strategy

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.

"I Want More Sales" Is Not A Plan - 5 Things You Should Be Doing

Sales

Clients will often tell us “I want more sales” when asked for their marketing objectives. Wow!  Who knew? Unfortunately, this is an all too common response. 

 Sales are an outcome of activities. Activities or tactics informed by having a clear business objective, supported by a strategy.

 The increasing complexity of marketing due to more informed and demanding consumers and exponential growth in channels, data, and content, causes many marketers to throw their hands up in exasperation on how to formulate that strategy. At which point, when pressed on what to do, it is not surprising to hear about just wanting to get results – give me more sales!

 So what are marketers and agencies that support these clients supposed to do? The answers have not changed, and there is no need to reinvent the well-established principles of marketing. The advent of digital and social media only amplifies the need for a company to truly understand their target audience and ensure they are authentic in how they deliver on their value proposition. Focus on the fundamentals: 

1.     Have a clearly defined objective. You can’t hit what you are not aiming for. An objective is a clearly articulated measurable outcome (e.g., A 5% increase in a our new product line within 1 year).  Each objective needs to have a plan. We are not marketing for marketing’s sake. If the investment your company is making in marketing is not supporting the overall objective of the business, then you are wasting your money. This requires every marketer to establish measures on how to assess the impact of the marketing investment.

2.     Do your homework. Hope is not a strategy. Once you establish the objective, conduct a classic gap analysis. What do you know, what don’t you know (that you need) and how are you going to get the insights? What is your competition doing? What are the trends in your industry? Data is not enough – use your data to develop insights, which in turn can guide your marketing strategy. 

3.     Know your target audience. This is arguably the most important component of any marketing strategy. Too often, especially in a B2B company, there is this notion of having developed the most awesome product or service – and when we tell the world, they will just flock to us. The question to ask is, how will what you are offering to your target audience improve their lives? Know them. Know how they think. Know how they feel and act when something triggers a need for a product or service. A “build it, and they will come” approach rarely, if ever, works.

4.     Know your brand. Authenticity is key. It comes down to the basic virtue of doing what you say. Has your company established a clear and inspiring vision and mission? What is your value proposition – what are your customers going to get in exchange for their time and money, and what are your employees expected to deliver on a consistent basis? Taking it a step further, when is the last time you reviewed your company values and how they were being applied?  

5.     Create great experiences. If you know your customers and you consistently express your brand, that is the key to both attracting and engaging your target audience – leading to the sales. However, creating awareness and even an initial trial is not sufficient. The traditional marketing funnel model has evolved into an ongoing fluid journey. We live our lives with needs and wants and endless distractions while being bombarded with brands constantly.  But if the right message intercepts us through channels we use and aligns with what we believe will make our lives better, we will take the time and energy to consider what you are offering.  And, hopefully share our experience with others and come back for more.

So, when things get crazy or somewhat overly complicated, go back and focus on the basics. Never forget who your customer is, be true to your brand, and create great experiences.

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.

Why Innovation Teams Fail

I recently received my latest and greatest credit card with the chip. It reminded me of when our innovation team pitched the leadership of our large credit card firm on how to transform our industry with this technology.  The company was looking for an innovative approach to help take a leadership position in the U.S. credit card market. 

The capabilities and security advantages of chip technology over magnetic stripes were already being put to use throughout Europe and Asia. Along with consumer benefits, there would however, be significant cost implications. Though, it was apparent that this was where the entire industry was headed and the benefits to the customer along with a reduction in fraud were clear. Not to mention the new applications, discoveries, and innovations that could be built upon the technology. We had an opportunity to make a bold and disruptive move in the U.S. card market.  That was in 1996. More on that later.

Unless a company has integrated innovative thinking into the fabric of the organization, they may fall prey to the idea that they can set up a separate group to come up with great new ideas to deliver to the market. 

Coming up with new or groundbreaking ideas is often not the greatest challenge. Delivering the ideas into the market is where things begin to fall apart. 

Organizations may come to the realization that they lack either the culture or know-how to develop innovative products or services and successfully get them into market. They may take the easy path and decide to set up a team, give some folks a new title, or even physically locate them away from the rest of the employees and dub them the “innovation team.” 

This will often prove ineffective and may backfire on two fronts. The primary issue is not that the team won’t come up with great ideas, but they will then have to take their magnificent concepts and introduce them into the very same system and organization that admittedly stated they were not good at innovating. A study of MIT technology transfer over 16 years, found that when a large company licensed a technology from MIT and introduced it into their development systems, the idea never even got to market 80% of the time.

The second issue is one of negative cultural impact, which is exactly the opposite of what leaders would expect to happen. The concept of demonstrating their commitment to innovation must surely boost confidence in the company. But exactly how would you feel if you were not selected or even asked to participate in the innovation efforts? There is the real threat of fostering animosity from existing employees who know they have great ideas and want to contribute, but can’t or were never given the option. Or worse - ask the employees to submit their ideas, and foster excitement, only to have little feedback on what happened with their ideas and inevitably, see the tiniest percentage ever see the light of day, if that.

Back to that pitch to our CEO two decades ago. We had our challenge. We completed our research and we even had pilot programs up and running. After a good hour long presentation, the CEO, with a very thoughtful expression on his face, leaned back and said, “couldn’t we just paint a chip on the card and make believe it did something, when in actuality, it just used our same mag stripe infrastructure?” Awkward silence followed. And here we are 20 years later finally implementing the technology in the U.S. And a bit too late, as more innovative companies are already moving us beyond chip technology with mobile payment systems and enhanced security features.

Innovation is not the job of a select few. Innovation is a mindset, supported by senior leadership, with systems, education and tools that empower all employees.

Before pursuing innovation in your organization, take the time to step back and consider the entire system, not just one component, such as generating ideas. Take stock in your culture, your leadership, your commitment, and your innovation capabilities before investing in tools, teams, or titles. As in any endeavor, the time taken up front to plan and prepare, will help yield better results on the back-end, where it matters.