Six Steps to Implementing a Plan

Its a new year and things are going to be different this year. We spent a little time reviewing our mistakes of the past. We are resolved this year will be different. We have a rock-solid plan. New ideas, better ideas, discipline of action and a whole lot more are ready to catapult us to the vanguard of our industry. The team brainstormed, labored and honed our direction to a finely polished point. Like Alexander the Great, well gaze out and watch the competition crumble before our well-orchestrated attack. Sound familiar?

We start the year with the greatest of intentions. Profit planning, sales territory alignment, pricing strategy, targeting and in many instances a shiny new strategic plan. Thats January. Then what happens? Well, according to Execution: The discipline of getting things done by Larry Bossidy former CEO of Honeywell and business advisor Ram Charan, the typical executive team spends less than four hours making sure the plan works. Somehow they let planning replace execution in their consciousness.

This isnt going to be a lengthy treatise topping the joys of cooking up a plan. If you dont believe in planning, youre probably beyond saving. Instead, join me as we spend some time talking about how to turn that plan into results the execution stuff.

To make this discussion real, well come back to one very commonly discussed plan.

Distributors struggle to maximize their gross margin. Dozens of trade publication articles, consultative commentaries and presentations exist on the power of adding just one percent more gross margin. Hundreds of plans for margin improvement can be found in the distribution community. So, not only is this a great case study it is real to a great many readers. We will call this a pricing plan.

Remember this article is not about planning. Its about make the plan work. Six steps to success? Well there are other factors, but these six ideas will stack the deck in your favor.

Step 1 Somebody has to be responsibleIf no one has the responsibility and corresponding authority to make the plan come to life, its damned from day one. The adage two heads are better than one doesnt apply here - committees are even worse. One specific person must be responsible for seeing the plan through.

This doesnt mean one person has to do all of the work most of the time this is impossible. But a single individual must be held accountable for pushing the plan forward. Additionally, the power, judgment and authority to make the plan work need to abide with this person. Judgment is critical - if this individual lacks the acumen to tweak the plan in accordance with changing business landscape, disaster could result.

With pricing plans, we need a single person at the helm. They must understand selling dynamics, pricing situations and customer needs and possess the judgment factor we spoke of in the last paragraph. The prestige and authority to stand up to the sales person pushback are a must have. This cannot be low-level person.

Companies with ongoing success in this category appoint an executive level Pricing Czar to assume responsibility for driving the plan. Serving as the ultimate authority in questions regarding margin and price, this person carries the full authority of the leadership team to solve disputes and handle pushback. His/her ruling is final.

Step 2 Develop metrics throughout the planIts a long road from here to Nirvana without measures the chances of successful completion drop off substantially. Mid-course measures become the catalyst for revisiting the plan. And, based on Bossidy and Charans observation executives spend way too little time revisiting the plan during the year.

Without a measure, forward progress becomes objective a matter of conjecture an opinion. Opinions sway on mood, recent events and convincing arguments. Setting milestones holds everyone to the straight and narrow.

In a pricing plan the most obvious indicator is gross margin. External forces like fluctuations in season, the economy and trends in commodity prices (copper, steel, oil, etc.) push us to look for additional measures - metrics lying just below the surface. Information such as pricing exceptions, salesperson compliance to system pricing and margin shifts in product lines have proven to be more valuable in tracking progress.

Quite frankly, these are time consuming and difficult for the average company to sort out. In the world of pricing process, a few thought leaders have emerged. David Bauders and his Strategic Pricing Associates have built complex software algorithms to automate the metrics with a number of reports which inform the manager on the speed and direction of change. Truly successful companies insist on this type of regular feedback.

Step 3 If issues develop, understand the root causes and make adjustmentsIts not enough to know the plan isnt working. Weve got to get to the root cause of the issues. This can be derived by asking Why, how, what? Lets face it every plan comes with unexpected issues. Unanticipated conditions are part of the business environment markets change, competitors react, suppliers fail to deliver and new technologies affect the playing field. Rather than lamenting failure or worse yet sticking with a bad plan, we must search for the root causes of the issues. Making wise adjustments to the plan is crucial to long term success.

Ask questions to better understand the situation things like:

Why are we falling behind our milestones?What has changed since we laid out our plan?What must change to get back on track?How can we bring other resources into the equation?Dont think generalities specifics are the name of the game. Insist on the same from your staff and coworkers. Drill down to the root causes of the issue via investigation.

Jumping back to the real world and a pricing plan many companies find they struggle to meet the initial goals of their plan. On the surface, a person might just assume the competitive nature of our business prohibits implementation. However, deeper drilling may uncover a host of root cause issues. Here is a short list:

Perception of competitive pushbackSupply contracts which limit ability to change pricesIncorrect system data where the prices are not properly maintainedPackaged deals tying prices of many items togetherToo many product combinations to manage properlyInterviews with companies who have instituted world class pricing plans indicate a willingness to attack each of these root cause issues systematically. For instance, Industrial Supply Magazines Distributor of the Year, Stellar Industrial Supply conducted a series of ongoing employee meetings to combat the competitive pushback issue. They addressed the root issue and pushed their plan over the goal line.

Step 4 Insist on individual compliance with the planAre there individuals who refuse to follow the plan? Many a great plan fails because a few dissenters stonewall the execution. Whether done in the open or covertly underground, these must be addressed.

Change is difficult and threatens the experienced more than the novice. Its not uncommon for a long-term team member to oppose some aspect of the plan. Except in the most blatant of cases this manifests itself with half-hearted or delayed activities. For instance, they may sheepishly try the plan once and announce failure. This is incredibly frustrating and damaging to morale particularly in selling situations.

In research for a new book The Target Driven Sales Process, we discovered a number of businesses who could not determine whether product introductions failed because of product design flaws or due to poorly executed product launches. A good many of these managers noted successful salespeople who were conspicuously lacking in their ability to launch any product that falls outside the mainstream offering.

In the world of planning for price improvement measuring individual compliance appears to be vital for success. Again referring to the work of David Bauders Strategic Pricing Associates; we notice easily accessible compliance reports are a tool for building results.

The Pricing Czar is provided with a report measuring compliance to the pricing strategy by division, sales group, territorial branch, product line and sales person. The report indicates not only those not expanding the pricing process but delivers what if numbers - showing potential assuming various levels of compliance.

Step 5 Instruct, educate and coach throughout the planCatastrophe awaits those who ignore the human element. Our plan no matter how basic must contain a mechanism for instruction of those involved in execution. As we contemplate the education piece - lets remember; human learning requires repetition. There is a good reason for our repeated expose to the same TV ad or Radio jingle Madison Avenue has this stuff down to a science.Launch your plan with an instructional session and repeat that session at points along the way. Provide metric related updates for the group. And, for those who lag behind provide personalized coaching. Remember good coaches motivate each person according to that persons personality. Some people need encouragement; others a pep talk and finally the laggards described in step 4 may need a shot of something stronger.

Switching back to our pricing plans we find top-flight companies have well developed educational plans in place. The very best actually launch the instruction well ahead of any other piece of their plan.

Interestingly enough, as one explores the pricing system developed by Strategic Pricing Associates, they find a wealth of training information designed to anticipate the issues arising as a company goes through the plan. Topics like understanding value, the buying habits of various organizations, pricing sensitivity and competitive pressures are rolled out ahead of the very first systemic change.

This brings us to our final point in developing a plan.

Step 6 Look to others for implementation tipsNo, this isnt a couched come-on for consulting companies. Implementation tips flow from a number of places basically anyone who has been down a similar road. Folks like benchmarking partners, distributor trade associations, and business networks. And yes consultants sometimes fill this role.

Understanding the pot holes on the road to executing your plan eliminates a great deal of frustration and save countless hours spent reinventing the wheel.

Finally a conclusion Whether we are just launching out with a new plan or mid-way through a rough and rocky implementation, following these six steps will maximize our success. Finally, remember even the best of plans must be tweaked along the way think implementation, adaptation, implementation.@@@@@@@@@@@@@

DEVELOPING AND IMPLEMENTING STRATEGIC PLANS THAT WILL DIFFERENTIATE YOUR FIRM FROM THE COMPETITION DURING 2015

by Joel A. Rose What is Strategic Planning?

A strategic plan is a clear statement of guiding principles, beliefs and overriding values that will direct the firm in the future. It is a clear delineation of who the partners of a law firm want to be, and the process to be followed to achieve these objectives.

The plan should include a clear resolution of important contradictions among and between partners, and address such items as:

-Will the firm be a "unified" law firm or a collection of solo practitioners?-Should we emphasize providing superior service vs. being more pragmatic and emphasizing cost consciousness?-Shall we strive to achieve uniformity vs. autonomy?-Should we be more production oriented vs. people oriented?-Should we emphasize business production vs. business origination?-Will we emphasize profitable growth and investment in the future vs. current compensation?-Why Engage in Strategic Planning?

Properly conceived and implemented, the strategic planning process, and its results will foster communication, provide partner input, and create a sense of ownership and common direction that will bind the firm, and help it withstand adversity, and to achieve longevity, and success. It builds "emotional and financial equity" among partners, as opposed to only financial equity.

Strategic planning allows firms to re-focus on team work and investment in the long-run, even though this investment can reduce short-run profit. The glue that holds the law firm together, never has been and never will be partner income. Instead, it is composed of the values and beliefs about client service held and followed by everyone in the firm, a clear and concise mission and direction, and goals that partners and employees understand and to which each partner is committed.

Lawyer managers in the better managed and more financially and professionally successful law firms recognize that their firms cannot build a long-term continuous stream of business in one year. No organization is static. Both internal and external forces change law firms. The following examples illustrate this point: Internal: The successful and profitable firm that fails to plan for the replacement of business generated by retiring rainmakers; External: The current recession, especially in transactional work, i.e., Mergers and Acquisitions, etc.

Law firms must grow (however defined) to improve position and retain viability: An important goal of long-range planning is to assure, as much as possible, that partner income will continue to rise at a pace equal to or better than the rate of inflation. But, growth must be managed so that success does not crush the organization. Strategic planning does not necessarily mean - how do we grow bigger? That may not be what is right for the firm, i.e., Brobeck, Phlager, since continuous issues affecting a law firm may change with growth.

Participation and Roles for Strategic Planning

Law firm managers must be committed to planning and execution. Without that commitment, no strategic plan will be successful. One of the crucial decisions that must be made in the planning process is whether to take a top-down approach or give more authority to various practice area and have them develop their strategic plans with the firms plan being the cumulative input from all of the various departments and offices.

The Managing Partner and Executive or Management Committee must set the tone and methodology of communication, inclusion, efficacy and input by all partners. They must review lessons of the past, lest mistakes of the past be repeated and decide on the result of the Strategic Planning Process, even if the goal is as simple as getting all partners together for a weekend Retreat for fun and interaction that reminds them why they are practicing law together.

The Department Heads and Practice Group Leaders provide the ultimate "sanity check" for the Managing Partner and Management Committee, i.e., are their broad goals and desired results realistic and achievable given the expertise, personnel, personalities and level of business in the firm? Further, they should offer more precise goal definition given their front line responsibility for, and knowledge of, the firm's practice and practicing lawyers.

All Partners will be responsible for contributing to the development and implementation of components of the implementation process.

How to Ensure Participation

Before the Retreat or Strategic Planning meetings, interview or survey all partners on the critical issues defined by the Executive Committee and Department Heads. Interviews or Surveys are best conducted by an independent, experienced law firm management consultant. Partners are more likely to "open up" to outside consultants during confidential interviews. Such interviews can advise the creation of an appropriate survey to propel the planning process into the directions that the partners of the firm consider advisable.

In larger and mid-sized law firms, interviews should be followed up with a survey to confirm the definition of critical issues and establish reportable and understandable data that will move the Retreat or Strategic Planning meeting into the desired direction in advance of those meetings. Moreover, interviews and surveys will eliminate or minimize wasteful pontificating at the Retreat or Strategic Planning meeting, and will focus the firm on the key issues for discussion and action.

Critical Elements to a Sound Strategic Plan

Partners must reach a consensus about the firm's (1) Culture; (2) Governance and Management for policy determination and implementation; (3) Compensation System; (4) Competitive Position; and (5) Plan of Attack, and each group's and each individual's role in the implementation effort.

1. Culture: Partners must define what is the firm now and what they want the firm to be within the next three to five years. They must assess those broad wealth, life, liberty and the pursuit of happiness issues.

2. Governance and Management: Partners must define how their firm is managed and how it should be managed. To achieve this consensus partners must determine what form of management best fits its culture, and will best achieve the partners' goals as in and through the strategic planning process. Also, they must agree upon their expectations of the various roles that law firm leaders will play and how their contributions will be measured.

3. Compensation: Partners must define the current compensation system and reach a consensus about whether it (a) reflects the defined culture and goals of the firm, (b) motivates and incentivizes partners to buy-in and to play their roles after the planning sessions, (c) will achieve group and personal reinforcement of expected behaviors, (d) will reward successful participation in implementing the firm's strategic plan and (e) will achieve results.

4. Competitive Position: Since a firm's competitive position represents its core strengths and competencies, and even, to some extent, its weaknesses. It answers the following questions: (a) Who are we? (b) What are we? (c)What makes us successful? (d) What inhibits further success? and (e)What should we do, and in what directions should we go?

Strategic planning requires assessment of core strengths and of weaknesses. The strategic plan must leverage strengths to exploit and profit from prior investment and established good will. At the same time, the strategic plan must identify those weaknesses in which the firm will invest, and those weaknesses which the firm will shed, in order to become more focused on its market position.

The plan must stress the importance of identifying core competencies in strategic planning. The more financially and professionally successful law firms have benefitted from the thoughtful and careful positioning of their firms in their marketplace. While firm's success may resulted initially from the energy, skill and reputations of the partners, at some point the firm should establish an identity which transcends the partners and attracts clients because of the firms special capabilities.

Quantitative and Qualitative Analysis

An examination of a firm's competitive position requires firms to conduct both quantitative and qualitative analysis. The quantitative analysis involves an examination of revenue at the firm level. Fees for the past several years should be collected, and arranged in the following ways:

Clients should be listed in descending order by order by fees collected.

Group engagements should be examined. For example, in an insurance defense firm, one grouping might consist of the dollars generated by coverage opinions.

Grouping clients by industry.

Grouping clients by geography.

Ranking clients by the size of entity.

Examining engagement by size (in fee dollars collected).

Ranking clients by billing rate.

Ranking clients by realization rate.

The foregoing are primarily financial questions, and define the firm's financial situation. The following quantitative issues are positioning questions:

Is the firm's client base diversified or dependent on a few clients?

Is the firm concentrated in one or a few particular industries or is it diversified? What are the future prospects for each industry?

Is the firm concentrated in one geographical area or dispersed?

Is the firm concentrated in one size client (or business vs individual)?

Is the firm performing a small volume of large-fee matters, or a large volume of small-fee matters?

Is the firm offering a full bundle of services to its clients, or just particular services?

What are the firm's trends in regards to profitability? Billing rates? Realization rates?

Are the firm clients sophisticated regarding the delivery of legal services?

What has the client turnover been in the last three years? Why have clients left? How does the firm obtain new work? Are those methods likely to be successful in the future?

What are the firm's service levels?

How does the firm's breadth and depth of expertise compare to its perceived competitors?

By assessing these attributes, the firm can determine its competitive position and determine where it has a competitive advantage, in which industries that it is most likely to obtain business, and in which geographic areas and what services the firm must offer. Most important, the firm will learn whether it is capable of offering the bundle of services needed to address its target market.

Plan of Attack: Positioning and Business Development Through Implementation of the Strategic Plan

Consistent with the definitions of culture, compensation and governance, and with established goals, the plan must:

Define expectations for group and individual behaviors.

Establish implementation systems that give constant feedback, that reward contribution, efforts, and results, and reinforce these expected behaviors and results.

Establish objective and measurable standards against which the firm can measure its progress and in interim and "final" basis.

Establish a culture of accountability achieved through the governance, management and compensation structures of the firm.

Identify trends.

Identify strengths - core business issues.Firms should be the best at what they do, and should do what they are best at doing; and"Many lawyers seem to feel that it is difficult to differentiate. Yet, they go about trying to differentiate themselves daily in their working activities." (Lundy article)

Identify targets consistent with the trends. Set goals.

What strategies and tactics will lead to achievement of goals?

The below strategies illustrate representative strategic planning action plans:

Example: Environmental Practice GroupTrends:-Cost recovery actions-Insurance coverage issues

Targets:-Real estate marketplace, professionals in the market, banks and business owners.-Cost recovery plaintiffs with insurance policies.

Goals:-Get six new clients in these fields within six months.-Increase billable hours associated with insurance cost recovery actions by 10% over last fiscal year.

Example: Capitalize on client-service strengths and eliminate client-service weaknesses. Analysis: Our firm is dedicated to serving the best interests of its clients. The firm intends to heighten all employees' awareness that its business is dependent on its clients.

GOAL : Create an environment which stresses commitment to client service. Continually seek to improve the quality of client service.

A. Objective: Seek to capitalize on client-service strengths and eliminate client-service weaknesses.

Strategy: Develop new programs to improve existing high standards of client service.Tactic: Strengthen "O defect" call back program wherein all calls are returned as soon as possible but in no event after one business day.Tactic: Initiate "O defect" client response program pursuant to which all client concerns are addressed within one business day.

Strategy: Become technically proficient so as to provide premier client service and internal operating efficiency.Tactic: Use Internet technology to enhance the service provided by the firm.Tactic: Develop systems to forge closer ties with clients via firm technology.Tactic: Use technology creatively in trials, hearings, and other public arenas to represent clients more effectively and successfully.Tactic: Train employees to utilize technology to increase the value of work for clients and to eliminate lower-billing, non-value-added and administrative activities.Tactic: Provide tools to enable employees to serve clients as efficiently and expeditiously as possible wherever the employee may be located, at as low a cost as possible.Tactic: Utilize all available methods of obtaining competitive intelligence, such as attendance at conferences and exhibitions, review of other law firms' initiatives, and analysis of initiatives in electronic commerce and client service in areas outside of the legal profession.

Strategy: Provide employees with requisite technology to maximize client service and internal efficiency.Tactic: Develop and effectively utilize the firm's extensive data bases.Tactic: Train employees to effectively utilize the firm's extensive databases.Tactic: Promote "partnering" between all firm employees and IT department in developing new methods to deliver excellent client service; create an environment in which employees consider IT related solutions when confronted with client-related problems and needs.Tactic: Provide sufficient financial and staffing resources to enable exploration of evolving technologies and ways of doing business and to permit effective implementation of projects.

Strategy: Annually develop a list of clients that will be included in the Key Client Program.Tactic: Differentiate the way the firm provides services to corporate counsel by promoting the Key Client Program.For each key client, assign a Relationship Principal (Account Executive) and initiate the following partnering concepts which are appropriate to each identified key client.Joint matter staffing;Joint training/CLE;Seminars and reverse seminars (repeat periodically);Technology integration such as e-mail, voicemail, case management, research resources, access to time/billing systems for their accounts;An annual plan of services to be provided (free of charge);Voluntary case/matter budgets to enable better projection of legal costs by the client;Rent-a-lawyer programs for finite client needs on a cost plus basis;Alternative pricing;Swap programs (trading lawyers, then trading back).Develop a long-term institutionalized relationship with corporate legal departments by including the firm's associates in the key client program.Prepare and distribute written description of the key client program as a supplement to the firm's marketing brochure and proposals.

Strategy: Develop a plan to eliminate client-service weaknesses.Tactic: Discuss client service priorities at employee training sessions and meetings.Tactic: Administer client panels, user groups or reverse seminars with clients/prospects at least three times each year.Tactic: Conduct market penetration research to assist with the identification of industries to target as well as to ensure excellent service to current clients.Tactic: Focus on efficiency in delivering legal work product. Train timekeepers in appropriate time to devote to tasks and appropriate timekeeping methods to satisfy client billing requirements.Tactic: Involve principals in ongoing litigation training for associate attorneys.Tactic: Solicit client feedback on attorney quality and immediately follow up on valid client concerns.Tactic: Consider client service issues when developing team rotations. Balance professional development goals with client service.Tactic: Assess workload allocations and devote resources as appropriate to meet client service needs.Tactic: Conduct client service performance reviews. Involve clients in the review process and get feedback from them on team members.Conduct end-of-matter surveys.Conduct overall client satisfaction surveys.Senior principals will periodically visit clients at their places of business.

Strategy: Identify those aspects of the practice for which traditional trial skills are vital and develop opportunities for lawyers to hone those skills.Tactic: Identify attorneys who are best suited by talent and inclination to serve as trial lawyers.Tactic: Train those attorneys in traditional trial skills by providing opportunities to try cases through trial academy, pro bono work, mock trails and other training vehicles.Tactic: Give those attorneys opportunities to work either directly or on a shared basis in substantive areas and on teams where work which leads to trials is more prevalent.Strategic Plan Implementation

Accountability is an essential part of the strategic planning and implementation process. If the investment of time and effort needed to develop a plan strategic planning process is worth engaging in, then it is worth supervising and insuring successful achievement of goals. Therefore, the firm must assign someone with responsibility and authority to implement the strategic plan.

The strategic planning process requires the full and complete support of lawyer management at the highest levels. Below the firm level, firms increasingly are using plans at the practice group, departmental, and individual levels. It is clear that overall direction must come from the top - this is the long-term strategic plan. The implementation of plans, at the department, practice group, and individual levels, drive toward short and long-range goals that lead to achievement of the long range strategic plan targets.

Increasingly, firms are gauging in new business development practices through practice groups, which are now key to many firms' marketing strategies. If practice groups are not used, marketing is conducted by specific legal discipline.

A critical role in the implementation process calls for firm management to define, for each partner and group (a) Their role in the large firm picture, (b) What each partner promises to do, and (c)(And later) An assessment what each partner and practice group has done to implement the strategic plan. As an integral part of the implementation process, the author recommends that the firm's lawyer management conduct a quarterly review of the plan's implementation and that ultimate accountability be enacted through the compensation system.

Implementation of the strategic plan requires the same priority as client work, continuing reminders of the firm's culture and expectation, follow-up, reinforcement, publicity - internal and external - for efforts and especially results, measurement of results and an assessment of goal achievement at various stages, i.e., are we getting it done? If not, mid-course corrections. Finally, the system must offer appropriate rewards to those who successfully comply with the strategic planning process

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