Critical Things in Getting Financing Through Successful Business Implementation
Business is a complex undertaking. It is difficult enough develop a compelling business strategy, target customers desirous of your offering, employ a competitive operating model, and choose the right leadership team. Beyond these you must get financing; sometimes for expansion or to just keep the wheels turning.
Whether you’ve been operating for sixty days or sixty years, financiers are looking beyond your vision, mission, and business plan. They want to see two things: results and a process for keeping those results coming. If you have been struggling with results lately, then they want even more, to see a process that can assure or increase the likelihood of results.
You can do this by demonstrating that your business implementation process is solid, proven, and repeatable. Your process needs to show that you are in command of four critical pieces of the business implementation puzzle: a clear strategy tree, effectively cascaded goals, action plans for every goal, and a process of accountability for every action. This might sound like a lot, but it is actually pretty straightforward. More importantly, to the ears of investors, it sounds like a company worth betting on.
1. The Strategy Tree
Since your organization’s strategy should be focused on the fulfillment of your vision; each of your strategic initiatives should align with that vision and collectively achieve it. There is a principle advocated by many consultant firms, McKinsey & Co. principal among them, that strategy trees be MECE: mutually exclusive and collectively exhaustive. This accomplishes many things at once. It allows you to organize your resources along parallel efforts, thus getting more done faster, with less conflict and confusion. Secondly, it enables investors to grasp each initiative separately. Thus, while mutually reinforcing, if one initiative seems weak, it is only one leg of a many-legged stool.
2. Cascaded SMART Goals
The strategic initiatives need to be translated into goals for individuals and their functions/departments. These in turn are distributed amongst the direct reports of the layer below as their objectives. The accumulation of deliverables of subordinates reporting to a boss, should exceed 80% of the boss’s goals. If not, that needs to be fixed. We have all heard that goals should be SMART (specific, measurable, aligned, realistic, and time-bound). Showing that you are executing this consistently can be quite impressive. It is even more impressive when you apply the best practice of measuring goals with missed, met, and exceeded criteria. This shows realism in your understanding of business variability and in people’s motivation. Setting stretch goals and declaring failure when missing them by a small amount, can be demoralizing. Having a range for success (met), keeps everyone in the game and protects you during reviews.
3. Effective Action Planning
Investors know that nobody can really “do” a goal, because goals are the end-states that result from executing action plans. An effective action plan requires start and end dates, and the name of someone responsible for each action step. The timing of each step is critically important. No step should take longer than one month to complete. If it does, break it down into smaller steps. Some clients review weekly steps. If every goal has an action plan, then using the above criteria, investors will recognize that you are on top of your company. You know what actions will result in goal achievement and ultimately the strategic initiatives.
4. Accountability Tracking
The only remaining challenge is knowing with certainty, that people are routinely being held accountable for results. If the progress of each employee is being reviewed and recorded at least monthly, and they are being asked about the completion of each action step due that month, then investors will be more willing to part with precious capital. In summary, investors want assurance of a return on their money. You don’t need to go to them with just promises. You can go with the two things they need to see: results and a process that assures their continuity. Sharing with them, a formal process to do just that, will make them think that your company, is the better bet.
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