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Managing the pandemic’s ‘new normal’ to benefit your business

As every business owner moves into the aftermath of the pandemic, major uncertainty lies ahead. The overriding question is how can you maximize profits and reduce uncertainty about your business?

To effectively answer this question, at least three distinct disciplines — or leadership tools — need to be employed. These tools are strategic and operational plans, a quality management system and a risk management system.

There’s no “cookie-cutter” solution. Each business is unique. For this reason, the following information describes a format — but not any content – yet these templates make it much easier to create content.

First, it’s critical to envision what your business is to “look like” in three to five years. That’s the “what” of planning – but not the “how” to do so. It’s formally called a “vision statement.”

Following this initial, usually succinct, statement, you need to think through your mission statement — your overall business purpose — your raison d’etre (reason for being).

If you already have a mission statement, it may be relevant today despite the pandemic. Mission statements are rarely revised. Yet, if new opportunities have emerged from the pandemic, it may make sense to consider a revision.

Also of great importance is a values statement. Here you “codify” what really matters to you. Your personal values can be inculcated into your business culture — again succinctly. Lots of examples are on the Internet.

With these three statements in place, you’re perfectly positioned to draft long-term strategic goals with each ultimately intended to accomplish your vision. Strategic goals spell out in greater detail the “what” of any plan. For a key reason explained below, it works best if each strategic goal is focused on one of these four segments: your customers — from their perspective; your systems and processes — plus their continuous improvement; your employees’ professional development — both formal education and training; and your financial goals — stated more qualitatively than quantitatively (measurable metrics come in the next step).

These planning steps cover what you want your business to accomplish. Now, your focus should shift to how you intend to do so — with annual operational objectives -- your key performance indicators (KPIs) that work toward eventual accomplishment of each long-term Strategic Goal — all on a single sheet of paper!

But first, a little background on this “single sheet of paper.”

You may be thinking strategic plans usually require 20 to 50 pages! Historically, that’s true, but two Harvard Business School professors have changed history. Moreover, their “one-pager” has proven to work all over the world in all sizes and types of organizations.

Robert Kaplan and David Norton (both Ph.D.) created the Balanced Scorecard (BSC). It brings together — all on a single page — the three elements of strategic planning, quality management and risk management.

In addition, it provides a “scorecard” that shows metrics not only for current year results, but also year-to-date progress, plus last year’s results, all on a single page!

As this tool’s name implies, operational objectives need to be “balanced” so no single element (of the four mentioned above) overwhelms the others. With such balance, Kaplan and Norton say the probability is greatly increased that the plan will be successful! If not balanced, there’s no assurance of success, they say.

This usually calls for you to draft three or four annual operational objectives (KPIs) for each grouping of objectives: customer focus, process improvement, professional development and financial targets.

You may have noticed this grouping coincides with the major elements of Six Sigma quality management! Lean’s focus on elimination of waste can also be factored into the BSC.

Risk management KPIs should be included in one or more of the operational objectives. A risk management system is composed of these processes: risk identification and measurement, risk avoidance, risk control (safety, security, fire prevention, etc.), risk transfer (to others by contract including insurance) and risk assumption (partial or total).

It’s highly recommended that you supplement the BSC with a graphic dashboard. Like your car’s dashboard, it shows what direction you’re headed, how fast you’re moving toward your destination, how much gas (money) is in the tank (bank) — and other KPIs — usually each year for the past five years (for trending).

Finally, one additional tool will be helpful: an action plan. It details who will do what by when and for how much — to accomplish each operational objective. This tool is best drafted by employees who are to accomplish the objective to which it refers. Once drafted and ready to implement, pre-approval by you should be required before implementation, especially where funding is needed.

That’s it! With these leadership tools in place, you and your business should be well positioned to successfully plow through the challenges and opportunities ahead for all of us in the coming “new normal.”

John Pryor, CPCU, ARM. AAI, AIS is a lead management consultant at CSU Bakersfield’s Small Business Development Center. To register for complimentary counsel, go to www.csub.edu/sbdc. Businesses with 500 or fewer employees are eligible. To purchase a copy of his book,”Quality Risk Management Fieldbook” at a discounted price, email johnpryorqrm@gmail.com for details. A complimentary copy of sample templates is also available with a request by email.