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Many corporate managers have related how they feel "out of
control". "The organization just seems to go on. I really have
very little impact on the companies operations".
"I
Need Answers!"
Have you ever found yourself
asking these questions?
-
Do
we have enough PC’s for the new hires?
-
Do
we have enough space to house our growth for the foreseeable future?
-
How
much will operations cost next year?
-
How
will we finance our operation?
-
How
many software programmers will we need to hire and when?
-
How
many employees will we hire next year, and when?
-
How
much will we pay them?
-
Should
we lease or buy our fixed assets?
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How
much can we afford to spend on marketing next year?
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Can
we survive if sales drop by 20%?
These
questions can all be answered in 1 minute or less with a well prepared
corporate resource plan.
Sound business planning is a rarity in business today.
Hip-shooting, managing by walking around, and management by looking
around will not serve the transition manager in an rapid growth company.
Resource planning is a bottoms-up planning effort which involves all
department managers in a company. It is very comprehensive.
It will actively involve all departments of a company.
The plan must focus on the deployment of resources.
Corporate resources include personnel, dollars, time, fixed assets,
vendors/vendor products, strategic alliances, etc. How and when
these will be developed and combined is the main thrust of the corporate
resource plan. In the end, the Chief Financial Officer must know
how much funding will be required, and when, to finance the company's
operations.
A corporate resource plan must end up as a written and published
document for each department and administrative manager. If
your plans are not put into an easy to read, easy to reference format,
they will be interpreted in as many different ways as you have
managers. They will also be forgotten and in some cases dismissed
as management's latest effort to get organized.
The plan must be monitored, updated, and compared to actual operating
results. It must be the launch pad for making changes to bring
a particular area of the company into conformance with
expectations. It must initiate comparison and corrective
action. Managers must know they are being evaluated based on how
well they meet their objectives and their projections.
Changes must be made to operations as a result of the variances
reported monthly. The resource plan is worthless if it only
serves to highlight problems. Corrective action must be taken and
results measured again, if the plan is to have a positive impact on the
forward progress of the company.
The plan must be scalable. As management gains additional
information through the passing of time, the plan must be adjusted and
future expectations modified. If the plan is not scalable, that is
if it cannot be comprehensively changed by changing one parameter, than
it is of no use past the first draft. It rapidly becomes apparent
to all that the exercise was meaningless beyond the point in time which
it was created.
The plan must be interactive. The plan must be able to
answer such questions as how will my funding requirements change if I
only sell 75% of my projection next year? Or how will my cash flow
change if my margin ends up being 5% lower than expected? Can I
stretch my payables to cover the negative cash balance late in the
year? This interactive nature will allow "what-if"
modeling and will give management a sensitivity to the impact of the
movement of each parameter.
New
Vision
The operating plans prepared by
The Silicon Valley Consulting Group are produced as either 3-ring binder
documents or comb-bound documents. The detail schedules provide a
"bottoms-up" operating plan for the next 2 years. 3 - 5
year projections are typically based on industry averages, linear
regression modeling, growth rates, and/or management's extrapolations
and are "top-down" models. Some of these plans fill a 3
inch binder, some only a 1/2 inch binder. The models can be
customized to most any enterprise in any industry. All financial
schedules can be printed in local currency or US dollars. These
schedules are all printed from a comprehensive model and are completely
interactive.
Now
the CEO has a comprehensive plan of action for this year and the
years ahead. He/she also has a standard against which to measure
performance.
Now the new purchasing manager has his action plan for the next 2
years without planning from scratch again.
Now the HR manager knows exactly what their proposed hiring schedule
is to be for the next 2 years.
Now the corporate facilities manager can plan for space requirements
well in advance of the need.
Now the CFO will know exactly what the capital requirements will
be for the new two years.
Now the VP of manufacturing knows exactly how much product to produce
by certain critical dates.
Now the director of engineering knows exactly when the product
development deadlines are scheduled. He can also model the
impact to the company if these deadlines slip.
Now the director of marketing can plan new product launches
intelligently, effectively and efficiently.
Now the purchasing manager can negotiate volume discounts based
on scheduled purchases.
Now everyone has the same comprehensive vision, everyone feels
much more secure. No more missed deadlines, no more gaping holes in
management strategy or logistics.
Strategic
and Operational Alignment for Accelerated Corporate Growth...
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