How to Build Strategy
Mon, 04 February 2013
How much money could your business produce right now? It’s a serious question, and yet most businesses aren’t sure of the answer.
You probably know how much revenue or income you produced last month. You probably have a figure in mind for how much you want to produce at some point, defined or not, in the future. But if you’re like most businesses, you’ve never done the exercise to determine your current capacity to earn.
That’s important, because not knowing your capacity means you can’t be sure how efficient – or not – your business is at any time. It also means not being clear on how you are going to move from where you are today to that goal you have in the future.
Capacity Planning is the simple way to develop business strategy. If you have ever set a strategy or written a business plan and not carried it through, then you will be pleased to learn Capacity can make that process much easier.
Shirlaws once ran a coaching session with a large corporate, where we asked all the senior managers to list the ways in which they planned to ‘grow’ the company in the near future. Not only did they share numerous conflicting answers, some were even completely contradictory – growing via new products to expanding marketing requires investment, which is at odds with redundancies that grow profit!
That business lacked a common language for discussing strategy. ‘Growth’ meant many different things, and there was no alignment about the opportunities that existed to be taken.
Capacity Planning introduces that common language through the framework of ‘The Cups’, a simple yet powerful way to understand your efficiencies today and communicate with alignment to your team about the choices you are making for the future.
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