Operational planning for the sales system

Delta Institute Switzerland
The Turbocharger
August 2005
Our website offers information about sales system management (SSM) and about DELTA T-Selling®, the leading methodology in key account sales system management. We update it continuously - adding new links, pointing out new books and events.
With our sales management newsletter THE TURBOCHARGER we inform our subscribers of such updates. We call it THE TURBOCHARGER because SSM, and especially DELTA T-Selling® “turbo charges” sales systems – leading them to outstanding business success.

In this edition …

Operational planning: executing strategy for the sales system

New on our website ...

New presentation SALES SYSTEM MANAGEMENT - for you to download. Questions? We will reply with pleasure.

New additions to our list of recommended books
We found two new books about "globalization" and one "classic" case story on the power of TOC:

Why Globalization Works (Martin Wolf) "Simply the best book on economic globalization (Frankfurter Allgemeine Zeitung)

Global Governance: An Architecture for the World Economy (Horst Siebert) 9 essays by world renowned experts.

Leading the Way to Competitive Excellence : The Harris Mountaintop Case Study (William Levinson) A classic: Turnaround with TOC

News about Delta Institute Switzerland
It's a pleasure to announce that Harley Systems have joined the growing network of associate partners. They are located on the East coast of South Africa, in Botha’s Hill (+- 30 km from Durban (Ethekwini)). Harley Systems started in 1994 focusing on sales and implementation of software for sophisitced simulation models. Since they ahve expanded their offer fousing more and more on Theory of Constraints (Dr. E. Goldratt). Starting early 2005 Richard Smal is now their lead consultant for the DELTA T-Selling methodology.

eMail us - we are looking forward to your ideas, questions and requests

OPERATIONAL PLANNING: EXECUTING STRATEGY FOR THE SALES SYSTEM

THE ECONOMIST recently published an article about the difficulties in project management. June 11, 2005: “Overdue and over budget, over and over again”?). "How can it be", they asked, "that after so many years of developing and using project management methodologies we still see the majority of projects fail to reach their goals and to stay within budgets?"

This question is even more burning when we ask it to strategic projects owned by top management - how come that we suffer a 50% - 70% failure rate in such projects?

Delta Institute has applied "engineering defect tracking" (1) to such projects over several years. Here are some results of our studies:

Top management projects are much more complex and difficult than most of us assume. It seems we grossly underestimate that complexity and difficulty. Therefore we neither spend enough effort in planning nor in leading execution.

Top management projects fail unless top managers continuously keep track and react to the slightest deviation from plan. Delegation kills top management projects.

Top managers have very little freedom to decide how they use their time. If they are very well organized, they can decide for 25% of their capacity what to do. (Example: in a recent interview Marcel Ospel, chairman of the board of UBS recently said in a TV interview that "75% of my available time is determined by other facts, events and people - not me"). If we plug too much into that capacity we will fail to deliver our contribution to success and be the cause for failure of our project.

Top management projects impact the enterprise system as a whole. The methodologies used to plan and lead such projects are often not adequate to the resulting complexity and difficulty of such projects.

Therefore it is extremely important to only focus on the vital top project.

Top management have defined the strategy, written the business plan with a detailed financial plan – now we need to turn the strategy into action. How is this supposed to happen?

Is everyone supposed to read the strategy and decide on their own how they will contribute?

Will everyone align their efforts to everyone else?

How to avoid adding more problems than we solve into our business system?

How will we know that the strategy is being executed?

... is delivering the results it was supposed to?

How will we make sure that we will not fail in execution, like most management projects seem to do? (see

THE SOLUTION

The operational plan is the vital link between strategy and action. It delivers the results of the strategy, by planning and steering the execution to deliver WHAT NEEDS TO BE DONE, BY WHOM, BY WHEN and AT WHICH COST.

OPERATIONAL PLANS MUST DELIVER

Operational plans will deliver - the result expected, on time and within budget - provided they are:

1) Built with rigorous application of systematic methodologies to decide WHAT needs to be done.

2) Built to be "fit for use".

3) Built to address how to lead the plan's emotional domain.

4) Built to be led by a simple clear execution dashboard.

RIGOROUS APPLICATION OF SYSTEMATIC METHODOLOGIES

Many management plans are built using the “BVI Methodology” (brainstorm, vote, implement). In result, these plans are more expressions of the political processes in a business rather than high quality management tools.

The Delta Institute methodology for operational planning is based on deep understanding of the business system which is expected to deliver the strategic results. Also, it is submitted to rigorous logical testing before being released for implementation. To do so, Delta Institute uses the power of TOC (Goldratts theory of constraints), which has been used by leading organizations since years to achieve superior results.

FIT FOR USE

Operational plans are the prime “product” of line management. Like all products, they must be fit for execution. It must not contain features that will cause problems in the execution phase. - Delta Institute’s Management Project Defect Tracking (1) studies have surfaced the key attributes of “fitness for execution” of operational plans:

Commitment: Weak reliability is the dominant cause for not achieving the goal of any management project. Operational plans must strictly be driven by correctly formulated commitments.

Alignment: “Classical” structured planning (like, for instance, HOSHIN) often leads to inter-department conflict and sub optimization. Operational plans must align the commitments perfectly.

Focus: More than one goal and any other than the “vital few” commitments waste organization’s effort. They are also the source for defocusing and sub optimization during execution. Operational plans must be designed towards one single goal and be limited to the absolutely necessary “vital few” commitments”.

Clarity: Voluminous plans fail to deliver. Operational plans must be crisp and clear. Delta Institute’s methodology uses “one page operational plans”, even for the most ambitious goals.

With best regards,

Dieter Legat

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(1) Engineering Defect Tracking is a methodology aiming at reducing errors in engineering projects. It observes defects during execution of such projects, relates them back to where they could have been prevented, and adds a rule at that “point of prevention” into the engineering process instructions. Delta Institute applied the same approach for several years to management projects, whose purpose we consider to be “to engineer a better company”.