Begin with a Plan

We’ve just started our Zingerman’s Annual Planning (ZAP) process. It’s a period every year from mid-March through July when the entire Zingerman’s Community of Businesses (ZCoB) writes our plan for the next 2-3 years out. It’s a comprehensive and collaborative process that helps us come up with a roadmap for our business.

These are the steps:

1. Vision. The managing partners worked on a vision for the entire ZCoB for the year 2011 that everyone read and supported. Then we write corresponding business and department visions that align with the greater one.

(We’re at this stage right now.)

2. Tilt-o-whirl! This Thursday, representatives from every business will have the chance to discuss relevant points of their plan and find synergies with each other. It’s like speed dating with an agenda for every match-up. It’s a fun and incredibly productive way of getting everyone on the same page.

3. Objectives, Action Steps and Key Measures. Now that we know where we want to be, we break it down into the necessary objectives and action steps to get there. Key Measures are numbers we will track over the next year to see if we’re going in the right direction. For example, we currently track our physical presence at the different Zing locations since we deemed it important to be frequently and readily available to our customers as the ZCoB grows larger.

4. Capital Requirements and Staffing. As we determine our projects, the need for some investments in equipment and staff will emerge. We include this in our plan so we can adjust our budgets.

5. Financial Numbers. The businesses plan their sales, gross margin and net operating profit for the next 2 years. ZingIT is part of Zingerman’s Service Network (ZingNet) which does not in itself make any money. ZingNet gets a percentage of sales from the other businesses in order to fund shared services like IT, HR, Marketing and Graphics, Accounting Support, Service and Donations.

6. Gain Share. Zingerman’s practices open book finance. That means that everyone is expected to learn basic financial concepts, understand and influence how the numbers work in our business, and have a financial stake in the outcome. When the organization is successful, every individual gets a share of that success in their paycheck! During this planning process, we agree on what the gain share rules will be for the next fiscal year. For instance, it could consist of a quarterly payout every time we beat our net operating profit plan by a certain percent. We didn’t make gain share this year but we’re determined to win the next one!

7. Sign Off. By this time, everyone (and we really mean everyone) in the ZCoB has been able to provide feedback on the plan and express their support. The managing partners of the businesses then sign their names on the written plan to show our combined commitment to achieving what we laid out.

The Annual Planning process ends with ZAP Wrap! It’s a big party where each business presents the highlights of their plan in creative ways.

This year’s ZAP is looking pretty exciting already! We’ll keep you posted.