Annual Planning: Beware of Sharks!

During the journey of implementing EOS in their business, it’s common for my clients to become skilled handling day-to-day issues. Unfortunately, some issues are out of sight like sharks. They’re swimming in the water, and we don’t notice until they bite.

The 2-day Annual Planning session, particularly the SWOT analysis, is critical to preparing for and avoiding these sharks that lurk beneath the surface.

2020-2022 taught us that by thinking about business risk and prioritizing which ones might affect us most, we can be proactive with steps to make our business resilient. In “The Infinite Game”, Simon Sinek says “A stable organization is one that can weather a storm and come out the same as it was before. A resilient organization can use the storm to go faster than ever”.

In the Annual we do a SWOT analysis to evaluate Strengths, Weaknesses, Opportunities and Threats. We use this analysis to smoke out Issues. Business risk “sharks” should be placed in Weaknesses and Threats. Key business risks tend to fall into these categories:

  • Concentration: Sometimes called “single points of failure”. Dependency on one or a small number of customers or technology without backups. Owners and key employees with proprietary knowledge or relationships. Use the Accountability Chart and Delegate and Elevate Tools to identify cross-training and delegation that needs to occur.
  • Supply chain: What materials are vital to continue operations? Do we need secondary vendors or emergency inventory?
  • Employment:  Vacant jobs hurt productivity and increase your costs. Do we have a perpetual recruitment process or a reliable source of labor to replace employees who leave?
  • Strategy (Core Focus): What could make our product or service obsolete due to automation or new competitors? Is our value proposition still sound enough and our marketing strategy effective enough to keep or grow market share?
  • External. Many of these (weather, health, economic cycles) are outside our control, but we can pre-plan if we think they’re likely in the near term.
  • Leverage. Is our business debt sustainable if there’s a downturn? What’s our comfort level in taking on additional loans or raising new capital?
  • Capacity. Optimism about the future can sometimes lead to building capacity of people, infrastructure, equipment, and inventory that can increase costs. Have we modeled both the upside and the downside?

Make your Annual Planning session the anchor of your Meeting Pulse. There, your team can celebrate past successes while having the time and space to consider the future. Taking this time to work “on the business” will help your team identify sharks that might be show-stoppers for the organization. The sharks are “just an Issue”, and ready for the Issues Solving Track (IDS) so that action steps in the form of Rocks can mitigate or prevent these risks from being catastrophic.

Author Ryan Holiday puts it this way: “The problem is that we don’t expect problems”. The EOS Toolbox is a complete set of problem-solving tools designed specifically for entrepreneurial leadership teams. Find out which EOS Tools can help you keep sharks away at www.EOSWorldwide.com.

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