Archive for the ‘Strategic Alignment’ Category

We Never Have Time for Strategic Planning!

Tuesday, May 18th, 2010
Strategic Planning Expert Robert Bradford

Strategic Planning Expert Robert Bradford

By Robert W. Bradford, President/CEO

I’ve heard this comment from people who are very successful.  People who are running companies that – for the moment – are doing quite well.  And yet, this comment puzzles me, mightily.  It puzzles me because strategic planning is about doing the right thing in the right place at the right time.  What could be more important than that?

When someone says they don’t have time for strategic planning, they don’t really mean they don’t have time.  Everyone has the same 24 hours in a day, 7 days a week.  Some do strategic planning, while others spend their time on other activities.  What “I don’t have time for strategic planning” really means is “I haven’t made strategic planning a PRIORITY”.  This scares me some times – when I hear it from people running larger companies – and it saddens me at other times, when I think about what any company can become with better strategic planning.

In the course of my work, I’ve encountered lots of people who run great companies.  Lots of them wanted to work with me on strategy development – and I have heard the excuse “I don’t have time for strategic planning” from many of them.  Sadly, some of them really needed it, and went out of business a few years later, after “not having time” for strategy.  Some of them I have ended up working with and they have unanimously said “We wish we had found time for this years ago!”   There is no question that companies that do strategic planning well end up much farther down the path to success faster than those who try to just “muddle through”.

The truth is, developing a strategic plan often creates the feeling you have MORE time, not less.  This is because good strategic planning helps the whole team focus on the things that will truly drive your company forward, instead of tugging your organization in six different directions.  Also, a good strategic plan will help you find activities that you are spending time and money on right now that aren’t moving you forward – so you can stop doing things that are just a waste of time and money.  If you are familiar with Simplified Strategic Planning, you also know that the best process also pays very close attention to strategic issues that you do or do not have time for – and helps you to assure that highest priority is given to the issues most critical to your success.

So, what kind of company is yours?  Do you have time to assure you are doing the right thing in the right place at the right time?  Do you have time to build a dependable framework for growth and viability for your company?  Or are you waiting until you feel you have “enough time” to do it?  Take it from someone who has seen this come up a hundred times – there is no “right” time to do strategic planning.  Don’t make the mistake of waiting for the right time only to find your best opportunities have passed you by.  Schedule your next strategic planning meeting now!

Robert Bradford is President/CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at rbradford@cssp.com.

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Help! My Market Doesn’t Need My Product Any More! How to Strategically Position Your Company for Success in the Face of Changing Market Preferences

Tuesday, February 2nd, 2010

By Denise Harrison, Vice President

Strategic Planning Expert
Strategic Planning Expert

“First, the bad news, the market for buggy-whips has disappeared; but the good news is, that we have cornered the market for 8-Track tape players.” 

Who makes the screens that go into electronic readers – you know the screens on Amazon’s KindleTM and Sony’s ReaderTM?  Prime View dominates this market; how did Prime View become the leader?  Is this a new company?  Well yes and no. Prime View was started by a Taiwanese paper company who saw that paper was being replaced by other media, in this case liquid crystal display (LCD) screens.  Prime View was born from this view of the future.[1] 

The Importance of Market Analysis 

The senior management team of the paper company correctly identified what the market really needed; the market did not need paper, the market needed something to display the written word.  Correctly identifying the true market need enabled the company to see electronic readers (e.g., KindleTM) as a substitute for using paper to publish books and other media.  Once this alternative technology was identified, the team developed a strategy to enter into the electronic reader market.  The electronic reader market is a very small segment of the overall LCD display market.  The larger segments of the LCD display market are dominated by large electronics companies, which are often competing on price.  Prime View selected the electronic reader market, a market that was still being driven by technological advances rather than lower cost. 

Once they identified the electronic reader market, they decided that it would be easier to buy/partner to obtain the technology required, rather than develop it in-house.  They acquired several companies including Philip Electronics, NV’s e-reader division who was providing screens for Sony’s ReaderTM.  They licensed E-Ink’s technology to further enhance the product and subsequently became Amazon’s e-screen supplier for the KindleTM product.  Finally, in order to control the technology the company purchased E-Ink.  Now they dominate the e-reader screen market, and all the key providers (Amazon, Barnes & Noble, and Sony) of e-readers use Prime View screens in their products. 

Keys to Success 

  1. Truly understand what the market needs – this is not necessarily what the market is already buying from you.  If you correctly identify what the market really wants, you will be able to see indirect competition and substitutes on the horizon.  Prime View realized that the market did not need paper, but an alternative medium to display the written word.  They realized that LCD screens would be used in place of paper. 
  2. Select a market where your company will be successful and develop a strategy to enter that new market.  Prime View selected the electronic reader market where technology was key to market differentiation, rather than lower cost. 
  3. When entering a new market, make the “make/buy” decision early; can you grow the competencies needed to compete in this market in-house or is it faster and more cost-effective to buy a company with the required competencies? 

What is next for Prime View? 

Now that Prime View has the dominate position in this market, it cannot rest on its laurels.  The good news is that the market is growing quickly; the bad news is that this market growth has attracted many competitors.  How long will this market be technology driven? What does Prime View need to do in order to continue to be the market leader?  When will the transition come that will move this market from a specialty market to a commodity market where low cost defines the winner?  How does it go about looking for the next emerging segment in the LCD industry – a new segment where technology is driving success rather than low cost?  As the market- dominate player, you cannot kick back and enjoy success, you must plot the next move on the chess board so that you are positioned for success for years to come.

[1] “Race Heats Up to Supply E-Reader Screens”, Wall Street Journal, December 29, 2009, p. B1.

Denise Harrison is Vice President of the Center for Simplified Strategic Planning, Inc.  She can be reached at harrison@cssp.com.

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Gaining Strategic Alignment Between Business Units

Tuesday, September 29th, 2009

By Robert W. Bradford, CEO/President

Strategic Planning Expert Robert Bradford
Strategic Planning Expert Robert Bradford

The other day I was talking with a CEO about building strategic alignment between business units in his organization.  I was intrigued, because my questions about the company’s strategic competency yielded a history of the company – but no clear sense of strategic competency.  In other words, the CEO knew WHY the company had the dozens of different products and markets they had – but not why it made sense to have all of those business units in one company.

On reflection, many of the business units had elements in common – some sold to similar markets, made similar products, or used similar processes.  There were even a few that could be combined into a vertically integrated supply chain.  But all of this was the result of opportunistic acquisition – not a clearly defined strategy of building skills, processes and knowledge around a true strategic competency.  Without question, in this situation, the key to good strategic alignment – getting the business units pulling together into a company with a unified strategy – is a clear, concise definition of a true strategic competency.

Those of you who have been to our Simplified Strategic Planning seminar will recall that a strategic competency is a combination of skills, processes and knowledge that create value for your customers, differentiate you from your competition and are difficult to copy.  As the global economy makes the world smaller and more commoditized, true strategic competency is the key to profitability for any successful company you can name.  I can name small delis that have a strategic competency…and large multinationals that do not.  Interestingly, the existence of a true strategic competency seems to correlate with long term profitability and – perhaps more importantly – the ability to weather ups and downs in your market environment.

When considering questions of strategic alignment, it’s always a good idea to start with a clear understanding of your strategic competency.  If it’s real, everyone in your company will “get it”, and it will be simple to focus on building your business around it.  If you try to work with an unrealistic strategic competency, it’s very likely your people will fail to support it because they simply can’t believe in it.  A workable strategic competency does not have to be something you are the best in the world at – but you do have to have a realistic shot at that title.  If you do, everyone in your organization will have something they can align with and strive for.  If you don’t, your strategies can be just another “make believe” exercise that fails to garner the necessary support below the top level of your organization.  The larger your company is, the more important this characteristic of strategic competency becomes.

In the case of the CEO I spoke with at the top of the article, the key for his organization is to: first, arrive at a clear understanding of the company’s strategic competency, and then realistically assess the relationship of each business unit to that competency.  It’s likely some business units will not support the ultimate competency – and those units should be spun off, sold, or (in the worst cases) closed down.  In the best of all possible worlds, each business unit would find a place supporting a strategic competency either independently, or as part of another company whose strategic competencies are well served by the skills, processes and knowledge present in that business unit.  This approach would lead to greater profitability for each business unit, and a much clearer shared sense of direction for the company as a whole.

Robert Bradford is President/CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at rbradford@cssp.com. 
 

 

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