Solving a relevance issue is perhaps one of the most difficult types of planning. Here’s one way to come at this:
Set the stage
What are the challenges we know customers are primarily facing?
What challenges do they have in the utilization of our solutions? Can they fully leverage what we provide them?
To what extent do they understand the full measure of value we create for them?
Are there any comparable alternatives in the market they contrast us against?
Do the analysis
Deconstruct each major process / function that you offer to determine
– Opportunity to further optimize in order to result in stronger creation of value
– Identify what form of value we create through this
– Discuss the level of appeal that currently exists
For each growth option ofâ€¦
– Making yourself more valuable to existing customers: solve new problems, customize more deeply
– Taking your model and expand your offerings: if you have a unique model/positioning, then can you run more things through it
– Expanding your existing offerings to more customers: does this create a secondary benefit of economies of scale
…Examine the degree of the following, against each growth option:
– Opportunity associated
– Is this possible, how might we do this?
– Implementation risk associated with this change
– What kind of general appeal would this have for customers, is the problem we want to solve known?
For reference: A value proposition is:
WHAT: The problem you solve for the customer
HOW: The form of value you create
Example: Buying a TOWEL for LESS MONEY is why people go to walmart.
What problem do you solve and what form of value is that delivered through?
To what extent does every member of your team understand this?
Once you’ve done all this work, you should have a pretty good idea what your options are.
Strategy maps are used to capture and communicate the components and interdependencies of a business strategy. Each objective (box) on the chart represents an improvement that is a driver for greater corporate performance. By mapping this out, leaders and employees generate a clearer and more consistent understanding of what drives the business. By understanding the relationships between the objectives, the risk of failing to achieve each objective/improvement becomes apparent. The overall premise is quite simply that you canâ€™t do what you canâ€™t describe.
Every objective on a well built strategy map is critical to corporate success. Once you know what the drivers of the business are (the objectives), the next step is to create data about your performance against each of those drivers by aligning the corporate measures to as many of these objectives as possible. This helps management to focus on what really matters, and away from general business metrics that arenâ€™t specific to the strategy. Measures are used to create actionable information, and the more specific that information is to your direction, the more relevant the information being generated.
Understanding these interdependencies is a foundational for management of corporate performance. In some cases, failure in a single objective mid-way through the chart (such as maintaining a corporate credit rating) may cause catastrophic results that reverberate across the entire strategy map. In a situation where customer needs change, this tool will help your organization make choices with a clear recognition of the implications on other parts of the organization.
From a communication perspective, describing the strategy in a clear and visual way creates a mutually consistent understanding of what the organization is working to achieve. This process also creates opportunities to challenge old assumptions about the overall corporate strategy.
Once this has been created, it becomes a key tool in the ongoing management of strategy. In a situation where one of the top row objectives change, the organization can purposefully consider the implications and can craft a solution that takes into account the potential impact on other objectives within the strategy map.
As a corporate planner, you encounter a wide range of internal clients. Some of them are crystal clear about the path to greater relevance and others struggle with and are scared by planning because deep down inside they donâ€™t know where to go with it. One way to get at this is to start asking questions about the unique form of value they create for their clients. In some cases, deconstructing and defining their value chain can be useful for identifying:
– areas where the value could be stronger
– determine whether there are irrelevant activities parasitically draining your focus and resources
– rediscovering your unique combination of skills, positioning and knowledge
Once you have a clear understanding of your unique selling proposition, you then have the option to go deeper or wider in your business. Can we expand the scope of who we offer this value to? Or, can we apply this value chain to something else?
There are lots of folks who want to lead. There are many different reasons why people want to lead. Before anyone SHOULD lead, they need to have the capacity for vision. Quite simply, leaders need to know or have the capacity to develop a vision of where theyâ€™re leading their group. They need to know where the opportunity is, and they need to see it with a clarity that others donâ€™t.
Once a leader knows where heâ€™s going, heâ€™s got a fighting change of making it happen. Until he does, none of you are going anywhere!
Potential and perception of potential are two different things. So are potential and performance. No one lives up to potential, but some people come a lot closer to potential than others. Weâ€™ve all heard stories of people who were told theyâ€™d never finish high school, who were expected to live out their lives doing menial tasks, who ending up with advanced doctorate degrees doing something really meaningful. More often, you see people and organizations who donâ€™t strive for something larger and greater because they donâ€™t believe itâ€™s possible. Most of these folks are quite happy with where they are at. In many cases, itâ€™s because they donâ€™t feel they missed out on anything, it’s good enough. A lot of this is created through world views and self concepts about what is good enough for you established through developmental years. The same thing applies to organizations.
Your world view of what is good enough for you often carries into the workplace too. So think about the kind of people you surround yourself with at home and in the workplace. Be aware of the intrinsic connection between your self concept and your performance. Companies who donâ€™t expect or strive to the change the world rarely do.
Where have you said “good enough,” and are you happy with that decision? If you’re not, do something about it. Life is about choice. Live the life you love and love the life you live.
Part of being productive is not getting so wrapped up in the details that nothing gets done. To that end, organizations quite often work from assumptions as opposed to real information. Itâ€™s difficult to get around this, the secret is to know what assumptions to test, and how often. When you begin testing assumptions, youâ€™ll more than likely run into some inconsistencies in how your organization defines, organizes and understands direction. These are often foundational to how you push the organization forward.
Within your strategy, what is the hierarchy?
What is the top line of your strategy map filled with? Does your executive team consistently understand the outcomes your organization exists to create?
What linked chain of improvements are you using to achieve your strategy?
What do your customers really want from you? Do you really know what their greatest dissatisfiers are?
At times, it can be critical to come back and confirm foundational elements, because everything else you do is based on them. You can quite often diagnose whether a need exists with a short conversation. Donâ€™t be surprised if you uncover a few gaps and donâ€™t underestimate the risk that these fundamental assumptions can create.
Supporting the board and executive team in:
Understanding environmental factors that are most likely to impact strategy
Understanding the environment, and the factors with potential to impact strategy
– Manage an environmental monitoring system to understand the factors most likely to support and resist our ability to implement strategy (develop internal data into information into knowledge into wisdom)
– Hold regular meetings with core strategy leads/subject matter experts to understand factors impacting performance
– Engage employees in the strategy through forums to create a knowledge base of collective wisdom (wisdom of crowds concept)
Establishing clear direction for the organization
– Ensure a compelling Vision, mission, values that are consistently understood
– Clearly defined customer objectives (top line of strategy map)
– Defined linked chain of improvements we use to strengthen the business (strategy map)
– Value discipline establishment and drive relentless alignment
– Executive level definition of where competitive advantage comes from
– Initiatives that move the business forward in the context of core business and long-term direction
Aligning to the direction
– Driving alignment operations to the value discipline, creating a strong value proposition
– Educating leaders about the strategy, and what alignment means
– Ensuring the organization is aligning to both strengthen core business and long-term positioning objectives
– Involvement in driving change and moving information to push the business forward (removing customer dissatisfiers)
– Involvement with key decision makers to ensure alignment with strategy
– Being the gate keeper for strategy and balanced scorecards to ensure overall consistency and fit
– Ensure plans are clearly defined to support implementation across the organization
Monitoring and course correction
– Establish and manage corporate level accountability structures: board reporting, strategy reviews, etcâ€¦
– Establish and manage division and core strategy level accountability structures
– Create team level accountability: Plans sent to planning for alignment analysis and to ensure they exist
– Ensure personal accountability in conjunction with HR performance planning, variable comp structures
– Involved in development of CEO and executive performance plans, and alignment to business plan
It is critical when making major decisions that you remove emotionality from the equation. As an agent of a corporation you have a responsibility to act outside of your personal reactions, in the interest of the organization and context of the strategy.
One thing that significantly impacts decisions are assumptions. We base decisions on assumptions, but quite often donâ€™t discuss and test our assumptions. Decomposing issues to this level puts all the cards on the table and allows you to more fully understanding the collective set of drivers for the decision.
Example: We have the intention making something big happen through a series of mergers
1) Why? Get into depth and list out all the reasons why
2) Define all the assumptions behind this (where you think the industry is going, what customers are going to do, anticipated competitor stratagems, etcâ€¦)
3) Test the assumptions:
…………….a. What would happen if it doesnâ€™t play out the way you assume it will?
…………….b. What are the different ways it could play out? (create some scenarios for those major assumption groupings)
4) Is there a different way to get at the benefits defined in step 2 that provides you with more options?
5) In order to achieve all these benefits, what kind of organizations do we need to merge with?
…………….a. Start to define the criteria (value discipline, financial capacity, alignment of long-term strategies, ability to correlate to a specific improvement in terms of customer outcomes, etcâ€¦)
…………….b. Define the risk of going outside that criteria (ensure they understand the problems with doing this)
…………………………..i. Impact of value discipline misalignment
…………………………..ii. Impact of culture misalignment
6) Compare specific mergers against that criteria
Once you get to this depth, you will have a much greater understanding of what to do next.
Before you sit down with your board or executive the next time to plan, stop and think about the impact this has on the potential of the organization for the coming year. It sets the threshold and upper limit (potential) of what is considered good enough for your company. Executives naturally want to avoid underwhelming the board and seek to get a pat on the back. They want to run a successful ship, enable their organization to pay out variable comp and to make their employees want to work there. The scope of the business plan has far reaching implications on what amount of energy gets released toward making positive progress occur in the coming year.
Here are some areas where we self-limit below our actual potential:
Not setting out with big enough intentions:
– Planning to define the increment of improvement rather than stepping back and changing the game
Allowing personal views of what is good enough to affect how we act on behalf of the organization:
– Individual views impact what we do on behalf of the company
Allowing fear of failure to limit your reach:
-Not exploring your potential, working from what you know you can safely implement and have figured out
Working from incorrect assumptions:
– Not discussing and challenging the assumptions behind what limits us (have they changed, can we not overcome them, do we all see them the same way etcâ€¦)
Accepting the extinguished burning platform:
– Becoming satisfied with the degree of success you have, accepting existing short-comings in the business, allowing your relevance to erode
Focusing on the wrong things:
– Allowing the plan to be operationally driven: primarily related to compliance, systems upgrades, fixing what is broken
Anywhere you’ve inadvertently said “That’s good enough” is an area where you will stop improving. Of course, taking a chance and building more aggressive plans takes courage, skill and the right people. At what point does your organization say, that’s good enough? We all do it.
Think about this: Would there be any changes in your organization if Donald Trump took the wheel. The guy who wrote think big and kick ass?
One of the most key elements of being a good strategy practitioner is the desire for information and always continuing to learn. As soon as you think you have it all figured out, your potential gets locked in to that level and will only incrementally change. This ignores everything we know about the realities of potential. Companies like Dell turning $1000 of capital into $44 billion dollars of annual revenue in less than 15 years speaks to the depth of what potential is all about.
Being on the lookout for big ideas that will change your world or change THE world opens up the POTENTIAL for your organization to do something that matters. This needs to be supplemented with some courage, intelligence and due diligence but it all starts with decision makers setting the degree of potential. Potential is determined by the thinking processes of those involved from the onset.
Thought leaders are starting to apply quantum theory to strategy. They are working to change how we approach this whole field. We are largely stuck in a 1:1 cause-effect system of thought today. Just because this is our existing paradigm, and people look for information to support what they already believe, this doesnâ€™t mean we have reached the optimal approach to how to view the world. Just being open to the possibility that we donâ€™t have it all figured out creates new opportunity and greater potential. Incorporating that into our world view changes things in that we now look for information to support the fact that new potential exists, and that makes your potential for performance tomorrow just a little bit stronger than it was yesterday.