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Lessons from the Great American Leaders & How They Apply Now

Posts Tagged ‘budgets

Plans Must Be Rooted in Past Performance

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Performance planning is not developed in a void, nor is it based upon unsubstantiated estimates of budgets, performance and plans. Effective leadership demands plans be based upon past performance and results. By successfully implementing such plans, leaders can stimulate their subordinates to exceed normal performance expectations.

It is surprising how many managers develop annual plans and budgets without accounting for previous years’ performance and the realistic capabilities of their operational unit. Plans that lack these important elements are typically ineffective as roadmaps for achieving high output from an organizational unit.

Effective leaders understand that in order to move their unit forward, they must look at what has worked in the past and then build upon those successes. They also take proactive measures to eliminate any apparent failures and weaknesses.

This process is important for leaders to understand if they wish to motivate their subordinates to reach higher levels of achievement. Plans are not a worthless set of documents to be viewed only once or twice a year: they outline significant milestones and detail what the unit needs to do to effectively operate throughout the year. Leaders understand that performance plans lay out the path for attaining their goals and objectives.

The importance of proper planning cannot be emphasized enough: if it is to be effective and realistic, it must be focused upon prior performance of the leader’s organizational unit. Therefore, a formal review must be conducted in the following three critical areas:

Operational Performance

A formal review in this area is normally conducted on two levels simultaneously: operational and leadership. The operational review compares the organizational unit’s performance with the stated goals and objectives passed down by senior management. The leadership review compares the organizational unit’s performance with the leader’s expectations. While both levels review the same information, the leadership review is conducted from the leader’s perspective of how he or she can motivate the unit to exceed expectations.

The process of a formal review begins with a superficial selection of areas that need further examination. Particular attention needs to be paid to what did and did not work during the past year. This is where leaders can begin to develop strategies to build upon their unit’s successes and eliminate or correct any failures/weaknesses.

Leaders next need to rate the actual performance of all aspects of their organizational unit, including personnel, tasks, assignments, roles, resources and so forth. At this point, any required changes and adjustments should be noted for inclusion in future performance plans.

A final review of operational performance needs to explore the impact and affect of new trends, changes in economic conditions, and uncontrollable events on the operational unit. A thorough examination should note exactly what occurred, how it impacted the leader’s unit and how the unit responded. Any lessons learned from these experiences should also be included in future plans.

Resource Utilization

A formal resource utilization review should be conducted to determine if the leader and the organizational unit maximized their use of available resources. Typically, this review determines if the unit effectually used personnel, machinery, equipment, time, schedules and financial resources.

Leaders need to analyze the operational or production capacity of their organizational unit. This can be conducted from several perspectives, such as production, operations or administration, depending upon the responsibilities of the unit. A resource utilization review pinpoints any bottlenecks or problems that occurred in these areas.

Next, leaders must determine the causes of bottlenecks and problems, which can include inadequate scheduling or insufficient human or financial resources. The findings should be detailed and included in future planning activities.

Financial Performance

The last step in this review analyzes the unit’s financial performance. First, leaders determine how well their organizational unit worked within its budget. They will often discover problem areas that can be more deeply examined during the performance planning process.

An additional review should be conducted to look at the profitability of the organizational unit, including potential ways for it to cut costs and improve productivity. These findings should also be detailed and noted for further examination as well as inclusion in future performance plans.

If you are seeking proven expertise and best practices in performance planning to train or educate your employees to solve problems and improve their performance in this area, refer to Planning to Maximize Performance: Pinpoint Leadership Skill Development Training Series. Click here to learn more.

Related:

Six Key Benefits of Performance Management

Five Critical Steps to Maximize Performance

Measure What Needs to Be Measured

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Copyright © 2014 Timothy F. Bednarz, All Rights Reserved

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Planning as a Means to Generate, Oversee and Measure Results

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manDelegating

Most corporations require leaders to produce an annual plan to project possible future results. Many leaders tend to undertake this assignment with little or no enthusiasm even though it is necessary to forge new paths to generating positive, successful outcomes. Once completed, most annual plans sit on the shelf until the next planning cycle. Many times the rationale is that people are too involved and overwhelmed with daily activities to follow their plan.

Effective leaders tend to view planning as a means to generate, oversee and measure results. Planning gives leaders time to consider how they can improve their own as well as overall workplace performance. It allows leaders to reflect on ways to stretch their employees’ abilities in order to make them a more viable resource for generating and enhancing long-term results. In order to get the best results possible from their leadership efforts, leaders need to prepare for them.

Leaders must recognize that preparing for results does have its challenges, and be aware of them before beginning their next planning cycle.

During planning and budgetary reviews, leaders sometimes develop unreliable projected numbers and assumptions. It is all too easy to develop projections without specific facts to back them up, yet obtaining positive end results relies on sound forecasting.

Many leaders fail to invest the needed effort to review past performance, and this deficiency tends to affect their end outcomes. Some also fall short in taking the necessary time to effectively base future projections and assumptions upon what their organizational units have actually achieved in the past, which distorts expectations.

Obtaining results implies that plans and budgets not be developed in a void. Effective leaders realize that they must build on past successes and determine why and how past failures occurred. They know that to increase results it is essential to plan for strengthening weak and non-performing areas.

Leaders can only accomplish this by thoroughly reviewing past performance in all areas in order to link plans to where the organizational unit currently stands. Performance reviews allow leaders to accurately project their organizational unit’s performance forward in incremental steps. This is the only realistic method of achieving and sustaining growth.

As leaders begin the planning process to increase performance and results, they need to address five specific areas that tend to create the greatest challenges:

Faulty Assumptions

Every plan that is designed to increase results needs to be based upon a series of assumptions. Consisting of future and anticipated variables that impact the actual performance of the plan, assumptions include economic conditions, sales and production forecasts, as well as anticipated major orders.

If assumptions are inaccurate, plans will be worthless and future results will not be realized. For example, if a plan is based upon 10% growth when in reality the economy is causing a 10% decline, everything in the plan is based upon an inaccurate assumption.

When developing their plans, leaders must focus on carefully creating, listing and detailing accurate and realistic assumptions. As conditions change during the year, reviewing assumptions becomes a necessary procedure in order to adjust them to actual conditions. This enables leaders to quickly alter and adapt their plans throughout the year, ensuring the likelihood of obtaining the results they want.

Inaccurate Information

To get results, the development and use of accurate information within the planning process is essential. Accurate information is one of the most important aspects of planning and the most significant step in the plan’s implementation process. Leaders must take the opportunity to examine every aspect of their organizational unit’s past performance. This includes reviewing past plans and budgets against actual performance.

Results-oriented leaders understand what worked in the past and why. They identify areas for improvement, revision, modification or an increased workforce. They then focus on underlying causes that tend to influence or precipitate inadequate employee performance. Leaders who make it a point to conduct exhaustive performance reviews are able to produce accurate information and data, which helps to generate higher levels of results over shorter periods of time.

Once leaders produce a comprehensive review, it becomes much easier to update and maintain their information with a higher degree of accuracy. Leaders use the planning process to audit their information and insure its reliability and accuracy.

Pitfalls to Effective Plan Development

The first major planning pitfall that definitely affects positive end results lies in leaders choosing to create new strategies by simply duplicating previous annual plans with one or two selective changes. Most often changes include simply altering numbers to reflect current conditions. The completed plan is then submitted to senior management. These plans have little value in terms of results-oriented direction or particular action steps to follow.

A second major pitfall is found in writing plans from a “backward perspective.” This is where plans are made according to where leaders want to go, rather than on where they should be going. Strategies are developed without regard to the specific facts, data, timelines and information needed to ensure they are accurate and realistic.

All pertinent information and related data supporting various desired outcomes must be included when generating plans, with all other information that tends to conflict with the desired outcomes omitted.

Both pitfalls are attempts to short-circuit the planning process or avoid it, and greatly reduce the chances of obtaining the results leaders need to generate. When this happens, leaders fail to meet their responsibilities to themselves, employees, associates, senior management and stockholders.

Impossible Plan Timetables, Allotments and Factors

How plans are scheduled can have a major impact on whether or not results are obtained. Many leaders often assume they can achieve more than is realistically possible to attain. They tend to insert and carry over expectations of impossible timelines and deadlines for employees to follow and meet.

Performance plans should stretch each organizational unit and members’ capabilities. Time allotments to move processes and actions along toward achieving goals and objectives must be realistic. Additional time must be factored in for unanticipated events that will inevitably occur during the year.

It is essential for leaders not to under-plan, where employees are not pushed to perform. Equally as important they should not over-plan, where employees are constantly placed under stress to meet deadlines. To get better results, leaders must consider the need to balance their plan’s time requirements, workload criteria and expectations.

Failing to View Performance Plans as Positive Management Tools

Often leaders will produce required plans and forget about them until the next ones are due. It is a serious mistake to view planning as an impediment to their work and daily responsibilities.

Results-oriented leaders appreciate how and why performance plans are powerful management tools. Plans guide and direct their actions throughout the year toward the accomplishment of their goals and objectives, which always move them to securing higher levels of workplace results.

Results-oriented leaders focus on taking their plans and breaking them down into smaller monthly plans, which can be easily monitored and altered. Leaders also make certain to generate smaller step-by-step plans for every individual employee. This process tends to link both time and individual performance toward the accomplishment of common goals and objectives.

Planning is a continuous, ongoing process. Performance plans need to be continually revisited, modified and adapted to reflect actual conditions. Situations change and performance plans should allow leaders to readily anticipate and adapt to fluctuations, speedups and slowdowns, as well as unforeseen occurrences.

Related:

Looking into the Crystal Ball

The Need to Test Opinions Against the Facts

The Mastery of Details is an Integral Part of Leadership

Focusing Your Employees on Future Performance

Excerpt: Becoming a Leader of Your Own Making (Majorium Business Press, Stevens Point, WI 2011) $ 16.95 USD

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreword Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web| Blog | Catalog |800.654.4935 | 715.342.1018

Copyright © 2013 Timothy F. Bednarz, All Rights Reserved

Plans Must Be Rooted in Past Performance

with 7 comments

Performance planning is not developed in a void, nor is it based upon unsubstantiated estimates of budgets, performance and plans. Effective leadership demands plans be based upon past performance and results. By successfully implementing such plans, leaders can stimulate their subordinates to exceed normal performance expectations.

It is surprising how many managers develop annual plans and budgets without accounting for previous years’ performance and the realistic capabilities of their operational unit. Plans that lack these important elements are typically ineffective as roadmaps for achieving high output from an organizational unit.

Related: Six Key Benefits of Performance Management

Effective leaders understand that in order to move their unit forward, they must look at what has worked in the past and then build upon those successes. They also take proactive measures to eliminate any apparent failures and weaknesses.

This process is important for leaders to understand if they wish to motivate their subordinates to reach higher levels of achievement. Plans are not a worthless set of documents to be viewed only once or twice a year: they outline significant milestones and detail what the unit needs to do to effectively operate throughout the year. Leaders understand that performance plans lay out the path for attaining their goals and objectives.

The importance of proper planning cannot be emphasized enough: if it is to be effective and realistic, it must be focused upon prior performance of the leader’s organizational unit. Therefore, a formal review must be conducted in the following three critical areas:

Operational Performance

A formal review in this area is normally conducted on two levels simultaneously: operational and leadership. The operational review compares the organizational unit’s performance with the stated goals and objectives passed down by senior management. The leadership review compares the organizational unit’s performance with the leader’s expectations. While both levels review the same information, the leadership review is conducted from the leader’s perspective of how he or she can motivate the unit to exceed expectations.

The process of a formal review begins with a superficial selection of areas that need further examination. Particular attention needs to be paid to what did and did not work during the past year. This is where leaders can begin to develop strategies to build upon their unit’s successes and eliminate or correct any failures/weaknesses.

Leaders next need to rate the actual performance of all aspects of their organizational unit, including personnel, tasks, assignments, roles, resources and so forth. At this point, any required changes and adjustments should be noted for inclusion in future performance plans.

A final review of operational performance needs to explore the impact and affect of new trends, changes in economic conditions, and uncontrollable events on the operational unit. A thorough examination should note exactly what occurred, how it impacted the leader’s unit and how the unit responded. Any lessons learned from these experiences should also be included in future plans.

Related: Measure What Needs to Be Measured

Resource Utilization

A formal resource utilization review should be conducted to determine if the leader and the organizational unit maximized their use of available resources. Typically, this review determines if the unit effectually used personnel, machinery, equipment, time, schedules and financial resources.

Leaders need to analyze the operational or production capacity of their organizational unit. This can be conducted from several perspectives, such as production, operations or administration, depending upon the responsibilities of the unit. A resource utilization review pinpoints any bottlenecks or problems that occurred in these areas.

Next, leaders must determine the causes of bottlenecks and problems, which can include inadequate scheduling or insufficient human or financial resources. The findings should be detailed and included in future planning activities.

Related: Five Critical Steps to Maximize Performance

Financial Performance

The last step in this review analyzes the unit’s financial performance. First, leaders determine how well their organizational unit worked within its budget. They will often discover problem areas that can be more deeply examined during the performance planning process.

An additional review should be conducted to look at the profitability of the organizational unit, including potential ways for it to cut costs and improve productivity. These findings should also be detailed and noted for further examination as well as inclusion in future performance plans.

If you are seeking proven expertise and best practices in performance planning to train or educate your employees to solve problems and improve their performance in this area, refer to Planning to Maximize Performance: Pinpoint Leadership Skill Development Training Series. Click here to learn more.

Timothy F. Bednarz, Ph.D. | Author | Publisher | Majorium Business Press
Author of Great! What Makes Leaders Great: What They Did, How They Did It and What You Can Learn From It (Finalist – 2011 Foreward Reviews‘ Book of the Year)
Linkedin | Facebook | Twitter | Web | Blog | Catalog | 800.654.4935 | 715.342.1018

Copyright © 2012 Timothy F. Bednarz, All Rights Reserved

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