Leadership teams that are on track to reach their potential to perform and grow have:

• A written, board-approved financial plan that shows revenue, direct costs, gross margin, indirect costs by function (e.g., marketing, sales, HR, R&D, etc.), and operating profit (i.e., EBITDA), by month and quarter for the year. Approved financial plans tend to have the following characteristics:
  • Smooth (or otherwise rational) ramp-up (or down) of revenue and costs from the prior year closing month and quarter.
  • Generally upward-trending scale (i.e., ever bigger and better).
  • A 75% chance of being achieved by the in-place team with roughly 2/3 of planned revenue either booked or highly-probable (B&HP) and a highly-qualified pipeline of prospective, current year, revenue equal to three times the gap between B&HP and Plan (and not all in the last quarter or two!).
  • Identified upside-downside potential with mitigation strategies on the downside and what will be done to take full advantage of any upside.
  • Assumptions and triggers that explain what has to happen for planned results to occur and for planned expenses to be made.

• An operating plan that covers:
  • Whose problem the organization solves, how it solves it, and how well compared to peers, prior years and plans.
  • A labor plan including sourcing, developing, managing, and deploying personnel consistent with the financial plan.
  • A market description and market development plan.
  • A product (or equivalent) development road-map.
  • Do-Sell-Grow systems of operations and governance.
  • Three-to-seven initiatives to improve performance and drive growth; including who will lead each and the associated budget, work-plan, targeted results, metrics of performance, and communications plan.

• A leadership team of from 3 to 7 who:
  • Are clear about who the team counts on for what (i.e., leadership roles and performance goals).
  • Are driven to achieve or exceed plan by an incentive program.
  • Routinely share with each other what is working and what each can do to improve.

• A track record of consistently achieving planned performance.

SEE ALSO

Executive Incentive Compensation Programs

Solution Development Framework

Account Development

Sample Operating Framework

Revenue Projections