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2015 ANNUAL BUSINESS ASSESSMENT AND
BUILDING GREAT BUSINESSES FOR A GREATER PURPOSE
STRATEGY GUIDE
WWW.TryC12.COM
2015
1
The purpose of this questionnaire is to provide a systematic overview of the existence and maturity of key business processes within your company. Business
owners and senior company executives can use this tool to identify underdeveloped areas for possible focus to improve business performance in 2015 and
beyond. This self-assessment is organized into the following nine primary functional categories:
- Core principles of the business
- Strategic planning
- Human resource management
- Financial management
- Key purchasing practices
- Customer relationships
- Operations management
- Ownership structure
- The ministry accomplished through your business
- Are the mission/vision/values of the business defined and written?
- Have your core principles been communicated to the stakeholders?
- Do employees know them by memory?
- Are they routinely used to make decisions?
- Do they relate the ministry goals of the business?
- Do these core principles drive supporting operating objectives and
Key Performance Indicators (or KPIs) using ‘SMART’ goals?
- If yes, are the ‘SMART’ goals written?
- Are they ‘cascaded down’ into the organization?
- Are results measured and compared to the goals?
- Are regular reviews held to discuss results and reassess goals?
- With full management team and with other employees?
YES NO
- Does your team employ a specific strategic planning process?
- If so, how much time is invested in this process, and when?
- Have you defined the target markets you serve?
- Have you estimated the size of these markets and your market share?
- Do you know the projected growth of your markets?
- Do they support the growth objectives of the business?
- Have you modeled what would happen if such growth occurred?
- Do you know your competition well (strengths and weaknesses)?
- Have you assessed your own company’s strengths and weaknesses?
- Have you assessed your threats and opportunities?
- Has your strategic plan been incorporated into your organization’s
annual plan (and budget) and shared as accountable goals?
YES NO
2SECTION ONE: Your core principles - In order to be valid, core principles must have
been developed in a manner reflecting the top leadership’s heart and commitment
while resonating as true with stakeholders.
SECTION TWO: Your strategic plan - The strategic plan represents an organization’s
deliberate process of defining its direction and making decisions on how to best
allocate resources to pursue this strategy.
YES NO
3
- Have you identified the key HR needs of your business?
- Do you perform candidate and employee assessments to identify
strengths, weaknesses, behavioral profiles, core competencies?
- Do written job descriptions exist, describing key responsibilities,
skills required, training and educational requirements?
- When hiring a new associate, are the following procedures used?
Compatibility with Company Core Principles?
Personality profiling, credit, criminal history checked?
Personal, professional, educational references checked?
Multilevel interviews (such as supervisors and peers) conducted?
New employee orientation process and probationary period?
- Is employee performance measured against written criteria?
- Are employee performance reviews conducted at least annually?
- Are action plans developed to address areas of deficiency?
- Are employees equipped/encouraged toward decision-making?
- Do you promote team-building and enforce team behaviors?
- Are pay/benefit levels competitive with local industry levels?
- Is voluntary employee turnover a challenge for you?
- Do you use ‘performance pay’ compensation approaches?
- Are succession plans in place for key positions?
YES NO
4SECTION THREE: Your organizational development and human resources
management - Recognizing that our people are our most valuable asset in our
businesses, we must constantly strengthen this vital resource.
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PAGE TWO - 2015 BUSINESS STRATEGY GUIDE
Produced by C12 Tarrant, LLC
- Can/does the company generally pay its obligations when due?
- Do you know your company’s critical economic drivers and are these
key performance indicators (KPIs) regularly discussed and ‘driven’?
- Is accurate and timely financial reporting provided at least monthly?
- Are bank accounts reconciled monthly?
- Is it done by someone without access to receipts and disbursements?
- Are annual operating budgets, prepared in conjunction with those
responsible for implementation and are they properly utilized?
- Are financial results shared with employees?
- Do you know your contribution margin and breakeven point?
- Are short-term and midterm cash flow projections prepared?
- Is accounts receivable and accounts payable aging data readily
available, along with accurate inventory records, and are they used
to help manage working capital and cash flow?
- Do you benchmark performance against others in your industry?
- Are actual costs compared to budgets for projects/jobs/products?
- Is product line (or service offering) profitability monitored?
- Is profitability by customer and by project monitored?
- Are cost reductions actively pursued and celebrated?
- As God’s steward, are you certain that you are producing a solid
economic return on the financial assets employed in the company?
SECTION FOUR: Financial management -Careful financial review and analysis shows
us the “reality” of our situation in our businesses. We must have the basic systems,
practices and process in place to lead our companies properly.
YES NO
6
- Are your sales and marketing staff true operating partners,
accountable for demand forecasts, timely orders, reasonable
promises, and profitable pricing?
- Do your prices properly reflect the value you provide customers and
does sales compensation vary with profit (instead of simply sales)?
- Do you know your target market customers and their attributes for
each of your company offerings?
SECTION SIX: Customer relationships - In order for our companies to build customer
value through managed relationships, we must understand their wants/needs,
improve interactions and nurture their trust through our performance.
YES NO
5
- Is vendor performance monitored (i.e., cost, delivery, quality)?
- Are multiple quotes obtained for items over a certain value?
- Are vendor references checked for performance and stability?
- Are authorized purchases documented via POs and contracts?
- Are insurance certificates obtained to verify that vendors have
adequate liability coverage for general, product and workers
compensation exposure?
- Are vendor relationships reevaluated by getting new competitive
quotes and assessing relative performance against best-in-class
suppliers least annually?
- Are key suppliers true operating partners that help you
strategically rethink your business model to improve cost, lead
time, inventory and quality?
YES NO
SECTION FIVE: Purchasing - We are responsible for the establishing and maintaining
the proper purchasing processes and practices that allow our companies to optimize
potential cost savings while increasing the quality of products and services.
PAGE THREE - 2015 BUSINESS STRATEGY GUIDE
Produced by C12 Tarrant, LLC
- Do you monitor your sales to identify positive and negative trends?
- Do you have specific criteria to measure customer satisfaction?
- Are regular meetings held to discuss/rectify customer satisfaction
issues and identify additional sales opportunities?
- Do you know why your customers buy from you?
- Are you easy to find for each target customer segment and do your
marketing materials tell your story well to overcome objections?
- Do you know customer turnover or defection rates and why?
- Have you evaluated your performance during each customer
“moment of truth” of customer contact (e.g., quoting, ordering,
delivering, paying, field service, etc.)?
- Do you include customers in a strategic process (focus groups,
surveys, retreats) to identify how you can better serve them?
- Have you identified your total business potential with each
customer and channel of distribution you currently have?
SECTION SIX: Customer relationships - Continued...
SECTION SEVEN: Operations Management- This is an area of management concerned
with overseeing, designing, and controlling the process of production and redesigning
business operations in the production of goods or services.
- Does the operations team have daily or weekly clarity on customer
expectations and priorities that tie to your official monthly plan?
- Have metrics been developed to help drive continuous improvement
in operations (i.e., cost/quality/delivery)?
- Does the company have a standard way of planning, managing
and reviewing project performance?
7YES NO
YES NO
PAGE FOUR - 2015 BUSINESS STRATEGY GUIDE
Produced by C12 Tarrant, LLC
- Does company leadership openly share its Christian/Biblical faith?
- Have you integrated Christian core values into the way you deal with
people, issues, priorities, standards, etc.?
- Has top management embraced and encouraged ministry?
- Which of the following have you seen occur through your company:
Service: Gifts, financial giving, practical help in Christ’s name?
Sanctification: Believers equipped and encouraged?
Salvations: People coming to faith in Christ?
- Are employees encouraged to participate in ministry activities?
- Do employees help identify and own such opportunities?
- Does the company provide ministry resources?
- Does a ministry team or oversight effort exist?
- Does the company and/or teams have a ministry plan and goals?
- Are ministry results measured/reported/celebrated like other KPIs?
9
- Does this year’s plan have operations staff pursuing stretch goals
(e.g., against previous costs/standards, industry benchmarks, past
best performance)?
- Is waste (e.g., cost of poor quality, rework, obsolete inventory,
poor execution) measured and reported?
- Are quality problems identified using internal and external
(customer) reporting, and countermeasures implemented to
eliminate the root causes?
- Is material usage tracked by job/process vs. budget/standard?
- Are schedules and workflow carefully planned to eliminate
unnecessary changeovers?
- Have order lead-times and inventory turns been compared to
‘best’ possible performance?
- Have employees been trained in “lean” principles?
- Has management adopted defined approaches for recurring tasks
(e.g., project management, decision-making, problem-solving,
brainstorming)?
SECTION SEVEN: Operations Management - Continued...
8
- Does the business have multiple owners, partners or shareholders?
- If yes, do formal agreements exist for the transfer of ownership?
- If no, do plans exist for ownership transfer?
- Do plans exist for the transfer of key responsibilities?
- Before the Lord, are the firm’s equity owners “equally-yoked”?
SECTION EIGHT: Ownership - Ownership structure, expectations and working styles
of partners and accurate, comprehensive documentation of all related agreements
will make up the foundation of your business. YES NO
- Beyond simply making a paycheck, are you generating a solid
return on investment (ROI) and building a company with value?
- Is your goal to ensure a future generational transition to
like-minded leadership that will sustain the Christian ministry that
currently occurs through the business?
SECTION EIGHT: Ownership - Continued...
YES NO
YES NO
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SECTION NINE: Ministry - The Bible is very clear that the purpose for our work life is
to reflect Christ in and through our lives. “Whatever you do, work at it with all your
heart, as working for the Lord, not for men, since you know that you will receive an
inheritance from the Lord as a reward. It is the Lord Christ you are serving.”
PAGE FIVE - 2015 BUSINESS STRATEGY GUIDE
Produced by C12 Tarrant, LLC
Your mission statement should clearly state the
reason why you are in business. Why does this
company exist?
Mission
Statement An effective mission statement for an organization should fulfill the following characteristics:
Timeless
Inspirational
Short and concise
Personal or visceral
Effective decision-making tool
Convey a clear sense of ministry


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ONE
The vision statement for your company will
describe what your business will look like if the
mission of the company is fulfilled.
Vision
Statement
The vision statement for your company should fulfill the following characteristics:
Evokes passion and conviction
Very specific (geographic, numeric, financial or ?)


God-sized: Beyond your ability to achieve
If achieved, this vision will be God-honoring

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Your core values represent the character traits and
synergistic qualities that you need in order to fulfill
the mission and vision of your organization.
Established
Core Values
Our core values are the fundamental beliefs of the organization and its leaders. These values are the guiding
principles that dictate our behavior, our actions and act as an internal compass for decision-making. The values
underlie our work, how we interact with each other, and which strategies we employ to fulfill our mission.
Our core values are the fundamental beliefs of the organization and its leaders. These values are the guiding
principles that dictate our behavior, our actions and act as an internal compass for decision-making. The values
underlie our work, how we interact with each other, and which strategies we employ to fulfill our mission.
Competitive
Advantage Your unique selling proposition (USP), defines your company’s unique position in the marketplace. A strong
USP lets you to stand apart from competitors and actively focus your energy on creating things that cater to
your customers. In other words, having a unique selling point is a competitive advantage that allows busi-
nesses to avoid the trap of trying to please everyone or becoming a commodity, simply distinguished by price.
The competitive advantage can be described as
your unique selling proposition. This advantage
must be real, well-defined and sustainable.
This should describe how your company will
achieve its vision in a way that is consistent with
thestatedmissionandcorevaluesoftheorganization.
Our core values are the fundamental beliefs of the organization and its leaders. These values are the guiding
principles that dictate our behavior, our actions and act as an internal compass for decision-making. The values
underlie our work, how we interact with each other, and which strategies we employ to fulfill our mission.
Overall
Organizational Strategy Your organization-wide strategy should fulfill the following characteristics:
Characterizes your competitive advantage(s)
Describes how the company will achieve its vision


Only changes if competitive advantage or vision changes
Often can lead to an effective “tag line” or brand promise


When everything is in alignment, the direction, purpose, and goals of an organization can be achieved through targeted performance consistent with our overarching core prin-
ciples. This purposeful and productive effort moves the organization forward. If efforts are poor or inconsistent with our overall direction and values, the company will flounder
and squander many of its opportunities. As we begin a brand new calendar year with 2015, let’s review our overarching goals and objectives that form the basis of a firm’s strategy.
PAGE SIX - 2015 BUSINESS STRATEGY GUIDE
Produced by C12 Tarrant, LLC
What you can’t measure, you can’t teach, reward or manage. Every business has key metrics or key performance indicators. These numbers indicate the health of the
activities of the business and help drive the general prosperity of the organization. Theses factors make up the economic “dashboard” of a company and are the key
drivers of your “economic engine”. They need to be continually discussed and driven over time (including trend charting, comparison against benchmarks or goals
and brainstorming). Over time, these key metrics (or KPIs) should be updated to reflect the long-term needs of the business. Depending on the nature and dynamics
of your company and industry, these numbers should be checked weekly, monthly, quarterly, semiannually or yearly.
Every business should have a combination of lagging & leading indicators included as a part of their key performance indicators. Lagging indicators measure activities that
have already taken place. There is no ability to change the outcome of past activities, however, regular monitoring at intervals allows future outcomes to be improved.
Leading indicators give insight into the future activities of the company. Timely monitoring allows the projected outcome to be affected in a positive manner. Examples of
lagging indicators include profits per units sold, customer satisfaction factors and return on investment (ROI). Several good examples of leading indicators would
include an order backlog, unbilled revenue and the quantity of qualified leads. Projected targets for company metrics should be balanced and aligned across the various
business components within the organization. Too much emphasis given to one component of the business will lead to a stressed work environment and a future
breakdown in the work flow and may threaten the success of the company. When multiple target metrics have been established, they also need to be aligned with
other target metrics and the company’s core principles. C12 calls this process the “Five-point Alignment Matrix”. Its use is further defined in the Strategic Objectives and
Goals sections below. The five components and examples of their activities are as follows:
TYPE SAMPLE SOURCE FREQUENCY EXAMPLE
OF METRICS INDICATOR OF DATA OF REVIEW OF TARGET
Raw Numbers Number of Customers CRM database Monthly
50 new customers by
end of year
Progress
Marketing Plan 75%
Complete
Project plan Quarterly
100% complete by end
of quarter
Change Percentage
6% Increase in
Revenue Over Last
Quarter
Profit and Loss Report Monthly
15% total revenue
increase by end of
year
FINANCIAL CUSTOMERS INTERNAL PROCESSES PEOPLE MINISTRY
Revenue Growth Sales Production Process Human Resources Charitable Giving
Cost Reduction Marketing Support Activities Learning and Growth Acts of Service
Asset Utilization Customer Service
Research and
Development
Training, Education and
Certifications
Turning Lives Over to
God
PAGE SEVEN - 2015 BUSINESS STRATEGY GUIDE
Produced by C12 Tarrant, LLC
Use this worksheet to identify and list a minimum of three leading and/or lagging key performance indicators (KPIs) in the various business components which are
most applicable to the health and fruitfulness of your business. To be meaningful, they must be objectively quantifiable and tracked on a regular basis by the leaders
and key team members of your organization.
KEYPERFORMANCEINDICATOR
NUMBERONE
LEADINGorLAGGING
Use this space to state the key performance indicator and describe how it will be measured, how often it will be considered its importance:
KEYPERFORMANCEINDICATOR
NUMBERTWO
LEADINGorLAGGING
Use this space to state the key performance indicator and describe how it will be measured, how often it will be considered its importance:
KEYPERFORMANCEINDICATOR
NUMBERTHREE
LEADINGorLAGGING
Use this space to state the key performance indicator and describe how it will be measured, how often it will be considered its importance:
PAGE EIGHT - 2015 BUSINESS STRATEGY GUIDE
Produced by C12 Tarrant, LLC
S W
O T
HELPFUL
TO ACHIEVING THE OBJECTIVE
HARMFULL
TO ACHIEVING THE OBJECTIVE
INTERNALORIGIN
(ATTRIBUTESOFTHECOMPANY)
EXTERNALORIGIN
(ATTRIBUTESOFTHEMARKET)
STRENGTHS (Capitalize on the internal):
As a company, what do you do well?
What unique resources can you draw on?
What do others see as your strengths?
What unique process is not fully utilized?
WEAKNESSES (Internal things to shore up):
What could you improve?
Where do you have fewer resources than others?
What are others likely to see as weaknesses?
What strengths could shore up the weaknesses?
WEAKNESSESSTRENGTHS
THREATSOPPORTUNITIES
OPPORTUNITIES (External things worthy of investment):
What good opportunities are open to you?
What trends could you take advantage of?
How can you turn your strengths into opportunities?
What ‘opening’ can you capitalize on in the market?
THREATS (External issues that must be identified):
What trends could harm you?
What is your competition doing?
What threats do your weaknesses expose you to?
Are there opportunities that can offset the threats?
SWOT ANALYSIS: What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well-placed to exploit. And
by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares. More than this, by looking at
yourself and your competitors using the SWOT framework, you can start to craft a strategy that helps you distinguish yourself from your competitors, so that you can
compete successfully in your market. Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate to external
factors. For this reason, SWOT is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix.
INTERNAL (Primary) DATA EXTERNAL (Secondary) DATA
CAPABILITIES RESOURCES PROCESSES
BUSINESS
ENVIRONMENT
INDUSTRY
PERFORMANCE
COMPETITIVE DATA
Focus groups, customer and employee surveys and review of internal
data will reveal strengths and weaknesses of our:
Applicable data that we cannot control which may reveal certain
opportunities as welkl as threats.
PAGE NINE - 2015 BUSINESS STRATEGY GUIDE
Produced by C12 Tarrant, LLC
STRATEGIC OBJECTIVES: After completing the SWOT Analysis on the previous page, review your Competitive Advantage and your Organization-Wide Strategy to see if
adjustments should be made before moving on to the development of Strategic Objectives. At their broadest, strategic objectives serve an organization’s ambition. Your
company’s ambition is found in its mission and vision statements. These statements together describe the main thrust of your company and its ultimate goal, a goal that can
only be reached by successfully carrying out business. Strategic objectives are the steps and accomplishments that your company will complete to realize that ultimate goal.
Strategic business objectives are goals deemed most important to the current and future health of your business.
Often, the first step is to prioritize these objectives through a thorough analysis of business practices such as the SWOT analysis on the previous page. Though prioritization
of strategic objectives is unique to each individual business, common objectives do often exist. Five of the most common areas to focus strategic business goals are in the
areas relating to customers, financial resources, workforce (or people), internal processes (or productivity), and business ministry.
Workforce
orPeople
Internal
Processes
Financial
Resources
Market
Share
Sample Strategic Objective Considerations
MISSION, VISION
AND CORE VALUES
AA
CC
BB
DD
Business
Ministry
MISSION,VISION
ANDCOREVALUES
MISSION, VISION
AND CORE VALUES
MISSION,VISION
ANDCOREVALUES
AAINTERNAL PROCESSES: Productivity
Productivity for any organization means fine tuning our business processes to achieve
the best result for a customer while increasing profit. As an example, a manufactur-
ing organization that fine tunes a process could reduce waste, reduce production
time, and in the end, make a better product that gets to the customer faster. A ser-
vice business that changes the way customers are handled can decrease call times
and increase customer satisfaction and loyalty.
CUSTOMERS: Increase Market Share
In order to grow, our business needs to increase its share of competitive markets.
Marketing plans start with the overall strategic business plan of our company, but
explains and details further how specific aims will be carried out. Marketing plans
address this through defining product or service offerings, researching target mar-
kets, analysis of competition, then strategically placing, pricing and promoting our
company’s offerings.
BB
FINANCIAL: Strengthening Resources
Included in the growth objectives of an organization is the availability of capital re-
sources to invest in future expansion projects. If our company’s financial resources
are strong, capital could conceivably come from cash reserves. For many organiza-
tions, strengthening financial resources means to build cash flow or increase assets
in order to attract investors and court creditors to fund growth as well as market
expansion.
CC
PEOPLE: Performance Management
The people within our organization are often our most important resource. The de-
velopment of an employee performance management plan may be paramount to
the success of our companies. In addition, programs that align employees’ compen-
sation – merit increases, bonuses – to their performance have proven to be very
effective. Motivating, rewarding, and retaining top performers is a key business objec-
tive for any company that seeks to successfully maintain or exceed growth expectations.
DD
PAGE TEN - 2015 BUSINESS STRATEGY GUIDE
Produced by C12 Tarrant, LLC
IMPLEMENTATION: The Action Plan
Our businesses cannot move forward without defining specific action steps to take them toward their goals and identified business objectives. Action planning involves
identifying the top objectives for our organizations, then developing specific, actionable objectives. Based on our three-to-five year Strategic Objectives that were established
in previous exercises, it is now time to develop our one-to-three year Organization-wide Goals (Action Statements). There should be at least one goal for each Strategic
Objective. Each goal should start with a verb (increase, reduce, provide, etc.). Remember, each of our goals should pass the “SMART” test meaning that each one must be:
SPECIFIC MEASURABLE ACTION-ORIENTED REALISTIC TIME-PHASED
CLEARLY STATED
GOAL OR OBJECTIVE
CHALLENGES IN
ACHIEVING THIS GOAL
METRICS USED
TO TRACK PROGRESS
RESOURCES NECESSARY
TO REACH GOAL
GOALONEGOALTWOGOALTHREEGOALFOUR
In order to make each objective truly attainable, it is important to include information such as the people responsible or resources necessary for implementing the overall
plan. Also consider the ideal frequency of reporting and how to best update others regarding the progress of entire action plan. Methods of communicating with team
members or consultants could include regular email reports, weekly or periodic status meetings, strategic planning meetings, real-time KPI dashboard reports, etc.
Based on this regular review cycle, take action to achieve success by implementing one or more of the following: A.) Celebrate successful milestones B.) Adjust time C.) Add/
Change Resources D.) Incentivize and/or encourage E.) Increase awareness of Goals, and F.) Hold responsible persons accountable.
PAGE ELEVEN - 2015 BUSINESS STRATEGY GUIDE
Produced by C12 Tarrant, LLC
2015 Business Strategy Guide Summary: At the end of the day, there are easy and hard ways to accomplish most things. This truism often proves itself as we lead the
companies entrusted to us by God. Using the assessment and planning processes included in this guide, we should be ready and fully prepared for the challenge of
creating and maintaining alignment across our entire company for the new year.
A final challenge: As stewards and servant leaders for Christ, our role involves providing a two-layered foundation for those who would follow us. First, we must
communicate the vision which continually helps to clarify our organization’s path forward. Although we may engage our team in developing certain aspects of this vision,
leaders are called to lead as the primary vision-givers, head cheerleaders, and direction-setters. We should consider the counsel of others, but can never fully delegate
this primary responsibility. We’re called to be stewards of all God entrusts to us and are expected to maximize God’s investment from an eternal perspective. Great
leadership in God’s kingdom is based on His purpose and principles that transcend our daily issues and circumstances. To lead effectively in the here and now, we must
remain connected to what’s eternal.
Secondly, we’re called to define good performance within the context of pursuing this vision. This involves operationalizing our vision, purpose, and values so that roles,
responsibilities, methods, recruiting, training, promotion, and compensation directly reflect these clearly-held principles. In other words, we need to ensure that aligned
performance is understood and honored. All workplace activity flows out of these two basic building blocks so vital to unified team performance: establishing vision and
direction, and defining good performance along the way. Clarity in these two foundational areas is essential!
Have you persuasively communicated to your team your heartfelt beliefs and standards with passion and commitment? Do you reinforce them and clearly live them out?
Have you developed your organization with these core principles in mind? Have you taken the time to clearly answer the three foundational questions to develop a team
with common understanding?
- Where are we going?
- How do we plan to get there?
- Why should we bother… for what purpose?
How can you communicate these things to your team in a manner that will help them to imagine the future, develop buy-in and trust, and see their involvement in this
success as a win-win proposition? Ask God to reveal to you the truth in each of these areas. He will show you as you pray and study His Word. Sometimes He will answer
through people who know you well, such as your spouse, close friends, or perhaps your C12 group peers.
Not in a C12 group? Give it a try in 2015 and you can make this absolutely the best year in your life. C12 is a unique, faith-based, executive peer advisory board made up
of CEOs and company owners that meet each month to study and share excellent business practices and solutions from a Christian perspective. As a C12 advisory board,
members learn how to better grow their businesses, to improve execution and to challenge, encourage and hold each other accountable as they become better leaders.
Check out our website (www.TryC12.com) and register for an upcoming, free introductory breakfast or luncheon. At this brief lunch, you’ll meet some great people, learn
more about C12 groups forming now in the Dallas/Ft Worth area and have a terrific meal on us. We hope to see you soon!
Joe Petersen, C12 Chairman
(817) 602-7035 - Joe.Petersen@C12Group.com
WWW.TryC12.COM

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2015 - Business Strategy Guide

  • 1. 2015 ANNUAL BUSINESS ASSESSMENT AND BUILDING GREAT BUSINESSES FOR A GREATER PURPOSE STRATEGY GUIDE WWW.TryC12.COM 2015
  • 2. 1 The purpose of this questionnaire is to provide a systematic overview of the existence and maturity of key business processes within your company. Business owners and senior company executives can use this tool to identify underdeveloped areas for possible focus to improve business performance in 2015 and beyond. This self-assessment is organized into the following nine primary functional categories: - Core principles of the business - Strategic planning - Human resource management - Financial management - Key purchasing practices - Customer relationships - Operations management - Ownership structure - The ministry accomplished through your business - Are the mission/vision/values of the business defined and written? - Have your core principles been communicated to the stakeholders? - Do employees know them by memory? - Are they routinely used to make decisions? - Do they relate the ministry goals of the business? - Do these core principles drive supporting operating objectives and Key Performance Indicators (or KPIs) using ‘SMART’ goals? - If yes, are the ‘SMART’ goals written? - Are they ‘cascaded down’ into the organization? - Are results measured and compared to the goals? - Are regular reviews held to discuss results and reassess goals? - With full management team and with other employees? YES NO - Does your team employ a specific strategic planning process? - If so, how much time is invested in this process, and when? - Have you defined the target markets you serve? - Have you estimated the size of these markets and your market share? - Do you know the projected growth of your markets? - Do they support the growth objectives of the business? - Have you modeled what would happen if such growth occurred? - Do you know your competition well (strengths and weaknesses)? - Have you assessed your own company’s strengths and weaknesses? - Have you assessed your threats and opportunities? - Has your strategic plan been incorporated into your organization’s annual plan (and budget) and shared as accountable goals? YES NO 2SECTION ONE: Your core principles - In order to be valid, core principles must have been developed in a manner reflecting the top leadership’s heart and commitment while resonating as true with stakeholders. SECTION TWO: Your strategic plan - The strategic plan represents an organization’s deliberate process of defining its direction and making decisions on how to best allocate resources to pursue this strategy.
  • 3. YES NO 3 - Have you identified the key HR needs of your business? - Do you perform candidate and employee assessments to identify strengths, weaknesses, behavioral profiles, core competencies? - Do written job descriptions exist, describing key responsibilities, skills required, training and educational requirements? - When hiring a new associate, are the following procedures used? Compatibility with Company Core Principles? Personality profiling, credit, criminal history checked? Personal, professional, educational references checked? Multilevel interviews (such as supervisors and peers) conducted? New employee orientation process and probationary period? - Is employee performance measured against written criteria? - Are employee performance reviews conducted at least annually? - Are action plans developed to address areas of deficiency? - Are employees equipped/encouraged toward decision-making? - Do you promote team-building and enforce team behaviors? - Are pay/benefit levels competitive with local industry levels? - Is voluntary employee turnover a challenge for you? - Do you use ‘performance pay’ compensation approaches? - Are succession plans in place for key positions? YES NO 4SECTION THREE: Your organizational development and human resources management - Recognizing that our people are our most valuable asset in our businesses, we must constantly strengthen this vital resource.      PAGE TWO - 2015 BUSINESS STRATEGY GUIDE Produced by C12 Tarrant, LLC - Can/does the company generally pay its obligations when due? - Do you know your company’s critical economic drivers and are these key performance indicators (KPIs) regularly discussed and ‘driven’? - Is accurate and timely financial reporting provided at least monthly? - Are bank accounts reconciled monthly? - Is it done by someone without access to receipts and disbursements? - Are annual operating budgets, prepared in conjunction with those responsible for implementation and are they properly utilized? - Are financial results shared with employees? - Do you know your contribution margin and breakeven point? - Are short-term and midterm cash flow projections prepared? - Is accounts receivable and accounts payable aging data readily available, along with accurate inventory records, and are they used to help manage working capital and cash flow? - Do you benchmark performance against others in your industry? - Are actual costs compared to budgets for projects/jobs/products? - Is product line (or service offering) profitability monitored? - Is profitability by customer and by project monitored? - Are cost reductions actively pursued and celebrated? - As God’s steward, are you certain that you are producing a solid economic return on the financial assets employed in the company? SECTION FOUR: Financial management -Careful financial review and analysis shows us the “reality” of our situation in our businesses. We must have the basic systems, practices and process in place to lead our companies properly.
  • 4. YES NO 6 - Are your sales and marketing staff true operating partners, accountable for demand forecasts, timely orders, reasonable promises, and profitable pricing? - Do your prices properly reflect the value you provide customers and does sales compensation vary with profit (instead of simply sales)? - Do you know your target market customers and their attributes for each of your company offerings? SECTION SIX: Customer relationships - In order for our companies to build customer value through managed relationships, we must understand their wants/needs, improve interactions and nurture their trust through our performance. YES NO 5 - Is vendor performance monitored (i.e., cost, delivery, quality)? - Are multiple quotes obtained for items over a certain value? - Are vendor references checked for performance and stability? - Are authorized purchases documented via POs and contracts? - Are insurance certificates obtained to verify that vendors have adequate liability coverage for general, product and workers compensation exposure? - Are vendor relationships reevaluated by getting new competitive quotes and assessing relative performance against best-in-class suppliers least annually? - Are key suppliers true operating partners that help you strategically rethink your business model to improve cost, lead time, inventory and quality? YES NO SECTION FIVE: Purchasing - We are responsible for the establishing and maintaining the proper purchasing processes and practices that allow our companies to optimize potential cost savings while increasing the quality of products and services. PAGE THREE - 2015 BUSINESS STRATEGY GUIDE Produced by C12 Tarrant, LLC - Do you monitor your sales to identify positive and negative trends? - Do you have specific criteria to measure customer satisfaction? - Are regular meetings held to discuss/rectify customer satisfaction issues and identify additional sales opportunities? - Do you know why your customers buy from you? - Are you easy to find for each target customer segment and do your marketing materials tell your story well to overcome objections? - Do you know customer turnover or defection rates and why? - Have you evaluated your performance during each customer “moment of truth” of customer contact (e.g., quoting, ordering, delivering, paying, field service, etc.)? - Do you include customers in a strategic process (focus groups, surveys, retreats) to identify how you can better serve them? - Have you identified your total business potential with each customer and channel of distribution you currently have? SECTION SIX: Customer relationships - Continued... SECTION SEVEN: Operations Management- This is an area of management concerned with overseeing, designing, and controlling the process of production and redesigning business operations in the production of goods or services. - Does the operations team have daily or weekly clarity on customer expectations and priorities that tie to your official monthly plan? - Have metrics been developed to help drive continuous improvement in operations (i.e., cost/quality/delivery)? - Does the company have a standard way of planning, managing and reviewing project performance? 7YES NO
  • 5. YES NO PAGE FOUR - 2015 BUSINESS STRATEGY GUIDE Produced by C12 Tarrant, LLC - Does company leadership openly share its Christian/Biblical faith? - Have you integrated Christian core values into the way you deal with people, issues, priorities, standards, etc.? - Has top management embraced and encouraged ministry? - Which of the following have you seen occur through your company: Service: Gifts, financial giving, practical help in Christ’s name? Sanctification: Believers equipped and encouraged? Salvations: People coming to faith in Christ? - Are employees encouraged to participate in ministry activities? - Do employees help identify and own such opportunities? - Does the company provide ministry resources? - Does a ministry team or oversight effort exist? - Does the company and/or teams have a ministry plan and goals? - Are ministry results measured/reported/celebrated like other KPIs? 9 - Does this year’s plan have operations staff pursuing stretch goals (e.g., against previous costs/standards, industry benchmarks, past best performance)? - Is waste (e.g., cost of poor quality, rework, obsolete inventory, poor execution) measured and reported? - Are quality problems identified using internal and external (customer) reporting, and countermeasures implemented to eliminate the root causes? - Is material usage tracked by job/process vs. budget/standard? - Are schedules and workflow carefully planned to eliminate unnecessary changeovers? - Have order lead-times and inventory turns been compared to ‘best’ possible performance? - Have employees been trained in “lean” principles? - Has management adopted defined approaches for recurring tasks (e.g., project management, decision-making, problem-solving, brainstorming)? SECTION SEVEN: Operations Management - Continued... 8 - Does the business have multiple owners, partners or shareholders? - If yes, do formal agreements exist for the transfer of ownership? - If no, do plans exist for ownership transfer? - Do plans exist for the transfer of key responsibilities? - Before the Lord, are the firm’s equity owners “equally-yoked”? SECTION EIGHT: Ownership - Ownership structure, expectations and working styles of partners and accurate, comprehensive documentation of all related agreements will make up the foundation of your business. YES NO - Beyond simply making a paycheck, are you generating a solid return on investment (ROI) and building a company with value? - Is your goal to ensure a future generational transition to like-minded leadership that will sustain the Christian ministry that currently occurs through the business? SECTION EIGHT: Ownership - Continued... YES NO YES NO    SECTION NINE: Ministry - The Bible is very clear that the purpose for our work life is to reflect Christ in and through our lives. “Whatever you do, work at it with all your heart, as working for the Lord, not for men, since you know that you will receive an inheritance from the Lord as a reward. It is the Lord Christ you are serving.”
  • 6. PAGE FIVE - 2015 BUSINESS STRATEGY GUIDE Produced by C12 Tarrant, LLC Your mission statement should clearly state the reason why you are in business. Why does this company exist? Mission Statement An effective mission statement for an organization should fulfill the following characteristics: Timeless Inspirational Short and concise Personal or visceral Effective decision-making tool Convey a clear sense of ministry       ONE The vision statement for your company will describe what your business will look like if the mission of the company is fulfilled. Vision Statement The vision statement for your company should fulfill the following characteristics: Evokes passion and conviction Very specific (geographic, numeric, financial or ?)   God-sized: Beyond your ability to achieve If achieved, this vision will be God-honoring   Your core values represent the character traits and synergistic qualities that you need in order to fulfill the mission and vision of your organization. Established Core Values Our core values are the fundamental beliefs of the organization and its leaders. These values are the guiding principles that dictate our behavior, our actions and act as an internal compass for decision-making. The values underlie our work, how we interact with each other, and which strategies we employ to fulfill our mission. Our core values are the fundamental beliefs of the organization and its leaders. These values are the guiding principles that dictate our behavior, our actions and act as an internal compass for decision-making. The values underlie our work, how we interact with each other, and which strategies we employ to fulfill our mission. Competitive Advantage Your unique selling proposition (USP), defines your company’s unique position in the marketplace. A strong USP lets you to stand apart from competitors and actively focus your energy on creating things that cater to your customers. In other words, having a unique selling point is a competitive advantage that allows busi- nesses to avoid the trap of trying to please everyone or becoming a commodity, simply distinguished by price. The competitive advantage can be described as your unique selling proposition. This advantage must be real, well-defined and sustainable. This should describe how your company will achieve its vision in a way that is consistent with thestatedmissionandcorevaluesoftheorganization. Our core values are the fundamental beliefs of the organization and its leaders. These values are the guiding principles that dictate our behavior, our actions and act as an internal compass for decision-making. The values underlie our work, how we interact with each other, and which strategies we employ to fulfill our mission. Overall Organizational Strategy Your organization-wide strategy should fulfill the following characteristics: Characterizes your competitive advantage(s) Describes how the company will achieve its vision   Only changes if competitive advantage or vision changes Often can lead to an effective “tag line” or brand promise   When everything is in alignment, the direction, purpose, and goals of an organization can be achieved through targeted performance consistent with our overarching core prin- ciples. This purposeful and productive effort moves the organization forward. If efforts are poor or inconsistent with our overall direction and values, the company will flounder and squander many of its opportunities. As we begin a brand new calendar year with 2015, let’s review our overarching goals and objectives that form the basis of a firm’s strategy.
  • 7. PAGE SIX - 2015 BUSINESS STRATEGY GUIDE Produced by C12 Tarrant, LLC What you can’t measure, you can’t teach, reward or manage. Every business has key metrics or key performance indicators. These numbers indicate the health of the activities of the business and help drive the general prosperity of the organization. Theses factors make up the economic “dashboard” of a company and are the key drivers of your “economic engine”. They need to be continually discussed and driven over time (including trend charting, comparison against benchmarks or goals and brainstorming). Over time, these key metrics (or KPIs) should be updated to reflect the long-term needs of the business. Depending on the nature and dynamics of your company and industry, these numbers should be checked weekly, monthly, quarterly, semiannually or yearly. Every business should have a combination of lagging & leading indicators included as a part of their key performance indicators. Lagging indicators measure activities that have already taken place. There is no ability to change the outcome of past activities, however, regular monitoring at intervals allows future outcomes to be improved. Leading indicators give insight into the future activities of the company. Timely monitoring allows the projected outcome to be affected in a positive manner. Examples of lagging indicators include profits per units sold, customer satisfaction factors and return on investment (ROI). Several good examples of leading indicators would include an order backlog, unbilled revenue and the quantity of qualified leads. Projected targets for company metrics should be balanced and aligned across the various business components within the organization. Too much emphasis given to one component of the business will lead to a stressed work environment and a future breakdown in the work flow and may threaten the success of the company. When multiple target metrics have been established, they also need to be aligned with other target metrics and the company’s core principles. C12 calls this process the “Five-point Alignment Matrix”. Its use is further defined in the Strategic Objectives and Goals sections below. The five components and examples of their activities are as follows: TYPE SAMPLE SOURCE FREQUENCY EXAMPLE OF METRICS INDICATOR OF DATA OF REVIEW OF TARGET Raw Numbers Number of Customers CRM database Monthly 50 new customers by end of year Progress Marketing Plan 75% Complete Project plan Quarterly 100% complete by end of quarter Change Percentage 6% Increase in Revenue Over Last Quarter Profit and Loss Report Monthly 15% total revenue increase by end of year FINANCIAL CUSTOMERS INTERNAL PROCESSES PEOPLE MINISTRY Revenue Growth Sales Production Process Human Resources Charitable Giving Cost Reduction Marketing Support Activities Learning and Growth Acts of Service Asset Utilization Customer Service Research and Development Training, Education and Certifications Turning Lives Over to God
  • 8. PAGE SEVEN - 2015 BUSINESS STRATEGY GUIDE Produced by C12 Tarrant, LLC Use this worksheet to identify and list a minimum of three leading and/or lagging key performance indicators (KPIs) in the various business components which are most applicable to the health and fruitfulness of your business. To be meaningful, they must be objectively quantifiable and tracked on a regular basis by the leaders and key team members of your organization. KEYPERFORMANCEINDICATOR NUMBERONE LEADINGorLAGGING Use this space to state the key performance indicator and describe how it will be measured, how often it will be considered its importance: KEYPERFORMANCEINDICATOR NUMBERTWO LEADINGorLAGGING Use this space to state the key performance indicator and describe how it will be measured, how often it will be considered its importance: KEYPERFORMANCEINDICATOR NUMBERTHREE LEADINGorLAGGING Use this space to state the key performance indicator and describe how it will be measured, how often it will be considered its importance:
  • 9. PAGE EIGHT - 2015 BUSINESS STRATEGY GUIDE Produced by C12 Tarrant, LLC S W O T HELPFUL TO ACHIEVING THE OBJECTIVE HARMFULL TO ACHIEVING THE OBJECTIVE INTERNALORIGIN (ATTRIBUTESOFTHECOMPANY) EXTERNALORIGIN (ATTRIBUTESOFTHEMARKET) STRENGTHS (Capitalize on the internal): As a company, what do you do well? What unique resources can you draw on? What do others see as your strengths? What unique process is not fully utilized? WEAKNESSES (Internal things to shore up): What could you improve? Where do you have fewer resources than others? What are others likely to see as weaknesses? What strengths could shore up the weaknesses? WEAKNESSESSTRENGTHS THREATSOPPORTUNITIES OPPORTUNITIES (External things worthy of investment): What good opportunities are open to you? What trends could you take advantage of? How can you turn your strengths into opportunities? What ‘opening’ can you capitalize on in the market? THREATS (External issues that must be identified): What trends could harm you? What is your competition doing? What threats do your weaknesses expose you to? Are there opportunities that can offset the threats? SWOT ANALYSIS: What makes SWOT particularly powerful is that, with a little thought, it can help you uncover opportunities that you are well-placed to exploit. And by understanding the weaknesses of your business, you can manage and eliminate threats that would otherwise catch you unawares. More than this, by looking at yourself and your competitors using the SWOT framework, you can start to craft a strategy that helps you distinguish yourself from your competitors, so that you can compete successfully in your market. Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate to external factors. For this reason, SWOT is sometimes called Internal-External Analysis and the SWOT Matrix is sometimes called an IE Matrix. INTERNAL (Primary) DATA EXTERNAL (Secondary) DATA CAPABILITIES RESOURCES PROCESSES BUSINESS ENVIRONMENT INDUSTRY PERFORMANCE COMPETITIVE DATA Focus groups, customer and employee surveys and review of internal data will reveal strengths and weaknesses of our: Applicable data that we cannot control which may reveal certain opportunities as welkl as threats.
  • 10. PAGE NINE - 2015 BUSINESS STRATEGY GUIDE Produced by C12 Tarrant, LLC STRATEGIC OBJECTIVES: After completing the SWOT Analysis on the previous page, review your Competitive Advantage and your Organization-Wide Strategy to see if adjustments should be made before moving on to the development of Strategic Objectives. At their broadest, strategic objectives serve an organization’s ambition. Your company’s ambition is found in its mission and vision statements. These statements together describe the main thrust of your company and its ultimate goal, a goal that can only be reached by successfully carrying out business. Strategic objectives are the steps and accomplishments that your company will complete to realize that ultimate goal. Strategic business objectives are goals deemed most important to the current and future health of your business. Often, the first step is to prioritize these objectives through a thorough analysis of business practices such as the SWOT analysis on the previous page. Though prioritization of strategic objectives is unique to each individual business, common objectives do often exist. Five of the most common areas to focus strategic business goals are in the areas relating to customers, financial resources, workforce (or people), internal processes (or productivity), and business ministry. Workforce orPeople Internal Processes Financial Resources Market Share Sample Strategic Objective Considerations MISSION, VISION AND CORE VALUES AA CC BB DD Business Ministry MISSION,VISION ANDCOREVALUES MISSION, VISION AND CORE VALUES MISSION,VISION ANDCOREVALUES AAINTERNAL PROCESSES: Productivity Productivity for any organization means fine tuning our business processes to achieve the best result for a customer while increasing profit. As an example, a manufactur- ing organization that fine tunes a process could reduce waste, reduce production time, and in the end, make a better product that gets to the customer faster. A ser- vice business that changes the way customers are handled can decrease call times and increase customer satisfaction and loyalty. CUSTOMERS: Increase Market Share In order to grow, our business needs to increase its share of competitive markets. Marketing plans start with the overall strategic business plan of our company, but explains and details further how specific aims will be carried out. Marketing plans address this through defining product or service offerings, researching target mar- kets, analysis of competition, then strategically placing, pricing and promoting our company’s offerings. BB FINANCIAL: Strengthening Resources Included in the growth objectives of an organization is the availability of capital re- sources to invest in future expansion projects. If our company’s financial resources are strong, capital could conceivably come from cash reserves. For many organiza- tions, strengthening financial resources means to build cash flow or increase assets in order to attract investors and court creditors to fund growth as well as market expansion. CC PEOPLE: Performance Management The people within our organization are often our most important resource. The de- velopment of an employee performance management plan may be paramount to the success of our companies. In addition, programs that align employees’ compen- sation – merit increases, bonuses – to their performance have proven to be very effective. Motivating, rewarding, and retaining top performers is a key business objec- tive for any company that seeks to successfully maintain or exceed growth expectations. DD
  • 11. PAGE TEN - 2015 BUSINESS STRATEGY GUIDE Produced by C12 Tarrant, LLC IMPLEMENTATION: The Action Plan Our businesses cannot move forward without defining specific action steps to take them toward their goals and identified business objectives. Action planning involves identifying the top objectives for our organizations, then developing specific, actionable objectives. Based on our three-to-five year Strategic Objectives that were established in previous exercises, it is now time to develop our one-to-three year Organization-wide Goals (Action Statements). There should be at least one goal for each Strategic Objective. Each goal should start with a verb (increase, reduce, provide, etc.). Remember, each of our goals should pass the “SMART” test meaning that each one must be: SPECIFIC MEASURABLE ACTION-ORIENTED REALISTIC TIME-PHASED CLEARLY STATED GOAL OR OBJECTIVE CHALLENGES IN ACHIEVING THIS GOAL METRICS USED TO TRACK PROGRESS RESOURCES NECESSARY TO REACH GOAL GOALONEGOALTWOGOALTHREEGOALFOUR In order to make each objective truly attainable, it is important to include information such as the people responsible or resources necessary for implementing the overall plan. Also consider the ideal frequency of reporting and how to best update others regarding the progress of entire action plan. Methods of communicating with team members or consultants could include regular email reports, weekly or periodic status meetings, strategic planning meetings, real-time KPI dashboard reports, etc. Based on this regular review cycle, take action to achieve success by implementing one or more of the following: A.) Celebrate successful milestones B.) Adjust time C.) Add/ Change Resources D.) Incentivize and/or encourage E.) Increase awareness of Goals, and F.) Hold responsible persons accountable.
  • 12. PAGE ELEVEN - 2015 BUSINESS STRATEGY GUIDE Produced by C12 Tarrant, LLC 2015 Business Strategy Guide Summary: At the end of the day, there are easy and hard ways to accomplish most things. This truism often proves itself as we lead the companies entrusted to us by God. Using the assessment and planning processes included in this guide, we should be ready and fully prepared for the challenge of creating and maintaining alignment across our entire company for the new year. A final challenge: As stewards and servant leaders for Christ, our role involves providing a two-layered foundation for those who would follow us. First, we must communicate the vision which continually helps to clarify our organization’s path forward. Although we may engage our team in developing certain aspects of this vision, leaders are called to lead as the primary vision-givers, head cheerleaders, and direction-setters. We should consider the counsel of others, but can never fully delegate this primary responsibility. We’re called to be stewards of all God entrusts to us and are expected to maximize God’s investment from an eternal perspective. Great leadership in God’s kingdom is based on His purpose and principles that transcend our daily issues and circumstances. To lead effectively in the here and now, we must remain connected to what’s eternal. Secondly, we’re called to define good performance within the context of pursuing this vision. This involves operationalizing our vision, purpose, and values so that roles, responsibilities, methods, recruiting, training, promotion, and compensation directly reflect these clearly-held principles. In other words, we need to ensure that aligned performance is understood and honored. All workplace activity flows out of these two basic building blocks so vital to unified team performance: establishing vision and direction, and defining good performance along the way. Clarity in these two foundational areas is essential! Have you persuasively communicated to your team your heartfelt beliefs and standards with passion and commitment? Do you reinforce them and clearly live them out? Have you developed your organization with these core principles in mind? Have you taken the time to clearly answer the three foundational questions to develop a team with common understanding? - Where are we going? - How do we plan to get there? - Why should we bother… for what purpose? How can you communicate these things to your team in a manner that will help them to imagine the future, develop buy-in and trust, and see their involvement in this success as a win-win proposition? Ask God to reveal to you the truth in each of these areas. He will show you as you pray and study His Word. Sometimes He will answer through people who know you well, such as your spouse, close friends, or perhaps your C12 group peers. Not in a C12 group? Give it a try in 2015 and you can make this absolutely the best year in your life. C12 is a unique, faith-based, executive peer advisory board made up of CEOs and company owners that meet each month to study and share excellent business practices and solutions from a Christian perspective. As a C12 advisory board, members learn how to better grow their businesses, to improve execution and to challenge, encourage and hold each other accountable as they become better leaders. Check out our website (www.TryC12.com) and register for an upcoming, free introductory breakfast or luncheon. At this brief lunch, you’ll meet some great people, learn more about C12 groups forming now in the Dallas/Ft Worth area and have a terrific meal on us. We hope to see you soon! Joe Petersen, C12 Chairman (817) 602-7035 - Joe.Petersen@C12Group.com WWW.TryC12.COM