The planning meeting (2)

The setting for the 2008-2009 planning meeting, a secluded lake chalet. We held this year's meeting at a dining room table at consultant Bill Caswell's Ottawa residence. The result: A strenuous and somewhat tiring day -- but we got (most of) the job done, and began to shape the picture for a much better year in 2010. Planning is essential, even if sometimes it can be painful in hard times.

The planning meeting yesterday proved to be long, tiring, and somewhat strenuous -- and as the clock ticked and our minds started frying with fatigue -- we concluded it without working through a key element of the planning process, the 2010 expense projections. Our consultants, led by Bill Caswell of Caswell Corporate Coaching Company, realizing that we lacked time to do this during the meeting, promised to pull together the numbers and prepare them in the overall report.

Several new employees attended, and two participated remotely. Designer Ray Levielle joined us by video link and Bob Kruhm in North Carolina spent all day on the phone. Unlike previous meetings, while I had a camera with me, I failed to capture a picture of the gathering.

The numbers this year showed the reality, horrendous losses earlier this year, some degree of stability and even gains this summer, and another bout of losses in the months immediately before the meeting (relating in part to the departure of a couple of sales representatives). The year-end looks okay, and -- at least on the revenue side -- the next year appears promising.

We "resolved" several key issues by agreeing to assign employees to co-ordinate ideas/answers. Of course, this reflects the reality that you cannot solve all problems in a single meeting.

Were there flashes of insights, magical answers, and clear resolutions of issues? The answer, I'm afraid, is "no".

In reality, the meeting couldn't achieve its full potential in part because of the necessary restraints. We were trying to force two days of intensive business decision-making into one, and we needed to operate in a setting/environment which, while functional, didn't allow the fullest natural environment for creativity and innovation.

These are the realities of operating in austerity. (Of course, spending the full cost of a complete meeting like we had last year, would have drained our budgets by $10,000 or more -- and I shudder to think about what that type of expense would do to our operating numbers.)

Nevertheless, I'm convinced the planning meeting/process is an essential for any business which wishes to grow beyond the tiny stage. You can, if necessary, hold the costs down, but it is not something to forgo. So, even though I am writing a less-than-enthusiastic review of my own meeting, I still consider it to be a success.

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The annual planning meeting

Today is our annual planning meeting. Things are a far cry from last year, when we rented a Quebec chalet for $1,000, and employees flew in from North Carolina, Sault Ste. Marie and Toronto. I shudder to think about the overall budget for the event, including consulting fees, travel, and time.

The recession had just started hitting, and we spent a fair bit of time discussing whether it would hit us. In fact, we made some strategic decisions to bolster our position including a rather creative one to raise our prices. (This actually proved to be wise; sales certainly dropped, but I don't think it was the price increase that caused the decline -- and the yield on sales we achieved obviously was better.)

But I didn't realize how much I had allowed costs to rise, and the thinness of the ground. Sales for the December issue were fine, but dropped through the floor in Jan 09, to create the worst monthly loss in years.

Initially, I didn't worry -- sales seemed on track for February, and the team had a cohesive, positive outlook. Besides, the business plan and projections seemed overall to be healthy.

But things started going very wrong in late January. As cash dried up, key bills could not be paid in a timely manner. Worse, we were preparing to add two new employees and expand the business. Then the February sales figures arrived. They were good, as expected, but with rising costs, the break-even point had increased to the point that even with the good sales we were treading water.

We lost money in March.

Now I knew we had a crisis, and pulled out all the stops. Things became really messy as the business suddenly went into survival mode. Sheesh, where did the business plan go?

We fought through the crisis, and things look much better now. Lots of cuts, lots of painful changes, and the real world of the business now is nowhere near what I thought it would be a year ago.

Does this suggest business planning is folly? You can argue that you can't control the variables and circumstances can change rapidly; as they did this year. In fact, the business plan fell off its tracks right at the beginning of the year.

But the plan also provides a cohesive benchmark, and clear indications of where we thought we should be, and when we weren't heading in that direction, gave me enough insight to do what needed to be done.

So we have simplified things and cut costs, but will still spend an intensive day planning the future. Some out of town employees will join by teleconference, and our venue will be comfortable but not the big chalet we used last year. We'll get the job done.

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Business planning and the real construction marketing world

Tomorrow we are holding our bi-annual plan review meeting. It will be an interesting session. Much has happened since our last get-together for the annual planning session in late October last year.

Much has also (thankfully) remained the same. People have come, people have gone, but the core employees are still with us -- though we had some painful lessons (and stresses) along the way.

One important note about planning, and planning meetings. If we had just sailed along and not modified our plan based on rapidly changing circumstances this winter, the business challenges we are dealing with now (and will discuss on Monday) would have been much greater (maybe graver).

Planning is not a once or twice-a-year process. You need to be able to respond, react, and innovate quickly -- and change course where required.

However the planning exercise is always useful: We could all see when things weren't working according to the original plan, so when we needed to make hard decisions along the way, we could do what we needed to do, and quickly.

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