Industrial Automation Companies

Strategic Planning

Posted on September 15, 2021 by

Clayton & Mckervey

Clayton & McKervey

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The Sound of Automation

In this episode of The Sound of Automation podcast, we sit down with Clayton & McKervey Industrial Automation leader Tim Finerty to discuss strategic planning. Learn how to get this process started and how to use your company’s strategic plan to help run your business day-to-day. Tim and Bryan talk about the importance of starting the process now, taking it slow, and putting the right team in place to help you establish and stick to your vision.

Podcast Transcript

Announcer:

Welcome to the Sound of Automation brought to you by Clayton & McKervey CPAs for growth-driven businesses.

Denise Asker, Director of Mkt. & Practice Growth:

Hey, Bryan.

Bryan Powrozek, Sr. Manager Industrial Automation:

Denise.

Denise Asker:

Good to see you.

Bryan Powrozek:

Good to see you as well.

Denise Asker:

Yeah. So, today you’re talking about one of my favorite topics-

Bryan Powrozek:

Me?

Denise Asker:

… strategic planning. And you.

Bryan Powrozek:

Okay.

Denise Asker:

And you. Strategic planning, so who you’re bringing on today?

Bryan Powrozek:

I’m bringing in Tim Finerty, the head of our industrial automation practice. Tim had the opportunity to, over the course of his career, work with numbers of different types of businesses, but particularly here over the last five, six years or so working with system integrators, industrial automation companies, and really help them kind of take their businesses to the next level.

Denise Asker:

Sure.

Bryan Powrozek:

So, it’s got a lot of good insights on the strategic planning process.

Denise Asker:

Good. Well, back in the day, we used to sit around and agonize over this strategic plan that would sit on a shelf and be implemented over the course of one or more years. It’s been encouraging to see the trend towards agile planning.

Bryan Powrozek:

Yup.

Denise Asker:

Is that something that you’ll talk about today?

Bryan Powrozek:

Yeah. I think it ties right in with kind of what the pandemic has forced everybody into, right?

Denise Asker:

Mm-hmm (affirmative).

Bryan Powrozek:

I feel bad for anybody who set their strategic plan January 1 of 2020 because it immediately went out the window a month and a half later.

Denise Asker:

Sure.

Bryan Powrozek:

So, but that doesn’t mean the process is useless and you shouldn’t go through it, right?

Denise Asker:

Mm-hmm (affirmative).

Bryan Powrozek:

It’s just accepting and, really to some extent, business owners always should have had that. You bring up agile when you go back to the old historical waterfall model of development.

Denise Asker:

Mm-hmm (affirmative).

Bryan Powrozek:

You do A to B to C to D to E and then you get to E and really realized you needed to go to Z.

Denise Asker:

Right.

Bryan Powrozek:

And so now you did all these steps that you probably could have done differently if you had thought about it.

Denise Asker:

Would have seemed it. Yeah.

Bryan Powrozek:

So, accepting that there’s going to be contingencies, there’s going to be changes. Let’s take in, adjust our strategy on the fly versus going down this path-

Denise Asker:

Being so committed.

Bryan Powrozek:

… just because we set this and we’re not going to touch it again for 12 months.

Denise Asker:

Yeah.

Bryan Powrozek:

So yeah, I think, we’ll hit on a little bit of that today.

Denise Asker:

Sounds good. Looking forward to it.

Bryan Powrozek:

All right. Thanks, Denise. Hello and welcome to the sound of automation podcast with me, again, here today is Tim Finerty. Tim, how’s everything going?

Tim Finerty, Shareholder, Industrial Automation:

Great. Happy to be back again.

Bryan Powrozek:

Excellent. Excellent. All right. So today, we’re going to take a little departure. We’re not going to look at the economics of things but we’re going to talk more on strategic planning, right? I think one thing a lot of companies have learned through the pandemic was that having a plan… I think most business owners have some plan of what they want to do but all of the uncertainty and the challenges around the pandemic really kind of reinforce the importance of having a strategic plan, maintaining it, updating it. So today, just looking to kind of get some of your thoughts particularly focused on kind of the smaller business owners who may not have much of a strategic plan or maybe they started one but it kind of fell off. So as you’re thinking about that, what’s some advice that you might have for a business owner trying to get this process started?

Tim Finerty:

Take it slow. Don’t just jump into it and say, “Oh, I got to do this. I got to do this.” Right?

Bryan Powrozek:

Yeah.

Tim Finerty:

If you’re thinking about a strategic plan, that’s a good thing, right? Now, there’s a lot of different ways to go about doing it, right? There’s things out there called the EOS system, which is the entrepreneurial operational system, right? That a lot of people talk about now. There’s the big thing out there, BHAG, right? Your Big Hairy Audacious Goal, right?

Bryan Powrozek:

Yup.

Tim Finerty:

That’s part of the EOS system but Jim Collins’s Good to Great kind of started that, right? And really thinking about it of who are the people in your company as well that should be part of that process, right? Not everybody’s going to be part of that process, right?

Bryan Powrozek:

Right.

Tim Finerty:

You’re looking at the people that you really want to help you grow in the future and consider your A-players. And maybe some of the smaller businesses have three or four partners, right? It could just be those people and maybe one other person but you probably also should think about getting someone else to help you through that, right? There’s EOS expert, there’s also your other advisors that can do that, even people in your own peer groups could help you through that process, right? They have an outside thinking that doesn’t have all the internal bad habits, let’s just call them. And they’re not always bad habits but you’re in the weeds of your own company, right?

Bryan Powrozek:

Right.

Tim Finerty:

And so, therefore, someone else coming in can help pull you back.

Bryan Powrozek:

Right.

Tim Finerty:

And then I think you need to really understand each person… You got to have those conversations of what are each person’s strengths and weaknesses, right?

Bryan Powrozek:

Mm-hmm (affirmative).

Tim Finerty:

Because if you don’t do that, you might put the wrong person in charge of handling the strategic planning process, right?

Bryan Powrozek:

Sure.

Tim Finerty:

You think about the EOS system a little bit and you talk about the visionary and the implementers, right?

Bryan Powrozek:

Mm-hmm (affirmative).

Tim Finerty:

And not everybody is going to be the visionary, right?

Bryan Powrozek:

Right.

Tim Finerty:

And potentially it may not be the majority shareholder, right?

Bryan Powrozek:

Mm-hmm (affirmative).

Tim Finerty:

Sometimes that person has to understand what is their biggest asset, right? What is the biggest strength? And if they can do that, then I think effectively you can have a very effective, strategic planning goal and BHAG that you will work towards, right? And, therefore, then it sets that vision.

Bryan Powrozek:

Yup.

Tim Finerty:

Right? And once you set that vision as well, then you got everybody underneath focused on that vision, right? And that’s somewhat what the strategic plan is. But if that vision is incorrect, it could drive you in the wrong way.

Bryan Powrozek:

Definitely. An interesting point you made there, it’s finding the right person to do this, right? Because, I think, you see those times where if you’ve got a very type-A driven owner and he’s the one running the strategic planning session, are you really going to get the input from the other folks in the room? Or is everyone just going to look to him because they know that he’s going to go the way he wants? So, yeah, finding the right person to facilitate and work through it is important so that you get an end product that represents everybody’s input, what everybody sees and is thinking in order to make sure that it really helps the company drive forward.

Bryan Powrozek:

So going back to that vision, in the strategic plan, you’re kind of establishing your vision, where you want to go, that can really, as one of our colleagues, Jim, put in an article, it really helps over an aim for the same tree on the horizon, right? And that helps guide people. How can business owners use their strategic plan and their vision to help run their business day to day beyond just setting goals and things like that?

Tim Finerty:

Well, I think when you set the vision right, then you’re going to have everything else come underneath it. And that means how you look at culture, how you look at customers, what is it that your vendors… How you deal with people and that hopefully resonates to how you can interact with the business community.

Bryan Powrozek:

Yup.

Tim Finerty:

And, again, I mean, you got to be proactive and not reactive but you also don’t want to overdo it, right?

Bryan Powrozek:

Right.

Tim Finerty:

I mean, I’ve seen it before people that really grab hold of the strategic plan and that’s everything, everything, everything. You got to remember, you still got to do your day-to-day work, right?

Bryan Powrozek:

Yep.

Tim Finerty:

And sometimes your vision now or your BHAG now isn’t what has to pay the bills now, right?

Bryan Powrozek:

Yup.

Tim Finerty:

So you still got to work towards it, rather than just going there, right? So it’s not something that happens overnight, right? That’s the thing. You have to understand that this is something that’s going to take some time, some effort in it. And sometimes it could change, you might think it can happen in four or five years but it may not be until eight or nine, right?

Bryan Powrozek:

Yup.

Tim Finerty:

And you have to realize that and understand that that is because, I mean, think about it. Think about last year, right? The pandemic, all of a sudden, nobody knew what was going on, right?

Bryan Powrozek:

Mm-hmm (affirmative).

Tim Finerty:

I mean, a lot of people still out of our businesses did really well but I don’t know that they did a lot related to strategic planning, right?

Bryan Powrozek:

Yup.

Tim Finerty:

Did those things early on because they were reacting to what needed to happen? And if you reacted the right way and did the right things, you ended up, hopefully, getting through this and learning stuff. But some of the stuff that you may not have had on your strategic plan for the last year, you may have done earlier because you didn’t have the work. So you started innovating and you started doing other things, right? So, it’s just how you use your resources to help you through that process.

Bryan Powrozek:

Yup. It’s interesting, you mentioned during the pandemic, right? I think because we deal in such an engineering heavy field, 3D printers are not out of the ordinary to have in the office and people using them. But I think there was this rush of, “Oh, well, if I buy a 3D printer, now I can start printing PPE and I can do all this other stuff.” And well, yes, that’s a good altruistic goal. Having the strategic plan can then look at it and say, “Well, am I going to have a use for this six, 12 months from now? Or am I just going to spend this and it was good because we had some downtime?”

Bryan Powrozek:

So it kind of like you’re mentioning, it helps you make better-educated business decisions or maybe you find out, and I’ve had this conversation with a couple of times, “We never really knew what all we could do with a 3D printer now that we have it, it’s opening up so many more doors for us.” And so now you take the time, you look at the decision, you may adapt your strategic plan for something you weren’t really counting on, so.

Tim Finerty:

I think that’s a great point. I mean, to be successful as well, you have to be able to adapt and take punches that are thrown at you, right?

Bryan Powrozek:

Yup.

Tim Finerty:

And that’s the biggest thing of how do you react to those types of things? You also don’t want to do… When I see business owners want to say, “Okay, I got to get a strategic plan in here. I got to do this.” What you don’t want to do also is give up any of your control, right? I think you’re the one as especially, not taking a backseat, right. You still got to be involved. And sometimes I’ve seen that you got people in your organization that really want to go, go, go, go.

Tim Finerty:

But if they aren’t getting you involved in the right way with it and you’re allowing them to go, there could be challenges there too. So you, as the business owners, need to make sure that you’re all in on it as well. And that goes for everybody that is an owner, right? If you have three owners and two are up for it, and one’s really not into it, it may not be the right time to start doing it, right? You got to get everybody on board for it to be successful.

Bryan Powrozek:

Yup. I want to go back to something you said at the very outset of your best piece of advice is to take it slow, right? Because I think anybody can sit down, they can buy a copy of traction, read through the process, spend two weeks and come up with a strategic plan. But really, almost even before that, it’s really understanding your market, who exists in that ecosystem, who are the potential customers, who are your potential competitors, things like that. And I know you went through this personally as you started figuring out the industrial automation segment. You started five, six years ago learning about it. And really you took some time and tried to understand, okay, what are these companies need? Is there something we can do or some way we can help them? Who else is operating in this space that we might be competing with? Talk to me a little bit about that and the importance of understanding the segment you want to work with.

Tim Finerty:

Well, I think it’s huge, right? I mean, you have to understand your customers, right? And if you’ve set a strategic plan and it’s completely the opposite of what your customers are, you’re not going to be successful. And so it does take time to truly build something, right? But it’s trying to understand what are people looking for, right?

Bryan Powrozek:

Yup.

Tim Finerty:

In a strategic plan, if your customers are your key thing, you got to figure out what is it that they need. And as we looked at members of CSIA or other areas, what I found over my career with most of my clients is that they want to know that you’re there to help them, right? You’re there. You’re not always there to make sure that you’re making the most money.

Bryan Powrozek:

Mm-hmm (affirmative).

Tim Finerty:

You’re going to fix something. You’re going to make it right. You’re going to do those things. And over time, if that relationship grows the right way, right? You know you have a customer potentially for life, right? And I think that’s a lot to do with the small businesses because they’re a lot of times they’re dealing with a little bit bigger companies but not the big boys. And I think it’s looking at what it is, I guess, going back to a couple of other things. What’s your why right?

Bryan Powrozek:

Yeah.

Tim Finerty:

The TED talk that Simon…

Bryan Powrozek:

Sinek?

Tim Finerty:

Sinek.

Bryan Powrozek:

Yup.

Tim Finerty:

What is your why, right? All those things have to be part of your strategic plan, right? Again, we talk about it. If you don’t have core values, you’re not the people… How you go after your goals, you can set the strategic plan to anything look like it’s going to work very well. But if you don’t have everybody running in the right directions or the right ways, it’s still going to struggle a little bit. So you just have to know how to make sure that you’re spending enough time collaborating with others and working towards that goal.

Bryan Powrozek:

Yup. And I think that strategic planning in and of itself is a challenging undertaking in normal circumstances and now you throw in the added complexity of trying to do it during a pandemic, right? Where things are changing on a monthly basis, weekly basis. How do you see the current environment that we’re operating in impacting the way your clients are approaching strategic planning?

Tim Finerty:

Well, I think it’s kind of like the nice, shiny object out there right now. I mean, as you come out of this pandemic and different things, what are some of the things you’ve made it through? Now, how do I even get better, right? So, it’s that shiny object that people are saying, “Oh, I got to do it.” You’re hearing it here, there, and everywhere.”

Bryan Powrozek:

Yeah.

Tim Finerty:

But as we just mentioned earlier, I just think you have to really be focused on that you’re going to do something like that. And knowing that it’s going to take longer than one year to do it.

Bryan Powrozek:

Right.

Tim Finerty:

And just wanting to do it.

Bryan Powrozek:

And I think it’s like you said, if you’ve got your core values in place, you’ve got your vision in place, it helps you kind of make those decisions that, I mean, you hear the phrase all the time the, “Not all business is good business,” right. Especially, if you do a really good job at providing your customer, your client service and quality products and things like that, inevitably, that customer is going to say, “Hey, you do this but is there any way you could do this for me as well?” And I think the initial reaction for most people is, “Yes, I’ll take it. I’ll do it,” without really thinking through, “Hey, now, is that taking resources away from something else I could be doing? Something else that’s going to advance my business or my goals.”

Bryan Powrozek:

But then at the same time, maybe that now when you go back and you look at your core values and you say, “Hey, yeah, that really does support and help me move forward.” And we were just speaking with a client the other day, they’re a system integrator machine builder, and one of their customers started talking to them about servicing some equipment. And now they found that this whole service line could potentially be even bigger than what they’re doing today. And so it’s having that openness and really knowing who they were and saying, “Yeah, this service stuff that we’re getting offers to do lines up with everything else we’re doing. So, let’s go after it.” Right?

Tim Finerty:

No, I think that’s a great point. I mean, you have to think about where you are at the stage of your life cycle in business, right? So the one that you mentioned, right, smaller company, 100% owned by a business owner, right? One of the things he’s trying to do is figure out and innovate or figure out and find something that will help him grow, right?

Bryan Powrozek:

Yup.

Tim Finerty:

Whereas if you look at a bigger company, is that really the right thing? Do they have the resources or is that going to make the right amount of money, right? I think it’s once that vision gets set and sticking to it, right?

Bryan Powrozek:

Yup.

Tim Finerty:

And I think you made that point is that look, a strategic plan sometimes you’re going to have to go away from it a little bit, potentially, depending on circumstances, like when a pandemic, and all hands of the board, right? You’re trying to just do stuff. But if things are going away, you have to stick with it, right? You can’t get out of your lane.

Bryan Powrozek:

Yup.

Tim Finerty:

And if you do, you open yourself up potentially to doing that. Now it could end up being a great thing but you’re really dependent on how you’ve set that strategy. Did you make the decision of doing that, right? And you talk about the business, I mean, at some point, if my vision was I got to hire great people and I want to always have a really good bench, right? But then you say, “I’m not going to take any job that doesn’t have margins over 30%.” Well, you’re hiring all these people that you need to help you grow, right? But if you don’t have the jobs for them, then you’re never going to have it, right?

Bryan Powrozek:

Exactly.

Tim Finerty:

So, you have to look at how that vision or strategic plan goes, right? And it’s got to mirror itself the right way. And, so yeah, every strategic plan could have its ups and downs and it could be set incorrectly. And I think that’s where the more people that are, I wouldn’t say, don’t get everybody involved, right? But you want to have three to five people at least involved in your strategic plan. But the other thing that it does too, right, once you get that strategic plan, you’re starting to resonate that down everyone else. So everyone else understands, again, what you’re doing, what’s happening with the business, how we’re going after, what are the things that we’re really looking for. And then, hopefully, that gets everyone else energized, again, to help you through and out.

Bryan Powrozek:

In kind of our last thing here, I want to go back on something because you talked about staffing in your last answer there. And across the board, when we talk to business owners, we talk to other service providers, whoever we discuss, this industry or even our own industry accounting, and I think it’s across the board for every issue. Staffing, huge issue, big challenge for people, and having the strategic plan and having these core values really help you with locating the right people, making sure, yeah, are these the type of people that we want to have in the company? But I think even beyond that, it helps you maybe connect some of those dots outside of the organization. And just speaking from our own personal experience, right?

Bryan Powrozek:

CPA firm focused on this industry. And you had the thought a few months back of, “Hey, let’s find somebody, an engineer that used to work in this industry. We’ve got some things that we could have them work on but that would be a good fit for us.” And so now it’s kind of opened up this whole different thought process for us on what we’re going to do as far as staffing goes. And so, I guess, what are your thoughts on that? And I know, specifically, in Good to Great, they talk about finding the right people. Regardless of we have a spot for them, find the right people and get them on the bus, so.

Tim Finerty:

No, I think we talk about that internally all the time, right? You’re trying to find the next person to take your position in a CPA firm over time. And it’s the same thing within your vision, how you’re going to get there and who do you need, right?

Bryan Powrozek:

Mm-hmm (affirmative).

Tim Finerty:

And, therefore, yeah, you may have to make some investments into those people. And it’s hard because you don’t know what it’s going to turn up.

Bryan Powrozek:

Right.

Tim Finerty:

They’re not providing that revenue off the start, right? And you’re trying to say, “Okay, how do I invest in something like that?” But you want to put them in the right place.

Bryan Powrozek:

Right.

Tim Finerty:

You don’t want to force them somewhere else that then when you do have that opportunity, they’re not available, right?

Bryan Powrozek:

Yup.

Tim Finerty:

And so I think, again, that’s the same thing within your strategic plan. You have to understand and have some flexibility in it.

Bryan Powrozek:

Yup. All right, Tim. So I’ll give you your final thoughts here, your last thoughts. What do you hope people take away from this conversation and things that can help them get this strategic planning process started and going in the right direction.

Tim Finerty:

I think that we opened up a little bit with it is that look, this process doesn’t have to be huge, right? I think everybody’s got to take that step back, think about what they want long-term with their core group of people because even as a one-person business owner, what is my end game, right? Where am I going to go? Right now, a lot of our clients, we call them lifestyle businesses, right? And I think if you’re still a lifestyle business what are you still going to do at the end of it, right? So take that step back, think about what it is that you want, who’s currently in your organization that could help you get there, or what do you need. And so then you have to go out and find it, right? So it’s just taking baby steps, start the process now and use resources. Use your peer groups, use your advisors, use others that give you names of other people to talk to.

Bryan Powrozek:

Excellent. Well, Tim, I appreciate you coming in as always, and we’ll speak to you again soon.

Tim Finerty:

Great. Thanks for having me.

Announcer:

Thank you for tuning in. Don’t forget to like us, subscribe, and share on social. To learn more about Clayton and McKervey, visit us at ClaytonMcKervy.com. That’s C-L-A-Y-T-O-N-M-C-K-E-R-V-E-Y.com. We thrive on finding the opportunities and solutions you deserve.

Clayton & McKervey

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