Plan to Perform: An actionable strategic plan helped a start-up soar to hit its goals
Services used in the case study:
Strategy meeting facilitation
Strategic Planning
defining priorities for strategy execution
financial modeling
Budgeting & annual planning
Identification of Business KPIs
incentive plan for management Team
quarterly business ANalysis
CASE STUDY: Facilitating the Development and Implementation of a Strategic Plan for a Start-up Company that Met its Plan Milestones and Goals, including a Successful Monetization Event for its Shareholders.
Situation:
“With the brand new senior management team and host of additional employees, it was extremely important for us to have an effective planning and communication process to make sure that we were as aligned as possible on priorities. Manasi’s customized planning approach accomplished just this, enabling us to hit our goals.”
A medical device start-up company with about $18M in revenue had just completed its Series C financing after facing a tough fund-raising environment in 2009-2010. The financial objective of the company’s CEO and investors was to sustain the company’s double-digit growth trajectory while making it self-sustaining within the next three years. The “ultimate goal” was to take the company public or make it an attractive target for an acquisition at a significant premium. To further this goal, the funds from the Series C were used to build a talented and experienced senior management team, including a CFO, Vice President of Operations, Vice President of Clinical/Medical Affairs, Vice President of Quality/Regulatory Affairs and Vice President of Human Resources. However, this also increased the monthly cash outflow (burn rate) of the company. Additionally, the new management team was energetic, full of ideas and calling for investments in their respective areas. The company’s CEO needed a comprehensive strategic plan that met the investors’ goals, channeled the energy and excitement of his newly formed team, prioritized areas of investment and aligned the growing employee base so that they could focus on execution.
Steps Taken:
NOW-WHERE-HOW Framework:
NOW: This step summarized the state of the company and opportunities based on market trends.
WHERE: This step focused on the future state of the company - including its identity, culture and financial goals - in a defined time frame (three years in this example).
HOW: captured the priorities for execution over the next three years - with emphasis on the first year - and included a top-down budget proposal.
I was tasked by the CEO to facilitate the development and implementation of the strategic plan. At that stage, I had been with the company for a month and was still learning the business and culture. Given that the culture was fast-paced, execution-oriented, and tactical, I needed to provide a simple framework. I chose to use a generic NOW, WHERE, HOW framework not only because it was simple but also action-oriented, easily communicated and understood. Furthermore, its flexibility enabled me to customize it so that critical elements could be discussed and aligned upon.
Success Factors:
Setting expectations: The team was briefed on the entire process so they knew what to expect and what was expected of them at each stage. Also, tangible content from the interactions was presented throughout the process. This sustained the team’s engagement.
What’s in it for me: An incentive plan was put together that aligned the team on executing to the annual objectives outlined in the plan. The plan was designed to ensure that all members of senior management team were significantly yet equally incentivized to meet the company objectives and became an instrumental short-term tool to drive the business forward.
Path to the numbers: The financial planning and analytic activities were integrated into the annual planning process. For this, I worked with the CFO to build the three-year financial plan, the annual budget and all the financial metrics for the company. In the financial planning meetings, we also discussed scenarios and paths to hit the numbers. This was important not only to identify the “priorities for execution” (designed as SMART goals) but also for the psychology of the team, ensuring that the annual financial goals, though challenging, were within reach.
“The planning process that Ms Ramanna developed for us worked extremely well because our financial plans, budgets and metrics were integrated into it. In addition, the financial plans were constructed with clear priorities for execution that had team incentives tied to it. The progress was reviewed on a monthly basis ensuring that we quickly, and in some cases, proactively addressed issues.”
Staying on top of it: Re-visiting and updating the plan annually was pivotal to its success, as was tracking the execution of the plan. My team created and distributed a monthly management package that included financials, a dashboard with key performance metrics and a progress tracker for the “priorities for execution” that included the responsible person. This package was reviewed in monthly management team meetings. It is important to note that the tone of these meetings was collaborative and solution-oriented. The package was also reviewed with the Board and shared with employees on a quarterly basis. This served to drive accountability and ensure any tweaks or contingencies were well communicated.
Speaking the same language: The plan became the foundation for communication to all stakeholders. This highlighted the alignment amongst the management team and inspired employee and shareholder confidence. This was especially crucial as the business and employee base were rapidly growing.
Making the most of the information and resources: While the plan itself was summarized in a few pages, the content generated through the process was re-purposed to create brand plans and functional area plans. In addition, the information was used to market the company, saving both time and money.
Successful Outcome:
The actionable strategic plan served to guide and enable this startup to focus on execution so that at the end of the three years the company met its goals: It reached $114M in revenue, was increasingly profitable and cash generative, and had established its desired identity in the market. It also met its “ultimate goal” and was acquired for $600M two weeks prior to an IPO roadshow.
We can help you too. Please contact: manasi@edge-strategicplanning.com