Episode 47 – Successful Strategic Planning

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We’re back with the first linen, uniform, and facility services podcast of 2022. Happy New Year to all of our listeners, and a special thanks to our sponsor, 6 Disciplines Consulting Services. I’m your host, Jason Risley, the senior editor of digital and new media at TRSA. As we begin a new calendar year, it’s always important to assess your company’s strategy and make any changes necessary to get your operations heading in the right direction. On that note, I recently spoke with Eric Kurgan, the president of 6 Disciplines Consulting Services.

 

6 Disciplines delivers management and executive consulting, coaching, strategic advisory services, leadership development, and Malcolm Baldridge National Quality Award Consulting to clients across North America, including several linen, uniform, and facility services operations. Prior to joining 6 disciplines, Kurgan was the president of Plumbline Solutions, a 75 person startup software consulting company. And before taking that role, he served as the general manager of the North American Professional Services Organization for Microsoft Corporation. As general manager, he led a team of more than 500. During our recent talk, Kurgan shared his thoughts on strategic planning and how to set a plan in motion for your business and employees to succeed.

 

Thanks for joining us again on the podcast today, Eric. Excited to talk about strategic planning with you and get your thoughts on how it helps organizations improve their performance. To start off, why does strategic planning make a difference? You know, that’s a great question, Jason, and I think that organizations that really focus on laying the groundwork and laying the road roadway, if you will, to where they wanna take their organization perform at a much higher level. And our experience over the last 15 years, with client organizations definitely proves that.

 

And there have been numerous studies done independent of 6 disciplines that show, in fact, doubling of operating income and doubling of sales revenue with those organizations that really do perform or follow a consistent process. And I think that’s really one of the key messages here is it’s consistency. So an organization that, does this once every 5 years or something like that, that that’s not going to get you where you wanna go. This has to become a integrated component within an organization on an ongoing basis. And it’s not just, hey, once a year, we’ll do this strategic planning thing.

 

It’s actually the follow-up and adjustment steps that need to occur during the course of the year. Because as you well know, things change. And, it could be a supply chain issue. It could be a pandemic. It could be, something as simple as someone key in your organization departs the organization.

 

Any of those things could upset the, original structure that you’ve built. So having a plan that you can adjust is pretty critical. And is one method or a style better than another? Well, of course, it would be shameful of me not to mention 6 disciplines as being a method or style that’s better than another, but, it is a style, it is a process, it is a methodology that we’ve created some 17 years ago and, has been installed and implemented and, hundreds of locations and, many laundry locations in particular. And, are there others?

 

Yes. I did a recent search on Amazon just out of curiosity, and there were over 9,000 books on Amazon that contain the words strategic planning just in the title. And so there are books that talk about the strategic planning process, and there are certainly books that are, if you will, instruction manuals, owners manuals that tell you how to do it. And so there are lots of other other considerations that an organization could choose, other than 6 disciplines. How do you start to break down the process into workable steps?

 

Well, the process that we apply within 6 disciplines and, that we’ve time tested with organizations is really what we’ll refer to as 5 key steps. You might say there should be 6 because it’s 6 disciplines, but we’ll go with 5. And these 5 steps are defining the vision for the future of the organization, which says basically, what will this organization look like in the next 3 to 5 years? And the timeline can be somewhat shorter or somewhat longer, but that’s the the general gist is, what does this place look like? And I don’t just mean physically, what does it look like?

 

But what are your revenue numbers? What are your profitability numbers? What are the clients that you serve? What are the, improvements that you plan to make to your plant or your facilities? What what markets will you serve?

 

All those are components tied to vision. Where do I wanna take the organization? And from vision, you need to define the goals or the objection objectives, which is how will we measure our success? What are those key metrics that tell us that we’re on track? And, what we use is a term that we call VFO, vital few objectives, not vital many.

 

Unfortunately, what I see in the laundry industry in particular is that there’s so much data. There’s so many possible areas and metrics to track. We really need to narrow it down to what are the key drivers that we need to be paying attention to. And those could be things, of course, like revenue, and that can be tracked in dollars or percentages. Some form of profitability, whether that’s net income or gross margin or EBITDA or some profitability measure.

 

I see organizations also track things like days outstanding, and they’re they’re tracking those elements under a segment that I would refer to as the financial performance of the organization. The next piece within that is tracking what my customer, component is. How many new customers do I have and or am I adding? And that can be in number of of organizations or it could be in dollars. And then the same could be said for existing customers.

 

How many dollars am am I gaining from an existing customer? And then maybe I want a satisfaction component tied to that as well. How satisfied am I making these these folks? And that can be done either through satisfaction survey, metrics, or it could be done through even retention. So how many people, stay with us, how many people re sign contracts, those are all key objectives that you would, house in that point number 2.

 

Point number 3 is defining what we refer to as initiatives. Some people call them projects, but these are the items that you’re going to focus on that are intended to change the trajectory of the organization. So those items I just mentioned, those key metrics, that’s what they are, metrics. They they measure how we’re doing. But how do you get it done?

 

That’s what the initiative does. So the initiative says, here’s the 3, 4, 5 key initiatives that we’re going to undertake in 2022, and that could be, we’re going to expand into a new geography. We are going to upgrade our wash aisle. We are going to add a certain set of products into our product mix that we haven’t had before. Those are all big projects that require, multiple steps and require people to invest time and energy to make those happen.

 

And I am a firm believer in, a few number of initiatives, as I said, 3 to 5. And then if you finish those early in the year, earlier in the year, you always can go back and pick another initiative to take on, and we can build out the action steps that support that one as well. But, the famous line is, finish what’s on your plate. So you can’t have more till you finish what’s there. And then the 4th key point are the work plans, and work plans really refer to the individual in the organization.

 

So what work am I going to do that’s part of my job description and potentially part of an initiative? So I have things that I do in my job every day. They are specific requirements that I have ownership of, but then there are some components that are actions that came out of or would come out of an initiative, and you have responsibility for getting that piece done. So if we went back to that wash aisle example of an initiative, in your given plan, if let’s say that you’re responsible for production, maybe part of your actions include examination of various vendors to see if there’s a particular product that fits your particular, wash aisle need. So that is a very specific item.

 

It would have your name on it, and then it would have a set date. And let’s say just for, again, sake sake of example, let’s call it March 31st. You’ll have that done, and you’re going to make a report back to the, leadership team, potentially, that this is what we’ve decided out of this initiative that we’re gonna go with this particular washer manufacturer. And then lastly, number 5 is you need to measure your results. So how are we doing against all the things that we said were important?

 

So that’s measuring those goals or VFOs. That’s measuring the initiatives. How well are we doing against them, and are we on track? Are we ahead? Are we behind?

 

And adjust as needed. So oftentimes, what we find in organizations is, they do bite off more they than they can chew, and that something else has surfaced. So, hey, we weren’t expecting to have to deal with, the fact that, we’re shorthanded because people can’t come to work due to COVID or have chosen not to come to work because of COVID. So we have to make some adjustments. So our our best laid plans might have some form of adjustment in terms of timelines being pushed out, or in some cases, we’ve even completely delayed a given project or initiative because you just can’t fit into the standard work that exists in the organization.

 

Sure, we can make everyone work 80 hours a week, but that’s, probably an unlikely, winning strategy, especially in terms of, client or, excuse me, employee retention. What do you see as the most critical step? I think the most critical step in this is, writing it down, really putting the process into writing and committing to the pieces that you have identified that you want to take forward. So whether that’s growth, whether that’s profitability, whether that’s competitive dominance in a given area, whether it’s succession planning for the next generation, or maybe even it’s preparation for selling the business. Those are all components that you need to make decisions about.

 

If you just leave them to chance, then, that’s what you have, chance. Hopefully, hopefully, they get done. So it’s, again, this concept of consist consistency. And does this sound like work? Sure.

 

It does. But there’s very few things that, produce meaningful, full results that don’t require effort. You know, there’s a quote that I really think, is apropos, and it comes from Lewis Carroll. He was the author of Alice in Wonderland, and I joke to the fact that he really had a clear understanding of the importance of strategic planning. And, this quote is, adapted from, the Cheshire Cat.

 

It’s not exactly what the Cheshire Cat says, but, I I like it nonetheless. And that is, if you don’t know where you’re going, any road will take you there. And that’s exactly what organizations find themselves doing. They’ll take any road and they end up somewhere. And so the most critical step is defining a direction.

 

Where do we want to go? It doesn’t mean we can’t adjust, but it is critical that we set that component in place so that we can have a clear direction. Not only is it important for the organization in terms of the leadership team and ownership to know where we’re going, but it also is critical for the rest of the organization, helping them understand what this organization is trying to achieve, helping this organization understand what is critical, adds tremendous value in terms of engagement. They feel that they’re part of a team. They feel they’re part of a set of objectives that, are valuable for the organization.

 

So, I think, again, that critical step is set the direction. Is the concept of creating a guiding direction the core to success? Oh, it is with without a doubt. You know, it’s, if you will, you need a north star to navigate to. So what is our north star?

 

What is it that we’re trying to achieve? So just as I mentioned a moment ago, having that consistent, clear, concise vision of where do you wanna go is is, the most important piece of this. And, within 6 disciplines, we use a technique that we call be, have, do, and what it refers to is what will we be, what will we have, and what will we do? And answering these questions really lays the groundwork for the strategy of the organization. And, I I cited a a few of these earlier as examples, but we have a fictitious laundry client we call Hancock Linen.

 

And let me just share with you just a couple items that we’ve identified as their be, have, and do. So they want to be a nationally recognized leader in textile products and services. They want to be recognized as a great place to work and retain people. They want to be a contributor back to their community in terms of providing a portion of their operating margin back to community causes. With respect to have, they wanna have $35,000,000 in in sales.

 

And today, let’s for sake of discussion, say they’re only at $20,000,000 in sales. So they have to figure out how are they going to gain $15,000,000 in sales over the next, let’s call it, 3 to 7 years? How will we get that done? What is it that will make that happen? Is that through acquisition?

 

Is that through, geographic growth? Is that by adding products? I mean, all those decisions need to be made. But having a north star that says we’re gonna be a $35,000,000 company, and for sake of discussion, Jason, let’s just call it by 2026, 5 years from now. Well, 4 years from now.

 

That’s what we wanna be. So now we’ve gotta start building plans that help us get there. And then when we talk about do, we do want to enter into new markets with new products. We do want to implement state of the art facilities. So that could mean upgrades to various pieces of equipment, or it might even mean building a new plant for some organizations.

 

And they also want to, make sure so do have sorry. Do increase customer satisfaction and retention, and there’s a measurement that they can attach to that as well. So the those statements that I just shared with you are really the roadmap for this organization’s wants and intentions. And then after you’ve set that vision, now we can start to build the pieces that will allow us to measure it. We can start to build the pieces about how we’ll go about doing it.

 

And we don’t lay out 5 years worth of work all at once. We lay out a year’s worth of work and break it down into quarters so that it’s more digestible, and then it gives us the ability to to move it forward as individual contributors in the organization. What would you do next? We we talked about the fact that, we set a vision, and then I mentioned that we set these items called VFOs, which are the key measures of the business. And then we next identify those initiatives or projects that we’re going to undertake that will help us get to those areas.

 

And I shared a couple of those ideas with you earlier, ideas about, adding equipment to the wash floor, expanding to a new region, perhaps adding a new product line. Those are sort of broad statements, and underneath each one of those would be a set of actions. Perhaps you’re familiar with the term of a project plan. It’s really the same concept, which basically says, it’s basically a recipe, which says, here’s what I have to do first. Here’s what I have to do next.

 

Here’s what’s next. What’s next? What’s next? And each of those items are identified as to who the owner is, who’s gonna do that work, and by what date will it be done. So if we can do that and get to that level of, specific specificity, it will allow us to, break down these large projects into projects that we can actually go execute against.

 

What if people already have a full workload? How do you inject these new directions and work? Well, that’s a a very common question. Most people say, hey. I’m already busy.

 

It’s not like I’m standing around with a lot of extra time. And it what it really does require is the organization to reexamine what our priorities, what are the things that we’re working on, are they the right things for us to be working on. There certainly are times where, we have this mentality that, only I can do this work or I can do it faster, so I’m going to do it. Well, it may not be the best thing for you to be doing, and what we can do is start to, provide an opportunity for somebody else. So we’re actually delegating work to other individuals.

 

So what does that do? 1, it builds a stronger bench strength in the organization that more than one person knows how to do a particular task. It gives that person you were delegating to an opportunity to stretch and to, build their skill set, again, adding more value to that themselves and to the organization as a whole, and it frees you up to focus on the most important things. I I had a client once say to me, if everything is a priority, then nothing is a priority. And so when we find individuals in organizations who say, I’ve gotta do this, I’ve gotta do this, I’ve gotta do this, I’ve gotta do this, There’s just no way for them to get all those pieces done.

 

So the key here is prioritize the list and then take those less priority items and move them somewhere else. Either stop doing them altogether, which is certainly a possibility that has that has occurred, where people have come to the conclusion that doing that work doesn’t make sense. Or as, I just mentioned, go forward with delegation, showing people how to do this work, train those people, build that bench strength, improve engagement, and improve employee retention. So there’s all kinds of wins out of this. Not only have we defined a direction for the company, not only have we defined methods and measures for the company, not only have we defined actions as to how we’re going to do them, but we’ve also defined how we’re going to get the work done.

 

And at the same time, we can be building engagement with the rest of the organization, improving our employee retention. So all of these pieces lead to why it’s important to have a strategic plan. So once a company sets the strategy in place, how do you recommend that they manage the execution of that strategy? As I mentioned just a moment ago, the concept of an individual’s responsibility and making sure that the individual has identified the work that they’re going to do in this prioritized order, and these are the most important things for me to focus on. That is indeed key, and, building a, what we refer to as an individual plan, that individual work plan is critical, but measuring and monitoring the work plan is equally as important.

 

So what we actually recommend is that an individual produce a weekly report. We’ve we’ve built some tools to help organizations do this easier, and there are lots of tools that are out in the marketplace besides what what we use, to do this as well. Trello, Asana, monday.com, these are all, in essence, project management tools that, are available, and they help to integrate organizations by showing, the various roles within the organization and who’s doing what things, and then tracking whether or not they’re on time or behind or they need additional resource in order to meet the dates that we’ve set, or perhaps we set too aggressive a date. But by using those tools and tracking the progress in those tools, it allows us to report weekly, to review every single week, are we focused on the right things? Because as I mentioned, there are many changes during the course of not only a planning cycle, but a week.

 

And then using a weekly meeting, So those people who are at a leadership level, for instance, meet weekly and review their progress as to how are they doing against the things that they said were most important. And if they have an issue, perhaps they are, running into a conflict, perhaps they’re running out of resource, that’s the place to raise those items and share those. And then, besides the weekly reporting and weekly meeting is quarterly planning. So what this does is it takes a look at the annual plan as was originally, devised and takes a look at the quarter’s performance. How are we doing so far for the year, this quarter?

 

And it gives you a flavor for whether you’re on track or not on track. If you’re not on track, then what do we need to do to adjust? What things need to occur? What resources might need to be reapplied? What items might need to be put on hold?

 

Because we once again, we overestimated what we could get done, something got in the way. So we use those quarterly meetings as a means of adjusting the plan. So again, it’s not just building an annual plan and here’s the annual plan and go do it. It’s building an annual plan, breaking it down into quarters, really then breaking it down into months of, and then weeks of what is it that I’m going to do, and how am I, as an individual contributor, going to uphold my responsibilities? So it it they’re all so well interconnected, and, those organizations that follow this prescription do perform at a higher level, and they get more done.

 

And that whatever more done means, it means, as I said, growing revenue, it’s growing profitability, it’s preparing the organization for succession. All these pieces, whatever they are as part of the vision, come to fruition because we have focus on them. If we leave it to chance, we know the answer to that one. It might happen. So it sounds like ongoing communication and check ins are really vital to meeting goals.

 

Absolutely. Without a doubt, if we don’t take the time to share where we are or what we need or why something is is or is not moving forward, we’re we’re really doing a disservice to the organization and, our colleagues around us. Eric, thanks for coming back on the show and sharing your expertise. Is there anywhere that, listeners can reach you if they have any questions? Oh, I would, welcome their emails atekurjan atsixconsulting.com.

 

Thank you. It’s been a pleasure, Jason. Thanks for having me. If you’d like to share your thoughts on today’s episode, send us a message at podcasts attrsa.org. That’s podcasts attrsa.org.

 

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