Center for Simplified Strategic Planning

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  • Differentiate Your Company – Don’t Poke the 800 lb. Gorilla in the Eye!

    Visiting Brazil I came across an example of how a company can create a competitive advantage by focusing on a relatively unattractive market niche.

    Embraer is now the third largest aircraft manufacturer in the world – much of its success results from its decision not to poke the 800 lb. gorilla (gorillas – Boeing, Airbus) in the eye. Embraer decided to focus on smaller commuter jets for short hops. This segment of the business was relatively small until worldwide deregulation caused this market to boom.

    Is your strategy pitting you against 800 lb. gorillas – or are you differentiating? How you answer this questions will be key to how profitable you are.

    Questions about how to differentiate your company? Please contact Denise Harrison at .

  • Back to Basics in Strategic Planning

    By Robert W. Bradfordrobert-bradford-presenting

    Strategic planning is the process of setting an organization’s course to optimize its future results.  We define anything that revolves around one of three questions as strategic:

    1. What do we do?
    2. For whom do we do it?
    3. How do we beat or avoid competition for resources?

    These may seem like simple questions, but they are not. They are the core of every truly strategic issue and discussion you will ever have. This fundamental approach – of both questioning and understanding the reasons behind the answers to these questions – is one thing many companies miss when they attempt to do strategic planning. A good sign that you are failing to address these questions is when your team starts to see major environmental trends only as threats that you need to resist. Resisting threats rarely stops the trend – it only creates the illusion that it has been slowed down. In reality, most companies that waste their precious resources in this manner simply become increasingly irrelevant as the real world – and their customers – bypass them.

    There is a second thing that is often missed, although many give it lip service. That is the concept of focus. Most of us understand the value of focus – you can do something very well if you do it over and over again. So why do so many organizations really fail at focus?  The reason focus usually only gets lip service is that there will always – ALWAYS – be some bright, shiny object sparkling just outside your current focus. These bright, shiny objects are often attractive and can, with some effort, produce some kind of results. The problem is, those results can never equal the performance of a focused player. Another way to put this is that focus is difficult – not because it’s hard to choose what you will focus on, but rather because it’s very difficult NOT to pay attention to the things you are not focusing on. In my mind, this is fine, because it makes focus difficult, and difficult things tend to be more profitable than easy things. When you do strategic planning, be acutely aware of how serious your commitment to focus is. If you only pretend to focus, your success is just as likely to be a fantasy.

    I pose these two ideas because I see more and more people attempting to re-frame strategic planning as something that should be more “current”. Being current is not about forgetting the basics of strategy – it’s about paying attention to the forces that are in play in the world around you. If you think strategic planning needs to change to adapt to the new ways of doing things in your market, you have probably been doing it wrong. I hope you’ll take this nudge to think about how to get your own strategy back to basics – not by becoming old-fashioned, but by thinking strategically about how you deliver value to those you serve, and focusing on doing just that.

    How are you currently doing strategic planning? Is your process yielding great ideas and solid implementation? If not, I’d encourage you to consider attending our 2-day Michigan State University seminar on Simplified Strategic Planning. And, as always, if you have any comments or questions, they are more than welcome! To learn more about our seminar, please click on Simplified Strategic Planning.

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

  • Lessons Learned: How Good Strategy Can Be Hurt by Poor Execution-Caterpillar Identifies an Attractive Market; but Outcome Hurts Bottom-Line

    Denise Harrison
    Strategic Planning Expert

    By Denise Harrison, Executive Vice President & COO

    “As part of Caterpillar’s strategy the company has identified the mining industry and improved support of its customers as one of Caterpillar’s key imperatives.” (Press release, 11/10/11)

    What trends did Caterpillar see that made the mining industry attractive?  The trends that were identified included:

    • Current and future growth of developing nations and their increased reliance on energy to raise standards of living
    • China produces more than half of the world’s coal – a key source of energy for the developing world (Hence, why Caterpillar identified China as key to its mining imperative’s success.)
    • A recent upsurge in mining accidents in China resulting in increased scrutiny by regulators and enhanced safety standards
    • Increased safety standards escalate the demand for automation which has been shown to reduce the number of accidents causing injury or death
    • Labor rates are increasing in China and automation of mining functions would boost mining efficiency and increase profits for mining companies

    In order to achieve its strategic imperative in the mining sector Caterpillar saw China as one of the keystones in its growth strategy. In order to capitalize on the opportunity quickly, Caterpillar decided that an acquisition would be the best way to gain traction in the market.  Caterpillar decided to buy ERA Mining Machinery, Ltd., a hydraulic roof support manufacturer.  Caterpillar purchased ERA for approximately $885 million.   The Caterpillar team expected to leverage ERA relationships and reputation to strengthen its position in the growing Chinese mining market.  Caterpillar also planned to leverage its global presence to sell ERA products world-wide.

    The Result:

    In spite of the fact that Caterpillar has operated in China for over 30 years, and has over 20 facilities in China, the company’s due diligence did not uncover significant accounting irregularities including inaccurate inventory data and revenue recognition issues.  This led to a write-off of $580 million in 2013.

    Lesson learned:

    Evaluating market attractiveness by analyzing future market trends is paramount for a good strategy.  However, a good strategy must go hand in glove with superior execution for a successful strategy. Often companies become so enamored with an acquisition and its possibilities that they overlook the weaknesses.  To learn more about what to look for when evaluating an acquisition, please  listen to our webinar: Acquisition: 8 Steps to Success.   Please click here.

    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 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Strategy and Culture – How do they interact?

    By M. Dana Baldwin

    Strategic Planning Expert
    Strategic Planning Expert

    Strategy: the course and direction we want to take the company.  Culture: the way things are done in the company, the atmosphere within the company and the sum of the relationships within the company.  Not easily defined, nor easily quantified, it is the essence of the heartbeat of a company.

    What does this really mean for a company and its people?  What are the implications for the effectiveness of strategies developed by the company and the company’s ability to implement and execute those strategies?

    What are the implications of the impact of culture within a company?  Things start at the very top of the company with the leadership setting the tone for the company.  Leadership is responsible for instilling the principles desired within the company and leading by example.  Culture is something which cannot be directly ordered by the leadership.  It has to be lived so that the tone within the company is changed (if necessary) to reflect the values desired by the company.

    Culture is very much affected by leadership.  Does the company have strong leaders?    Are the leaders actually involved in and responsible for the development of the strategic direction of the company? Are they good at communicating and reinforcing the strategies to the rest of the company? Are they involved personally in explaining the strategies or do they delegate the explanations to lower level people?  Is the information about strategies sufficient to inform the rest of the company well enough to allow everyone to support and buy into the course and direction of the company?

    Do the leaders really “live” the strategies they have developed by supporting and guiding the company’s execution of those strategies?  How often and how energetically do they review and update their strategies?  Do the leaders participate in the execution of strategies or do they only delegate execution to subordinates?

    Effective implementation of the strategic course and direction of a company requires a number of elements.  First, the leadership team must be directly involved in the development of the strategies that the company will follow.  A rigorous process should be followed in order to develop strategies which are appropriate and achievable by the company.

    Next: the team that develops the strategies should be directly responsible for and involved in the execution of the actions required for the strategies.  Each senior executive should involve those people who are appropriate to help carry out the actions which are necessary to effect the strategy.

    The senior team is also responsible for communicating the strategies and the desired results to the rest of the company.  Everyone in the company needs to know enough about the strategies and the desired outcomes to make them relevant to each person, so they will be “bought into” the process and the results.

    In the end, the ability of the company leaders to communicate and execute their strategies effectively depends on:

    a. the culture within the company,

    b. the willingness of the staff to buy into the desired course and direction selected,

    c. the eagerness of the staff to carry out the strategies, and

    d. the belief in the senior leadership by the staff to develop appropriate strategies and to lead them through the execution of those strategies.

    If you would like help in developing and communicating your strategic plan, please contact Dana Baldwin at baldwin@cssp.com.

    For more information, we suggest you access the following article: Excellence in Strategic Management Teams by Thomas E. Ambler.

    To enhance your company culture by communicating its strategy and enabling employees to participate in its achievement will enhance employee engagement.  To learn more about how to do this please click here to listen to our Strategic Alignment webinar.

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Employee Engagement: Key to Your Company’s Profitability – A Case Study

    Chris_web2
    Christopher Anbari

    By Christopher Anbari, President / CEO, Result Global

    “Employee disengagement costs American business $350 billion annually.” Gallup Organization

    Repeated studies have shown that improving employee engagement enables companies to be more profitable.  In this case, Result Global, a leading consulting firm which specializes in solving critical problems for companies with poor employee engagement, was brought into a well-established computer products company located in Michigan.  This company produces scanners, printers, Auto ID and labeling systems. The company has 350 full-time employees.

    Challenges:                The company faced multiple challenges including decreasing sales from $64 million to $48 million over 4 years, with no expectation of improvement for the near future.  There were complex inefficiencies in sales, pricing problems caused by high costs of manufacturing and other services, plus a dysfunctional management team, made worse by constant disagreement among the executive team about how to address short and long-term business challenges.

    Actions: To reveal and address the causes of the problems, we used STAR™, our proprietary assessment program with smart logic. It provides both business and employee engagement analysis and, most importantly, a strategy to address the identified areas needing improvement.

    Using STAR™, we assessed employees, management and leadership groups to define the root causes of the problems in the company.  First, we performed an on-line survey of all employees on an anonymous basis to ensure confidentiality and to get the best input from everyone.

    After analysis of the assessments, Result Global delivered a detailed, highly specific Business Strategy Report (by location, group, and employee type) to define immediate initiatives for operations and human resources.  We worked with senior staff and management to develop key performance measures and strategic indicators and to select a group of change leaders from within the company.  We also prepared a process for engaging employees at all levels of the organization and developed indicators to signal improvements in operational and HR performance.

    Strategic Objectives: The recommendations included:

    • Sales improvements:  Adjusted hourly billing rates to be equal to their regional competitors, expanded billing per customer, increased weekly billing per technician, and initiated premium emergency service billing rates and policies, standard customer equipment safety inspections, and planned preventive maintenance service of client equipment service, initiated premium emergency service and billing.
    • Cost of services: Instituted strategic M/P assignment planning and distribution, Annual Just-in-time purchase planning, inventory turnover management, replaced their aged, and high fuel, high maintenance transportation fleets, with smaller, fuel efficient fleets.
    • Management accountability: Introduced new qualitative, quantitative performance scorecards for key leadership team and new KPR (Key Performance Requirements) for business unit’s leaders. Setup monthly progress reporting and facilitated performance GAP session, which initiated transparency and accountability.
    • Recognizing employee contributions: created EVAP(Economic Value-Added Performance based) incentives for field, technicians and support personnel, included commission for add-on service, tied to expanded sales, gross revenue and customer service.
    • Repositioning the company in its marketplace: Introduced world- class verifiable customer service, efficient and on time customer responses. Improved field dress code, personal hygiene, to improve image in community and position in the market.

    Results: Within 8 months of implementation, Client’s position in the market was strengthened; in addition Client realized a net gain of 25% in sales, improved customer satisfaction, 15% reduction in the cost of services. These improvements resulted in sustainable additional annual net earnings (EBITDA) of $1,280,000.

    Our unique delivery of the processes with progress audits every 90 days assured the company that the improved results trajectory would continue into the future.  As a final check, our improvement results were verified by the company’s own CPA Firm.

    If you are interested in learning more about how you can enhance your company’s profitability through the use of these assessment tools and recommendations please click here.

  • AI Hype vs. Human Reality: Ford’s Pragmatic Lesson for Mid-Market Strategists

    In the world of strategic planning, it’s easy to get swept up in the latest technological wave. AI, in particular, often promises a silver bullet for efficiency and cost savings. But a recent story from Ford offers a powerful, pragmatic lesson for mid-market business leaders: sometimes, the best solution isn’t the newest one.

    Ford, a company synonymous with manufacturing innovation, recently found its advanced AI quality control systems falling short. Despite the promise of automation, these systems weren’t delivering the expected results, leading to ongoing costs like warranty coverage and recalls. Their solution? They rehired 350 experienced human engineers – the “gray beards” – to not only oversee operations but also to train younger staff and, critically, to train the AI tools themselves. This move is already saving them hundreds of millions of dollars.

    So, what does this mean for your mid-market business?

    The ‘So What?’ for Mid-Market Leaders

    For businesses with limited resources, a misstep in technology adoption can be incredibly costly. Ford’s experience highlights several crucial strategic considerations:

    • AI is a Tool, Not a Replacement: The Ford story underscores that AI, while powerful, is most effective when it augments human capabilities, rather than attempting to replace them entirely. For complex tasks requiring nuance, judgment, or adaptation, human expertise remains paramount.
    • Value Your “Gray Beards”: Experienced employees possess invaluable institutional knowledge and tacit skills that are difficult, if not impossible, to codify into an AI system. Strategic planning must include how to retain, leverage, and transfer this knowledge. Don’t let valuable human capital walk out the door in pursuit of unproven automation.
    • Strategic AI Adoption Requires Pragmatism: Before investing heavily in AI, mid-market companies must conduct rigorous pilots. Define clear, measurable objectives. What specific problem are you solving? Is AI truly the most efficient and effective solution, or can human ingenuity, perhaps supported by simpler tech, do it better or more cost-effectively?
    • Resource Constraints Demand Caution: Unlike a giant like Ford, mid-market businesses typically cannot absorb “hundreds of millions of dollars” in AI-related failures. This makes careful planning, phased implementation, and a strong focus on ROI even more critical. Prioritize solutions that have a clear, demonstrable impact on your operational reality without excessive risk.
    • The Human Element in Training: Ford’s rehires aren’t just doing the work; they’re training the next generation and the AI. This highlights the critical role of human trainers in making any new technology truly effective. Your strategic plan for technology integration must include a robust human-led training component.

    Actionable Takeaways for Your Strategy

    Don’t let the siren song of AI lead you astray. Here’s how to apply Ford’s lesson to your strategic planning:

    1. Realistic Assessment: Before any major tech investment, clearly define the problem and realistically assess if AI is the best, most cost-effective solution.
    2. Pilot Programs: Always start with small, controlled pilot programs. Measure results rigorously against predefined KPIs before scaling.
    3. Hybrid Models: Explore how AI can enhance your human workforce, rather than aiming for full automation, especially in critical quality control or customer-facing roles.
    4. Invest in Experience: Actively engage and empower your experienced employees. Their wisdom is a strategic asset for training both new hires and new technologies.
    5. Total Cost of Ownership: Factor in not just the purchase price of AI, but also implementation, integration, training, potential failure costs, and the ongoing need for human oversight and intervention.

    Ford’s journey reminds us that in strategic planning, balancing innovation with practical reality, and valuing human expertise, often leads to the most sustainable and profitable outcomes. Don’t just chase the future; build it intelligently, with a clear understanding of what truly drives value for your business.

  • Strategic Thinking – Understanding Limits – Are You Limiting your Company or are They really Constraints?

    I spend a lot of time around motivational speakers. These people tend to be very positive, and always talk about how we should transcend our limits. This is a useful way of thinking, but the word “limit” can also mean something very real that should NOT be passed.

    When you think of the limits your business has, both types probably come to mind.  Your business has limits that should be smashed through so you can go to the next level.  There may also be limits which simply need to be understood so you can adapt to them and – possibly – use them to increase your profitability.

    The first type of limit is easy to spot.  I saw it recently in a company where certain activities had

    slowed down to a near standstill because of bureaucratic paperwork.  In key strategic areas, the company simply was not moving forward because every step required three or four times as much effort as it was worth.  The key to spotting this issue is to watch for this type of statement:  “If we didn’t have to wait for requisition approval, we could have gotten this done a year ago.”  The phrase “if we didn’t” often carries the key concept – WE are slowing ourselves down, so this is a self-imposed limit.

    The second type of limit is almost always systemic in nature.  To give a simple example, if you put a pair of fruit flies in a jar with a banana, there will shortly be many more fruit flies.  Wait a little longer, and the number of fruit flies will double…and so on.  The jar, however, will never become completely packed with fruit flies because there is a real limit on the number of fruit flies that can grow this way.  In this case, the limit is the food source – the weight of the fruit flies in the jar can’t exceed the weight of the banana, because all of the creatures in the jar grow from that food source (and use some of it up as energy).

    How does this relate to your business?  Quite simply – in many, many ways.  Businesses use up all kinds of resources – suppliers, employees, raw materials, customers.  While some of these can grow over time (markets, for example), all of them will impose a limit on how much business you can do at any point.  If you sell cell phone parts, it is unlikely that you can sell a number of parts exceeding the human population of your markets.  That is a limit, and if your company is very successful, you might approach such a limit someday.

    How does understanding limits help us in strategic thinking?  There are endless ways, but here are five critical ideas that you may want to apply:

    1. Look for the self-imposed limits in your business and remove them
    2. Find the hard external limits and look for ways around them
    3. Unavoidable hard external limits will define the nature of competition
    4. Understand how system dynamics may change your limits over time
    5. Hard limits often cause cyclical fluctuations – anticipate these

    Each of these ideas can be the basis for major undertakings in your business which will have incredible results.  If you are interested in any of these, please comment and I’ll cover it in more detail in my next article.  If you are interested in learning more about strategic thinking please listen to my webinar by clicking here.

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

  • Making the Case: Employee Engagement

    Christopher Anbari

    By Christopher Anbari, President & CEO Result Global

    In 2007, according to Gallup lnc., American businesses incurred $350B in extra costs because all levels of employees were not fully engaged. Have you ever considered how much your company contributes to this phenomenal number? Is the current slow growth environment in any way attributable to lack of employee engagement? It sure is!  We innately impact each other with every move we make. Research shows that up to 25 percent of direct costs are related to disengaged employees. Complacency is not an option. Employers must challenge habits. Evoke change. Do things differently.

    Employee Engagement -as defined by SegaVGibson, a leading HR consulting firm -occurs when employees know what to do and want to do it. The heart of the process is for both leaders and employees to act as partners in business growth. That means that not only the employees, but the leaders must participate. An employee or leader who “goes that extra step” on the job, even when no one is watching, is truly engaged.

    As an employer, it’s critical that you consider your own involvement in the process. How is what you are doing serving the entity that you have committed your time and efforts to?   In this increasingly challenging economic environment, business leaders have no other choice than to courageously and honestly assess the engagement of all their employees at all levels – including their own. They must be prepared to make audacious changes allowing their business not only to survive, but thrive.

    To successfully engage employees, you must create a strategy that begins with validating employee performance needs, wants and obstacles.  You must also increase their discretionary contributions to compete and prosper in today’s ever increasing global competition.

    The following example illustrates how disengaged employees can hamper and ultimately derail a process.

    A Case for Disengaged Employees

    A food company servicing 200 regional grocery chains engaged Result Global to design a program tying employee incentives to business net gains, replacing discretionary raises with an Economic Value Added Performance (EVAP) incentive program.

    Two years before our arrival, a costly initiative was started to upgrade packaging.  Its goal: improve profits.  Many visible signs of performance indifference, distrust and hostility toward management were detected.  The company failed to communicate the benefits of the new system to the employees, even overlooking the announcement that the new technology would not eliminate any jobs.  In addition, less than 10 percent of the overall investment was spent on training.

    There was disengagement on both the side of the union leadership and the employees, who were under the mistaken impression that the new technology would eliminate jobs. Another major problem was that the new technology program did not assess or validate the employees’ needs, wants, opinions and training challenges.  The human element of the new process was ignored.

    We suggested including all employees and management in an opinion survey.  Utilizing our proprietary system STAR™ (Strategic and Tactical Assessment to Re-engage), we collected information from ten key business and operational areas:

    • Business Growth Strategy
    • Emotional Intelligence
    • Communications
    • Organizational Collaboration
    • Information Technology
    • Diversity Management
    • Career Expectations
    • Rewards and incentives
    • Training and Development
    • Service Effectiveness

    The assessment revealed issues that needed to be addressed, and together with management, we developed a long-range employee engagement strategy that involved all levels of the organization. The 24-month net result:

    • Created measurable performance scorecard for management
    • Initiated customized management training
    •  Reduced cost of services by 20 per cent due to sharp reduction in labor/management grievances
    • Improved customer service quality and loyalty
    • Increased annual earnings sharply

    Although the nature of business is ever changing, the heart of employee engagement remains the same. The fundamentals include eliminating dysfunction and indifference, cultivating employees’ skill development as the core of business growth, and providing an organization that is a positive, supportive and progressive place to work.

    The Center for Simplified Strategic Planning has teamed up with Result Global to offer solutions to your employees’ engagement issues.  If you would like to find out more about how we can tailor a program for your company, please click here.

    © Copyright 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Lessons Learned: Sony Falls from Market Dominance – Loss of Focus Causes Poor Decision Making

    By Denise Harrison, Executive Vice President & CO

    Strategic Planning Expert
    Strategic Planning Expert

    For many years Sony dominated the consumer electronics scene: from its ground-breaking Sony Walkman to its Trinitron TVs, Sony innovations in the consumer electronics space were unparalleled.  Now Sony is losing money in its consumer electronics business and is having limited bottom-line success in its entertainment business.

    Loss of Focus

    From 60,000 feet Sony’s two major business areas entertainment and consumer electronics look like there would be synergies between the businesses.  But when it comes closer to the ground, you find that the high-level synergies are not really the key to success of either business.  What makes a blockbuster hit in the entertainment field is very different from what drives success in the consumer electronics field.  Ideally, they would have been able to leverage the respective set of skills of each unit to differentiate Sony in the market, but, alas, that leverage never emerged.  The entertainment division has had a number of blockbuster entertainment successes – but the success was on the topline and the bottom-line numbers were lackluster when compared to their entertainment business peers.  The consumer electronics business fared far worse – the once market-dominant business is now losing money.  Trying to focus on two businesses with little in common, one often finds that business decisions are made to satisfice: trying to invest so that both do well, but not invest enough so that either one is able to keep its leadership position.

    Key Take Away:  When developing your strategy, ensure that your various business units are leveraging a common set of skills/priorities so that you are not trying to spread your investment over unshared and perhaps conflicting goals.

    Sony Loses Its Dominance in TVs

    Sony’s consumer electronics business long dominated the TV space with its cathode ray tube technology (CRT).  However due to its success in this business, it was slow to move to promoting flat screen technology, even though it was one of the first to develop the LED flat screen.  Instead it wanted to capitalize on its investment in the CRT technology rather than invest in the new technology to meet emerging consumer trends.  By trying to hold onto the old technology and garner as much profit as possible before moving to the new technology, they lost their lead to Samsung, a company who, not held back by a large CRT business, saw an opening to gain market share as Sony lagged behind.

    Key Take Away: While an existing business may be extremely profitable, don’t rest on your laurels.  Keep up with market trends and be sure that you are the company that moves business from a profitable core segment rather than one of your competitors stealing your business because you didn’t want to make a change.

    Not Capitalizing on New Technology

    Not only did Sony not capitalize on its LED technology, but it also did not capitalize on its first-to-the-market status with the e-reader.  Both technologies introduced by Sony were made popular by its competitors.  What happened?  Well, in the one case we know it was holding on to its old CRT business, but what about the e-reader?  Sony made investments in the entertainment side of the business while it let the marketing of these new technologies languish.

    Key Take Away: Loss of focus and protecting turf can starve the investment needed to feed the growth of a new technology or product.  Be sure that you are vigilant in assessing how you are investing your resources to be sure you are investing to optimize your total company’s future success.

    For more reading how to better develop a strategy to focus on your company’s future potential please read:  Xerox Positions Itself to Succeed in the 21st Century by clicking here.

    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 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Professionalism – Do Your Customers Believe You Have It?

    By M. Dana Baldwin

    Strategic Planning Expert
    Strategic Planning Expert

    When you meet with your customers and prospects, you want to be perceived as a professional in your field.  What does it take to garner this respect? Broadly speaking, you need to be trusted for your knowledge, ethics and quality performance.

    One of the first things you should be sure of is that you actually know as much as possible about whatever it is you are selling or representing.  Know your product or service inside out, upside down and front to back.  Be able to clearly describe not only the product or service itself, but especially what the application of that product or service will do for the customer.  The customer most often is seeking to solve some kind of problem.  If the customer actually believes your product or service will deliver the benefits you say it will, you have a higher likelihood of making the sale.  In order to have the customer believe you, you must earn his/her trust.  Knowledge is one of the keys to earning that trust.

    Another key area is truly listening to the customer.  Many sales people believe they have to demonstrate how much they know to the customer, and they attempt to do this by talking entirely too much.  A much better approach is to listen to the customer’s perception of the problem, then responding with a simple explanation — talking in terms that show you know what the needs of the customer are and that you can help solve the problem for the customer. Creative questions are important to not only establish trust, but to gather information about the problem, what may have been tried already, and what the customer thinks might be solutions.

    Don’t talk down your competition!  In one instance taken from my personal experience, our company, a relatively small machinery manufacturer, was going head-to-head with one of the best machinery manufacturers in the country for a large machine installation.  Our competitor met the prospect the day before we did, and the vast majority of their presentation was about how bad our design was and how it would not do what the customer wanted.  The next day, we met with the prospect, and we talked only about our own design and its performance, reliability, accuracy and effectiveness.  We got the order.  The other company shot itself in the foot, and within a year was out of that particular segment of the machinery business.

    Along with not talking down your competition, drop the hard sell.  Customers don’t want to be sold, they want to make their own decision about whether to buy or not.  The last thing you should want is to make a sale with the wrong product or service, and to then suffer the loss of reputation and integrity fundamental to trust.

    Speaking of integrity: you should always strive to live up to your word.  Example: We sold a machine to a customer which performed very well for them.  About five years after they received the machine, the main table cracked, and upon inspection, it was obvious that the casting had been made with an inclusion which led directly to the crack occurring.  Even though the machine was out of warranty by four years, we replaced the table and installed the new one at no charge to the customer, because, in our minds, it was the right thing to do.

    Every once in a while you simply can’t make the situation come out as promised.  What should you do?  You need to come clean, and do your best to make the situation as right as possible for your customer.  Good communication and openness will allow you to keep your reputation in nearly all circumstances.  In the end, being honest with your prospects and customers will almost always pay off for both of you.

    Following these principles, you should be able to establish good, professional and trusted relationships with most prospects and customers, and, in the end, this should lead to better sales and better associations with those we respect.

    If you would be interested in reading more on interacting with customers please click here to read “Why Do Your Customers Buy from Your Company?

    M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. and can be reached at baldwin@cssp.com.

    © Copyright 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Systems Thinking in Strategic Planning

    One of the most useful tools for good strategy analysis is systems thinking.  Some people think this means you have to treat your business like a computer program, but really it’s simply a way to think through all of the connections that affect your business and how it both operates and competes in the marketplace.  It doesn’t hurt to understand computers, but systems thinking can be used by anyone.

    The basic concept of systems thinking is that we can understand complicated systems by learning how the pieces of the system connect to each other and change the behavior of the system.  Let’s use a simple example.  If you go to a restaurant, sometimes they may be able to seat you right away and some

    Robert Bradford
    Author, Robert Bradford

    times you may have to wait for a table.  This is the result of a fairly simple system.  There is a finite pool of resources – tables – which can be used to convert customers from one state – “waiting for a table” – to a second state, “seated at a table”.  If all the tables are empty, this process takes very little time – you speak to the host or hostess and are seated at an empty table.  If all of the tables are full, it will take longer, as you wait for the current occupants of a table to finish their meal and leave, and then wait for the server to prepare the table for the next set of guests.

    So what determines whether you have to wait for a table?  There are several variables and processes that will affect this system.  First, the number of tables is important.  If you have a thousand tables, it will take a lot of customers to fill your restaurant, while if you have just two tables, your restaurant will be full as soon as the second customer group arrives.  Clearly, the rate at which customers arrive is also important.  When customers arrive faster than existing customers can finish their meals, the restaurant will start to fill up.  When the restaurant is full, a line for tables will form, and it will increase in length as long as new customers are willing to wait in line.  Another key variable is the rate at which customers finish their meals and leave the restaurant.  For a restaurant owner, it’s very important for customers to finish and leave quickly during busy periods, because otherwise the restaurant fills up and a line forms.  Unfortunately for most restaurant owners, many customers like to sit around after a meal, especially if the restaurant environment is pleasant.  Benihana tackled this issue by making the meal a show with a clear beginning and end, which creates the expectation that guests will leave shortly after the chef finishes.  This clever approach allows Benihana to turn their tables more quickly, and has generated above average profits for the chain over the years.

    It’s clear that a business situation like a restaurant can improve its efficiency and profitability by tuning the processes that fill up the restaurant and create lines for tables.  For example, one simple way most restaurants can reduce lines is by raising prices.  As a result, it makes sense for a popular restaurant to have a more expensive menu – especially during busy hours.  This has two beneficial effects:  it reduces the aggravation of waiting for tables for the customer, and it increases the profit of the restaurant.  Of course, if all of the customers disappear, it may be that prices have been raised too much, but this, too can be tuned by a smart, attentive manager.

    Can you use this type of thinking in your own business?  I’ve seen many situations where customers ask a company to do difficult and sometimes expensive services to support customers.  If you don’t charge a premium for such services, you will, of course, tend to see an increasing demand for such services.   If, on the other hand, you charge for such services, you may put a damper on demand for those services.  If a product line, for example, is unprofitable because of expensive customer demands, pricing may be used to bring demand into line with your capacity to serve such customers.  At the same time, increased pricing will improve the profitability of sales to those customers who are willing to pay the higher price.

    Naturally, we sometimes see a terrible situation where using pricing to manage demand is very difficult, because some competitors may not charge for the same service.  In such situations, the behavior of competitors may well drive down profitability for the entire market, and a different set of strategic responses may be in order.

    In my next article, I’ll look a little more closely at some kinds of processes that we can think about when using systems thinking to assess our strategy.  If you would like to learn more about strategic thinking please listen to my webinar 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 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

  • Challenging Old Paradigms and Achieving Success

    By Denise Harrison, Executive Vice President & COO

    Strategic Planning Expert

    That won’t work!  We’ve tried that before!  The idea is then rejected without consideration.  Yes, sometimes you should learn from history, but what if something has changed and history no longer reflects the potential of this idea?

    We Tried This Before

    As president of the research center of a Fortune 500 company, I was often faced with the “we tried it before and it didn’t work” argument.  Yes, it had been tried before, as a matter of fact, more than once, and the product had never gotten enough traction to be successful.  So why try it again?  Rather than reject the idea, I had the product team analyze current trends to see if there was anything new that would indicate that this product would be more successful this time.  Some background, this product’s success was predicated on insurance companies sharing their claims history on individuals.  The data would be stored in a third party database (this is where we came in) and could be accessed so that the insurance company could use claims history as one piece of information for a risk profile.  Historically, the insurance companies were not willing to share their proprietary information.  Why should they share now?

    Well, increased claims and lower profit margins were causing insurance companies to look for ways to prevent losses.  These trends made some of the companies more amenable to sharing information.  Once the industry leaders joined, the product moved forward; it was a success with the insurance industry because they had a better understanding of the risks they were insuring and a success for us as we were now the provider of this information.

    Corning: In with the Old

    During its 161 year history Corning has had numerous technological breakthroughs: silica for fiber optics, ceramics for both CorningWare® and military applications.  But along with the breakthroughs, there have been innovations that did not have commercial success immediately.  So when a consumer electronics firm came to Corning looking for a durable, lightweight glass for its touch screens, Corning took a look back through history and found a 40 year old project on glass fusion and formulation and dusted it off.  Using this proprietary technology the team was able to develop Corning Gorilla® Glass – now used in many electronic devices across the world.  It is now a $1 billion business.  A technology rejected 40 years ago comes to life and adds to Corning’s success.

    BNSF – Trains are Back

    Oil is traditionally moved across the country in pipelines; high volume, point to point.  Recently new deposits of oil are being produced in areas not traditionally serviced by pipelines, so EOG Resources contacted BNSF to see if they could work with the railroad to develop an efficient system to move oil from the production sites in North Dakota to various refineries.  At first the railroad hesitated – was this just a short-term opportunity?  BNSF decided to take the plunge investing in infrastructure that would support the movement of oil by rail.  This new “light tight oil” now moves by rail to all three coasts (East, West and Gulf) and now more oil moves out of North Dakota on rail than it does by pipeline.

    What changed to make rail an acceptable mode of transportation?

    • While generally more expensive than pipeline costs, rail costs have fallen about 50% from where they were 30 years ago.
    • Rail is now faster and more predictable. (No more rail cars missing in black holes!)
    • Rapidly increasing domestic production along with increasing supply from Canada and transportation constraints have created price distortion that have incentivized construction of new rail capacity,  making it cost-effective to ship by rail to areas that do not have access to this lower-priced oil.
    • Permitting/environmental issues with pipelines cause rail to be the only option in some cases.

    Key Take-Aways

    A good strategic planning process causes you to question your paradigms:

    • Try to ensure your team is not locked into old paradigms.  It may not have worked last time; but maybe something has changed to make it viable now.
    • Look at your facts and assumptions, what has changed?
    • Casting a broader net for possibilities; e.g., should you be evaluating rail as the cost has gone down and reliability has come up?  It may give you options you need to consider; especially when the Panama Canal opens and fewer goods are traveling by rail across the country, there should be excess capacity.
    • Have your customers’ needs and preferences changed?
    • Is there a technological change that makes a previously unattractive option more attractive?
    • Are there changes to supply constraints (e.g. availability of natural gas) that allow you to look at opportunities differently?

    To learn more about strategic thinking and challenging paradigms please listen to our Strategic Thinking webinar by clicking here.  Challenging paradigms can lead to strategies that your competition has not considered enabling you to gain a competitive advantage.

    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 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.