Friday, December 21, 2007
The answer, of course, is YES.
I spend my time doing nothing but strategic planning - and I've spent 20 years paying very close attention to what works and what doesn't work in the strategic planning process.
I speak at trade association meetings, conventions, corporate meetings, and I facilitate planning meetings for companies and associations of all sizes, all over the world.
If you think your strategies could use the fresh perspective of an experienced outsider who does NOTHING BUT STRATEGIC PLANNING - give me a call today!
My direct phone number is 734-665-2971
Thursday, December 20, 2007
Every so often, when speaking about strategic planning, I meet folks who describe their business by telling me they are "Value Added Resellers". Now, for people outside of the IT world, a Value Added Reseller (or "VAR" for short) is a company that re-sells equipment, most typically computer and communications equipment. The "value added" part can come from many different sources, although most seem to have to do with installation and technical support.
Value can take on a lot of different forms from being certified with a prestigious vendor, to rapid response, deep inventory or highly trained professionals. The key thing to remember about value is that it should match up with a primary decision making factor for a significant part of your market. Also, remember that some value items - rapid response, for example - may be more valuable to front-line employees at your customer than to their supervisors. This implies that some value sources may make you prone to succeed when selling at one level in an organization - but prone to fail at other levels.
Here's an interesting question for people in the VAR world: can you identify your company's value added? How much of it is simply labor, or specific skills? How hard would it be to replace what you do by going to a competitor? If it's easy, you are in for a tough time, strategically. One of the biggest challenges for any company in business sevice markets is to develop truly distinguishing strategic competecies, and make sure that those competencies are front and center in your customers’ minds.If your main value added items are common or easily copied, you can bet that you will sooner or later face stiff price competition. The only real remedy is to find ways to set yourself apart from the pack. Unfortunately, actually having better knowledge about how to serve your customers might be the hardest way to compete, because your customers might not have the technical expertise to recognize this value directly. So be sure that – whatever value you do use as a basis of competition – you make the value extremely visible and understandable to your customers. If you fail to do this, you can be sure that someone who isn’t as good as you are can take those customers away simply by having a lower price.
Monday, December 03, 2007
One of the strategic planning phenomena I’ve noticed this year is a tendency for execution to go better with some strategic action plans than others. There are several reasons why execution might not go well – outside influences, poor estimation of time requirements or time availability are the most common – but one element stands out as very common when execution goes well: the energy that members of the strategic planning team have for the project. This makes perfect sense, and it also presents us with a challenge.
The challenge is this: some of the most strategically valuable activities that occur as a result of strategic planning are also some of the most difficult. How can we get our management teams excited about taking the harder path?
I suspect the answer lies in the nature of the strategic planning process in general, and in how we assess opportunities in particular. When you look at your opportunities, it’s certainly useful to take into account how much energy your team members have for the ideas. I will hypothesize that the greatest strategic successes occur where your team is excited about doing things that people in other companies would find difficult or unpleasant, so it will often pay to use these factors in assessing opportunities.
Another possible answer for this challenge lies in the area of strategic competency. I have noticed that a truly unique strategic competency that is understood and embrace by the management team leads to excitement about opportunities that other companies would shy away from. This excitement usually comes from pride in the skills associated with your competency – and should always be encouraged.
Tuesday, October 30, 2007
1. Implementation is more difficult that planned
2. Resources are less than planned (especially time, and seldom money)
3. Objective is no longer appropriate
4. Priorities have changed
Which of these issues to you encounter in your strategic planning implementation?
Friday, October 26, 2007
Wednesday, October 24, 2007
Often, when I am either doing strategic planning or conducting a seminar on strategic planning, someone will ask me if one of our worksheets (usually the strategies worksheet – page 5.4, or the mission statement – page 6.1) is like a “vision statement”, “mission statement” or some other buzzword. In general, people who ask such questions have read at least one or two books on strategic planning that use these terms. While I usually answer “yes”, the real answer is – it probably doesn’t matter.
Why would I say this? After doing close to a thousand strategic planning meetings, I can confidently say that terminology does NOT make good strategy. Quite the opposite, in fact – the more buzzwords you stuff into your strategic plan, the more I will worry that it’s not going to work. We use buzzwords in an attempt to solidify meaning around some fairly difficult and intangible concepts that are necessary to craft good strategy – but, at the end of the day, it is the quality of the strategy that matters, not whether you identify the components with the corrct buzzwords.
For your own strategic planning, you should be aware that the process and its outcomes are more important that the terminology you use. One of the beauties of Simplified Strategic Planning is that all of the tools in the process have been tested, tweaked and re-worked over more than twenty-five years to produce tools that will help you generate great strategy regardless of the terminology.
Tuesday, September 18, 2007
What should we do when we face such opportunities? I've noticed three distinct behaviors when such an opportunity comes up: 1. Pretend it won't matter. 2. Embrace it. 3. Figure out a way to try it, cheaply.
Of the three, I'd say #3, The Cheap Trial Run, is by far the best. I think this is because I'm partial to the scientific method - form a hypothesis, figure out a way to test it (ideally with a control!) and compare the results. The more we can do this in our business lives, the better off we will be.
Option #2 is better than #1, in the long run, unless the cost of embracing the opportunity is unaffordably high. I say this because we, as humans, have a terrible penchant for sticking with the tried and true. In business, this is almost always the enemy of innovation, and time and again I see companies get in trouble because they insist on the "safe" route which ultimately leads down the path of staleness and lost market share.
Have you seen other behaviors? How do you respond to the big unknown opportunities in your business? Some thinking about this - and the long term impact it has on your strategic success - may be a productive way to begin your next strategic planning meeting.
Monday, September 10, 2007
Focus is a serious, serious problem for a professional speaker for two reasons. First, when you speak you are absolutely selling your experience, expertise and polish. These increase dramatically with repetition, and a speaker who gives the same speech twenty times is far better than one who gives twenty speeches once. Secondly, it is so very very easy to lose focus as a speaker. In manufacturing, you have to develop new products or markets, hire new people, and sometimes acquire new facilities or equipment to lose focus. For a speaker to wander off focus, all he or she has to do is read a couple of books and agree to speak on a topic that is outside of his or her focus.
Do you have commas in your list? Why are they there? And can you imagine how much better you would be if they weren't?
Thursday, September 06, 2007
I will be teaching the programs in Troy, San Francisco and Orlando - so if you'd like to see me in person, be sure to sign up!
Sunday, August 19, 2007
Does this mean you should give up on the idea because it is irrelevant to you and your business?
Strategic competency is the one thing that separates the men from the boys in strategic planning. Wimpy strategic planners will back off from the idea and go after the low-hanging fruit of modest operating improvements and shrewd tactical moves in the marketplace. The muy macho approach is to take the bull by the horns - so we don't have a strategic competency? Let's get one!
The problem with this response - and the reason most companies don't respond this way - is that it's hard. No question about it, building a real strategic competency where one does not currently exist is probably the most difficult, expensive and time-consuming undertaking in strategic planning. And that is exactly why it is also the most valuable. So why do most of us shy away from committing to an obsession with our competency? I think we shy away because it's risky. Commit to the wrong competency and you will waste a ton of time and money, with poor results to show for it.
But...let's have some confidence in our strategic planning, ok? If we've done a good job on the planning process (and, if you use a real professional, you should have confidence in that), why wouldn't we commit? Sun Tzu pointed out that soldiers fought better if you made them smash their rice-pots - because commitment to winning the battle was the only way to assure they would eat. I suspect that many of us in management are unwilling to smash our own rice-pots...and we pay the price every day with less than stellar results.
Sunday, July 22, 2007
A good example of this happens with airline tickets. There are times when a given route, because of intense competition, is priced very low. Let's say you would be willing to pay $200 for a ticket from New York to Miami, especially if you felt you would be getting good service. Because of competition on that route, you might find prices as low as $100. Now, in the long run, $100 is probably not a viable price for that route - because the average cost of flying the plane exceeds $100. But you buy the ticket anyway, since you want to go to Miami. The airline has suffered an dead weight loss of $100 when you buy the ticket for $100 less than you were willing to spend.
dead weight loss also occurs when you decide NOT to buy the ticket if the fare rises to $250. In that case, the dead weight loss is $200, because you did not spend any money with the airline. Airlines tend to use a process called yield management to fill as many seats as possible at a given price level with minimum dead weight loss, but it tends to be a losing battle. The main reason is that the main fare variations tend to happen in very predictable ways, and passengers understand those systems pretty well. But the basic concept does have some merits, because it enables airlines to offer multiple prices for the exact same seat, which reduces the dead weight loss. How can you do this in your business?
First, it's safe to assume that your current pricing doesn't represent the ideal price to most of your customers. In some cases, you lose customers because your price is too high, and in other cases, you are leaving money on the table because your price is too low. If customers were honest with us about the prices they are willing to pay, we could, theoretically, ask each customer and set the price for that customer. Unfortunately, this doesn't work in most real world cases, and in some cases it involves an illegal practice known as price discrimination. However, you can always offer customers a little more or a little less when you sell them anything. For example, when customers buy electronics at many chain stores, they are offered a service plan. Without going into the merits of the service plan or its real value, this is a good example of upselling customers who are willing to pay a little more for a better consumer experience.
How can you do this in your business? In my next post, I'll explore some of the ways this can be done, and after that, a process for identifying the possibilities in any business.
For those of you who are interested, our Fall Simplified Strategic Planning seminar schedule has been posted. I'll be teaching programs in Anaheim, San Francisco, Orlando and Troy, Michigan. The California programs will be the first time I've taught a public program outside of Orlando and Troy in years, so I hope my West coast readers will take advantage of it.
Friday, July 06, 2007
People who have researched this kind of behavior point out that the key to my son's enjoyment of the game were the "levels" he was achieving. You see, playing the game properly (which isn't that hard) leads to gaining a "level". This game started out as a pretty easy one - my ten-year-old was able to gain ten levels in his first hour of play. After a while, though, it got harder...and he still kept going. He's proud of his levels. He talks about them with his friends. And it turns out they all play this game - a lot.
What can we learn from this behavior? I see three key points for keeping excitement going for anything in your business:
1. Measure, measure, measure. Everyone wants to keep score, and the things we measure help create a sense of accomplishment.
2. Give feedback. While some people are motivated by team scores, most individual effort seeks a personal score. The more immediate the feedback, the stronger the motivation. If it takes a quarter to get feedback, you won't get as much bang for your buck.
3. Allow comparison. People love to measure themselves against each other. It's the equivalent of little boys talking about what level they are in a game. Think about how to give your people useful feedback about their contributions to your efforts that make sense when compared with others.
Are there pitfalls in this approach? Absolutely. You can measure the wrong thing. Sometimes feelings will get hurt. And some measurements will make key people think they aren't contributing much - when, in fact, they are critical to your success. But a little thought can lead to great excitement about the things that really matter to you and your company.
If progress on your strategic planning seems to be slowing down, you may want to consider how to get your team to treat the process as more of a game. While some teams just don't have the spirit, a good team will always seek to win when they know there is a score.
Thursday, June 28, 2007
Far too many companies do strategic planning as a 2-day retreat. I imagine this has been driven by well-meaning, but amateur, "facilitators" who see strategic planning as an easy way to sell a weekend gig in between their "more important" work. In my experience - which is considerable - you need three meetings for a good strategic planning process. Each of the meetings asks a different question:
1. Where are we?
2. Where do we want to go?
3. How will we get there?
Most people pretend you can just ask the middle question. Sadly, as in any navigation, if you don't know where you are, you can't really figure out the proper direction you should be going. Worse yet, in strategic planning, if your management team doesn't AGREE on where you are, they won't agree on your course. You'll save yourself a lot of headaches by having a meeting before you strategize, to figure out what you need to know and how to structure that information. If you skip that meeting, you will likely end up with poor strategy - or, at best, a poor discussion of your strategy.
The third meeting is just as important, because it's not enough just to have a strategic plan. You have to implement the plan, and the hundreds of plans we have completed have shown conclusively that an implementation framework (and a few other tricks we use) greatly increases the number of strategic objectives achieved. In other words, with an implementation plan, you will actually end up doing most of what's in your strategic plan. Without it, you are likely to achieve only 30% of your objectives.
The last comment I'll make on spending time on strategic planning is about spending too much time on planning. Your team has work to do, and planning is only a part of that work. Four or five meetings are not better than three, and if you try to do your planning in, say, an hour a week, you will never, ever get through the process. Almost everyone should allocate between four to seven days (that's 8 hour days) for their strategic planning process every cycle - and maybe another 10-20 hours for homework. That's it. If you need more time, you are probably attempting to implement your objectives inside your strategic planning meetings. While this is admirable, in some respects, it will ultimately sink your strategic planning. So make sure you set a practical, realistic schedule for strategic planning - and stick with it. Otherwise, it can eat you alive.
Naturally, a good, experienced strategic planning professional will tell you these things, and help you navigate all of the questions that come up about the strategic planning schedule.
Thursday, June 21, 2007
There are two important parts to this question, and they both lead to insights about how to improve your strategic planning.
First, should you use an outside strategic planning professional? Of course, I think the answer is yes, but not always. A professional planner (and by this, I mean someone who does NOT consult on other topics, such as marketing, team-building or manufacturing) can add a lot to your process by stimulating good strategic thinking and giving lots of examples of strategies that have worked at other companies. A planning professional can also take a lot of burden off of your team - by knowing what to do, when to do it, and how much time to spend on it. A highly experienced strategic planning professional will know exactly when to let a conversation run on and when to cut it short, in order to create a strong strategic plan with great support from your strategic planning team. When companies try to do this on their own, they inevitably have difficulties with discipline and buy-in, and worse, the person doing the planning has to divide his or her attention between the planning activity and the strategic content of the plan.
Here are the most common mistakes around the question of whether to use an outside strategic planning facilitator:
1. Not using a strategic planning professional when you need one
2. Using one when you don't need one
3. Using the wrong person
Most poorly written strategic plans that I've been asked to fix over the past twenty years have been the result of either #1 or #3.
Second, who should you use as a strategic planning facilitator? Obviously, an experienced professional who does nothing but strategic planning. Why? Because strategic planning is like surgery - yes, a doctor can do it, but if you need it, you probably want someone who does it over and over again. The difference between getting your strategy right and "pretty close" may only be one or two percent - but that can amount to millions of dollars over time for even a small company.
So what skills should you look for? Here is a list that I have found useful when hiring strategic planning professionals for my firm:
1. Strategic thinking skills
2. Team facilitation skills
3. Solid business understanding
4. The ability to absorb a large amount of information quickly
5. Strong personal integrity
6. Familiarity with a large number of different business models
7. Familiarity with the strategic planning process
Here are some skills which do NOT affect the quality of your plan (although I sometimes look for them when hiring):
1. Experience in your industry
2. Familiarity with the latest buzzwords
3. Sales ability
4. Certifications of any sort
5. Public speaking ability
Hopefully, these comments will help you understand the need for a strategic planning professional, and how to pick a good one.
Monday, June 18, 2007
So - who should do your strategic planning? Ideally, the strategic planning process should be undertaken by a strategic planning team made up of the CEO and his or her direct reports. In a perfect world, this would be a team of 6-8 people who have intimate knowledge of all the different facets of your business - markets, operations, and financial issues. This group must also have the ability to implement the plan through their day-to-day involvement with the operation of your business. This means that the primary strategic decision making role should go to the people with the primary strategy implementation responsibilities. NOT the board of directors, NOT outside suppliers or union representatives, NOT customer representatives, and NOT a consultant. There are roles for all of these people in your planning process, but the decisions need to be made by the people who will actually have to carry them out. A really good strategic planning consultant, for example, will coach your team through the process in a way that saves them time and stimulates them to better strategic thinking. But by no means should such an outside actually set your strategic for you!
The key idea here is that there are two critical things required for a good plan to work: one is input from the right people, and the other is commitment from the right people. Involving the right people in your strategic planning process will get you both.
Thursday, June 14, 2007
The cold, hard fact about strategic planning is that it isn't over when the strategic planning meeting is over (and the consultant goes home). Strategic planning is NEVER done - it is part of a cycle of activity that should be changing your company in significant, noticeable ways over time. If you are doing strategic planning and you are not seeing noticeable change, it's probably because you have no mechanism for tracking.
In Simplified Strategic Planning, we tell people to review progress on strategic objectives by writing action plans for them with monthly milestones - and then track progress on those milestones with a mandatory monthly review meeting. This meeting takes a couple of hours most months, and is well worth the time. There are two key benefits you get from this: (1) It puts accountability into the implementation plan and (2) It gives you the ability to correct your course in mid-year when reality doesn't match your plans.
In my experience, of the hundreds of companies I've done strategic planning with over the years, the top 10% ALL do a monthly monitoring meeting and the NONE of the bottom 10% do a monthly monitoring meeting. When you consider that the top 10% in my database averaged 40% per year profit improvements over 5 years, you can see why I strongly recommend this approach!
Sunday, June 10, 2007
A good rule of thumb for objective setting is to have no more objectives than you have effective team members. For many companies, this puts the limit somewhere in the 5-10 range. Most companies I've worked with in the past five years have done very well with six objectives.
Friday, June 01, 2007
Surprisingly, a common answer to this question is "We didn't really use a process" or "We read a couple of books and came up with our own process". Obviously, both of these can lead to problems. There are inevitable pitfalls in process design in strategic planning, and no process, or a mishmash of elements from several processes, can get you into those pitfalls quickly. So my first point is use a strategic planning process! Ideally, you want to use a process that's been tested and refined through use in thousands of companies in many different industries over the past 25 years, with a proven track record. Anything else is probably a mishmash of other processes put together by an inexpert strategist who wants to get into the business, and just as likely to lead to problems. Your best bet, of course, is a program like Simplified Strategic Planning, which is the most popular strategic planning model in use today.
The second point I want to make is that many processes that people use for strategic planning leave huge gaps where there should be data, analysis and documentation. My favorite example is Balanced Scorecard, which is an blown-up version of the Measures of Performance we started using in 1981. It's not a complete planning process - it's just a part of the process - and yet many companies treat Balanced Scorecard as their main strategy effort. That's like trying to drive from New York to LA by watching the speedometer and gas gauge - but not a map. Sure, you'll make good time...but where the heck will you be going?
The most common gap I find in other people's planning processes is implementation. Be sure to ask about how a process handles this, because implementation is the most common issue with strategic planning among attendees at our Simplified Strategic Planning seminar.
Wednesday, May 30, 2007
There are a few questions I always ask, because they lead to some of the most common reasons why people have trouble with planning.
1. What strategic planning process did you use?
2. How many objectives did you set?
3. How are you tracking implementation?
4. Who did the planning?
5. Did you use an outside strategic planning facilitator?
6. How much time did you spend on the process?
7. How many market segments are you using?
8. Are you segregating your assumptions from facts?
9. How are you measuring the success of your plan?
In my next few posts, I'll discuss each of these questions, and the answers that are often warning signs that the planning process needs a major fix.
Tuesday, May 29, 2007
The second way to schedule your strategic planning process is to do it just after your year end. The main advantage of this is to give you the most complete, accurate and up-to-date data on your company's strategic performance. If your financial data gives you key insights about what strategies are working well for you (and it should), this approach might give you the best information for your strategic planning. One possible disadvantage is that it might not allow for inclusion of the action plan expenditures into your budgets, requiring a second look at your budget at the end of the strategic planning process.
The third scheduling approach is to time your strategic planning for a low point in management activity for the year. The main advantage of this is that you won't overload your executive team with the additional burden of planning meetings and homework. For construction, this might be the Fall or Winter, while for schools this is most likely the summer.
All of these approaches have pros and cons, and - of course - there are hybrid approaches that combine these approaches to scheduling strategic planning. I'd suggest you try one and see how it works for your team, understanding that it's always possible to change the timing of your strategic planning in the future. And, of course, a short discussion with an experienced, qualified strategic planning consultant can really help you find the timing that is right for your organization.
Thursday, May 24, 2007
I have two very opposing views on this. The first is that swinging at home runs can be very distracting and, when you actually get a hit - it can be downright disastrous. One of my earliest home run stories tripled the size of the company in less than a year and brought their strategic planning to a halt. Within three years, the company - partly because they had stopped planning - had serious growing pains, including cash flow issues. The great "opportunity" they had found nearly killed the company! This is not as uncommon as you would think - there is a very real danger of growing your company to death. Also, let's not ignore the fact that, as in baseball, you are likely to have a lower batting average if you are always hitting for the fences.
On the other hand, while most of my success stories are about dependable, steady growth, there are quite a few that were explosive...and that can be the just thing to get a company out of a rut. Certainly, I'm proud of the home runs that worked out well, because they were built on sound strategic thinking and created sustainable competitive advantages.
So my basic answer is this: put most of your effort into your strategic competency, and the strong, steady growth that comes from that. Consider having a project with home run potential on a side burner, especially if it relates to your competency, but don't bet the farm on it. And...if it starts to take off, be very careful of how it will affect the viability of your company in the long term. Strategic planning is an excellent tool for assessing these kinds of situations, and if you are looking for explosive growth - or in the middle of it - you will be well rewarded if you take the time to do a good job of strategic planning.
Friday, May 18, 2007
Any strategic planning consultant who says "I do strategic planning and..." is not focused. They are just fooling around when it comes to strategic planning.
You wouldn't go to a brain surgeon who says "I do brain surgery and plastic surgery." So why work with someone who does something else, like marketing, operations or teambuilding consulting? Your company deserves the best, not an amateur.
Here are some useful questions for when you are choosing a consultant:
1. How many strategic plans did you work on last year? In the past 10 years?
2. What results do your clients get? Can I talk to them?
3. What else do you do besides strategic planning? Will you try to sell that to me?
4. How are you different from other people who do strategic planning?
5. Why do you think there is a fit between you and my company?
6. Do you work with my competitors? How do I know you won't share my data with them?
On that last question - you want to avoid consultants who work with your competitors. The worst strategy is the one that looks just like your competitors - and using the same consultant is a sure-fire way to get that.
Thursday, May 17, 2007
People who use any strategic planning model tell me that implementation is really the hard part for them. Yes, I make my living helping people come up with great strategies, but I recognize that I get to go home at the end of the meeting and the managers I work with have to actually put a lot of attention and time into turning those strategies into reality. I suspect that the time I spend on implementation - about 20-30% of the whole process - is one of the reasons my clients get such great results. Some clients tell me it feels a little weird the first time through, but after the first year, almost all of them are completely sold on my unusual approach.
One of the keys - and this is a valuable point for anyone concerned with strategy implementation - is that we pay a LOT of attention to the money involved in most of our projects, and very little attention is devoted to the time involved. This has always seemed backwards to me, because (in the hundreds of projects I've worked on) 95% of the projects that fail in execution do so because people at the top of the organization didn't spend enough time on the project.
So my idea for the Implementation Program is to lay out each company's objectives, action plans, and resource issues, and discuss those in depth, probing for areas where little changes can yield big results in effectiveness. I'm guessing there will be some really great stuff we can do in a program like that on three areas: (1) writing better objectives, (2) writing better action plans and (3) structuring the resource allocation process to yield more realistic commitments. This is just an idea, so I'd love to hear what you think about this!
I think any company who is doing strategic planning could leave the room with a much better implementation plan - maybe even people who are already working with me! If you are interested in this program, drop me a line. I haven't decided where to hold it yet - it might be anywhere in the world.
On that note, I still have a couple of days available when I'm in Europe in late June- early August - my plan is to spend most of that time in Switzerland, but I'd love a chance to do a Simplified Strategic Planning workshop for anyone who hasn't had a chance to see me for a while. Since my only European gig was in Norway last year, that's probably most of my readers in Europe. Drop me a line if you think some great strategic stimulus would be valuable to your company.
Sunday, May 13, 2007
1. Good objective setting
2. Well-written action plans
3. Good allocation of both time and financial resources
4. Routine monthly monitoring of action plan progress
Are you doing all of these things well? If implementation is an issue for you - as it is for most companies - you might want to think about how you can improve your effectiveness in these four areas.
Friday, May 04, 2007
Wednesday, May 02, 2007
Sunday, April 22, 2007
1. What do we do?
2. For whom do we do it?
3. How do we beat the competition (or absent competition, how do we excel)?
A good strategic plan also incorporates a systematic analysis of the environment, current situation, organizational capabilities, and assumptions about the future as a foundation upon which to build the answers to those questions. Finally, a good strategic plan, being a tool for creating better results, is simple and includes short-term implementation activities that make a critical difference in pursuing your organization's long-term vision.
Anything less than this is just a piece of a strategic plan that someone is calling a strategic plan so they can charge you more money for it. At best, these planning fragments will be useful but leave you exposed to many of the common pitfalls of poor strategic planning. At worst, they will waste your organization's time and money and leave people disillusioned about the entire strategic planning process.
Fortunately, the Simplified Strategic Planning process will help you avoid these pitfalls. Unlike ANY other model, it has been fine tuned through application over 25 years in hundreds of companies of all sizes.
Sunday, April 15, 2007
Using a diagram similar to the 3-7 element flowchart mentioned in my last entry, you can ask the team which relationships/communication points are most critical to effectiveness in each area. For example, in some companies, the key to effectiveness in customer relationships is the relationship between sales and operations management. Since these areas involve very different mental disciplines, it's not unusual to find the two departments don't communicate well with each other, and there may be some excellent opportunities there to improve effectiveness.
One way to dig in to this diagram is to ask each team member how value is created or destroyed for the customer in their department. Once you have identified, say, the top three ways value is created in each department or area, you can draw lines that connect those value drivers to the departments involved. In many cases, this mapping process can identify areas where you can greatly increase your value to the customer by putting a little effort into improving how the involved departments communicate and work together.
After completing this diagram, it's useful to ask the individual team members how they might improve their role in the identified relationships. You may also want to ask individuals to pick something they do that works well in this area that the other managers might benefit from trying.
I almost always use these tools when discussing strategic issues (page 5.2) in the simplified strategic planning process, which is in the second meeting of the cycle.
Wednesday, April 04, 2007
One way of driving home the personal nature of commitment to your team's plan is to bypass personality issues and address the question in a fairly neutral way. An exercise I often use to do this involves asking the team members to identify exactly how they envision themselves contributing to forward motion along the lines of the strategy, and how they see themselves (and their activities) creating obstacles to that same forward motion. As you might guess, it's much easier to get team members to discuss their positive roles in a group setting. One way around this is to reduce the initial interactions around this to a one on one conversation. It's also a great exercise to have team members pair up and discuss the positive contributions, then have each member report on the positive elements of his/her partner.
To reassure the team, I like to tell them that this exercise is not about who is the best, or who has the least weaknesses. Instead, I point out that the greatest opportunity in this exercise lies in our ability to find the best adaptations to existing weaknesses - and that the more obstacles we can identify, the more obstacles we can get out of our way.
So...here is one process, in outline form:
1. Ask the team members to pair up and spend 5 minutes describing to their partner the ways they can drive the strategy forward.
2. Ask the team members to spend 3 minutes identifying specific ways they either (have created obstacles to this in the past) or (could create obstacles in the future).
3. Lay out what you consider to be the KEY elements of the strategy in a diagram (say, on a flipchart). Ideally, it's optimal to have just 3-7 key elements, such as "customer relationships", "quality processes" or "asset acquisition". For a FULL description of the modeling discipline I use, see Jay Forrester's Industrial Dynamics.
4. Ask people to point out where their partners can contribute the most on your diagram, and illustrate it.
5. Ask people to point out where they might/do obstruct the strategy in the same way - but be VERY encouraging about it. The key here is not to fix the person, but to get the pieces of activity that don't FIT the person moved to someone else. A useful set question here is "How could we accomplish this effectively? Are you the right person for this task? Can we use your skills better elsewhere? Is there a process, person, or piece of equipment that would take some of the difficulty of this activity off of your shoulders?"
6. One of the best ways to really tie this up is to ask the team where they feel they personally can create the biggest improvement in the effectiveness of the company. It is important NOT to permit discussion of what other can do, but rather to keep focus on how you can change yourself, or what you do, to increase effectiveness. At times, I've encouraged this by suggesting we will devote resources to the one or two best ideas, but even simple verbal encouragement will generate good results.
The point of this exercise is to really connect team members with the key elements of your strategy. As you progress with your strategy, this exercise can serve both as a reminder of this connection, for the team members, and a diagnostic for some types of implementation issues, for the CEO.
I've tried this exercise several times with different clients now, and I've been impressed with the results, even with clients who have been through several cycles of the strategic planning process already. There are some critical issues that tend to surface with this approach, and team members feel really good about what we achieve when we put this exercise into the strategic planning process.
In my next entry, I'm going to cover another exercise I use to make the strategic plan more personal.
Tuesday, April 03, 2007
As stated before, "drilling down" is a term I use for picking apart parts of the strategy framework. I'm assuming you are using simplified strategic planning as your basic strategic planning model. If not, be sure that your planning process has the following information outlined WELL before you attempt this technique. (I say this because most strategic planning processes are written by people who don't do that much actual planning, so the important chunks may be missing):
1. A good outline of your own capabilities. If you've done a standard "SWOT" analysis, you are probably fine, but avoid focusing on the weaknesses and be wary of BS.
2. A good outline of the capabilities of your 3-5 key competitors. NOT 20 competitors...just 3-5 that really bug you.
3. A good analysis of customer behavior in your markets, in particular, needs, preferences and specialty/commodity tendencies.
4. A good understanding of your operations, current technology, and supplier markets.
If you have all of these, "drilling down" simply involves picking ONE element - such as your supplier markets - and closely examining how they affect the strategic dynamics inherent in the information provided above. For example, in one retailing client, when we first looked at supplier markets, we assumed they wouldn't have much impact on our strategy, because everyone was in the same boat vis the different suppliers. Drilling down led us to ask whether a differentiated supplier market position was possible. We looked at 4 key supplier markets:
1. Capital/real estate
2. Labor/key skills
3. Merchandise/raw materials
What immediately became clear in our discussion was a firm belief that our larger competitors would quickly copy any strategic move we made in most of these markets - and beat us squarely. In key skills, however, we identified that the size of our competitors would make them reluctant to radically change their human resource practices, so we opted to examine possibilities relating to those. The "drill down" involved a very detailed, almost tactical look at opportunities and operational changes required to change our ability to attract and retain people with key skills. We specifically rated each idea for 2 characteristics:
(1) How easily would/could our competitors copy this change?
(2) How well does this change fit our strengths?
Ultimately, this helped us choose a combination of initiatives (including training and recruiting) which yielded a significant advantage in this area. In the following year, the company increased market share by 10% in a large and mature market while maintaining premium prices.
Friday, March 30, 2007
When I talk about drilling deeper, I'm definitely talking about a strategic planning process that involves the top management team, and not external stakeholders or media. When you take planning outside the organization, you are generally looking to communicate why your strategy is a good one rather than how you came up with it. An example of what I mean by "drilling down" could be seen in an airline examining the customer satisfaction impact of all the contact points a passenger may have with them. This might involve some detailed analysis of the operation, combined with insights from market research on things that affect customer satisfaction. While it would look tactical to an outside observer, this kind of "drilling down" can identify places where operational, financial, IT or HR practices (to name a few) can be changed to be better aligned with the overall corporate strategy.
This kind of work is unlikely to be productive with the media, because it is time-consuming and hard for them to package. They will, however, appreciate any surprising bit you might come up with. For example, when Sears acquired K-mart, they saw the real estate involved as the key piece of the value of that deal. This was interesting, because it was a merger of two huge retail brands, not just a real estate transaction. The news media were fascinated by this, without really knowing why that made sense for Sears.
Outside stakeholders may have more appreciation for the actual "drill down" process. The best way to handle this with them (if you have the resources) is to walk them through the key questions. They won't have the data or experience of the management team, but - if you are well-prepared - you can throw those in as trump cards to move the conversation and its conclusions along.
One important point here is that the process of strategic planning is entirely different from the process of communicating the strategic plan. Both are important, but it's possible to do either poorly if you mix them together without considering how you will affect the quality of the strategy or the perception of the resulting plan.
Thursday, March 29, 2007
I currently have client dates in a number of cities where I wouldn't mind adding a day or two for a workshop, or even a full three-meeting cycle. Here are the cities I am currently looking to add dates in:
If you would like me to coach your team through the process...or simply train them in our highly popular program...please contact me about meeting in one of these cities!
This question often comes up for reasons that are inherent in the process itself. First, strategic planning - as an ongoing process - tends to yield easy benefits in the first couple of years, as your team focuses attention on the low-hanging fruit. After a couple of cycles of this, the fruit that is left may seem to be a little harder to reach...and often, it is. Secondly, if your process is well-run, each cycle of planning will seem more like a part of your management routine and less like a special event. This is true of any process that you repeat routinely, but with strategic planning, the first couple of years seem strange and wonderful because good strategic planning is so far outside the norm for most managers. Finally, as your team gains experience with the process of identifying strategic objectives and effectively implementing them, they also learn how much work is involved...and there may be a natural reluctance to commit to the big, exciting projects that bring so much energy to the first few years of strategic planning.
In the next few posts, I'm going to take a look at some exercises I have used to give the ongoing planning process a little more "zing". In general, these exercises fall into 3 categories:
1. Making the strategic plan more personal - many plans lose their "zing" because they seem to be about someone else...so identifying how individuals affect - and are affected by - the strategy can help reverse this.
2. Giving the vision more substance - sometimes, the vision encompassed in your strategy is too abstract for the team to "get into it". In these cases, some work on what the reality of that vision will look like can be just the thing.
3. Drilling deeper into specific parts of the strategy - in many cases, there are things just below the surface that can dramatically transform your company. A little digging in some specific areas can turn up gold!
Friday, March 23, 2007
This is one of the most difficult parts of the whole strategic planning process. Getting started with strategic planning can appear to be a daunting task, even if you are using a simple template like Simplified Strategic Planning. Here are a few tips to help you get started:
1. Set a date - sounds simple, but if you have a process with a schedule, committing to that schedule will help a lot.
2. Don't wait until you are ready - sadly, a lot of companies get stuck with this. There is no time when you are more ready to do strategic planning - so just start NOW.
3. Don't wait for data - you might do a better job of strategic planning with more/better data, but, again, there is no substitute for just doing the plan.
4. Don't overcommit - do NOT use a process that takes more time than you can commit to strategic planning. A good model, like Simplified Strategic Planning, should cover everything from gathering data through implementation with just a few days invested.
5. If in doubt, take a class - a seminar on strategic planning is a great way to get started - especially if you can bring your whole team.
6. When all else fails - or even if it doesn't, you will get a LOT from using a real strategy professional. The very best do NOTHING BUT strategic planning, and have done the strategic planning process hundreds of times. A professional will get you going - and coach you to do a better job the first time than you would even with years of experience.
strategic planning, strategy, management, business, getting+started+with+strategic+planning, strategic+planning+process
Wednesday, March 14, 2007
Here are a few tips from successful transitions that I have seen in the past 20 years:
1. Start early! It's never too soon to think about transition.
2. Don't dwell on the weaknesses of candidates...almost always, other people can handle the things they can't, but DO look for candidates with big strengths in key areas.
3. Involve internal candidates in your strategic planning as soon as you can.
4. Use vacations and other absences to give candidates time "in your shoes"
5. Mentor the candidate positively - I've seen really good successor candidates abruptly leave companies because they were negatively mentored.
6. Help the candidates get a good sense of their own strengths and weaknesses as managers
7. Start working on professional development for the successor as soon as you can
8. If you see a big red flag come up on any candidate be willing to try another candidate
strategic+planning strategic+planning+process management business, succession+planning
Tuesday, March 13, 2007
Here's a thought process you may find useful: every management team needs good implementers, good strategic thinkers (planners), and good idea people (creatives). While every manager has some of each of these skill sets, the best at each of the three will likely have less of the other two. This is because the mindset of, say, a good implementer, is about doing, while the mindset of a good planner is about thinking ahead. Neither is necessarily better than the other (although some are better for certain functions in your organization). Strategically, these three management approaches need to be present, in strength, in your top management team.
When thinking about who will succeed your current CEO, you want to watch your team for evidence of one of these three strength areas:
Implementers will be very effective working on action plans, and will generally have all their homework done, well and on-time. Action plans written by Implementer types will have lots of steps, most of which are specific, concrete actions.
Planners will likewise be very prepared for your meetings, but are likely to analyze more. An action plan written by a Planner type will have many more preparation and analysis steps.
Creatives will bring a lot of clever ideas to the table - but many of them will be impractical. Creative types tend to turn in homework that is incomplete but peppered with brilliant insights, and their action plans often contain just a few really critical steps.
I won't tell you that one of these makes a better CEO than others - because different companies, at different life stages, can benefit greatly from each of these. What I will tell you is that it will pay to be aware of these three styles and strengths in your own management team, especially when you are doing your strategic planning. An effective CEO always brings one or more of these skill sets to the company, and being aware of how that mixes with the rest of the management team can help you in your selection process.
strategic+planning strategic+planning+process management business, succession+planning
Thursday, March 08, 2007
Companies that do no succession planning usually survive the transition period from one CEO to the next. There is no clear data on the correlation between profitability and succession planning, but research on market leaders versus laggards in various industries do note some correlation between market leadership and certain succession planning practices. Those practices are:
1. Management development programs
2. Early identification of successors
3. Mentoring of identified successors
All of these take time, and they can cost money, as well, so it's a good idea to understand why you are doing succession planning before you start. Also, you want to match the investment you make in the process with the outcomes you expect. It's quite possible for a smaller firm to spend tens of thousands of dollars on the succession planning process with little measurable output on the bottom line.
I'm not saying that you shouldn't do succession planning, but I am saying that you need to choose an approach that will match your organization's resources, and the value that you will get from a successful transition. If you are already doing strategic planning, there are some specific steps you should consider adding. Over the years, I've noticed companies doing well with succession when they have undertaken projects to do the following:
1. Inventory strengths and weaknesses of the management team
2. Assure the management team has easy access to a wide range of development opportunities (eg seminars, conferences, coaching, etc.)
3. Involve possible internal successors in the strategic planning team and the action plan teams
4. Discuss possible successors with a knowledgeable outsider who is familiar with your organization
5. Arrange opportunities for non-task oriented interaction between possible successors and those who might mentor them
It's clear from available research that some succession planning activities pay off handsomely, so you may want to examine this activitiy as a possible strategic initiative for your organization. Here are a few items that suggest a high value for succession planning that may come up in your strategic planning:
1. There are predictable reasons to expect an ownership transition, such as impending retirement of the founder/CEO, or health issues
2. Succession questions are making your team reluctant to commit to a clear strategic vision
3. There is an identified weakness in the next level of management or the pool of likely successors
strategic+planning strategic+planning+process management business, succession+planning
Monday, March 05, 2007
In my experience, one of the most important intersections of the two disciplines occurs when strategic planning is an ongoing part of the organization's overall strategic management. Strategic planning will very likely help you towards a successful transition in five distinct ways:
1. Strategic planning situation analysis will likely identify succession as a key issue early
2. Strategic planning will help the departing CEO to evaluate the strategic thinking of his or her top management team
3. Strategic planning can expose the new CEO to the strategic thining of the departing CEO
4. Strategic planning is an excellent joint activity for the new and departing CEOs during the transition period
5. Strategic planning helps to stabilize the organization during what might be an otherwise disruptive period
While you probably don't need benefit number one, if you are already concerned about succession planning in your organization, the other four benefits are all excellent reasons why a routine, disciplined strategic planning process should precede any planned succession and continue through the transition period.
strategic+planning strategic+planning+process management business, succession+planning
Wednesday, February 28, 2007
10. Reflect on Success and Failure
All organizations that are successful over long periods of time are learning organizations. This requires that the management team learns from its experience. It's worthwhile, periodically, to take some time to reflect on both your sucesses and your failures, because each has something to teach you about what works and what doesn't work. The most important thing to question is why you succeeded where you did...and also, why you failed. Do not make the mistake of focusing on one over the other, because they both offer great learning opportunities.
One of the most difficult things to do in reflecting on success and failure is to separate the effects of good decisions and good situations. This is important, because we want to learn to make good decisions under any circumstance, but circumstances are unlikely to co-operate by repeating themselves. A good example of this can be found in Disney's efforts to restore profitability in their theme park business after 9/11. The situation caused almost all of the decline in profitability, yet the management team made many shifts in strategy hoping to find a better way to make money with the park operations. In the final analysis, profitability returned as the economy resumed growth and people resumed travelling to the Disney parks. On reflection, it would be easy to confuse increased profitability in this case with good strategy, but many strategies would have resulted in increased profitability in that situation. Likewise, Wal-Mart's same-store sales numbers suffered as the economy recovered - not as a result of poor strategy, but rather because some consumers, who shifted to buying at discount stores when the economy got tight, shifted away when things improved. In my mind, these are both cases of what I think of as "living by the sword and dying by the sword". In your own strategy, if you succeed by riding the pendulum one direction, think about how you can succeed as it swings back.
strategic planning, strategy, management, business, marketing, entrepeneurship, growth, learning
Monday, February 26, 2007
9. Don't Underprice
It's hard to push the idea of charging for value when some of the most notable strategic success stories of recent years have been commodity players. After all, if low prices worked for Southwest Airlines and Wal-Mart, shouldn't they work for everyone? The answer is NO. In any industry - any industry at all - there is only ONE winning company that follows the low price strategy, and that only occurs if that company has a real, tangible, differentiating advantage in cost (not price - cost). In many industries, what this means is that there is a crowd of bottom-feeders all thinking they will be the next Wal-Mart - with none of them succeeding. I can think of very few more certain recipes for failure than to pursue the low price strategy without a serious cost advantage based on strategic competency.
It's a hard fact that 90% of pricing mistakes are underpricing. The reason is quite simple - we are reluctant to lose customers for any reason, and - often - we have trouble believing in the true value of what we are selling. To succeed, we have to escape this trap. There are two essential ideas necessary for this:
1. Understand your true value and be confident in it. - it's much easier to hold your ground on price when you know what your added value is worth. The sale makes more sense to everyone - pay X get Y value, or pay less and don't get it.
2. Be willing to lose customers on price. Good products, high quality and excellent service are not for everyone. What this means is that some customers just aren't willing to pay for anything more than the minimum value. Your task is to get those low-value customers to but from someone else, so you can focus on the customers who value what you do well.
This is one of the hardest tips I've given, because it's terribly difficult to watch customers go somewhere else. Just remember, at the end of the day, it's not how much you sell, but how much you make that really matters.
strategic+planning strategic+planning+process management business pricing
Sunday, February 25, 2007
8. Execute Better
Execution is the Achilles' heel of strategic planning. Far too often, we create elegant, wonderful strategies that fall short of our expectations simply because of lackluster execution. There may be many reasons for this, but there are two very common reasons which can be mitigated by proper strategic planning processes.
The first common reason execution becomes an obstacle is that we always want to commit to more than we can actually accomplish. In terms of Simplified Strategic Planning, this amounts to setting more strategic objectives than your team can realistically implement. There are two basic rules of thumb I use for matching our commitments to our capacity. The first is an absolute number - no team will be effective implementing more than 10 strategic objectives. Sure, you may get more than 10 objectives done, but with real strategic objectives, you will certainly be taxing every part of your organization to do so. And why not? Because you will eliminate your ability to handle unforeseen events, and cripple your organization's ability to take advantage of serendipitous opportunities. The second rule of thumb is that you generally want as many objectives as you have effective implementation leaders in your organization. While it's possible for an implementation leader to do a great job on two or even three strategic objectives, you will be reducing his or her ability to perform in any other function in your organization. You also will lose a certain amount of focus, which is usually going to reduce effectiveness. Please note that this rule of thumb refers to "effective implementation leaders" - not "strategic planning team members". While we like to assume that all of the members of our strategic planning team will be effective implementation leaders, this is often not the case.
The second common reason execution stumbles is that we often do a poor job of monitoring our progress on implementation. Most strategic plans are poorly designed for monitoring - there are few, if any, measuable milestones and no built-in process for routine monitoring. In addition, we have a tendency to put the monitoring of strategy implementation at the bottom of our priority list, because it is seldom urgent. As we've pointed out so many times in our strategic planning books and strategic planning seminars, you must commit to monthly monitoring of your progress if you want good execution on your plans.
strategic+planning strategic+planning+process management business discipline execution implementation
Friday, February 23, 2007
7. Segment Better
This tip goes with some of the previous tips very well. When I tell people they need better market segmentation, I don't mean that they need more market research data, or anything like that (although some of you surely do need more market data). What I really mean is that your segmentation looks just like everyone else's segmentation.
Remember tip #3, "Be different"? This is perhaps one of the easiest ways to become different that I can think of. You see, when you define a really unusual market segment that no one else uses, you start to think strategically about how to provide better products and services for that market. Because you are the only person targeting that segment, it doesn't take long before you become the preferred supplier for that segment. Now, that may not lead to 100% market share (although sometimes it does!), but it will enable you to have the first, best shot at any customer within that segment.
Here is a good way to re-think your segmentation productively: Take a look at a list of your 10 favorite customers - the ones you really make great money on. Ask - do any of these customers belong to a grouping that is NOT recognized as a segment in my industry? If your industry is segmented by consumer age and gender, for example, perhaps you should target by ethnicity, or hobbies. If you are in a B to B market that is segmented by industrial classifications like automotive and appliance, consider segmenting by size, ownership or creditworthiness. Not every segmentation you consider will work, but those that do will create golden opportunities for you!
strategic planning, strategy, management, business, marketing, entrepeneurship, growth, market+segmentation, segmentation
Thursday, February 22, 2007
6. Understand Value
Now, when some people say value, what they really mean is "cheap", and that's not what I'm talking about here. I'm talking about (Q+S+E)/P. Here, Q=Quality, S=Service, E=Effectiveness and P=Price.
The hardest part of understanding this is to know that each customer has his or her own approach to value...and that the definition of value may change depending on the circumstances. For example, let's say my wife asks me to get a loaf of bread on the way home. Am I going to drive 10 miles to Sam's Club and buy a 12-loaf bundle? Of course not - I value my time more than that. So I have my choice of three stores within 2 miles of my home - one is cheaper, almost as cheap as Sam's, one is dreadfully expensive, but very high quality, and the third is pretty expensive but there is never a line there because the store is very well staffed.
Where will I go to get that loaf of bread? If you said "it depends", you are right. If we are having a fancy dinner, I might stop at the really expensive, high quality store. If I'm pressed for time, I might stop at the really quick store. And if I have to buy a lot of other, very commodity oriented stuff (like Kleenex and bleach), I may go to the cheap store. But in each case, my value equation has changed.
To take advantage of understanding this, you have to accept that you won't always get every customer - and, in fact, sometimes you won't get 100% of the business from ANY customer. This is OK...as long as you do get some customers some of the time, and their reasons for choosing you are well integrated into your operations, marketing and pricing. What do I mean by this? Take the expensive, high quality store in the example above. Their operation includes more highly paid people than either of the other stores, because they spend a good deal of time and money on learning about the best products and why those products are better. This helps the store to sell a pound of salami for $18, because every staffer involved can explain to you why you would choose this product over a $3.69 package of Oscar Mayer salami from another store. In addition, choosing just the right - often unique - products to sell takes a lot more know-how than goes into merchandising in a more run-of-the-mill store. And, of course, there must be additional margin to compensate for the increased difficulty of running a specialty store.
So - do you understand the value your customers see in you? Most successful companies have a firm, clear answer to this. Often, profitability problems are the result of mixing two reasons (cheap and high quality, for example), because the underlying operational requirements of optimizing different reasons usually clash, creating inefficiency. A proper strategic focus will greatly increase your ability to create strategic alignment around one, good reason to be preferred by your customers.
strategic+planning strategic+planning+process management business value marketing strategic+competency
Wednesday, February 21, 2007
5. Respond Faster
"Time is money". We've all heard that, right? But does your company operate that way? Many times, I've seen companies succeed wildly simply because they do things faster than their competitors - usually, a LOT faster. This works simply because all of us, as consumers, would prefer to have whatever we want whenever we want it. In many cases, we are prepared to pay a huge premium to someone who can save us just a little time - sometimes even paying this premium for a product or service on inferior quality.
How can you use this? First, in your strategic planning, you need to understand the time performance standards of your industry. Do 90% of your competitors turn around a customer order in a week? A day? An hour? Obviously, this can vary a lot, depending on the business you are in. But whatever that standard is, you need to ask the question "Are there many customers who would find it valuable to be served in half the time?". Usually - but not always - the answer is yes. In many cases, customers will be willing to pay a premium of 10-20% to get the same product or service in half the time.
Knowing that your customers will pay a premium for faster service is only half the battle. Naturally, you actually have to deliver on this - and make sure the customer knows you deliver. A simple time-flowchart can help you to identify where your customers' time is spent in your operation, and give you some ideas about how to cut that time down. This analysis should be done in the strategic issues section of the strategic planning process (page 5.2). Here are the top five time wasting places I've found in various industries over the years:
1. Credit approval
2. Waiting for engineering
3. Communicating the order slowly
4. Packaging for delivery
5. Waiting to be delivered
Granted, these are more applicable to products than services, but service examples tend to be very industry-centric (ie. an airline wastes time in different places from a restaurant). Anyway, try doing a little flowchart of your own operation and see if you can't find some treasure for your customers - chances are, they will be glad to pay you for it!
strategic+planning strategic+planning+process management business customers speed time competitive+advantage
Tuesday, February 20, 2007
4. Think Outside the Box
Some people will point out that "think outside the box" is a lot like yesterday's tip - "be different" - and it is. But there is more to thinking outside the box than just being different. Perhaps the most important way your company can get outside the box is to focus on the actual need your are serving for your customers, rather than just your product or service. By "actual need", I mean the reason your customer is buying from you. For example, Harvard professor Ted Levitt liked to cite the case of a company that made drills - the need was the hole, not the drill. Far too often, we get hung up on the thing we do and completely miss what it does for our customers.
How can you use this? Stop for a moment and think about why your customers are buying from you. Then ask two follow-up questions: (1) Is there any other way this need could be met (besides buying what we sell)? and (2) Is there something we can add to what we sell - maybe a completely different product or service - that will enable us to meet our customer's needs even better than we do right now?
There's much more to thinking outside the box than thinking broadly about customer needs, but this is a good way to free yourself from the constraints of doing things the way you always have. Give it a try - you'll be glad you did!
strategic+planning strategic+planning+process management business customer+needs strategic+competency
Monday, February 19, 2007
3. Be different
On the surface, it's obvious that you want your company to be different. But look at your company with a more objective eye - just how differently do your customers see you? One of the interesting things we've discovered from years of doing strategic planning with companies in many different industries is that being truly different is usually more important than being better. This is because everyone claims to be better - but few companies have the courage to be truly different.
Using the strategic competency tools in the Simplified Strategic Planning process, you should be able to identify some ways that you can distinguish your company from the competition. My challenge to you is to ask this simple question: What would happen if we turned this up a notch? Or even, how far could we turn this up? Can we expand upon our difference to the point that our competitors simply walk away, shaking their heads? I always like to ask this question, because - and this is the important part - if you can get your competitors to walk away, then you will not have any competition.
strategic+planning strategic+planning+process management business uniqueness strategic+competency