By Alexandre Ribas, partner at FALCONI
The constant advances in technology and changes in social relations have in recent years carved out a new profile for our consumers. Access to e-commerce, online reviews of products, comparative prices and company reviews have generated a much more informed and more critical consumer. This context serves only to further increase the challenges of a sector that is already highly competitive and notoriously characterized by low margins, such as retail.
So what should we do to overcome these challenges, to continue to make our businesses grow their profitably in a sustainable manner? In theory, the recipe is simple: we need the right goals, a good action plan and discipline to transform this action plan into reality. These pillars are the essence of what we call method.
The right goals!
In order to have the right goals, we first need to better understand our organization. It is important to understand the chain of value in the business and the processes that it is made up of. With this understanding and based on the established strategy, we can define and deploy the correct indicators for each area of the company, always seeking to maintain the cause and effect relationship between the indicators in each management level, that is, the sum of the results of the indicators on the supervision level should be equal to the result of the management level and so on.
It is not uncommon to find companies where supervisors reach their goals and the manager do not reach theirs. This indicates that the development was poorly done or that the indicators were defined incorrectly. Once we have the right indicators deployed to all levels of the company we need to open what we call gaps.
A gap is the difference between your current results for the best known value, be it from a competitor, something that you’ve done in the past or even a theoretical reference. For each indicator prioritized in the company, a gap must be opened. This is a technical process, which will require a lot of analysis from your team. A good gap is a key element of a good goal, because it will show that it is feasible. Once the gaps are opened, the next step is to define how it will be captured, based on available resources: time, investment and dedicated people. It is worth remembering that the percentage of the gap to be captured should be challenging and promote the need to acquire new knowledge to get there. Therefore with the right indicators, aligned and deployed, good gaps and good challenges to capture them, we can say that we have the right goals.
A good action plan
It is common to say that a good action plan is one that attacks the root causes of a problem. Okay, this really is a fact, but how can we get to the root causes? Similarly as a lot of analysis is required to open a gap, it is also necessary to find the cause of problems that should be addressed in an action plan.
This analysis should focus on business processes, where we need to understand the flow of activities, the structure and division of work, the people and their skills, as well as the technological tools available. It is in these variables that we find the causes, or structures, which prevent us from achieving new heights in results. The success of our action plan depends on how deep we went in these analyzes. Once we have mapped and prioritized the causes, we need to define what the best action to take is. Remember that, as with everything it requires resources (not always financial, sometimes only time) and it is important to prioritize actions to bring more return and require fewer resources, and as a result it will address the rest according to the business strategy, to ensure that actions are sufficient to achieve the set goal.
We cannot forget that for every action we must scale a person responsible and have a clear time frame for its completion. These are the elements that have a consistent plan of action.
We often find that the role of some good action plans comes down to decorating the drawers of managers, therefore, all the effort expended to set the right goal and good planning will be for nothing if the actions are not implemented! The watchword to ensure the implementation of the action plans is discipline. To ensure discipline, it is important to structure a system of weekly evaluation of the implementation of actions. This system need not be complex and should not encumber existing routines, but should promote constant reflection on if what was planned is being done and whether the expected results are actually occurring, and in the case of failure new actions must be proposed.
All concepts placed here are simple and have a great power to generate sustainable results. However, for this to happen, you must put them into practice at all levels of the organization and every day.
Practice makes perfect in the execution of the method, making the company capable of solving more complex problems and ready for even greater challenges to come.
Text featured in the october edition of the magazine Super Varejo.