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Note: This is an excerpt from my latest book, Drive One Direction: How to Unleash the Accelerating Power of Alignment. In the One Plan chapter, we highlight companies who unleashed the accelerating power of alignment with an intense focus on their corporate plan.
IDEXX Laboratories, Inc. (NASDAQ: IDXX) is a global leader in pet care innovation with over 8,000 employees serving customers in over 175 countries.
They create alignment with a comprehensive strategic planning process.
Over 68 percent of U.S. households have a pet. That translates to 80 million dogs (I have two of them), 58 million cats (sorry, but I don’t like cats), and all kinds of other animals—birds, fish, snakes, and more. (I hate snakes!)
When you take your pet to the vet, there is a high probability that IDEXX’s tests and equipment are used to evaluate your pet’s health. They offer an extremely broad product line, organized into distinct lines of businesses, each run by a general manager.
Fast-lane companies like IDEXX use both the planning process and the codified plan to accelerate alignment.
A well-designed planning process should be the catalyst that helps your company confront the critical issues, debate potential strategies, evaluate alternatives, and allocate resources. In addition, an effective planning process “connects the dots” between the company’s vision, goals, strategies, plans, and budgets.
IDEXX’s Chief Financial Officer, Brian McKeon, uses an open and highly collaborative planning process to drive alignment. “We are very transparent with information,” explained McKeon. “Our planning process is a byproduct of our open, cooperative culture.”
The process starts each February by identifying the three or four critical strategic questions and “cross-cutting themes” that are critical to the business. Over the next few months, the executive team has multiple meetings—they call them check-ins—to discuss and unpack these questions.
“By the time we get to the multi-year plan review in May and June this up-front work and collaboration on key areas adds depth to our strategic thinking,” said McKeon.
At the end of this process, they have high alignment on resource allocation priorities and key areas of execution for the annual operating plans.
IDEXX’s planning process creates benefits for all stakeholders, including shareholders.
“We are proud to have built a business model with enduring and predictable growth and profit dynamics,” explained Jonathan W. Ayers, IDEXX’s Chairman and Chief Executive Officer. “Perhaps this is why we are part of a small minority of companies that provides earning guidance in the Q3 call for the next calendar year. Note that this has been our practice for every year for the last 15.”
Clearly, McKeon’s planning process has produced results. Since he joined the company in 2014, their stock has nearly quadrupled.
Who drives your company’s planning process?