insights

It's Strategic Planning Season! Are You Ready?

An effective strategic plan is a critical component to running a successful organization, yet only few companies do it well.

According to a study by Bain, they asked nearly 300 global executives to rate their company’s planning process, and only one in three said that the strategy was effective. 

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You may be already swimming in a sea of data, PowerPoints, and debates on whether a stacked bar chart or an exploding pie chart is the best way to tell the story.  Good strategic planning is a methodical process.  However, it's important to keep the objective in mind and not get lost in the process of planning.

5 guidelines for effective strategic planning:

1.      Align with the mission and vision of the company.  This not only helps keep your organization's brand authentic, it also serves as a guide when making decisions.

2.     Make strategic planning an important ongoing process, with continual process improvement, regularly managed throughout the year, and not an annual ritual that is part of a corporate to-do list.

3.     Have clear objectives.  Objectives that are quantifiable so everyone knows what they are aiming for and a way to be able to measure progress.  Tactics follow strategy.  

4.     Update your insights. Your company does not live in a bubble, everything around the company; your customers, competition, the regulatory environment, and many other factors are continually changing.

5.     Don’t isolate the process by managing and making decisions solely on a select group of c-suite executives that push down a plan through the organization.  A strong strategic plan incorporates the views of the customer as well as employees who will be executing the plan. 

Elevate your strategic planning from an annual exercise into an integrated part of your company’s business management process. Take into consideration the voice of your customers, the perspective of your employees, and the insights from market research.  This could be the difference between an acceptable strategic plan vs. one that is inspirational, guiding, and effectively defines how the entire organization will work together to achieve your objectives.

Lessons From Running With The Bulls

Lessons

Lessons can come from places you'd never expect.

Just take into consideration all the perspectives you may have read about lessons in life from the sandbox, kindergarten, samurai, and maybe even from the Grateful Dead (yes, there is a book on that one).

But the validity of real world insights and lessons had never become so polarized to me as when I visited Pamplona, Spain and found myself in the historic running of the bulls.

Here, in winding, cobblestone, and wet streets (from the cleaning crews washing off the residue of the revelry from the night before) of this beautiful Spanish town (did I mention very narrow streets?), I found there are lessons that apply well to life or business . . . and some that absolutely do not.

Lessons That Apply!

1.  Be present. If you don't show up and stay aware, you can only be a spectator. More importantly, the lack of awareness of what is happening around you can lead to missed opportunities to prosper or avoid very bad things happening to you.

2.  Be flexible. Have a plan, but be ready to make a change immediately. During the run, you quickly realize what lack of control you really have, even with all the planning in the world. Improvise and just keep moving.

3.  Make friends. Having someone to share thoughts, ideas, strategies and provide support along the way is not only helpful, it may save your life.  Journey's are better shared.

 

Lessons That DON'T Apply!

1.  Get up if you fall down. This is one of those grand tidbits in life that someone has or certainly will impart upon you. Not such as good idea during the run. If you fall, stay down unless you are absolutely certain there are not thousands of pounds of rampaging beef behind you with very sharp horns. Can't say I didn't worry a bit about karmic retribution for all those hamburgers and steaks I have eaten.

2.  Grab the bull by the horns. Carpe diem! Not here. In the run, it is highly recommended not to try to grab, touch, or in any way further taunt any part of the bull. Again, enjoy the journey, and don't tempt fate unless you are prepared to handle the consequences.

3.  Take selfies. I certainly hope this trend will continue to die a long slow death, and if anything, the run is helping the cause. Not only will it cause you to miss out on probably a once in a lifetime experience, in the run, it is illegal. Your lack of awareness and focus on yourself may kill or hurt you and others.  

Demographics Are Outdated

Using demographics to identify and target your audience is increasingly ineffective.

While demographics still have value, they shouldn’t be the sole or primary criteria for identifying your audience and determining the best message to deliver. As our reliance on demographics fades, so too is the effectiveness of classifying people in broad categories, such as Gen Xers and Millennials.

Demographics alone won’t tell you the most important thing you need to know about your audience, which is what they value. The emphasis on understanding what people like and how they share experiences creates new tribes and new ways to segment your audience.

During a study we conducted for a financial institution that wanted to attract Millennials, it became clear that how they felt about money and savings had largely to do with whether or not they lived with their parents. A 21-year-old working her first job and sharing an apartment with roommates has more in common with a 35-year-old in a similar situation than a peer living at home with mom and dad. This is common sense, but it is surprising how companies continue to use generic targeting schemes based on the faulty premise that everyone born between the early 1980s and 2000s will respond as a single homogeneous cohort. Trust me, I’ve seen enough RFPs come through.

This coming together around common values is related to how we access content, increasing urbanization and the growing popularity of authentic brands aligned with our values.

Our ability to access content anywhere at anytime, along with social media platforms that let us share that content, create new opportunities to interact with like-minded people — often in ways that shatter demographic boundaries.

In a 2014 interview, BBC Radio’s George Ergatoudis said, “If you look at the list of the 1,000 favorite artists for 60-year-olds and the 1,000 favorite artists for 13-year-olds, there is a 40% overlap, and if you take 30- to 39-year-olds and 13- to 19-year-olds, over 50% of their favorite artists are the same.” Can you imagine listening to 60% of the same music your parents or grandparents did when you were 13? I validated this when my 14-year-old son said he listens to Green Day, Led Zeppelin and the Stones. Cool.

Our increasingly urbanized society allows us to interact more closely while being exposed to a greater variety of cultures, ideas and experiences. According to a 2015 McKinsey Global Institute study, urban populations are growing by 65 million people every year — that’s seven new Chicagos a year, a mind-blowing statistic.

This growth leads to increasing economic spend, and brands that play on this global stage respond, not based on demographics, but in shared value experiences and by meeting individual expectations. This is why Starbucks has no stated demographic only target audience; it has created environments that allow people to share experiences. The company understands its power comes from how consumers feel when they interact with it. And when they love it, they will share it. Starbucks is one of the most popular brands shared on social media; it has more Instagram tags than Apple, McDonald’s and Coke combined.

Living in a society that allows us to connect with people and ideas in ever-expanding ways, virtually and physically, lets people more fully express themselves as individuals. Knowledge, technology and choice allow freedom of expression to blossom. It’s why consumers flock to brands that allow them to express who they are or who they want to be. We see this in fair trade coffee, Tesla and handmade crafts on Etsy. Brands allow consumers to do what they want, how they want, while feeling good about themselves. The Swedish clothing company Uniforms For The Dedicated has launched an initiative called the Rag Bag. It allows customers, once they take their new clothing out of the company shopping bag, to turn the bag inside out and place a donated item inside. Once reversed, the bag turns into a printed and pre-paid package that can be sealed and dropped in the mail. It effectively renders shopping guilt-free, even virtuous.

To more precisely target and meet the needs of your audience, look well past the demographics.

They are important, but to be truly effective in your marketing, study audience psychographics. Understand what they value, how they feel about your category, what is important to them and, above all, stay authentic. Like the old adage goes, say what you mean, and do what you say – and never stop listening to and studying your audience.

Can You Trust Your Mind?

1962 was a peak year in market share for GM, with 52% of the U.S. car market.  Today they stand at 18%.  The decline was not sudden nor should it have been unexpected. There were rumblings of change all around them, beginning with the rise in oil prices in the 1970’s, but they were ignored. By the 80’s they finally realized that the Japanese could not only make better cars, but also make them more efficiently, and they were popular with the U.S. market. What took the leadership so long to realize this? Part of the answer is the mental models they operated within. 

Peter Seng, in his book, “The Fifth Discipline”, defined mental models as, “deeply ingrained assumptions, generalizations, or even pictures or images that influence how we understand the worlds and how we take action. Very often, we are not consciously aware of our mental models or the effect they have on our behavior.” This is not new. The idea of mental models was first postulated by the American philosopher, Charles Sanders Peirce in 1896.

The assumption under which GM functioned were never written down, but, the following were obtained from interviews of retired former senior GM executives:

1.      GM is in the business of making money, not just cars

2.    Success flows from rapid adaptation, not technological leadership (automatic transmission was last major innovation)

3.    Cars are primarily status symbols:  people want to upgrade

4.    The U.S. car market is isolated from the rest of the world

5.    Fossil fuels (oil) will remain cheap and abundant

6.    The government is an enemy and so are unions

7.    Planned obsolescence works (quality less important)

8.    Efficiency of mass production beats other approaches

9.    Bigger is better – we can manage anything

Imagine how these filters and perceptions of the world affected the decisions GM was making. Mental models are subtle, yet very powerful. And not all models are bad, in fact, they help us organize and navigate our lives. For the most part, they have helped us survive. The issue is that they can influence our behaviors without us even being aware. In fact, they can at times cause a collective herd mentality that in the case of GM, had disastrous effects. 

What are the unwritten rules or mental models in your company? It’s the stuff you talk about that is not in your employee handbook, or the bits of wisdom you provide to new employees to help them adjust to your culture. Are the mental models of your most senior executives different from the rest of the staff? How are your individual or corporate wide mental models affecting your decision-making? How are they possibly blinding you from growth opportunities, competitive threats, or changes in your target audience purchase patterns?

Take the time to reflect and write down your unwritten rules – whether in your company or in any other aspect of your life. Question them. How do you know them to be true? Are they helping or in actuality, limiting beliefs? Share your mental models with others in your company and look to get to the data behind them and see if they can really stack up or if they are just assumptions that filter your thinking and actions.

Being consciously aware of your mental models and intentionally managing them can not only free up your thinking to new possibilities, but also shed light upon blind-spots.

How Strong Is Your Employer Brand?

Attracting and keeping top talent is one of the biggest challenges for most companies. In a recent study by the National Center for the Middle Market, staffing is the number one issue these companies have as they look forward over the next 12 months. Harris Allied’s Tech Hiring & Retention survey similarly found (for the 4th straight year) that hiring top talent was the number one concern for tech companies. 

Over 60% of CEO’s interviewed in a Harvard Business Review study stated that talent related issues were their top concern.

So, if you want to attract the top talent, what do you think these prospective employees think about your company? What is your company’s reputation or Employer Brand? Even though the term Employer Brand was coined in the 1990’s, few companies are doing an effective job at managing a unified brand – a brand platform that is universally applied internally as well as externally.

The same brand management principles applied to your customers, such as being authentic, consistent, and having a clear value proposition, need to be applied internally. Yet, companies often struggle with developing a unified brand.

Only Going To Get Harder

The changing employee landscape is only going to increase the need to be clearer about what it means to work at your company. The rise of social media and entrance of millennials not only into the mainstream workforce, but increasingly holding senior level positions, is transforming companies and sometimes forcing them to become more transparent, whether they like it or not. 

What it’s like to truly work in a company is an important consideration for any prospective employee, and easy to find out.  Just as companies increasingly use social media in the hiring process, prospective employees are using sites like LinkedIn, Glassdoor, and profiles on The Muse to get a sense of what a company culture is really like as they conduct their due diligence.

Internal Brand Management

When companies think about their brand, they often focus on the external facing element of how customers perceive their brand. However, that is only part of what it takes to effectively manage your brand. In a similar fashion to how a company has a value proposition for its customers (or why should I give you my money and time), a company needs to develop and apply a clear value proposition for their employees.

The good news is that a company doesn’t need to rebrand themselves or put any extra time and effort in redefining their brand – they just need to ensure that they apply the same brand management principles internally as they do externally. 

Authenticity is key to attracting and keeping top employees as much as it is to finding and keeping customers.

 

Things To Do

·      Start with the basics and find out how well your employees understand your company’s mission, vision, and most importantly, values. How well are new employees on-boarded and how well do current employees live the brand?

·      Does your company have an employee value proposition? If not – think about what image your company wants to portray externally as a place to work. Also consider what your company needs to do to help promote that image. Social media is not only critical in these efforts, but should be a mandatory tool to help promote your Employer Brand.

·      Investigate how well your employees make value-based decisions. In other words, if one of your top values is putting the client first, how is this value applied in every interaction with your customers? Or if work/life balance is a value, what is your company doing to communicate and manage to this value?  If your values are fully incorporated into how your employees work every day, they shouldn’t have to pull out an employee handbook to figure out what to do. It will be instinctual, because, “this is just how we do things around here.”

·      Don’t leave this responsibility solely in the hands of the HR team. It’s important that defining the Employer Brand begins with the CEO and is just as much a responsibility for the leaders of the organization and marketing as it is for HR.

At the end of the day, having a clear employee value proposition is just plain good for business. 

It should be a no brainer that attracting and keeping top talent will only lead to better financial results in the long term. The Middle Market study, further showed that companies with a clear employee value proposition had nearly a 3:1 top line revenue performance difference compared to companies that didn’t have one. 

And finally, it will only strengthen your brand overall. When your employees understand your brand, and if your brand is consistently applied internally as well as externally, employees will deliver upon your mission, vision, and values in every interaction with your customers. It’s simply a win for everyone and worth every effort required to make it happen.