Q #153: Which elements must any organizational improvement plan include?

In this series, Bob Morris poses a key question and then responds to it with material from one or more of the business books he has reviewed for Amazon and Borders.

In The Breakthrough Imperative: How the Best Managers Get Outstanding Results (published by HarperCollins in 2008), its co-authors respond to that question when analyzing an abundance of research data accumulated by Bain & Company. According to Mark Gottfredson and Herman Saenz, “Whatever the specifics of a company’s plan may be, there are at least three elements that it must always include:

• Resource allocation and capability acquisition that fit with the action imoeratuves. A company that sets out to gain pricing flexibility through product differentiation can’t then stint on the R&D or brand development. Indeed, many sources of value targeted in the diagnostic process are likely to require both investment dollars and the development of one or more capabilities. If a company doesn’t already possess the required capabilities, it will have to develop or acquire them.

• Metrics and interim milestones. The small number of action imperatives should create a small number of key metric s, the very few operating variables that absolutely must be on target if the plan is to succeed. The plan should contain targets for these variables, not just for the point of arrival but for interim milestones along the way. Metrics, too, will cascade down to lower levels of the organization as each one sets its own specific initiatives.

• Contingency plan triggers and actions. If things go off track, you need to know what you are going to do. You need triggers that tell you when the plan has gone awry [i.e. an early-warning system], and contingency plans that you can put into effect. And if something appears that was wholly unexpected – an unanticipated move by a competitor, for instance – you have to be sure that your information gathering and decision-making capabilities will enable you to respond effectively. The [aforementioned] four laws will continue to be the essential guide to the options you have available for response.”

Comments, questions, requests, or suggestions? Please share them. They will be most welcome and I thank you for them. Best regards, Bob