Monday, April 2, 2012

Reviewing the Performance of Your Business Units

By Virgil Carter
Most non-profit organizations consist of a number of important business units that contribute to the profession’s or industry’s body of knowledge, and provide the knowledge-based goods and services that drive the organization.  How does one include review and planning for these key units of the organization?

Authors Renee Dye and Olivier Sibony offer these guidelines in their recent article, “How to Improve Strategic Planning”, published in a recent McKinsey Quarterly:

·         Are major trends and changes in your business unit’s environment affecting your strategic plan? Specifically, what potential developments in customer demand, technology, or the regulatory environment could have enough impact on the industry to change the entire plan?

·         How and why is this plan different from last year’s?

·         What were your forecasts for market growth, sales, and profitability last year, two years ago, and three years ago? How right or wrong were they? What did the business unit learn from those experiences?

·         What would it take to double your business unit’s growth rate and profits? Where will growth come from: expansion or gains in market share?

·         If your business unit plans to take market share from competitors, how will it do so, and how will they respond? Are you counting on a strategic advantage or superior execution?

·         What are your business unit’s distinctive competitive strengths, and how does the plan build on them?

·         How different is the strategy from those of competitors, and why? Is that a good or a bad thing?

·         Beyond the immediate planning cycle, what are the key issues, risks, and opportunities that we should discuss today?

·         What would a private-equity owner do with this business?

·         How will the business unit monitor the execution of this strategy?

 All too often, the business units of many non-profit organizations are left on their own, with the result that the units may simply evolve to doing “what they like to do”, as opposed to focusing on their markets and the changes/opportunities that take place.  In such cases, it’s not unusual for these types of business units to “always do what they’ve always done”, with little concern for their markets.  How do you review and plan for your key business units?

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