Monday, April 14, 2008
One quote by Richard Hunter from Gartner Group caught my eye:
“Google has the potential to be the first-choice provider of many services that are now handled by internal IT organizations, starting with non-competitively-differentiating services such as email (which Google already provides to a number of enterprises), and ultimately including high-value-added functions and services such as business intelligence, mobile sales support, and others. Some IT organizations might consider it a boon to pass these functions on to Google so that the IT department can concentrate on very enterprise-specific competitively differentiating applications. IT organizations that measure their worth in terms of how much of the company’s IT needs they supply themselves will be less happy to see Google move in on their turf-and I do mean specifically that in many cases it will be an argument about turf, not enterprise value."
This comment shows a lot of strategic savvy. The interesting question is similar to the questions that plagued IT during the rise of personal computing in business in the 1980's - first, is this really a wave? Secondly, if it IS a wave, do we fight it, roll with it, or ride it? These questions should be coming up in your strategic planning.
In my thinking, the idea that IT can (and should) focus on company-specific differentiating technology is dead on - and very important for most IT departments. An IT department that isn't differentiating the company might not be worth what you are paying for it.
How about your IT department? Does it contribute to your company's strategic competency? Do you have them working on technologies that other people can already deliver?
Monday, April 07, 2008
The fourth main reason why you may be disappointed in your balanced scorecard program is fundamental to the limitations of the scorecard itself.
-The change your business needs involves a more fundamental shift in strategy
Simply put, you can't measure your way out of some strategic issues. To use an analogy, let's say you are part of a team of jungle explorers, and you are measuring your efficiency. You might look at "miles traveled per day". Under many circumstances, this might get you where you want to go. But there is no measurement around this that addresses the more fundamental strategic questions - such as "Are we in the right jungle?" and "Should we be in a jungle in the first place?". No matter how well you perform on your measurements, being in the wrong jungle will prevent you from succeeding - and you won't even ask the right questions if you stay completely focused on any set of metrics.
So, to sum it up - a balanced scorecard is a very useful tool, one that is quite similar to the "Measures of Performance" we have been teaching since 1981. Even more importantly, measurement can drive strategically useful behavior, so a balanced scorecard program can yield excellent results. But - as with any other management process - you need to be aware that no one approach can solve all of your business problems, and there is no substitute for a robust, formal strategic planning process.
Friday, April 04, 2008
I just read an interesting blog entry on “bringing perpetual reality to strategic planning”. This is EXACTLY what you need in your strategic planning – a process that drives from good strategy and vision to the hard realities of what is going to happen, who will do it, and how much it will cost. Putting real feedback into your planning process helps us to correct, improve and build on what we learn in implementation.
In Simplified Strategic Planning, we drive this approach three distinct ways:
- The structure of the process flows toward an end-point that makes very specific, measurable objectives and implementation plans.
- The implementation planning process leads to a regular monitoring process where progress on execution is tracked and discussed.
- The entire experience is reviewed at the beginning of the subsequent cycles for learning and opportunities for improvement.
Does your strategic planning do these things? If not – let’s talk about how you can improve the “reality connection” in your strategic planning!
Thursday, April 03, 2008
Sales can be good or bad for your company. I've seen many situations where big increases in sales have nearly killed a company - and others where the sales that were added were to completely the wrong kind of customer. Both leave you with a bigger problem - that is, your company is bigger, but your problems are bigger, too.
Good strategic planning is about finding a way forward that does not leave you to the mercy of a sometimes capricious economy. In the last two recessions, we had many clients that used the pause in market growth to build substantially sturdier and more profitable businesses. Sadly, I met some people who chose the path of more sales instead of better strategy - and more than half of those people are now out of business. I now expect this to happen to companies that don't have excellent strategies - because recessions have a way of weeding out companies with poor strategy.
Which will you choose? A stronger, stable company - or a bigger, weaker one?
Consider contacting me for a short strategic planning tune-up - even if you already have a plan, you will probably find some valuable ways to improve profitability now.
Tuesday, April 01, 2008
One of the most interesting points in the article is that while a huge majority of firms that do strategic planning say it improves their profitability, 74% of law firms don't do strategic planning!
It also refers to an interesting article about why strategic planning is such a problem for law firms, written by a partner in a large firm:
This is most likely true, if you are doing balanced scorecard instead of true strategic planning in your company. Why do I say this? Because true strategic planning focuses attention on the things that will make a difference for your company. Balanced scorecard processes, on the other hand, tend to rely on employee understanding of the links between metrics and reality - and, because of shortcomings I've discussed in earlier posts, these links rarely motivate employees as well as understanding the underlying issues. Granted, your CFO or other technical managers may quickly grasp the relationships - but true strategic competency requires broad participation and support from all parts of the company.
Even if you have excellent training and support throughout the company for balanced scorecard, you are likely to have issues if you are not also driving execution through a routine tool for monitoring and accountability on actions (rather than numbers). The action plan process in Simplified Strategic Planning is an excellent approach to doing this, and can be helpful even if you are not using an optimal strategic planning process. There are several keys to making implementation work - it is, after all, the sore spot in strategic planning for most companies. The most important of these is to have rock solid and unified support for implementation accountability at the top levels of your company. This is a key area where executives must always act as role models for the rest of the organization - failure to do so almost always results in sloppy execution.
If you are looking for a strategic planning speaker to help your organization learn better strategic planning implementation - or the whole strategic planning process - please check out my strategic planning speaker brochure or see what past clients have said about me at http://www.strategyspeakers.com/p_rwb.asp