What is a Game Plan and Why Does Every Company Need One?

Why do so many companies fail, even with what look like terrific business plans? I think the answer is three-fold:

1. They have leaders who aren’t willing or able to lead
2. Employees are disconnected from the purpose and direction of the company
3. They don’t have specific plans of action based on the reality of today and the vision for tomorrow

Why A Game Plan?

Business plans aren’t enough. Each company needs a game plan.

A business plan is like a brochure – all sales pitch and no hard reality. Your business plan may create investor support, but be careful not to believe your own advertising. And it isn’t specific enough. A game plan is like an instruction manual of how to meet the company objectives.

Here’s an example of what I mean:

The CEO takes a look at his balance sheet and decides that his company has too much of its cash tied up in inventory, so he gets his managers together and creates a new corporate objective for the year - to reduce inventory by 25%. If they do that they will all be entitled to a bonus. The managers aren’t stupid – they know the only way to reduce inventory is to sell what they can and not replace it. So they put on a special promotion for their hottest selling items, they reduce the inventory of those to almost nothing, and they get their bonus. But what has really happened here. The CEO’s company is now left with the inventory of the items that weren’t selling, and they don’t have adequate inventory of their best selling items. The CEO didn’t really lead, the employees cared more about their bonuses than doing what was right for the company, and there wasn’t a plan of action that was tied into a meaningful company objective.

Let’s look at another example:

A company’s sales have been flat for two quarters. Expenses continue to increase, flat sales, profits decreasing. The CEO, worried about the course of events, decides that if sales are flat, then they must not be able to sell any more volume to existing customers, so they need lots of new customers. So he sets a new corporate objective – increase revenue with new customers by 50%. The sales manager will be paid a bonus for doing that. The sales manager, after some thought, decides the best way to do this would be to set up an incentive plan for the salespeople. Instead of 12% on any sale, now the commission plan will be 15% for new customer sales, and 10% on repeat business from existing customers. The plan works, because new customer sales are up by 80% and the sales manager gets his bonus, and the salespeople are happy with their additional commissions. But again, what has really happened here. The company lost their most profitable repeat customers due to neglect, and their profits plummeted. The new sales were more expensive to make so expenses went up, and many of those first time buyers never bought again. And again, the CEO didn’t really lead, the employees cared more about their bonuses than doing what was right for the company, and there wasn’t a plan of action that was tied into a meaningful company objective.

The answer is appropriate leadership, which seeks to link company objectives to the work that is being done by each employee each day, using a meaningful game plan. Let’s talk about each of these in turn:

1. Leadership. The essence of leadership is finding a purpose, and communicating that purpose in a way that creates trust, connection, and willingness to follow. Great leaders are mature as people. They see the long term, and they know their every action is scrutinized by their employees to see if it increases trust or decreases trust. Game plans are only effective if the CEO is a leader, and not a manager using this as one more tool for control. Game plans allow for decentralized decision-making at a high level, for every employee.

2. Employee Connection. According to recent studies, only half of employees see any connection between their jobs and their company’s objectives. The job of the leader is to create these links and keep the connection going through constant reinforcing messages.

3. Game Plan. The process that can be used to bridge the connection between company objectives and an individuals’ work is a game plan. A game plan focuses on these things: creating big goals that matter, giving individual employees responsibility to carry out their portion of those goals, creating a budget and a reward system that supports the goals, and tools to allow employees to measure their own progress.

Steps in the Game Plan Process

The game plan requires a series of steps, beginning with the CEO really getting in touch with what he or she wants for the business. Then, a team of people must delve into what is real for the business today – understanding the business model (how the company makes money), having a handle on what is happening in the market, and finally, knowing what is happening in the company culture. With all this background work done, the actual creation of the game plan begins. At best, it is a facilitated process of discussions matching what is real today with what is possible tomorrow, in the long run and in the short run.

A game plan only looks out a year at most, but within the context of a much longer period of time. The company might decide where they want to be in five years – the game plan is just the next series of steps toward that longer-term goal. There is no point in setting objectives for which there aren’t adequate resources, so objectives and budget need to be discussed in tandem. Another challenge of the game planning process is the adequately define success in each objective and decide how measurements will take place.

This is a time for healthy argument as sales wants more resources to increase revenue, product development wants more of the objectives to be toward R&D for the company’s future, and the operations manager wants more staff to improve quality. This is also the time for managers to consider the implications for all the decisions. And it is the time for the CEO to create a connection between the objectives and each of the managers so that there is personal commitment to the success of the company. If managers are not committed, they will never be able to expect commitment from other employees.

Making Objectives Real

When the company objectives and budget are ironed out, the game plan is only half completed. The second series of steps has to do with taking objectives made at a company and department level, and creating specific action items for each employee that support the department and then company objectives. Just as the CEO and the managers hashed out the process of give and take between what is today and where they would like to be tomorrow, each manager must go through the same process with the departments’ employees. Each employee must have a series of actions, but most importantly, each employee should know how to find a measurement for their progress at any time they wish to check it.

For instance, if the objectives for a customer service employee are to keep call length to an average of 2 minutes, have sales of an average of $50 per customer who calls, and to return all calls within 24 hours, then you want that employee to be able to find the measurements for those objectives as often as he or she wishes. The measurement and their source must be the same as for the manager who will be reviewing the progress of that employee. The goal is always that the employees have access to just as much information about their performance as the manager. An employee who can assess his or her own progress real-time will correct performance deficiencies without a manager’s insistence.

The final piece is in the constant communication about the plan to the employees. The game plan is not only communicated initially, it must be kept alive throughout the year with meetings focused on measuring progress toward the goals. Successes should be celebrated frequently.

In my own company, we used something we called a Game Plan Circle to illustrate our plan each year. It served as a visual we could refer to in each meeting. It also illustrates our process from vision to individual action plans.

The Bottom Line

A business plan is a great first step in starting or fundamentally changing a business. The next step is a game plan – a translation of that business plan to each employee’s actions every day. Courageous leadership and a strong communications plan are the other elements for long-term business success.