March 8th, 2012
Organizations find a cadence for planning and execution. For some, planning their business is rhythmic and routine, and for others more ad-hoc and choppy.
The discipline required to be successful at strategic planning is not innate in the human condition. It requires creating methods, habits and norms that perpetuate a desired process, and that takes energy and patience only employed by the best CEO’s. Such habits will rarely occur without the complete buy-in of senior management.
The only way to establish such discipline is to have a repeatable process. Best-in-class organizations typically have multiple strategy events per year. For some, perhaps it is an annual retreat and quarterly follow-ups. For others, it is a semi-annual retreat followed by monthly check-ins that focus on execution. It is not as important what system you use for strategic thinking, as it is that you have a system you can commit to.
Once such a methodology is understood, certain norms begin to take form. Mid-management can rationalize their contribution to the greater good and develop their own methods for applying the strategy to their organizations. For many companies, strategic planning includes:
- Gathering research about the market and operating environment
- Gathering input from front line staff
- Gathering additional information about their current state
- Formulating the mission, values, vision, goals and strategic initiatives
- Conveying the mission, values, vision, goals and initiatives to their employees
- Establishing departmental goals and infrastructure requirements necessary to implement the strategy
- Creating a performance management system that is in alignment with the company’s core competencies
- Measuring the effectiveness of execution in real time
Many organizations have such a cascading routine for budgeting, and the same thinking applies to the formation and execution of strategy. Often the strategy discussion precedes the budgetary process and the timing of the two are linked. It is for this reason that one cannot think of planning as a single event (such as an “off-site”) but as a cycle. As such, your plan is never really complete—it is a working document that must continue to change as new market conditions present new threats and opportunities.
Organizations also need to change things up to foster new thinking. Some meetings can be structured and organized and others need to be free-flowing brainstorming sessions.
Whatever your process, provide an environment that will guarantee that your team continues to think about the broader picture and how you can maintain your strategic advantage.
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Posted by Marc Emmer - President - Optimize Inc.
September 15th, 2011
One of the bi-products of our caffeine crazed, media blitzed economy is that we have virtually no attention span. It is as if we have a collective form of ADD. Over time, customers get bored with their vendors, alliance partners and trade associations. Client relationships have a natural tail.
The ability to continuously delight customers is a skill mastered by few. Clients need some type of stimuli that reinforces the value we provide them and it needs to come in different forms at different times. Variety is not just the spice of life; it is the remedy for overcoming the dreaded- inevitable customer fatigue.
Entertainers understand the element of surprise all too well. We all have a lot to learn from that ingenious management mind; Jerry Garcia. In the 60’s, the Grateful Dead had a Board of Directors and a call center. Whenever “the Dead” where touring, “Deadheads” who had gladly forked over their phone numbers would receive outreach about upcoming performances. The Deadheads would do something extraordinary; they would follow the band from city to city. As every show was an ad lib (jam), no two were alike, and no one knew what the Dead were going to play. Most businesses would kill to have the raving fans of the Dead.
The problem of customer fatigue is exacerbated by the fact that challengers are incented to barrage prospects with new offers and discounts in a way that an incumbent is not. In relative terms, the incumbent can easily become complacent and offer clients much of the same. As the old adage goes, “if it isn’t broke…”.
I heard of a guy who gave a business review presentation to a client on an iPad. At the end of the presentation, he said to his client “thank you so much for your business” and handed him the iPad. Giving such generous gifts may not be as accepted as it once was, but imagine the shock value of the meeting. It is one the client will never forget! We need to find ways to maintain our clients’ attention span.
Customer fatigue only magnifies themes we have often shared in this space. The number one rule of customer relationship management is to take better care of the customers you already have than new ones you might attract. Offering our best discounts to new customers flies in the face of this principle. Organizations often position their best people as hunters, and then delegate customer service to others (who may not be empowered to make customer retention decisions). An organization can easily lose sight of its most precious possession, its most profitable customers.
Customers should be treated differently based on their lifetime value, and perhaps even receive different benefits based on their tenure. One of my clients recently calculated their average client retention cycle (and at what time they lose the average client) and is now taking steps to change their approach over the span of the customer relationship.
Find a way to shake things up and keep customers coming back for more.
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Posted by Marc Emmer - President - Optimize Inc.
June 28th, 2011
The long term implications of Japan’s massive earthquake and tsunami have recently begun to materialize. Over the course of the last twenty years, management principles have centered on efficiency; do more with less. Six Sigma, Lean Manufacturing, outsourcing, and off-shoring have boomed. Perhaps our fascination with reducing costs and optimizing return on assets has manifested in an overly minimalistic view of the world.
The recent supply chain disruptions have illustrated the vulnerability of our thinking as just in time translated into late product shipments, unsatisfied customers, and sluggish earnings, spanning from Toyota to Tiffany’s. The vulnerability may be far greater for smaller companies with less sophisticated logistics and reliance on a smaller web of suppliers.
Thus the central question is shifting away from what is the minimum possible cycle time to what are the supply chain risks and how can they be mitigated? Manufacturers have had to adapt, in some cases reengineering their products to use components or materials that have been suddenly unavailable. Some product development teams have had to adapt, at times looking like a scene from Apollo 13 (when astronauts famously had to construct a part based on the materials they had on hand).
Customers have the right to ask more questions about how their vendors manage supply and what types of contingencies they have in place. As has been evident in recent years, vendors and customers alike must think broadly about what eventualities could disrupt the global marketplace and collaborate on solutions. The horrific events in Japan reflect only the latest in a series of events that are reshaping how products come to market.
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Posted by Marc Emmer - President - Optimize Inc.