Strategic planning is clarifying the overall purpose and desired results of an organization, and how those results will be achieved.
In your life, perhaps you could depend on your brother for corny jokes or your best friend to be there in a pinch. I knew that my father could clearly explain confusing mathematics concepts like asymptotic lines. In my family, we learned to play to win and play by the rules. No cheating was an absolute rule. I could count on that.
These days, playing by the rules can seem to others as being naïve.
To win some online games, players must find ways around the rules and obvious premises. In many movies, shrewd detectives find ways to surface evidence no matter what it takes. Search warrants are often portrayed as a nuisance. For a while, the public seemed to be accepting drug enhanced performance of top athletes. Corporations can beat out the competition by tying one another up in court fighting over patent and trademark infringement. Pirates of intellectual property (IP) win. Even if the court case doesn’t go their way, they can afford to pay the fine because they have sold so many products in the meantime…at a higher net profit because they didn’t have to invest in expensive R&D. This presents a huge challenge to organizations like the International Trade Council (ITC).
Gamification is now being touted as the primary way corporations can engage their millennial generation workforce. What was the highest score last month on the major game being played? How can you beat your highest score? On the surface that sounds exciting, competitive and motivating. But what are the rules, and do the rules matter?
I’ve seen more and more trusted vendors become frustrated by the gamification mentality over the past few years. If their customers expect that you must “beat your highest score” over and over again, how much is enough? Those customers are never satisfied. It can also be demotivating to millennial employees. They initially like the game, but they tend to withdraw if they don’t continue to get praise and appreciation or if it feels like the expectations keep going up and up and up with too little reward. We all know young adults who have opted out of the careers for which they earned higher education degrees. Instead of being a math teacher, one of my nephews has chosen to work at McDonalds.
If your company is considering gamification as a strategic direction…corporate culture, be prepared to look at the concepts of rules, beating your previous high score and the pros and cons of ever-increasing expectations. What will customers be able to count on from you if/when it becomes a game?
No matter what industry you are in, advances in technology influence what your growth strategies should be.
Maybe you don’t view your company as directly related to technology. Perhaps you sell things like paper products, over the counter medications, or canned or bottled foods. The reality is, each year’s flu season drives increased sales for Kleenex tissues, Charmin’ toilet paper, Chap Stick lip balm, TheraFlu, Halls cough drops, Vicks Vapo Rub, Canada Dry ginger ale, Joy Mangano’s cotton and bamboo blend blankets, Hallmark get well cards, and Campbells chicken noodle soup. The flu even impacts which items are purchased from the Home Shopping Network.
If your company is involved with these and similar products, you may not be happy to learn about progress being made by Dr. Rider and his team at MIT, but you do need to know about it. An article by Scott Tarone in the September 2013 issue of TECHLIFESCINEWS shares information about DRACO, which is a double stranded RNA activated caspase oligomerizer that has been successful against 15 different viral infections including the H1N1 flu virus!
If customers tend to purchase and use your products when they are feeling well, you need to know about DRACO too. You might decide to establish higher market penetration goals.
If you don’t think that something like DRACO is relevant, maybe a better question is whether someone from your team should attend the annual CES event. Their advertisement in the Sept 2013 issue of WIRED magazine accurately describes the event as “It’s a Lab. A Social Phenomenon. A Marketplace and a Look into the Future.” This global stage for innovation will be in Las Vegas, Nevada from January 7-10 in 2014.
What your team members read is also important. If your business is influenced by techno gadgets, maybe someone in your company should be reading Liszewski’s Gizmodo blog.
Think about it. The formulation of growth strategy includes rethinking: your company’s positioning, products/services, customers & market, competition, and business model. We all need to be informed about technological advances before making these big decisions. Who is leading and coordinating the research effort for your organization?
The cover of the 09-09-13 issue of BLOOMBERG BUSINESSWEEK proclaimed HOLY SHIP … for good reason. Drake Bennett’s article shares that Maersk Corp. has recently ordered 10 of the new Triple-E cargo ships that can haul 18,000 TEU (standard shipping containers). That is huge! It wasn’t very long ago when carrying 6,000 TEU was remarkable. One Triple-E ship is as long as the Empire State Building is high and can carry 182 million IPADs or 111 million pairs of shoes from Shanghai to Rotterdam. That 25 day trip involves 530,000 gallons of fuel. When you visit Shanghai Harbor, you cannot help but notice the three Triple-E hulls on DSME’s floating docks. At this point, a new Triple-E is entering service every 6-7 weeks.
Although a portion of the readers of my weekly blogs are in ship building, import/export, and/or transportation, I realize that not all of you are. So why should you care that Maersk ordered 10 Triple-E cargo ships?
Maersk is the world’s biggest shipper in part because its leaders apparently know how to read the rise and fall of the economy and spot windows of opportunity. The shipping industry is very cyclical. They started planning to GO HUGE 4 years ago. The 500+ page contract to order 10 Triple-Es (with an option to buy 10 more) was signed in February 2011. It takes a year to build, test, and deliver one Triple-E, so the ships are now launching during the 3rd and 4th quarters of 2013. If competitors try to copy Maersk, their timing would be way off.
This is yet another example of true wealth that can be traced back to actions taken during recessions and periods of uncertainty. 2008-2010 were some of the most stressful years for most companies. Maersk was busy getting ready to buy/fill/launch 10 HUGE Triple-Es. By the way, Maersk did not exercise its option to buy 10 more, but isn’t it impressive that they created the opportunity for themselves?
Although we are not anywhere near the scale of Maersk, we do benefit from the fact that 3 of our 5 related businesses grow more rapidly during periods of uncertainty and/or recessions. That didn’t just happen. The concept of establishing a suite of related businesses (and 2 unrelated companies) was the result of deliberate research, analysis, and negotiations. Fortunately, none of our contracts were/are 500+ pages, like Maersk’s.
What is your executive team doing to read the cycles of the global (macro) economy? your industry’s economy? your company’s micro-economy?
What risk will you be taking to turn the waves of the economic ocean into success?
How many times have you convened with other leaders to do strategic planning and the session starts with the traditional SWOT analysis (strengths, weaknesses, opportunities, threats)? OK, the approach helps board members and executives hear one another, get caught up, and slowly start to think about something other than day to day implementation. But if your organization has been approaching strategic planning this way every year, it’s time for a change! Kill it. Smash it like an ugly bug.
The SWOT approach exercises the parts of our brains that consider incremental change and linear progression. If your last strategic plan includes several “improvement goals” you know exactly what I mean.
Strategy # 1: Let’s improve customer satisfaction or customer retention or net promoter scores by 5%
Strategy # 2: Let’s improve capacity utilization, productivity or efficiency by 3%
Folks, those aren’t even strategies. They are execution targets for sure but we could substitute “do more with less” on everyone’s strategic plan and skip SWOT analysis and the retreat all together. WHY and HOW should you improve these things? What is the strategic logic behind the goals?
Do you remember a few years ago when the Cadillac division of General Motors came up with the CATERA and the cute advertisements said “LEASE A CATERA” “WHO’S LISA CATERA?” What a fiasco that was. In my opinion, that was a blatant example of inside out, incremental, linear thinking. They wanted to save money. They wanted to have a smaller Cadillac. They had access to cheap OPALs. The result was a charade. An OPAL is still an OPAL even if you call it a Cadillac.
Strategy is more about “outside in” thinking than “from what we already know.” Strategy starts with insights about the outside and is about what you don’t already know.
Research about societal trends, buying patterns, new technologies, generational differences, power and influence, etc. is a more powerful way to get into strategic planning than SWOT.
That kind of research can be unsettling for folks who focus on implementation most of the time, but frankly…that’s the difference between executives and managers. This probably reminds you of Peter Drucker’s famous view of leaders doing right things and mangers doing things right.
And stop calling it a planning session. It’s enough to get important people together to do some strategic thinking. How about strategic working (or thinking) session?
Instead of SWOT, could your strategy session with a review of high level trend research. Where is the market headed? What are the challenges/problems people and organizations in the market experience? What do they want (even if it doesn’t exist today) better, faster, and cheaper? Which of today’s problems and complaints could/would/should be resolved in that time? What will their world look like 5 years from now? Take some time envisioning the future…your customer’s desired future.
That step of becoming fully immersed in the improved lives of who you serve raises the bar on your own thinking and helps you temporarily stop thinking only in terms of what your organization is capable of doing today. What role should your organization play in the improved lives of people in your market(s)? What would you be providing to have earned loyalty and rave reviews?
This process leads many organizations to let go of “forecasting” … accepting incremental improvement of what is done today. Back casting from the vision of a better future outside typically leads executives to embrace much more aggressive changes inside. How else would you see that you might need to actually improve efficiency 12%?
“Forty Under Forty” awards have been around for a long time to shine a light on “future leaders.” These days it feels like we need “Thirty Under Thirty” or “Twenty Under Twenty” awards instead.
The National Speakers Association recognizes the trend. One of the keynote speakers at this year’s NSA convention was 17 year old Philipp Riederle. When Riederle was 13 years old, he hacked into his iPhone® to see how it worked and started a blog…which is now read by over 1 million subscribers. These days, large corporations pay Riederle good money to teach them how to reach teen aged and young adult buyers.
NSA has committed to stay ahead of its members and keep embracing new technologies and trends. That’s good because it is important for our professional societies to do what is needed to be as relevant as possible. NSA’s apps provide value. On line education keeps improving. And conventions are colorful, lively, multi-media events.
There’s a relatively new special interest group within NSA for young members (generations X and Y and millennials). A core group of these members sit together with their heads down as they busily thumb their smart phones during main stage presentations. They text ideas, tweet what comes to mind, and friend one another.
What would happen to your product development or marketing if it had to be relevant to millennials today? By the time some companies figure that out, the millennials will be older and folks can meet one another half way. Maybe not.
George and his executive team succeeded in pulling their organization up out of a deep hole. They survived 2008 – 2010. They have been on a plateau for 4 years. That’s OK, right? They deserved a chance to breathe. Maybe you don’t have to always be aggressive, go for growth, and create new things.
These people are incredibly dedicated and work long hard hours. They have become accustomed to being short staffed and watching every dime.
But now George has become rather paternal. In fact he’s a little like the PAPPA BEAR in children’s storybooks. He looks for perfection in his team and can seem somewhat critical. But, WOW…you should see how his back tightens and his voice booms if anyone outside his team even hints that they need some training, should try something new, or might be stuck! ¾ of their board meetings are dedicated to bragging about how much and how well everyone has been doing.
George is not alone. Maybe you can identify with how he feels. Since the past 5 years have been pretty hard on most organizations, maybe you have also become a bit protective of your team. You certainly wouldn’t want anyone to leave. Right? You’ve all been through so much together…you can finish one another’s sentences. Right?
Be careful though. This pattern can feel like over protective parents. At some point, bright people who crave learning leave the nest to go try new things.
Instead of waiting for the bright people to leave George’s overprotective nest, they are making a group commitment to do some research, find new opportunities, learn new skills, and take some chances…together. They aren’t going to do anything crazy. There will be no diving into the deep end of the pool without swimming lessons. But they are facing the fact that the recession and the lingering tail of uncertainty has affected how they think. They are intentionally working on becoming less risk adverse, learning how to think bigger, and trying to expect more.
It’s one thing to SAY you want to go about the strategic planning process a completely different way this time around. But, if you are accustomed to the usual SWOT analysis, departmental status reports, and incremental progress goals, you could become very uneasy when the research step starts for truly strategic (not tactical) planning.
Of course names have been changed whenever I provide examples. See if you identify with Jake’s situation.
Jake is the CEO of a national non-profit/charitable organization. There are no real chronic recurring problems (like tight cash flow, high turnover, etc.). There are no significant organizational issues (conflict, silos, confusion, productivity, etc.). And there is fairly clear information about the competition, and current clients and funding sources. Jake’s organization knows enough about its day to day operation that they can take this opportunity to pause and consider much larger trends related to: the economy, societal patterns (particularly re. power and influence), how money (including philanthropy) really works, technological advances, the legislative and regulatory environment, best practices of similar organizations and completely different entities, etc.
Each member of his executive team would be assigned one major area (like technological advances) and they could help one another out. They could share what they are learning as they explore. They could get one another “unstuck” if anyone inadvertently regresses into tactical day to day thinking. For six weeks, they would each dedicate 10 hours/week to research outside their organization. It all has an impact on them, but the 6 weeks is about opening their minds and thinking beyond their organization. Each executive would have a “buddy” from their board of directors. The Director(s) would not be asked to do research, but the Executive could pick the Director’s brain and benefit from his/her contacts. Plus, the Directors would feel more engaged and become curious about the upcoming strategic planning retreat.
If you met Jake, you would think he could embrace this. He thought so. He has advanced education and a curious mind. But when the research began, he reverted to a bit of a control freak. Poor guy. He needed reassurance that no one was going to make him look foolish and the health of the existing organization wasn’t going to be forgotten or taken for granted. He became very protective…. of himself, the board members, the executives, the staff, the funders, and the clients.
Punch line: If you engage the services of an outside strategy professional, make sure he/she/they understand the emotional commitment it takes to be a good CEO these days. Jake has a strong sense of stewardship. It would be terrible if an opportunity for everyone to open up, learn, and be better prepared for the future didn’t also include compassion for how uneasy bright dedicated people become when they are out of their comfort zones.