Strategic Planning Best Practices

Oct02
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flowerThe following strategic planning best practices while fairly broad are important to management teams regardless of industry or challenge they are facing:

Determine and Set Realistic Goals

A business has to set realistic goals based on their company’s capabilities, resources and industry.  Once key goals are determined, then strategies can be developed to achieve them.

Create Accountability and Leadership Focus

Company executives need to be in control of the process of strategic planning from the beginning to end.  A facilitator should be appointed to keep things organized and on schedule.  Seek perspective from subject matter experts outside of the company. Benchmark what competitors are doing. Understand how the company performs against its competitors and develop strategies to either close the gap or maintain a leadership position.

Engage the Company, Not Just the “Key” Managers

Promote new ideas by engaging all the employees in the process.  An opportunity presented from a field representative or customer service agent may be more compelling than those from the executive committee.

Make it Clear that Nothing is off Limits

When determining the future of a company anything that needs to be changed has to be changed.  The process can’t work if people are too emotionally invested in their own projects, programs or team members.  It is important to obtain an open and honest view of the situation.

Discuss

Once a plan is drafted it should be presented to the company in the form of clearly defined goals.  Agreement may prove challenging between personalities and departments.  The executive leadership needs to be decisive.  Receiving feedback from qualified outsiders can also be effective.

Communicate and Execute

Once the plan has been developed, it’s imperative it be communicated properly and then followed.  In the words of Peter Drucker, “What gets measured, gets managed.”

Corporate Development Timing

Aug05
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moonmanIt sounds obvious: every corporation is always seeking ways of further developing its business model. Those who are able to prioritize those efforts in an uncertain economy are the ones who leave a formidable mark not only on the industry in which they dominate, but the business and financial sectors as a whole. Of course, economies ebb and flow, but it’s about weathering those natural shifts. The only certainty? The fact that nothing is ever certain. What worked in 2008 may be the worst possible scenario for 2013. It’s about timing and bringing a corporate development effort full circle when the moment is right.

The challenges are different for each business; markets shift and risks emerge and evolve. Even today’s tax dynamics would be unrecognizable to the CEO of yesterday. While it’s absolutely crucial that corporate development first protect the corporation, questions about social responsibility, the environment and transparent business practices are now part of the game plan. Underestimating these elements is a risk no CEO can afford.

The success of any company, whether it’s a small business or a global corporation, must have protective mechanisms in place that will protect it. If the leaders can’t identify the various risks, there can be no realistic protections in place. How will the capital requirements change in the coming years? Can the business model accommodate those changes? Better still, is the company being led by those who are willing to step up to the plate and make those hard decisions when necessary? What a leader could have done in the past might not be a realistic approach today. Corporate development efforts often require a bit of a “fearless leader” mindset. It goes much further than simply having strong leadership abilities.

Corporate development isn’t a static effort; it plays a significant role in a corporation’s ongoing approach. As part of its strategy, a healthy organization may develop an internal corporate development team or may consider outside help in areas such as strategy consulting, tax structuring, legal compliance, financial considerations and marketing and operations.

Even with a solid business foundation in place; one that has served its purposes well over the years, there comes a time when corporate development is not only inevitable, but a welcome strategy.

Developing and Refining a Business Model

Jul08
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schoolcrossingProfessor Steve Blank, who teaches business courses at Stanford University, sat in with a founder and an investor during a startup pitch and related how asking his students to blog as they started real companies gave him the idea for a startup tool. It would guide them along a better path and keep them connected with investors and mentors. The result of this session was LeanLaunchLab, an integrated view of startup management that has gotten many new businesses on the road to success and has spawned a new market all its own. LeanLaunchLab went live last year and has served thousands of startups.

At the heart of LeanLauchLab is the business model canvas. The idea behind this tool is that a business model is ultimately a make-or-break entity, and therefore anything that helps startup founders map it out, reform it, and strengthen it ultimately gives them a great deal of value. The model encourages startups to take a holistic view of “customer segments, value propositions, channels, customer relationships, revenue streams, resources, activities, partnerships, and costs.”

Of course, this model itself is a strong foundation for a startup tool, but other components to success include making progress towards goals and adapting as needed. LeanLaunchLab mixes in auto-population with defined experiments and testable metrics that encourage revision and continual maintenance. Best of all, it acts as a “virtual board meeting” that puts a startup’s adherence to its business model out for every stakeholder to see, meaning that keeping important partners in the loop is easy.

Kill the Company

Jul08
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no_way_signNormally, we think of a business strategy comprising the mission, vision, and values of a firm.  Strategic plans are operational and tactical, often with a three to five year outlook.  However, what happens if your strategy isn’t working?  Or, if you sense a strong competitive threat?  A new book by Lisa Bodell, “Kill the Company,” offers some advice for organizations that are stuck in a rut of incremental improvement.

Firms can easily be seduced into a culture of complacency when their strategy  is working.  Yet, the industry, competitors, and customers can change rapidly.  One way to shake up the strategy is with a tool from Lisa’s book – literally, killing the company from within.

This strategic exercise goes beyond a traditional strategic threats analysis.  Results of competitive analyses usually leave the firm with plenty of data; however, the outcomes of kill the company are immediately actionable.

Here’s how it works.  The company plays the role of a competitor who desires to put their own company out of business.  With their inside knowledge, the team can focus on weak points and enhance the firm’s own strengths.

For instance, one outcome of a kill the company exercise might note that the firm’s distribution system is particularly weak and competition can put the company out of business with faster and more efficient shipping.  Recognizing this weakness, management can tackle the distribution chain before it becomes a strategic threat.

Kill the company can help a firm recognize strategic pathways that other brainstorming tools cannot.  It is a surprisingly effective communication tool as workers are more energized to “kill the company” than they are to make long lists of competitive weaknesses and threats to the firm.

Contact us to learn more about tools to develop an effective business strategy.

Traditional Versus Fast-Paced Innovation

Jul08
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Innovation is inherently risky, especially in today’s fast-paced marketplaces.  Traditional innovation proceeded slowly: First, find out what causes the customer pain.  Next, experiment with different technologies and market sectors to develop a new product.  Then, build models and test prototypes with potential customers to study acceptance and pricing strategies.  Finally, move into a planned product launch addressing early adopters through laggards in sequence.

True innovation is extremely rare.  Business innovations often involve more than simple novelty.  Innovation requires a confluence of customer needs being met with novel technologies and competitive marketplaces that are receptive to the new product or service.  Invention alone does not make an innovation.

Traditional innovation is now a notation in the history books.  In a recent article in Harvard Business Review (March 2013), Larry Downes and Paul Nunes coin the term “big-bang disruption” to describe innovation in our fast-paced, interconnected world.  Rather than marketing a well-tested new product to a sequence of market segments, innovation are tested en masse and survivors garner windfall earnings.  Big-bang disruptors can seemingly come out of nowhere and beat the competition in the blink of an eye.

While traditional disruptive innovation focused on the low-end customer who previously did not participate in the market, big-bang disruptors combine existing technologies and services to offer new and innovative products and service.  Consider, for example, Amazon’s ability to capture 20% of all book sales revenue by combining existing web and pioneering e-book technologies in a new way.  And to think the Kindle was not even introduced until 2007!

An essential component of all innovation is experimentation.  The difference with big-bang disruption is the speed and number of experiments.  Because the cost is trivial, innovators run many experiments in parallel and in live markets.  Technology makes these multiple, concurrent experiments possible and technology can make a successful innovation turn into a very, very successful product.

Creating a Winning Strategy: Aligning Company Vision with Market Opportunities

Jun11
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rock_concertThe path to achieving strategic business goals — whether pursuing operational excellence, or growth opportunities — requires a certain amount of change. So is change necessary to win in today’s competitive economy? W. Edwards Deming, the so-called father of the quality evolution flatly  informs us: “It is not necessary to change. Survival is not mandatory.”

This is a stark warning to those companies and leaders who are stuck in their ways. Change must be embraced. If it’s avoided the inevitable outcome, according to Deming, is an eventual collapse and failure of the outmoded firm; supplanted by more innovative companies that better serve customer needs. Therefore it seems wise to heed the common platitude: change is the only constant.

So what does it take to make a business not only succeed but flourish? First, there needs to be a clearly articulated vision and strategy. The strategy should be informed by the vision of the company. The vision is where the company sees itself going, based on its strengths, and market opportunities.  To fully realize the company vision, however, a well crafted strategy must be designed, communicated and followed.

Given the company culture, the strategy is a playbook that aims to inform the planning process to guide operational activites. This achieves alignment such that everything works together toward achieving the company’s strategic goals, bringing it closer to its vision. After agreeing on company goals — targets to aim for — a strategy can then be formulated to navigate the market to successfully achieve these ends.

Without a formally thought out and articulated strategy that guides and informs daily decision making, there would be a chaotic environment, indecision, waste and inefficiency. A failure to execute a rational strategy will lead to lackluster company performance. Clearly, it is critical to have the right strategy.

Contact us to learn more about how Garrison Street can deliver results for you.

A Growth Strategy as a Core Focus

Jun04
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shoeA sound growth strategy is an important component to any successful business venture. A company without a growth strategy risks losing market share as other, more competitive, businesses emerge with aggressive expansion plans.

Here are a few growth strategy tips.

1. Focus on what works. Consider your current portfolio of products and/or services. Which ones are selling the most? Which ones have the highest market share? Focus on those offerings in terms of marketing and expansion. It’s tempting to have a “pet” offering that a company absolutely loves. But if the market doesn’t love it, focus on something else.

2. Make growth part of the company culture. Executive management, as the leaders of the business, has to decide that growth is imperative. Communicate that goal to stakeholders, employees and shareholders. Ensure that business growth is a key objective of the company, and that everyone who is part of the company understands that. The successful business grows as a result of a growth-oriented mindset.

3. You don’t know until you test. You may think that you have a winner with a new product or service, but the fact of the matter is that you won’t know until you test it. New offerings should not be assumed to be successful. Instead they should be tested to see if they work. This is not only true for new additions to your portfolio, but to new advertisements and marketing strategies as well. Test these new initiatives out first, before investing excessive capital into them. By focusing only on what is successful, the company has a higher probability for growth.

A solid growth strategy, complete with a marketing campaign oriented towards maximizing top line income, is absolutely necessary to the long-term success of any company.  Contact us for further insight on effective business growth strategies.

It Must Be Worth Twice That … I Hope

Oct24
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A first in a series of upcoming articles on strategy and corporate development written by Garrison Street.  “It Must Be Worth Twice That … I Hope?” provides a blueprint  to understand and unlock the value of a company as seen through an outsider (an investor) evaluating the company.

To read more click the link below:

It Must be Worth Twice That … I Hope?

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