Posts Tagged ‘strategic planning process’

The Five Pillars of Strategic Planning

Friday, August 7th, 2015

By Robert W. Bradford, President and CEO

Strategic Planning Expert Robert W. Bradford

Strategic Planning Expert
Robert W. Bradford

Strategic planning has been done many different ways.  Some work, and others don’t.   I’ve heard people talk about planning processes that are deeply detailed and months long, and I’ve heard of planning processes that are done in a couple of hours with post-it notes and tinker toys.  My own take on strategic planning is based on experience drawn from working with hundreds of companies over the years, and I’ve paid particular attention to three outcomes from strategic planning:

-What was the effect on the PROFITS of the company?

-What was the effect on the SALES of the company?

-How much of what was committed was EXECUTED?

Based on the experiences of those who fared best in these three areas, here are a few key things you NEED in your strategic planning:

  1. Data+
  2. Assumptions
  3. Direction
  4. Commitment
  5. Execution

You can do anything you want, but without the five items above, you will end up with either a bad plan or a bad outcome.  With the five items above, very little that you add can greatly improve the plan quality or the effectiveness of execution.

Let’s examine each of these separately:

  1. Data +

Far too often, I’ve seen companies try to strategize based upon opinions, feelings and presumptions.  There is simply no substitute for data – but strategically useful data is hard to find (and often expensive).  Anything you can do to improve your repository of strategically useful data is likely to pay back in your planning process.

  1. Assumptions

While we desperately attempt to avoid assumptions in our daily lives, temporary estimates about the future are completely inevitable in strategic planning.  The key to making assumptions and using them well is to do so consciously, and remember that they are subject to revision in the future.

  1. Direction

Direction is the heart of strategy – in my definition, strategic planning is the planning of a direction that will focus the organization’s resources to the best possible effect.  Almost no one skips this.

  1. Commitment

There are two downsides to commitment.  One is that commitment creates accountability – which is only a downside when you want to avoid it.  The second is that commitments that aren’t backed up with resources and execution damage the credibility of the plan and the management team.  The simple solution to this problem is to fix it with good, resource-based execution planning, but the tedium of that process can prevent companies from doing so.

  1. Execution

The Achilles heel of the entire strategic planning process, execution must be planned fairly meticulously with ample resources allocated to the expected efforts.  Any execution which is going to be strategically useful will require a significant amount of time and/or money, or else its strategic utility will be short-lived.  Because many strategists shy away from anything that some might call micro-management, I often observe poor execution planning in companies that are doing strategic planning without professional help.

I’d strongly recommend you take a look at your current strategic planning process.  Are all five of these areas covered?  If so – congratulations, you’re much more likely to get good results from your planning than most companies.  If your strategic management is missing any of these items, you might want to take a closer look at Simplified Strategic Planning, a battle-tested methodology that assures you will cover the critical pieces with an appropriate investment of time.

To learn ways to take your strategic planning to the next level please listen to our webinar:  Why my strategic planning isn’t working.

Robert Bradford is President/CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at rbradford@cssp.com.
© Copyright 2015 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution

3 Cool questions to ask in your strategic planning

Friday, May 15th, 2015

By Robert W. Bradford, President & CEO

Strategic Planning Expert Robert W. Bradford

Strategic Planning Expert
Robert W. Bradford

The other day, a client was chatting with me and mentioned something about my strategic planning work I’d never thought of:  I ask weird questions.  Not so weird, in my mind – but my favorite questions are always strategic, and always lead to excellent discussions about the sources of value in business and how you can create more.

With this in mind, I created a list of fun questions that I like to pose at different points in the strategic planning process.  I don’t recommend tackling them all at one, and – in Simplified Strategic Planning – there is a concrete, data-driven process that definitely creates a logical, practical framework for addressing these questions.  That being said, you might want to think about how to incorporate these key questions into your own strategic planning (or pick up a copy of Simplified Strategic Planning, and learn how a structured approach could save you time while giving you better answers).

  1. Why do our customers choose us?

I think of this as THE question for business strategy.  There are many, many possible answers, yet – in most markets – the decision seems to boil down to about 3-5 variables that dynamically drive customer preference.  For example, in the airline industry, low fares, convenient schedules, and extensive network explain a huge portion of the ticket purchases.  Likewise, in banking, convenience, relationships and fee structure seem to be the top drivers.  You don’t have to be the best in all of the factors (indeed, many industry leaders are pretty bad at one or more), but you do need one or two that will lock in a sustainable customer base for your business.

  1. How will technology change our industry even more?

Of course, I say “even more” because most of us are currently riding some of the biggest waves the market oceans have thrown at us already.  If you think those changes are big, you may be surprised at what the future has in store.  We are wearing computers.  We are tinkering with the chemical and genetic makeup of familiar products.  Our world is getting smaller and more segmented.  These factors – and dozens like them – will not stop changing to give us a breather.  We will continue to be buffeted by technological changes that can wipe out entire industries (pay phones, anyone?) and spawn entirely new ones.  Again, in strategic planning, we don’t need to get these 100% right, but if we can anticipate just a little bit, we can move to the front of our industry – or even escape it, if it’s heading for disaster.

  1. If customers could change ONE thing about our industry, what would it be?

I like this question because it forces us to look at the problems of our industry from the customer point of view.  Good market segmentation might lead us to very different answers for different customer groups, but some of the best opportunities to grab new market share – or hang on to your existing share – are likely to arise from the customers’ frustrations with the way business is currently being done.  If your industry is highly oriented towards operational efficiency, there may be opportunities in becoming more personalized and human.  If your industry offers a plethora of choices, a simplified product may be welcomed.  Whatever the frustrations are, it’s likely you (and your competitors) have great reasons for creating the frustration – but it’s also likely someone will come up with a clever way to sidestep it, leaving the rest of the industry playing catch-up.

These are just three of the best questions I like to use.  Naturally, if you’d like us to drill into your team with these and other penetrating questions that will improve your market share, drop us a line.  Do you have any questions that you find useful in your strategic planning?  Please comment below and let us know!

For more ways to take your strategic planning to the next level please listen to our webinar:  Why my strategic planning isn’t working.

Robert Bradford is President/CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at rbradford@cssp.com.
© Copyright 2015 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution

Listening: An Important Skill for Successful Strategic Planning

Friday, March 20th, 2015

By Denise Harrison, Senior Consultant

Strategic Planning Expert

Strategic Planning Expert

Recently I spoke with a CEO and found that the most important thing that his team learned during strategic planning was the importance of listening.  This was an unusual answer to my question asking how his team had benefited from the strategic planning process, so I asked him to explain his answer.  He said that his company was full of “idea” people who spent so much time talking about their ideas that they failed to listen to others.  Without solving this problem, his company would have been stuck in the mud and perhaps gone out of business because nothing moved forward – each person was his or her own island.

Listening: An important skill for strategic planning

One of the benefits of including research on key topics during strategic planning is to ensure that all of the team members have a shared base of knowledge from which to make decisions.  By listening to all of the research and ideas, the team can have constructive discussion concerning what is the best course and direction.   The ability to listen allows each team member to thoughtfully consider what the company should say “yes” to and, more importantly, what it should say “no” to.  Important facets of listening include:

  1. Allowing all team members to develop a shared base of knowledge, broadening their understanding of the business and the possible choices the company can make.
  2. Allowing for better discussions and the development of a broader range of solutions, due to the shared base of knowledge.
  3. Allowing all on the team to better understand the impact of a variety of different forces on a particular idea, as each idea is looked at from different points of view (financial, customer, product development, production).
  4. Allowing the CEO to sit back and watch the team develop their strategic thinking skills instead of always being the one with the answer. Strategic thinking is like a muscle – the muscle develops with use, but atrophies if it is unused.
  5. Allowing the team to hear what customers have to say, rather than just presenting solutions. This listening skill can enable the company to develop a better understanding of their customers’ businesses, enabling better future solutions.
  6. Allowing the top management team to build trust as a cornerstone of a company-wide culture that most effective companies want to foster.

Considerations for your strategic planning process

As you go through your next strategic planning process, remember the importance of listening.  Remind team members that it is not only important to have good ideas, but also important to listen to others’ thoughts.  It is the team’s combined thinking that generates a great strategic plan.

Interested in how you can get your strategic planning team to listen better and to capitalize on other team-building benefits of strategic planning?  Please contact me at harrison@cssp.com or listen to our webinar:  Strategic Alignment click here.

Denise Harrison is a senior consultant for the Center for Simplified Strategic Planning, Inc. She can be reached at  harrison@cssp.com.

© Copyright 2015 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Fixing Your Balanced Scorecard  –  Part 1

Monday, March 16th, 2015

By Robert W. Bradford, President & CEO

Strategic Planning Expert Robert W. Bradford

Strategic Planning Expert
Robert W. Bradford

Note:  This was previously published in Compass Points May 2008

Some time ago, I had an interesting conversation about the Balanced Scorecard with a friend who works in a large organization. His comments reminded me of so many comments I’ve heard about Balanced Scorecard and Strategic Planning that I went back through my notes to see what common threads underlie the biggest issues companies have with Balanced Scorecard initiatives.

To begin with, Balanced Scorecard projects are no more Strategic Planning than budgeting is. Sure, you can use a scorecard to drive certain fragments of the Strategic Planning process, but it is still a fragment of what is needed to create the right strategic change for your organization.

Based on feedback from the companies I’ve met through my Strategic Planning seminars, speaking and client work, here are the main reasons why you might be dissatisfied with your Balanced Scorecard program: 

Part 1 will discuss – In this post:

  1. You have too many measurements 

Part 2 will discuss – In the next post:
II. You are measuring the wrong things
a. You are measuring things because they are easy to measure
b. You aren’t measuring the things that really matter

Part 3 will discuss – In the third post:

III. Your scorecard isn’t driving action
IV. The change your business needs involves a more fundamental shift in strategy 

I’ve explored each of these in my blog:  http://simplifiedstrategicplanning.blogspot.com/, following is a compilation of the main points.

I. You have too many metrics in your scorecard

This is most likely true, if you are doing Balanced Scorecard in your company. Why do I say this? There are four reasons you have probably put too many metrics into your Balanced Scorecard.

  1. A bigger document = better document:This is a holdover from when we had to write five page papers in high school. We are all now old enough to know that quantity does NOT equal quality, it just makes work and wastes paper.
  2.  You can’t decide which numbers to throw out:You know you should have only two or three financial measurements, but there are so many good ones from which to choose. Is the solution to keep them all? Only if you want to make people’s eyes swim and make sure only the accounting types really read your scorecard numbers.
  3. You want to be inclusive and have a metric for everyone:After all, if Bill in the mailroom doesn’t have a metric, how will we include him in our process? This is a hard one, because inclusion does create value – but let’s have a tactical number for Bill…and avoid pretending that our company should have a mailroom strategy. Either that, or admit that your Balanced Scorecard process is tactical rather than strategic.
  4. You don’t want to exclude certain measures because someone says you “have to” watch them: I hope you’ll immediately explore what will happen if you do the exact opposite. The future belongs to the unconventional company, and you are seriously conventional if you do everything people say you “have to” do…

And what are the reasons for having fewer measures? There are only three:

  1. It’s less work
  2. It’s more effective
  3. More people will read it

In our second and third installments, we will finish the discussions started here.

For more information on how to take your strategic planning to the next level please listen to our webinar: Why Isn’t My Strategic Planning Working?

Robert Bradford is President/CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at rbradford@cssp.com.
© Copyright 2015 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution

Execution and Executability

Friday, October 3rd, 2014
Strategic Planning Expert Robert W. Bradford

Strategic Planning Expert
Robert W. Bradford

By Robert W. Bradford, President & CEO

When I ask audience members at my seminars and speeches “What is your biggest strategic planning problem right now?”, I inevitably hear the response “Implementation”. Without question, this is one of the biggest issues for any company trying to accomplish anything at a strategic level — execution seems to inevitably fall short of our stated intentions. As one CEO put it, “We say we will do something, and get excited about it, but a month later, it’s forgotten as we move on to the next thing”. This is perhaps true even when attempting to implement non-strategic objectives — but it’s far worse with the strategic ones. Why? Because nothing is more postponable than a strategic objective — until it’s too late to even think strategically. In addition, strategic objectives are much more likely to introduce powerful changes in your organization, and so they meet with far greater resistance than more operationally oriented objectives.

You can enhance your effectiveness at strategy implementation by the things you choose to do in your strategic planning process. There are three key areas where you can do this: 1. Implementation Planning, 2. Resource Allocation and 3. Implementation Monitoring. The approach we take to these three areas is quite different from the norm in strategic planning, and it yields superior results. According to Robert Half Associates, most companies achieve about 30% of the objectives they set for themselves in a process like strategic planning. Using Simplified Strategic Planning, you should be able to achieve an average that is closer to 80%. It is the unusual way we handle the three key implementation management steps that makes the difference.

First, in implementation planning, it is important to set objectives well. This means using the SMART approach — objective must be specific, measurable, achievable, with results stated in a timely way. In addition, you should make sure you set a reasonable number of objectives. We find many companies improve their execution effectiveness simply by limited the objectives they set in strategic planning. Secondly, you need to write a good, clear action plan that is useful for directing and tracking the implementation of your objectives. The approach illustrated in the Simplified Strategic Planning seminar and book is a robust way to assure this.

In resource allocation, we find that most organizations already pay a great deal of attention to the money required for effective implementation. This is the first resource you should look at. Money is important, but it is usually less important in strategy implementation than time. Ironically, few companies devote even half as much attention to time as they devote to money.

Finally, monitoring of strategy implementation is vital, even if it is sometimes difficult. This implies two important things. First, you must write your action plans to be monitorable — which means the steps should be stated as clear, finite actions which are considered complete at some point, and also that each step needs a clearly stated start and completion date.

Assure that your team follows the recommendations in all three of these areas and you will find your execution will improve dramatically.

For more information on how to take your strategic planning to the next level please listen to our webinar: Why Isn’t My Strategic Planning Working?

Robert Bradford is President/CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at rbradford@cssp.com.
© Copyright 2014 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution

Ready, Aim, Fire?

Friday, June 6th, 2014

By Robert W. Bradford, President & CEO

Strategic Planning Expert Robert W. Bradford

Strategic Planning Expert
Robert W. Bradford

In over 1,600 strategic planning meetings, I have noticed that people have a tendency to approach their planning process from many different angles.  One of the most interesting sets of angles revolves around the very common idea that we can hit our targets more accurately using the sequence “Ready, aim, fire”.   This sequence originated with the drills for musket-armed infantry in the 18th century, and the basic sequence makes perfect sense – that is, we should ready before we aim and aim before we fire.  There are other approaches that managers adopt, and some make more – or less – sense, depending upon the dynamics of the situation.  These approaches can be summarized using a few, common, versions of this sequence.

Ready, aim, aim, aim, aim…

This sequence is unfortunately all too common.  People who are likely to expend huge amounts of time and money on their planning often fall into this category, as do people who never really feel ready for their next big move.  One of the common causes of this poor sequence is the idea that a plan must be perfect in order to work.  Obviously, there is no such thing as a perfect plan, so the sequence itself is a trap brought on by a sense of perfectionism.  The best counter to this sequence is to look for action in the short term supporting the strategy – if it doesn’t exist, it’s very likely someone is being too critical, and that criticism is going to hold the organization back.

Ready, fire, fire, fire…

The “machine gun” approach has some advantages.  The biggest advantage is that it is very action-oriented, and may, with luck, lead to an effective strategy.  The disadvantage is that the “fire” part of the sequence may use up resources to no effect without adequate measurement of results and reflection.

Ready, fire, aim.

While it sounds wrong, this approach actually matches the tactics of naval gunners for most of the past 200 years.  The idea behind it is that one cannot accurately incorporate all variables into one’s aim, and so taking a shot to see where the shell hits is the simplest and best way to hit the target.  Historically, this approach usually led to one shot that went too far, one that fell short, and the third shot hitting dead on – at which point the commander would order “fire for effect”.  In a rapidly changing and dynamic environment, this sequence can work better, and faster, than “ready, aim, fire”.  The key drawback is that you will often waste ammunition in the first two “ranging” shots.  The key advantage is that the feedback of watching whether you hit or not is going to give you better information on your targeting than any amount of analysis.

Ready, aim, fire

If you have a single shot available to you, this approach – the classic – makes the most sense.  Its application in the historical setting was in conditions where re-loading would leave you vulnerable to an enemy melee attack (such as a bayonet charge), and it makes sense in business situations where you will just get one shot.  In strategy, it is better to avoid the “one-shot” situation if you can, but that’s not always possible, so this sequence is the one you should use if you find yourself forced into this kind of “do or die” position.

Which approach do you normally see in your business?  Is it appropriate?  A good evaluation of this seldom-examined cultural phenomenon is just one element of our Simplified Strategic Planning leadership.  If you’d like to discuss how these concepts apply in your business, give us a call or attend one of our Simplified Strategic Planning  workshops.

Are you frustrated with your strategic planning efforts?  If so, please listen to our  webinar:  Why My Strategic Planning Isn’t Working by clicking here.

Robert Bradford is President/CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at rbradford@cssp.com.
© Copyright 2014 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Why Stretch Goals Make Bad Strategic Objectives

Friday, April 18th, 2014
Strategic Planning Expert Robert Bradford

Strategic Planning Expert Robert Bradford

By Robert W. Bradford, President & CEO

This is my fifth post on bad strategic objectives.  In my first post, I discussed a test to tell whether an objective you set for your organization is truly strategic.  By now, I’ve also highlighted four common types of non-strategic objectives, the incremental objective , the accounting objective, the lead brick objective and the world peace objective.  Today, we’ll take a look at one more very common type – the stretch objective.

We hear all kinds of people extolling the virtues of “stretch objectives” – people who tell us to “shoot for the moon, because even if you miss you’ll be among the stars”.  In some cases, this advice can be truly useful.  In most strategic planning situations, instead of ending up “among the stars”, you’re more likely to end up lost in space without any air.

Why is the stretch objective a problem in strategic planning?  First, in strategic planning, we are explicitly creating a plan of what we will do in the future.  The credibility of the plan itself is vital – and stretch objectives encourage us to depart the sensible world of the possible for the la-la land of the unlikely.  Second, good strategy requires that we carefully match our intentions with our resources – and the stretch objective inclination pushes us to ignore the realism required for good resource planning.  Finally, stretch objectives create a feeling that your planning and execution have failed even in cases where you have achieved quite a bit.

This is not to say that you shouldn’t consider audacious objectives – but rather that there is a place for audacity, but that objective-setting is not that place.  Remember, your strategic objectives are the crucial link between your strategy and execution.  One of the key transitions we need to make when shifting from strategy to execution is the transition from thinking of possibilities to thinking of realities.  A good, audacious objective will connect possibilities with reality, and force your thinking into an action plan that delivers a substantial, but realistic result.  By way of contrast, many stretch objectives will cause people responsible for execution to throw up their hands in despair and not even consider execution.

If you face the temptation – or the pressure – to include stretch objectives in your strategic planning, how do you handle it?  A well-thought out, disciplined strategic planning process can be a vital tool in assuring your objectives are both strategic and realistic.

If setting good objectives is hampering your execution of your strategic plan, you might also want to consider re-thinking your strategic planning process.  A great starting point to this would be to attend one of our popular Simplified Strategic Planning seminars.  Click here for more information.

To improve the execution of your strategic plan, download an archived version of the webinar Strategy Execution: Path to Profitablity.  Click here.

Robert Bradford is President/CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at rbradford@cssp.com.
© Copyright 2014 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Is it a good objective, or are you seeking “world peace”?

Tuesday, March 18th, 2014

car pic square

This is my fourth post on bad strategic objectives.  In my first post, I discussed a test to tell whether an objective you set for your organization is truly strategic.  By now, I’ve also highlighted three common types of non-strategic objectives, the incremental objective , the accounting objective, and the lead brick objective.  Today, we’ll take a look at a very common type – the world peace objective.

When beauty pageant contestants are asked what they would like to accomplish in their lives, one of the most vapid answers we often hear is “world peace”.  Smart people find this distasteful for two reasons:  first, it’s not what the contestants really want, it’s what they think the judges want to hear, and second, it’s impossible.

Do you ever encounter this in your strategic objectives?  When the owner, or CEO of a company says “I want to see profit rise by 80% each year”, does someone suggest “Increase profit by 80%” as one of your strategic objectives?

On its face, the world peace objective looks very strategic.  After all, we can’t argue that and 80% increase in profit wouldn’t be great, and it seems strategic in its impact.  But there are three key problems with the world peace objective:

1.  It’s about symptoms, not causes.

While the SMART definition of objectives maintains an objective must be a result, it’s very difficult to act on results.  The best objectives help us act toward a mid-point goal which leads to the results we want.  This means your objectives will lead to better results if they at least mention the cause that you are working on.

2.  It’s completely overwhelming in scope.

Think about it:  where would you begin?  You might take the “eat an elephant” approach and tackle the objective one bite at a time, but this one could be streamlined into a single, unworkable action step:  “everyone do their jobs better and get better results”.  In a real-world action plan, this would lead to about 2,000 steps, which would look like an insanely detailed job-description manual that NO ONE WOULD READ or use.  Sure, you might score big with it, but I see far greater success with smaller, do-able objectives.

3.  People have real trouble getting excited about it.

Think about objectives that you have seen people get excited about.  They are very, very specific, and people like thinking about the result of the objective.  Certainly, the CEO and CFO will be excited about a big increase in profit, but it’s much easier to celebrate the opening of a new location, the launch of a new product, or a patent on a new technology.

So, next time you hear someone suggest a “world peace” type objective, ask this simple question:  “How, specifically, could we accomplish this?”  If you can break it down into three or four concrete, big things you can do, consider making those your strategic objectives instead.

If setting good objectives is hampering your execution of your strategic plan, you might also want to consider re-thinking your strategic planning process.  A great starting point to this would be to attend one of our popular Simplified Strategic Planning seminars.

 

Are your Objectives Really Worth Pursuing? Or are they just “Lead Bricks?”

Friday, March 7th, 2014

By Robert W. Bradford, President and CEO

Strategic Planning Expert Robert Bradford

Strategic Planning Expert Robert Bradford

In my first post on strategic objectives, I discussed a simple test to tell whether an objective you set for your organization is truly strategic.  I’ve also highlighted two common types of non-strategic objectives, the incremental objective and the accounting objective.  Today, I’ll cover another common non-strategic objective – the lead brick objective.

For some managers, one of the uncomfortable things about the simplified strategic planning process is that it requires accountability for the completion – or non-completion – of objectives that move your organization in the direction of your strategy.   This discomfort is healthy – it’s hard to get anywhere without feeling uncomfortable about your current position – but it is unfortunately easy to avoid by devising certain types of objectives.  One of the most common is an objective that simply reflects what would happen anyway in the normal course of your business.  For example, if you have good reason to expect a specific market segment would grow by 10% this coming year, you’d feel very comfortable committing to an objective to grow that segment by 5%.  Why wouldn’t you – it will be done about as easily as falling off a log!  Unfortunately, for strategic planning purposes, this type of objective is not just a waste of time – it will preclude you from actively pursuing a more vigorous objective that would necessarily require attention and resources.  This is certainly true if you limit the number of objectives you manage – and we strongly recommend you limit yourself to a maximum of 10 (or less!).

How can you manage around this tendency?  First, you want to test your objectives with two questions:

  1.  Are we likely to achieve this objective without an action plan?
  2. Will the active management of the action plan make a difference in our results?

If the answer to the first question is “yes”, there is no need for an action plan to achieve the objective, so don’t waste a precious action plan on it.  If the answer to the second question is “no”, then the action plan is useless, and should also be avoided.  Strategic action plans should be strictly limited to objectives that require top level co-ordination of resources – both people and money.  They should also be limited to objectives that will change the direction of your enterprise or propel it more successfully along the chosen direction.

Have you experienced the frustration of “lead brick” or other useless objectives?  Consider attending our popular seminar “Simplified Strategic Planning” and come home with a treasure trove of ideas to improve the results you get from strategic planning in your organization.  Register at www.cssp.com today!

Robert Bradford is President/CEO of the Center for Simplified Strategic Planning, Inc.  He can be reached at rbradford@cssp.com.
© Copyright 2014 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

Know When to Hold ’em and When to Fold ’em – Knowing when to get out of a core business is key to being successful in the future.

Friday, February 21st, 2014

By Denise Harrison,  Executive Vice President and COO

Strategic Planning Expert

Strategic Planning Expert

Sony, the leading consumer electronics company in the 20th century, is not having success in the 21st century – many of its core businesses are hemorrhaging cash.  Recently the company has taken steps to right the ship:

  • Cutting jobs in the PC business and putting it up for sale
  • Cutting jobs in the TV business and separating it out – potentially putting it up for sale
  • Separating the video game and cell phone businesses

As noted by the CEO, Kazuo Hirai, Sony is looking to rekindle the spirit credited with spawning cool gadgets in the past. (WSJ, February 7, 2014)  Sony lost focus on what made it a success – innovation in the consumer electronics space.  Instead, it held on to old technologies and old businesses that had become commodities.  And by focusing on low cost production rather than innovation, it lost its competitive edge.

Key Takeaway:

One of the hardest decisions to make in developing a strategic plan, is knowing when to fold a core business.   When looking at a mature segment of your business, consider the following questions:

  • Has this business become a commodity business where purchasers are only looking for low price?  This means there is little price differentiation resulting from additional features and/or additional service.
  • Does your company still have a competitive advantage in this business?  (For example: Blackberry evaluating its skill set after the iPhone was introduced; can they still compete in the cell phone market?)
  • Will you get higher return by investing in other areas – specifically areas in where your competitive advantage is better defined?

Making the transition away from a formerly attractive core business to new areas for growth is a difficult one.  Still many companies have faced this dilemma and made the transition to a new core. (DuPont is a good example.)  Will Sony be able to make this transition?  The jury is still out.

Interested in more ways to improve your strategic planning process?  Download a complementary version of our Strategic Planning Tune-up book by clicking on Tune-up.

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

© Copyright 2014 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.