In my capacity as a business and sports coach, I have used reverse engineering successfully in so many different situations.
Whilst the concept itself is really simple, the work behind the scenes and monitoring are critical to the eventual outcome. Reverse engineering is part of an overall strategic planning review. Before jumping in and explaining more about reverse engineering and how to use it in your business, let’s take a moment to discuss strategic planning.
Every business should undertake strategic planning once a year. The process helps you to evaluate your business, its resources, its markets, its customers and most importantly its direction. What does the business really portray itself as? How does it do this and should it continue doing this? The process helps you reassess your markets, products and/or services to understand whether what you sell is the right fit for your market.
Of course, there are many very difficult questions which must be asked. The truth is the more difficult the question the better the answer, even if it’s not what you really wanted to hear. Sometimes, gut instinct is the key driver, taking into consideration your experience in a particular market/industry and your ability to read where the industry is moving. The big issue then is whether you will be a leader in this changing market or simply a follower.
Strategic planning helps you fully understand, answer and document these three main questions:
1) Where are we now?
2) Where are we going?
3) How will we get there?
Reverse engineering is a process that is used once we understand the answers to questions two and three.
Let’s look at an example…
Let’s say you have achieved sales of £1 million this year and you’ve had a good, solid year. Whilst it would be easy to rest on your laurels and hope you achieve the same success next year, this would be a high-risk and perhaps foolish strategy. Markets are changing rapidly these days and businesses are under threat not just from home competition but also international competitors too. The internet has created a new market and it is still growing. This is both a threat and an opportunity.
Back to our example…
The business does not have a strong online presence and does not use social media even though its target market could easily be reached using these services.
The business also decides to add a few products to its current range to stay in line with market trends and sets an aggressive sales target of £1.5 million for the year – a 50% increase.
Of course, the question now is how are they going to achieve this? Here’s where reverse engineering works…
We now know that the end target is £1.5 million in sales. We also know the make-up of this figure in terms of different products, including the new products to be introduced throughout the year. With this information we ask the question, what must the business look like in 11 months to be on track to achieve the annual target? We track this back in terms of sales performance, products/units sold, places we are marketing/advertising in, the structure of the office in order to be able to deliver these products (this includes number of staff in each department).
Having analyzed the estimated data, we then look at 9 months, six months, three months. Of course this is a lot of estimated data. We then spend more time looking at the first quarter of the year. At this point we need to understand exactly what has to happen in this period to get the business on track. After all, failing or surpassing expectations here completely changes the year-end results. This is where the detail planning, strategic goals and objectives must be focused. It is important to document and understand who is going to complete what task and by when, together with the desired outcomes.
The key to success is in the detail…
This now drives different levels of activity in the business, maybe resulting in members of your team carrying out different or additional roles/responsibilities in order to push the business towards these goals.
Tasks are broken down into daily, weekly and monthly activity and monitored. The role of the Managing Director or managers is to monitor frequently, freeing up their time to complete tasks they are accountable for and also to ensure they provide support to their team to complete their tasks on time.
It is always recommended that weekly meetings are held to drive the business forwards without allowing tasks to be incomplete by deadline dates unless there’s a good reason. Meetings do not have to be long but they need to be thorough. If a member of the team is missing targets frequently, these meetings will highlight this and allow somebody to provide help where required to get the tasks completed on time.
Whilst certain targets cannot be set in stone due to the nature of business, it is important to recognize the potential consequences of failing to meet targets, even if there are good reasons which could not have been anticipated at the annual strategic planning meeting. If you consider a ship leaving harbour. If it is one degree off course, unless corrections are made on the journey, the ship will never reach its desired location. The further it travels the more off course it will become, which could result in being hundreds of miles adrift of its target. The same can be said for your business and that’s why weekly, monthly, quarterly and half yearly monitoring are essential.
Summary
I began this article explaining that reverse engineering is a successful process. However, it needs key data and key milestones to make the process work. It’s amazing how few businesses ever undertake planning like this and yet they have big ideas and dreams regarding their success.
As with most things in life, if you are going to do a job, do it to the best of your ability. Use a tried and tested process which provides you with the structure and means to change your business forever. Once done, you will revisit this process annually, which in turn will continue to drive your business forward and create a solid, highly profitable enterprise, providing an abundance of rewards and riches for you.
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