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“Relentless Progression” or Staying In Cruise Control?

June 22nd, 2012

     In continuing the theme of my last post, I can’t help but reinforce the theme of relentless progression. As it relates to my day-to-day professional endeavors, I really don’t see much of a divergence from what I do in the office versus the activities that I pursue personally. For those that know me, cycling is a passion that gives me a balance, but one I pursue with a laser focus. Don’t get me wrong, I love getting out on PCH in the mornings and just going for a “ride”, but at the end of the day I’m recording and monitoring my wattage, heart rate, caloric burn, and how that ride fits into my longer term training plan. There is nothing about my execution that doesn’t fit into a longer term plan.

     That same approach is what I carry into the office on a daily basis. Yes, time is spent developing the Quarterly and Annual Budget, but that is merely a point in time and really doesn’t address the executional aspect of achieving the plan. Nor should the Budget be viewed as another exercise or used as a set of bookends at the end of the day. It’s essentially the promise you’re making to your employees and key stakeholders on what will be delivered. There’s no doubt that we all have to deal with dynamic environments that will lead to a drift in the plan, but ultimately, it’s the execution on multiple fronts that will allow you to respond and ultimately deliver a bottom line result that is in line with expectations.

Drift? Why don’t you just anticipate the drift in your planning process? I have yet to meet a colleague that has the perfect crystal ball. One of my favorite examples of the drift process is a 5-year Plan that we had worked through, and ultimately approved by the Board, during the time I was at Pacific Sunwear. We outlined the obvious elements of revenue, margin, expenses, capital expenditures, store growth, along with every other key item. It was really a very detailed plan. Keep in mind that this was the Summer of 2001. Two months later we had the unthinkable events of the September-11, combined with a recession. Only a few months after we had the plan approved….MAJOR drift.

     The drift can be an entire market, a specific customer, or the cost of your inputs in the supply chain, but the ultimate question is whether you have the ability to quickly respond and mitigate the risk. For me personally, the drift might be a bad night of sleep, a week of sickness, or work commitments that conflict with my training plan. It’s being able to respond and keep a definitive focus on the end goal and achieve that goal.

     What have you done to maintain control on your operating expenses and pull back where necessary?

     Are you clear about ALL the contributing elements to your margin and where you can adjust?

     What have you done to ensure you’re carrying proper inventory levels to take advantage of opportunities, but not leave yourself exposed to additional reserves?

     What have you done to ensure you haven’t created too narrow a range in your supply chain that you can’t respond to significant changes?

It’s all in the day-to-day execution….

Thanks for reading…

Jeffrey Ishmael

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