Thursday, May 08, 2014

Are you looking forwards or backwards?

It is a simple enough question. Do you have a route map for your business that points the way forward, or do you rely on accounts which tell you where you have been?

If you are driving a car you will probably have a sat nav. these day which shows the route ahead, but you still need to look through the windscreen to see where you are going and to avoid hazards. If you have the directors of the company on board, the finance director will be the one looking out of the back window and telling you where you have been!  

Immersed in the day-to-day operation of running a business there is not so much time to look around and see what the route ahead offers, or even where it is going at all. In most cases members have joined along the way and didn’t know where the car came from and what the initial direction was. To go forward we need to decide where it is we are going and then have a route map to describe the way there. 

It is the same with a business. Unless we know what the objectives are, then planning to achieve them is a non-starter. That means writing a business plan. Marketing should be a major contributor to this. In fact the degree of marketing input determines the style and thrust of the company. Marketing is critical to business success. It is not just the preserve of the marketing director, it needs to be a company-wide philosophy. There must be a shared vision of what the company is about, what it does, what it stands for, who it serves in the market. This must be communicated to staff at all levels and communicated to the public, so the message must also be easy to comprehend.  Although the ‘Business Plan’ must of necessity address financial projections, it also needs to state the goals as a clear set of aims that people can actually work on implementing. To simply make a statement such as ‘our objective is to return 18% return on net assets employed’ makes it hard for most employees to interpret in a meaningful way that they can contribute towards. The general actions expected must also be set out. 

With the business direction agreed and the vision shared we can then start drawing up a ‘Marketing Plan’. It seems like common sense to start with defining the business objectives, but it is surprising how often I have come across companies that start in the middle by deciding to do a bit of advertising. When asked why and where this fits into a plan, it usually emerges there is no plan, the business goals are only vaguely known. Generally most people soon see the sense in spending time with planning first. Then the implementation fits into a scheme of things rather than happens at random. Planning is also far more efficient in deploying what are usually scarce resources to achieve goals by doing the job right first time, rather than piecemeal stabs that end up dissipating funds and confusing everyone.

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