By Robert W. Bradford, President/CEO

Strategic Planning Expert Robert Bradford

In strategy, you will inevitably find resistance to your plans.  This resistance is sometimes forceful, and other times something you can overcome with resources and effort.  An interesting question is how to deal with resistance.  Should you always push hard to overcome resistance to your strategic objectives (probably not) – or should you allow resistance to stop you every time the going gets hard (also probably not)? 

There are several key questions to ask yourself about the resistance you encounter to your strategic objectives.  First, what is the nature of the resistance?  Are you finding the objective difficult because of competition, the learning required, or the resources required?  Second, is the resistance something that is even possible to overcome?  Third – and very importantly – how important is the objective to your strategic success?  

Very often, the thing that separates great companies from OK companies is the willingness to do difficult things.  A great company will often (but not always) undertake to overcome obstacles that stand between it and true strategic differentiation.  OK companies allow themselves to be stopped by adversity. 

This does not mean that you must always persevere to be great.  Another hallmark of great companies is the ability to give up where it is appropriate.  Not too soon – but also not delayed where the end result will be a large consumption of resources with little or no forward strategic motion. 

What kind of organization is yours?  Do you show perseverance or are you stoppable?  And when you persevere, how do you assure that you are not spinning your wheels, attempting to overcome difficult resistance that will lead to little gain? 

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

Strategic Planning Expert

By Denise Harrison, Vice President

Execution of strategy: we know it is important, but why doesn’t it happen? Based on my experience working with over 100 companies on strategy development there are four key areas that lead to execution success.

1. Focus on the few:
   1. Select a few – 8-10 key strategic objectives to accomplish in the next 12 – 18 months. No more than 10! Don’t fall into the trap of “We have to do this!” and end up with 12 to 15. It is better to work on a few rather than work on everything and get nothing completed. Four to six is even better, especially if the objectives are large.
   2. Once you have selected the key objectives, then develop action plans that are detailed roadmaps of how you will accomplish these objectives:
      1. What are the action steps (granular detail)?
      2. Who is involved with/responsible for each step?
      3. How much time will each step take?
      4. How much money will each step cost?
2. Balance your resources:
   1. Now you know the amount of time and money for each objective, do you have enough resources? Do you have the right resources?
      1. Often the required financial resources are clarified in the budgeting process
      2. The human resource aspect is often lightly considered (if at all) and this is where many implementation plans go off-track.
         1. Understand that your people have day-to-day activities that help the business run in addition to the projects that will position the company for future growth; you have to balance these requirements so that both are accomplished.
         2. If you find that you do not have the resources to accomplish your action plans, evaluate how you can
            1. Delegate (both routine as well as project activities)
            2. Eliminate (routine and/or project)
            3. Reduce (routine and/or project)
            4. Postpone (project only – you can’t postpone routine activities; they just don’t happen)
         3. The operative word here is balance!
3. Monitor your progress:
   1. Monthly have your action plan team leaders report on their progress to the strategic planning team
      1. Work with the team to relieve bottlenecks if projects are behind
      2. The strategic planning team should be able to help reduce bottlenecks – use this meeting as a solution-finding meeting rather than a way to assess blame. The team should be working together to move things forward.
   2. If new projects come up, then evaluate each project in the context of what has already been selected.
      1. If the new project is more important than one of the current key objectives, then add it, but be sure to take one away.
      2. Do not pile objectives on top of one another – sometimes we assume that we have hatched new resources during the year.
      3. Do not evaluate new projects in isolation – evaluate them in the context of the projects that are already on your plate. If the current projects need to stay on the list, save the new one for next year’s strategic planning.
4. Communicate early and often
   1. Communicate the strategy and key objectives to all employees
      1. Make sure that communication is clear and concise
      2. Make sure the communication is two-way (see article: Lessons Learned in Aligning an Organization -Two Way Communication is Key)
         1. Give employees a way to react
         2. Have them prepare what their departments are going to do in support of the strategy and key objects – make sure the communication is two-way.
   2. Communicate frequently and update when changes occur.
   3. If everyone in the boat has his/her oar in the water and everyone is rowing in the same direction as the company, it will move forward quickly – outpacing the competition.

Efficient strategic execution is paramount to outperforming your competition during this recovery phase of the economy.  If you accomplish these four steps you should achieve over 90% of your objectives within the timeframe selected.

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

By M. Dana Baldwin, Senior Consultant

By Robert W. Bradford, President/CEO

By Denise Harrison

Strategic Planning Expert

By Denise Harrison, Vice President

It is often argued that strategic planning processes miss industry shifts due to a myopic focus on existing customers and market segments, as well as existing products and product lines – but is this correct? NO! While market analysis and customer segmentation are important to any strategic plan, it is paramount for the process to look outside the existing business for opportunities and changes that will have significant impact on your business. In addition, it is essential for your team to develop a scenario for your industry looking out beyond the planning horizon; looking for trends that will emerge 5-10 years in the future. This allows the team to identify industry shifts – disruptive drivers (e.g. technology, demographics, regulations, lifestyle changes) which might transform your industry. How does this work? Let’s look how Wyeth Pharmaceuticals addressed a structural shift in the pharmaceuticals market. Next we will look at how Clorox used trends to identify new growth opportunities.

Wyeth: Traditional Pharma vs. Bio Tech

During the mid-1990s Wyeth developed a vision of the pharmaceutical industry. In their scenario they saw that traditional pharmaceutical development would be less fertile for growth opportunities than the emerging biotech approach. Understanding that this new technology would foster significant future growth, Wyeth faced the decision to build from scratch or buy. The Wyeth team decided that acquisition would be faster than building from scratch and they acquired two companies: Genetics Institute and American Cyanamid (now Wyeth Biotech) which had the intellectual capital that Wyeth did not have resident inside its own company. Wyeth did not hesitate; they jumped in with both feet with a significant investment to fund these acquisitions.

The Results

Wyeth correctly anticipated the benefit of the biotech approach to developing drugs and now WyethBiotech is 45% of their business. A decade later, Wyeth is still reaping the benefits of its investment decision – the biotech industry is blooming and profits at Wyeth (2008) are up 12%. Many other pharmaceutical companies dabbled in biotech but dabbling did not position their companies for success. Now, these companies are playing catch-up: Eli Lilly purchased ImClone in 2008 and Roche is purchasing the rest of Genetech. Recently, Pfizer made the decision to purchase Wyeth so that it, too, can get into the biotech and enhance its pipeline.

Clorox Capitalizes on Mega-trends to Fuel Growth Strategy

Clorox identified two key trends when it defined its growth strategy: consumer focus on health and wellness, and environmentally friendly products. The recognition of these trends resulted in the acquisition of Burt’s Bees® natural personal care products, the launch of Green Works® natural cleaners, and repositioning the Brita® brand as an alternative to bottled water, thus positioning Clorox as a more environmentally friendly company. It took an acquisition and new product line launch along with product repositioning in order for Clorox to capitalize on these trends. Like Wyeth, Clorox made significant moves rather than taking a “wait and see” attitude.

Challenging the Status Quo

Is your strategic planning process allowing you to challenge the status quo? Do you look for opportunities outside of the box? Do you look out beyond your planning horizon to evaluate industry shifts or new competitors? If you are able to see trends before your competitors, you will leapfrog the competition by positioning yourself to meet the needs of emerging markets. Remember, what made you successful today may not be the key to success tomorrow – it is important to anticipate future industry shifts. It is essential to look five to ten years in the future and develop an Industry Scenario and Winner’s Profile as part of your strategic planning process. These two steps will enable your team to identify shifts that will significantly impact your business and allow your team to develop a strategy to meet these changing industry conditions.

Strategic Planning Expert

By Denise Harrison, Vice President

Three Key Areas to Consider

How should the Board be involved in strategic planning? This is a frequently asked question. The key objective of strategic planning is to identify the sound course and direction for the organization that optimizes the organization’s future potential. Setting the strategy is the responsibility of the senior management team — the team is responsible for the success or failure of the strategy. This team is close to both the customers and the internal workings of the company and is best suited to determine the course and direction for the company.

How can the Board play a role?

While the Board is not responsible for setting strategy it can often give valuable input before the strategic planning process begins and act as a sounding board as part of a review process. Hence, the Board can play an important role during several steps of the strategic planning process:

1. Before the process starts – the Board gives guidance including an overview of future environment along with specific opportunities and issues to be considered during the strategic planning process. The Board will often have a broader vision, enabling the team to consider more choices before selecting the optimal course and direction.
2. After strategy development – the Board provides a review function; review of the strategy to make sure that it is internally consistent and that there are concrete implementation plans for key strategic objectives.
3. During the year – the Board should monitor progress to ensure the strategy stays on track or changes when business conditions necessitate change.

Some Boards participate in all three steps — others in steps two and three. In the case where the Board is not close to the business then the process should include just steps two and three. If the Board has members who do have broad business experience and understand the industry than participation upfront is often beneficial.

Board Involvement before the Strategic Planning Process Begins

Typically Board members work through the following steps:

1. Industry Scenario – this allows Board members to give the strategic planning team their insight into industry trends.
2. Winner’s Profile – Board members may see characteristics of the Winner that team members may not see (Board members may have a better understanding of what a company will look like at $100 million than the team members of a $50 million company looking to grow to $100 million.).
3. Opportunities - to be evaluated — the broader make-up of the Board may uncover additional opportunities to be researched.
4. Threats/Issues – the Board members may have a broader vision of what the risks are in the business.

The Board should be providing guidelines and suggestions rather than edicts. The senior management team should then use the input as they work on the strategic plan. Some ideas may be incorporated into the strategic plan — others, while considered, may not make it into the plan. This does not mean that the ideas were not good, it just means that with limited resources the team had to select the few items to work on rather than choosing a large number and becoming unfocused.

This is a general format for Board involvement before the process begins — however, due to the individual nature of a Board’s relationship with the senior management team we continue to work with companies to design programs that work for their specific requirements. The key thought is that Board members often have wide ranging experience and you need to ask yourself the question: How can we best leverage their expertise when developing a strategic plan?

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

Strategic Planning Expert

by: Robert Bradford, CEO, CSSP, Inc.

Stealing from customers.  Some would tell you it’s the secret to profit in today’s economy.  If you are only worried about the next quarter, it is.  You can always make more money in the short term by delivering a little less than your customers expect.  For example, if I am making automobiles, I can use less steel, making the body lighter and, unfortunately, less durable than previous models.  Customers won’t know the difference until years later, when that model starts to fall apart faster than its predecessors.  Did I get the same price from the customer as I did for the earlier, more durable design?  You bet!  So why wouldn’t I continue to behave this way, cutting little bits of value out of my product or service in order to fatten up the bottom line at the customer’s expense?

Obviously, this strategic approach starts your company down the road of commoditization.  If you are pursuing a commodity strategy, you should already be driving towards the “no-frills” experience your customers are willing to pay for.  But for a company with a specialty strategy, this amounts to trading some of your specialty status (usually irrevocably) for short-term profit.

What do you think?  Is this a viable strategy?  If I’m an executive in a big auto company, who can’t even trust that I will have a job three or four years from now, why would I care?  Are you adequately addressing this issue in your strategic planning process?