (and your board) honestly whether you’ve made progress and whether you should keep heading in the same direction or do a course correction.
In conclusion, to secure long-term success, you must minimize risk. To do so, be sure to implement a strategic plan, report against that plan and make adjustments accordingly. Compensate people under that plan and establish an object body to provide governance on achieving that plan. Follow these steps and you’ll be on the way toward achieving your goals.