Customers’ dimensions of value may be very different from ours

Customers don’t look at us – or our products and services – in the same way we do.  When we look at what we do, we see the effort, the difficulty, and the risk we put into everything.  The sum of the know-how we apply in our business hopefully translates into value for the customer.  This dimension of value, however, may be very different from the value we perceive from our side of the fence.

The difference, of course, comes from the fact that customers don’t make the product or provide the service.  Rather they simply use the product or service to enhance their lives or their businesses.  Therefore, this means that customer evaluations don’t always come from the INPUTS we see in creating value.  Customers tend to evaluate the OUTPUTS – or enhancements to their lives or businesses.

Let’s take a look at a service many people purchase frequently – a meal in a restaurant

The inputs include raw materials, capital equipment and real estate, labor and know-how.  Often, more intangible inputs such as marketing or decoration may be added to enhance the perception of value.   Yet what customers care about is the expectation that their life will be enhanced by eating a meal out.  The enhancement is the output – which we can think of in terms of the entire “package” the meal represents.

This enhancement can show up very differently for different customers.  Some customers care deeply about convenience, while others may seek the feeling that they are being catered to.  Others, however, may simply evaluate the quality and presentation of the dishes.  Each customer will bring a unique set of dimensions of value to their decision making process.  Specific decisions may change the dimensions, even for the same customer.  Take the example of a customer looking to grab lunch during the work day – convenience and speed may be important.  The same customer, when looking to impress someone important, may downplay that dimension in favor of luxury service and presentation.

So, with different customers having different dimensions of value, we have to remember that good strategy involves differentiation

Some customers’ dimensions of value may be inconsistent with others – meal presentation and convenience sometimes detract from each other.  Never the less, in a given situation, most customers perceive an ideal combination of dimensions of value that they seek.

How can we use this in our businesses?  In the restaurant example, your strategy should clearly identify types of customers that value the dimensions you deliver on.  Furthermore, you may want to examine the specific situations.   A restaurant that appeals to affluent consumers looking for a special meal needs luxery service, atmosphere, food quality and presentation.  Those same dimensions of value will work against you if you try to appeal to students grabbing lunch between classes.

What dimensions of value do your customers use in evaluating your offerings?  Do they change in different situations?  We’d love to hear examples of how this may define your markets and your differentiation.  Attend our seminar on Simplified Strategic Planning to learn more about markets and differentiation and other aspects of strategic planning.

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

M. Dana Baldwin is Senior Strategist with Center for Simplified Strategic Planning, Inc. He can be reached by email at: baldwin@cssp.com

For more about differentiation click here

Technology and labor trends -Is your company seeing these trends?

• Many experienced workers are retiring from the workforce, often taking critical knowledge with them.
• Hiring difficulty: especially among the skilled trades.

Well, your customers also face these trends – how can you help?  Can you design products/services that will help alleviate these issues for your customers?  Technology can be key to providing the solution.  Yes, you have heard the buzz words “big data” and IOT (Internet of Things) – but how can these technological advances work for you?   Is there a way that you can install sensors in your product to have alerts when the systems need maintenance or parts need to be replaced?  Would this ability help streamline and extend your customer’s maintenance department?  (Maintenance departments are one of the areas where there is a shortage of skilled labor.)  Could you add a service that would provide maintenance when these alerts are raised?  This could be on-site service or remote service, directing the plant personnel on what needs to be done.  Would resolving these issues for your customers give you a competitive advantage?

How do you get started?

Start by using sensors and collecting data within your own organization.  Start small (say air compressors); understand what is possible, then assess how you can use this knowledge to provide value to your customers. Starting with an in-house function allows your team to work on the kinks before you get an application into the field.  Your first thoughts on customer applications may change after you have seen the impact of technology in-house.

Buzz words and bite sized chunks

Buzz words like IOT (Internet of Things) can be meaningless unless you cut them down into bite sized chunks, small applications where you can test how they perform.  As you learn by using the technology, you will create a more efficient manufacturing facility as you link operations and then can look at “big data”.  Starting small allows the team not to be overwhelmed by the amount of data generated.  As you develop this knowledge, you will be able to apply it to your products, service and your internal processes.

Technology, one of Michael Porter’s five forces, can be harnessed to give you a significant competitive advantage.  As you develop a strategic plan, be sure to look at emerging technologies and how you can leverage them to provide a competitive advantage.

To learn about how to look at technology in your strategic planning process please contact Denise Harrison: harrison@thestratplan.com.

Is your company dealing with technology and labor trends?  Attend the Simplified Strategic Planning Seminar for more instruction on dealing with technology and labor trends as well as all other aspects of Simplified Strategic Planning.

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

© Copyright 2018 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission

By Dana Baldwin, Senior Consultant

Note: This post is a part of a series taken from Dana Baldwin’s article When Strategies Go Bad previously published in Compass Points in April 2004.  In Part 1, we introduced the series and discussed what happened with IBM.  In Part 2, we discussed what happened to Global Crossing.  In Part 3, we discussed what went wrong with Worldcom, Enron, and the State of California.  In Part 5, we discussed what went wrong with Tyco.  In this final session, we will summarize our discussion.

What lessons may be learned from all of the examples we have listed in the When Strategies Go Bad posts?   The results of actions taken or not taken by companies and/or high level executives can have a huge impact on their companies. These impacts range from misdirection of the corporation to outright violations of laws.

When IBM forgot to listen to the marketplace, it not only fell behind the curve with its PC products, but it held onto its main frame products beyond their useful life in some cases. The saving of IBM is a powerful story, and a real tribute to Lou Gerstner and his drive and perseverance. But that it was necessary drives home the importance of listening to multiple sources of market intelligence. Global Crossing overcommitted to its ambitious fibre plan, badly misjudging the market growth and demand, then compounded errors by falsifying records. Worldcom and Enron took unfair advantage of their customers, their employees and their stockholders, with the responsible people at the top driven by unrealistic personal ambition. The State of California tried to take advantage of a temporary situation in the energy market, with no consideration for the long term implications for the citizens and businesses which ended up paying the bills. An attempt at social and economic engineering resulted in a tragic set of losses for all.

Tyco’s CEO and CFO apparently looted the company for over $600 million. Their raw ambition and lust for money resulted in total disregard for the laws, ethics and morals that are required of businesses in the USA. They violated the trust of their stockholders, their employees, their customers, their bankers and the public.

A wide range of faults, from not listening to the market place to stealing from the company in huge amounts, resulted in some companies having to make a major turn-around, others going into bankruptcy. Many thousands of stockholders, creditors, customers, vendors and employees have been harmed, some grievously. A few were complicit, most were relatively innocent, with great losses thrust upon them, mostly for the benefit of the few.

At the corporate level, seeking broadly-based, multiple sources of market intelligence on which to base strategic planning is a good start. Having sufficient independent oversight on operations and finances is another good method. At the end, however, it comes down to the ethics of the company and its leaders. There is no substitute for good long-range strategic planning and good visibility inside the company, especially at the board level, of the activities and the direction of the company.

Does your strategic planning give you the control and the visibility that will help prevent unethical behavior going undetected?  Good strategic planning will have risk analyses built into the process.  How does your strategic planning provide protection for your organization?

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

© Copyright 2017 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By Dana Baldwin, Senior Consultant

Note: This post is a part of a series taken from Dana Baldwin’s article When Strategies Go Bad previously published in Compass Points in April 2004.  In Part 1, we introduced the series and discussed what happened with IBM.  In Part 2, we discussed what happened to Global Crossing.  In Part 3, we discussed what went wrong with Worldcom, Enron, and the State of California.  In this part, we will discuss what went wrong with Tyco.

Tyco International Corporation’s former CEO L. Dennis Kozlowski treated Tyco as if it were his personal plaything. He decorated a lavish town house in New York City with a budget of $6 million of company money. He purchased two classic paintings, a Monet for $3.95 million and another at nearly $2 million. He gave himself raises without permission of the Board of Directors Compensation Committee. He authorized high bonuses for himself and a few key henchmen, again without the permission of the Board of Directors Compensation Committee.

He hired people and gave them outrageous salaries, raises, and bonuses. For example, he hired one employee originally as a receptionist and switchboard operator. She was later promoted to bookkeeper and flight attendant on the company jet. Still later, she was promoted to his personal financial assistant. In this role, she approved millions of dollars of expenses for art, restaurant bills and the bills for a birthday party for his wife in Sardinia which cost the company over $2 million. Later on, it appears that she approved a $5 million loan to purchase a diamond ring for his wife from a fund which was created to pay taxes owed on restricted stock, again, apparently without permission of the corporation. As a result of her rising positions within Tyco, the company paid for her daughter’s education at private high schools in Maine and Florida, and for college at the University of New Hampshire. The company also reportedly forgave a $239,000 mortgage on a home she bought in Florida after she was relocated there. She is now testifying against Kozlowski in his trial in New York City in which he and CFO Mark Swartz are charged with looting Tyco for approximately $600 million. Kozlowski apparently tried to buy the loyalty of his personal financial assistant with the largesse he doled out.

What happened here? Very simply, Kozlowski and Swartz apparently decided they were above the rules for ordinary people. They decided they were worth whatever they could take from the company. Their impression of their own importance was so large that they exceeded any possible boundaries. These were such egregious violations of ethics and securities laws that the State of New York had no choice but to prosecute. The complicity of Arthur Anderson here and with Enron prevented the public from learning the truth, and enabled the schemes of the top people to go on for much longer than they should have with proper audit and exposure to the public. Anderson was supposed to be the watchdog, but instead became a party to the problems. They let us all down.

Have you developed strategies to enable disclosure of this type of problem so the organization will be protected?

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

© Copyright 2017 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By Dana Baldwin, Senior Consultant

Note: This post is a part of a series taken from Dana Baldwin’s article When Strategies Go Bad previously published in Compass Points in April 2004.  In Part 1, we introduced the series and discussed what happened with IBM.  In Part 2, we discussed what happened to Global Crossing.  In this part, we will discuss what went wrong with Worldcom, Enron, and the State of California.

Another area of serious concern is the recent rash of ethical lapses which have dominated the headlines for the last year plus. What leads companies and their leaders to stray from what is acceptable morally and ethically? Why do companies violate the laws for short term gain, when it is highly likely that the efficiency of the market place, in the long term, will force them public? Let’s look at a few of them.

Worldcom, formerly and lately known as MCI, had a fabulous idea. Become the primary carrier of telecommunications, from telephone to wireless and data, world-wide. The company made acquisitions and investments which took them to the top of their industry, but at what cost? They were overextended and overleveraged with more than $32 billion in debt, and when world wide capacity exceeded world wide demand by a large amount, they began to cover their tracks.

Part of their problem stemmed from the method by which the top people were compensated. Much of their compensation was based on their stock options and the price of their stock. In order to keep the stock price up, they started manipulating their books to reflect sales that were not real, by swapping contracts and counting the swaps as revenue. The further they got into the scheme, the harder it became to go back, principally because the market did not recover as they had expected. Nearly $3.1 billion of false profits had been reported by the company in 2001 and early 2002 prior to the schemes becoming public knowledge.

Worldcom was not the only company which fell prey to this general problem of not playing fair with its books. Enron, an energy company, started off as a leading reseller of electric power, natural gas and other energy. They developed a series of highly innovative schemes to resell energy and to make good returns while doing so.

When the state of California “deregulated” its electrical power market, Enron led the way in buying and reselling electric power. Everything they did at the beginning was acceptable, as far as we know. Not too long after this “deregulation” was implemented, the rules for trading of energy were seen to allow a very unusual situation.

As it turned out, the trading of electrical power during each day’s trading was priced at whatever the HIGHEST PRICE was for that day’s trading. This meant that there was considerable incentive for traders to bid up the contracts during the day, because at the end of the day, all contracts would be repriced at whatever the highest price paid during the day turned out to be. It is folly to think that a corporation is not going to maximize its return/earnings when the market will allow it to do so.

The problem is that Enron took this to extremes, while playing games with its liabilities at the same time. In order to maintain its share price, Enron developed a scheme to transport debt off its books and into affiliated partnerships. The need to keep share prices high was based on the reward scheme that the executives’ pay was based on. Compounding this, the partnerships were mostly funded with Enron stock. When the value of the stock tanked, the partnerships came apart and many, many people suffered.

The real problem here is not the trading of energy futures contracts, although they were ethically questionable at best. The larger problem was the development of the off-book partnerships without disclosure and using company stock to fund the partnerships. This scheme was the real undoing of Enron.

While we are looking at Enron, let us also look at the State of California. Under the guise of deregulating the energy markets for the purpose of lowering the costs of energy to California consumers, both individual and corporate, the laws passed to accomplish this actually put the power companies within the state at real risk. The reason for this is that only a part of the energy market was deregulated: the supply side. The demand side was limited in how much it could charge consumers. This caused the eventual bankruptcy of the two major power companies in the state, because of the prohibition on long term energy supply contracts, resulting in the companies having to buy power on the spot market.

The impact of this was huge because of the requirement that each day’s contracts had to be repriced at whatever was the highest intraday contract price. Added to this were limits on what the power companies could charge their customers. Eventually, after the two major power companies in the state filed for Chapter 11 Bankruptcy Protection, the state allowed them to increase their prices to cover their costs, only to discover that there were increases of up to 1200% which immediately drove consumers crazy and shut down businesses. In addition, at least two power generating plants were shut down for maintenance and upgrading, further aggravating the problems.

Does your strategy formulation contain any flaws?

[CSSP_Funnel color=”red” intro=”Click here for complimentary recorded webinar ” title=”Why Your Planning Isn’t Working and How to Fix It ” close=”from Center for Simplified Strategic Planning’s CEO Robert Bradford” link=”https://strategicplanning.clickfunnels.com/b01-why-your-plan-isnt-working/#!/”]

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

© Copyright 2017 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

M Dana Baldwin, Senior Consultant

In 2012, a new CEO took the reins at McDonalds.  During his three years of leadership, McDonalds lost market share and profitability.  Why did this happen?  There are numerous reasons, and we will hit some of them here.

As the economic situation gradually improved in the US, it became obvious that McDonalds’ leadership in the fast food business was on shaky grounds.  They were selling food that was not as healthy for consumers as some of their competitors. Their brand was a little tired, because they needed to introduce food items that younger people – Millennials—would prefer.  There were more competitors in the market place than Burger King and Wendy’s.  Five Guys, Shake Shack, Qdoba, Chipotle and others were expanding in the fast food market, with most of them offering healthier foods as well as some traditional products.

There is no substitute for having very good products.  With the increasing emphasis on lower pricing going on in the market place at that time, price became the emphasis rather than taste and quality.

In the fast food business, introduction of new products can be a major factor to sustaining profitable business levels.  McDonalds failed to do that.  In fact, McDonalds’ last significant product introduction was McCafe’, which predated the new CEO’s regime.   It is my opinion that consumers sensed the lack of commitment to new products, and gradually moved at least a part of their business to other providers.

The actions and inactions that occurred during this time hurt the McDonalds brand.  In the past, McDonalds had been known for good food, good quick service and good prices.  By the early teens of this century, the food had become very ordinary and price became the principal driver.  Ronald McDonald was nearly invisible, food quality was ordinary, and, as a result non-differentiating, plus the atmosphere was not inviting. McDonalds had lost their way in the market place.

Have you?  What is the health of your brand?  Are you like McDonalds, trying to ride a crest of success in the marketplace?  Sustaining that success into the future requires not only keeping the good things going, but also understanding and responding to the shifts in customer tastes and the competitive landscape.  Sound strategic planning makes that happen.  That is our specialty.  Contact me at baldwin@cssp.com or at 616-575-3193 for help in building your strategic plan for the future.

To learn how to succeed when market trends change, click here.

Click here for complimentary recorded webinar “Why Your Planning Isn’t Working and How to Fix It”  from Center from Simplified Strategic Planning’s CEO, Robert Bradford.

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

© Copyright 2017 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By Dana Baldwin, Senior Consultant

Note: This post is a part of a series taken from Dana Baldwin’s article When Strategies Go Bad previously published in Compass Points in April 2004.  In Part 1, we introduced the series and discussed what happened with IBM.  In this part, we will discuss what happened to Global Crossing.

An example of not paying enough attention to the realities of the market place was also exemplified by Global Crossing. Global Crossing decided they would build up their inventory of fibre cable to the point where they would dominate domestic, trans-Atlantic, and trans-Pacific data and voice traffic. The company spent billions to install/lay fibre. The problem was that they were not the only ones doing this. The result was that there was a tremendous overcapacity of fibre to the point where the market price for fibre cable usage collapsed, leaving Global Crossing with very high debt and low revenue, a fatal combination.

Global Crossing failed to look at the competitive capacity being built by others, and at the actual levels of usage, which were miles below the forecasts which were the basis on which they built their capacity. They took no notice of the drivers which shaped and limited the real needs they thought they were filling. As a result, they filed Chapter 11, when their stock was down to $0.30 per share from a high around $60. While they currently have a large cash reserve, they will need a large infusion of capital as they are competing in a market which is suffering from both low utilization and low prices.

The result is that revenues do not appear to be enough to sustain this business model in the future. Lesson: Be sure your assumptions about the future direction of your markets are realistic. Overly optimistic assumptions can easily allow you to charge off in a direction that the market place will not support – a recipe for disaster.

Click here for complimentary recorded webinar “Why Your Planning Isn’t Working and How to Fix It”  from Center from Simplified Strategic Planning’s CEO, Robert Bradford.

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

© Copyright 2017 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By Dana Baldwin, Senior Consultant

Note: This post is a part of a series taken from Dana Baldwin’s article When Strategies Go Bad previously published in Compass Points in April 2004.  In this part we will introduce the series and discuss what happened with IBM.

How many times have you read an article in the newspaper or seen a report on television news about a company which appeared to be doing very well, but which recently had come on hard times? Lately, this has happened more often than we remember it occurring in the past. But, this is not just a current phenomenon; it has happened many times in the past, and is happening now only with a little more frequency, or so it would seem.

In former IBM Chairman Louis V. Gerstner’s book, Who Says Elephants Can’t Dance? Inside IBM’s Historic Turnaround, you will read about the tremendous rebirth of IBM. Under Gerstner’s leadership, IBM virtually reinvented itself, pulling up from near ruin.

What happened to Big Blue? In the 50s, 60s and 70s, IBM was the 800 pound gorilla in the computing marketplace. IBM set the standard for performance, sales capabilities, service, innovation and market leadership. Things were done the IBM way: Blue suit, white shirt, red tie, black wingtip shoes, black briefcase. There were prescribed ways to sell IBM systems, and conformity was demanded of everyone. Why, after all these years of success, did IBM require turning around? Much of the responsibility for this goes back to the type of market intelligence IBM listened to during the late 70s and early 80s.

When IBM sought market intelligence, they went to their best resources – or so they thought. They contacted the people who used and managed their systems in the many installations around the country. In essence, they talked with people who had a vested interest in preserving the IBM way of life: Large systems which require lots of highly trained, highly paid systems people. Self-reinforcing market intelligence told IBM what it wanted to hear.

The thought that personal computers and distributed processing could replace main frames was totally alien to the IBM way, and talk of this type of future could cost a person a job if the wrong people heard it. A friend who worked on a special project for IBM during the roll-out of the IBM Personal Computer said the resistance within the company was palpable and obvious. The consequence was that while IBM developed and sold desktops and later, laptop computers, the heart and soul of the company remained committed to main frames. This resulted in a lack of real commitment on the part of IBM to the PC, which allowed other companies to clone their machines and to push IBM from the initial position of dominance to near irrelevance in a short time.

All this happened while IBM was still primarily focused on their large systems, and resulted in the near-meltdown of IBM. While this statement is extreme, it reflects what happened to IBM because they did market research in too restricted a manner, resulting in bad information on which they based their future course and direction. Lesson: Be sure that your information sources reflect fully and accurately the true characteristics of your market place, and not one which tells you what you want to hear. Failing to listen to the true intent of the market can lead to poor investments in developments, direction and strategies.

In the next part of this series we will discuss what happened to Global Crossing.

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

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

© Copyright 2017 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

By Denise Harrison

In today’s fast paced economy, we often find that executives think that they don’t have the time to reflect on their business.  While quick decision-making is important, taking the time to reflect on the possible choices and looking at long-term implications will set your business on a course to achieve long-term success.

Reflection: What does this mean?

There are three areas that we often find are missing when teams develop a strategic plan:

1. Discussion of topics for research
2. Collection of research in a consistent format
3. Analysis tools that help the team think through what is the best use of the company’s resources

Topics for Research

Many teams have a two to three-day retreat to develop a strategy; this is a good time for team building and gets ideas out on the table.  But if your strategic planning is done during this retreat, we often find that the team does not have all the information to make good decisions.  Our recommendation is a more-robust three-step process:

1. Situation Analysis

Select the topics that require further research (markets, competition, opportunities, etc.)  Selecting these topics and then developing research allows the team to have better information for decision making when they get to the next step.

2. Strategy Formulation

Review the information to have a shared base of knowledge and make decision based on this information. Now you can select the strategies and the strategic initiatives that are most likely to position your company for future success. Take the time to develop action plans for your strategic initiatives so that you know what steps need to be undertaken, who is responsible and how much time and money each step will take.

3. Implementation

Vet the action plans to ensure that accomplishing the steps will achieve the objective and assess whether the company has sufficient talent and financial resources to accomplish the task set out in the action plans.

This three-step process allows your company to reflect on the correct topics to research.  Once the research is completed, the team can reflect on the information gathered to make informed decisions concerning the future direction of the company.

Consistent Format

After you select the topics for research and develop the research, it is important that the information is collected in a consistent format.  Having templates that aid in consistent information development allows for better analysis as your team develops its strategy.  For example, without a consistent format, you will get different information regarding opportunities to be researched and this will make it hard to compare options because the data is inconsistent.

Analysis

Once you have reviewed the research and the team has a shared base of knowledge, it is important to use analytical tools to assess where the best opportunities lie in your business. Tools include the Growth/Share matrix (often associated with Jack Welch) to assess which of your core business should get the most emphasis.  Analytical tools pull out the key variables and help the team better understand the information that has been gathered.

If you would like to learn more about a structured process, with templates for research and analytical tools to help digest the information please call or email me: Denise Harrison, 910-763-5194 or harrison@cssp.com

To learn how to take your strategic planning to the next level, please listen to our webinar:  Why Isn’t My Strategic Plan Working?.

For a discussion on doing strategic planning in one day, 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 2017 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

One of my favorite parts of my work is speaking at conventions.  Interestingly, I’ve noticed far more interest in hearing about strategic thinking than strategic planning in the past few years.  While this trend is likely because most people are doing strategic planning the wrong way, it’s still interesting to ponder why people have difficulty thinking strategically.

Ultimately, the difficult part of strategic thinking is that it’s not what we are hard-wired to do.  Scott Halford, author of “Activate Your Brain”, points out that there are excellent biological reasons for this.  Our brains developed during a time when the immediate threat of being eaten by a lion was very real and immediate for humans.  The strongest and fastest parts of our brains, as a result, tend to be those that help us respond to threats, since deep analysis could well be fatal in those “lion is attacking you NOW” situations.

In today’s world, however, there are precious few lion-induced fatalities.  Indeed, most of us would be far better off paying far more attention to good strategic thinking, but that means getting past the well-meaning defenses our brains have set up for us.  Here are a few, simple things you can do to accomplish this:

1. Learn to focus

The term “focus” is incredibly misused, even in strategy.  It sounds so good – but focus is so hard for most of us.  The problem of focus is not one of thinking about whatever you choose to focus on – it’s much more a problem of NOT thinking about the things you aren’t focusing on.  This is a serious skill, and one that requires practice.  If you can build effective shields that keep useless distractions from entering your thinking, you’ll be far ahead in the strategy game.

2. Use your sword (and not your shield)

In the pre-modern world, soldiers who fought with sword and shield tended to defend better when attacked from their left (shield) side.  While this makes sense, it creates a strong tendency to favor defensive, “hunkered down” thinking that – while creating decent defenses – often interferes with forward-thinking strategies.  If your thinking doesn’t involve attacking effectively with the best weapons you have at your disposal, you may be guilty of defensive thinking.  This can work – for a short while – but ultimately will leave you exposed and vulnerable to threats that you failed to anticipate.

3. Be more like Einstein

Of course, by this I don’t mean be a genius – though this can help.  What I mean here is that you have to think in relative terms.  Your company doesn’t exist in a vacuum – your choices will change customer, supplier and competitor behaviors in ways you can predict, if you think through the second and third order effects of your strategic choices.  Good strategic thinking tends to demonstrate an awareness that we function within a huge network of decision-making processes which can change our strategic choices in unanticipated ways.

4. Remember your competitors have motives, too

While this can be seen as an extension of relativistic thinking, some of the most effective strategies I’ve used have simply involved giving your competitor an easy way to succeed by letting you dominate the customers you choose to get.  This isn’t a magic bullet – it requires accepting something that’s bad enough that your competitors wouldn’t choose it – but most competitors would rather take the easy bait than fight you tooth and nail for market share in places where you have strategic advantage.  All you need to do is make sure the bait is the customers you don’t want.

5. Have a well-considered plan

All of the above approaches work far better when your team has – and understands – a rigorously developed, flexible strategic plan.  A quality strategic plan – which doesn’t mean reams of budgets or oversimplified rah-rah truisms – will give your team the confidence to think strategically about novel situations.  This reaction – a strategic one – is far better for your long-term success than instinctive “the lion is going to eat me” thinking.

Naturally, the details of using all of these approaches are not always easy, and an experienced focused strategist can greatly improve your team’s ability to use these tools.

Does your company think strategically everyday?  Let us know how you are dealing with it – or, better yet, attend our amazing, data-driven workshop on Simplified Strategic Planning to learn how to think strategically.  Our highly acclaimed Simplified Strategic Planning approach has helped many hundreds of organizations improve their strategies and bottom line results with effective, actionable strategies.  Please listen to our webinar:  Why my strategic planning isn’t working.

By M. Dana Baldwin, Senior Consultant

Note:  This article is part of a series taken from Dana Baldwin’s article Improve Morale-Increase Motivation originally published in Compass Points in January 2003.  Although this article was written in 2003, these tips are timeless.

In previous posts we’ve discussed what affects morale.  In the post last week we discussed how to develop motivation by having a strategic plan in place and communicating that plan.  In this post we will be wrapping up the series with some strategic thinking points.

STRATEGIC THINKING POINTS:

1. Discover what your employees think of their management and the company.
2. Learn how talking with employees, mostly listening, can help improve the internal situation in your company.
3. Learn and teach your managers how to delegate more effectively.
4. Clearly explain your expectations to those who will carry out the task. Be sure they truly understand what the goal is and how they are to get there.
5. Know when to jump into your team’s problems, and when to stay out, for the best learning experience for the team.
6. Ask your employees how to eliminate wasted effort and unnecessary costs. They are closest to many of these situations, and often have the best input.
7. Have a good, well-developed strategic plan that you share with the employees and involve them in. With knowledge of the company goals, most employees feel more secure and will contribute more to the success of the company.
8. Communicate regularly with everyone, not just when there are problems. Use effective two-way communications as a trust-building tool. This effort should pay significant dividends over time, but don’t expect instant results. Give it enough time to really become effective.

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

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

© Copyright 2016 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.