Given the pace of change and other challenges businesses face today, it's no surprise that many organizations of all sizes and scope lack a long-term plan.
Businesses that plan for growth might look a few years years down the road. And although that seems like a good idea, even just a few years can be too long to be able to predict the future with any accuracy. At the same time, the consequences of “flying blind" without a plan can be disastrous, especially when companies are growing rapidly. Product development may drift, priorities quickly become reactive, a lot of time is wasted while different teams argue their points of view and people quickly lose a sense of purpose in their day-to-day jobs.
So how can a leader provide the vision and blueprint for long-term success, while still empowering employees to act nimbly and effectively?
Our long-term plan is called our Manifesto; it's the way we plan and communicate our shared vision and collective goals. Whatever you choose to call your plan, it's going to take a lot of work, will impact every one of your employees and stakeholders and has to provide long-term vision and direction, while still holding those employees and other stakeholders accountable in their daily work lives. To that end, we feel it is critical that our leadership, including our board, all sign off publicly on the plan. Our Manifesto is the first document an employee gets and the signed version is prominently on display for everybody to see. In addition, every board member brings it to our board meeting as a guiding document.
A good plan starts with stakeholder involvement, since diverse opinions will help you describe why you are in business, where you are now and where you want to be in five, 10 and even 15 years. At Avalara, our vision and mission have remained the same for the last 12 years, but our Manifesto is focused on a five-year “season" or time horizon; we call our most current season "Mission2Mars" because it's bold, exciting and daunting! It reiterates our mission and our purpose, outlines our guiding principles, strategies and a framework for how to measure success.
We chose the five-year timeframe because it's long enough to force us to think seriously and make the tough choices, yet short enough to incorporate quantifiable, achievable goals. Regardless of its timeframe, if done correctly, a long-term plan can identify problems and opportunities and define a vision for success. Stakeholder involvement can build internal cohesion, commitment, enthusiasm and the willingness needed to meet changing business conditions.
Sure, planning takes time and focus—but it can be worth it. Here are my recommendations for how to create your own plan:
State your mission.
A mission articulates a company's reason for being and can serve as a public declaration of its objectives and commitments. Avalara has had the same consistent vision, mission and purpose since the company's founding in 2004. Business-tax compliance is staggeringly complicated and wasteful, and our mission is to solve those problems for customers so that they can get back to their core business. Our vision is to be a part of every indirect tax transaction in the world—surely a bold one—and we have concrete success metrics that define our revenues, number of customers and other measures that enable us to envision what success looks like in five years' time.
Remember, guiding principles guide your decisions.
Another crucial element of any plan is the “how"—how a company intends to achieve its goals. In Avalara's Manifesto, our guiding principles empower employees to act rapidly yet with consistency, regardless of their role or location in the company. While founded in Seattle, today, Avalara is a distributed company with employees all over the globe. Faced with challenging or confusing decisions, employees use our guiding principles in their everyday work lives, meetings, tasks and internal and external conversations. Guiding principles help employees create the steps along pathway to long-term success. Our guiding principles are simple, but powerful:
- We fight every day to protect and accelerate our market leadership.
- We live by the Cult of the Customer (a commitment to define and meet our service standards).
- Our success depends on investing in, empowering and supporting our partners (our primary means to go to market).
- Inertia is our enemy (we recognize the need to adapt continuously).
- Our prime directive is growth while constantly improving business efficiency.
- Technology is our DNA; we want to automate everything.
- We will accelerate our leadership via acquisitions.
- We continually work to squeeze out risks in our business.
- We attract and retain the best employees.
- The “Power of Orange" is a lasting legacy: We are all Avalara brand ambassadors.
These are simple precepts, but they're essential to informing our innovation, investments, resource allocation and our sales-and-marketing initiatives.
Develop and nurture a strong culture.
Sadly, many plans lack the heart or human element to an enterprise. But culture, or human behavior, is ultimately a key ingredient to driving success. The faster your growth, the more important it can become to hire and retain the people you can entrust to achieve big goals. Fostering their success means building and supporting a culture that's aligned with your plan. Avalara's culture is the “Power of Orange," our shorthand phrase to describe crucial success traits we use in hiring, managing and retaining employees. These traits include optimism, passion, adaptability, humility, fun, ownership, curiosity, urgency and simplicity.
Measure your progress.
Successful businesses operate not on feelings or intuition, but on facts and numbers. That's why long-term planning should be anchored in accurate and up-to-date metrics. Good managers internalize their metrics, continuously use them in daily decision-making and feed performance insights back into their teams. That's how high-performing companies maximize business value.
Depending on your organization, there are a number of metrics that should be tracked and analyzed. The most common ones include sales and revenue, costs by various categories, gross margins, customer retention, inventory and labor and operating productivity.
By charting and reviewing key performance indicators (KPIs) on a regular basis, leaders can realistically measure their progress, or lack of it, against their strategic business goals.
Take the time to do it right.
Yes, planning takes time and effort, but it's the only way to know where you are, where you want to go and how to get there. For companies that aspire to substantial growth and profitability, today and into the future, long-term growth planning may be your best business investment.