In the business world, a pressure test is a rigorous evaluation process designed to assess a company's resilience, adaptability, and efficiency or a specific strategy under challenging conditions. This process involves simulating scenarios that could potentially impact the organization, such as market fluctuations, economic downturns, or increased competition. By exposing the company or its strategies to these simulated stressors, decision-makers can identify potential weaknesses, areas of improvement and gauge the overall robustness of their operations. Ultimately, pressure testing allows businesses to make more informed decisions, optimize their performance, and enhance their ability to withstand real-world challenges, ensuring their long-term success and sustainability
Once you've worked hard to assemble a strategic annual plan, how do you pressure test it to feel confident before sharing it with your company and key external stakeholders? Leaders likely feel more uncertain than usual this year, considering many of us proudly shared plans only to have them thrown out the window due to changing market conditions (or a pandemic?).
Stress Test Your Annual Plan
- Does your plan help you achieve your company's financial goals? You need to be sure the activities you are committing to for the next year will generate enough profit and revenue to keep your business running.
- Have you budgeted for the right resources to make your initiatives successful? Ensure you don't create your financial and execution plans in silos; the two processes should be iterative and integrated so that you have budgeted for the right people and resources to achieve your plan.
- Do you have a plan B for hitting your financial plan? Plan for various scenarios: How will you continue to be healthy financially if there are more shutdowns or if you lose a key customer?
Have you defined a clear focus to grow and improve the business? Have a clearly stated theme or the main thing that your whole company can easily remember and rally around.
Do you have too many priorities? We've seen time and again that when companies have more than 3-5 priorities for the year, they achieve fewer of them than when they settle on a tight list of top initiatives. In an uncertain environment, it is even more important to have fewer priorities so you can save some energy for handling unexpected events.
- Are your team's priorities connected to your top initiatives for the company? Simply put, are individuals and departments working on the right things to move the company's plan forward? Is there anything in left field, or do the plans align with the company's goals?
- Do you have enough people working on your top priorities? Make sure you have enough energy - teams, resources, time - behind the top initiatives for the company.
- Is anyone overloaded? If you've got departments or individuals with long priority lists that would be impossible to achieve, address it now. Deal with resource dependencies and overloaded team members upfront so you don't burn out the team and find out later that your priorities just weren’t realistic.
- Do you know who owns each of your goals in the plan? Every goal in your plan should have one clear owner. You may have many team members working on a goal, but there should be one person who is ultimately accountable for getting it done.
- Does your plan have clear success criteria for all your priorities? Each of your goals should also have clear criteria defining what a successful outcome looks like. Without a vivid picture of success and failure on each, you risk having teams work hard on the wrong thing.
Run your plan through this list, and see where you may have vulnerabilities. Don't risk investing in a plan that's destined to fail. Your resources are too precious at this point to do that. Have confidence in your plan by ensuring you meet your financial goals, focusing everyone on the right priorities, marshaling resources and energy around the top items to achieve, and providing clarity and accountability for achieving results.
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Photo credit: iStock by Getty Images
Photo Credit: iStock by Getty Images