Competitive Strategic Planning
April 28, 2020Competitive Strategic Planning is the process of figuring out where you currently are and where you need to be in order to be competitive in your business landscape. It’s commonly a two to three day process with the “leaders” of an organization providing the business landscape expertise and an outside facilitator leading the process. However, I did experience as a member of a Senior Leadership Team (SLT) the facilitators-there were two-to my consternation actually participated in the decision-making. So let’s look at the composition of the team members making the decisions in the room. Who should be on that team? 1. Who brings knowledge, expertise, and/or history to the table about the business? This person(s) could be brought in at certain points of interest in the process to lend their knowledge, expertise, and/or historical perspective. They don’t necessarily need to be in the meeting 100% percent of the time. 2. Who has “skin in the game” if the strategy were to fail-is accountable? 3. Who could sabotage your strategy by not being part of the decision-making-is responsible for strategy implementation? This person(s) could be asked to be present as certain issues are being discussed. * ie. a key person in the Operations group. Note: This individual(s) would be identified in advance and would be seen to represent his or her group interests. 4. Who understands your business landscape better than anyone else? 5. Who knows your competitors better than anyone else?
The Process A. make sure you have a facilitator that has expertise in Running an Effective Meeting. B. Craft or review your Mission or Core Purpose. * see previous blogs. C. Craft or review your Core Values. * they should be written in behavioural language and they should not have another value embedded in the statement. D. Craft or review your Core Principles. * they should cascade out of your Core Values and be results driven statements. E. Review your current Vision Statement. * it should be future focused with a clear timeline, and clear Strategic Goals that excite and mobilize your organization’s membership into action. E i. Start with your current state by conducting a Strategy Landscape that consists of identifying your competitors and sizing them up based on the key deliverables for your business. How do you stack up against them on each deliverable? Create a graph to show how your business compares to your competition. E ii. Now conduct a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) after you have decided where your strategic advantage is based on the Strategy Landscape. * I do my SWOT Analysis a little different than most. 1. What are our Strengths that will allow us to capitalize on our Opportunities? 2. What are our Strengths that will allow us to mitigate the potential Threats to our business? 3. What are our Weaknesses that can stop us from capitalizing on our Opportunities? 4. What are our Weaknesses that can magnify the Threats to our business? E iii. Business Drivers. What are they? Firstly, they provide a useful means to understanding potential problems within an organization. Secondly, they force leadership to make clear decisions about strategy ie. WHERE and HOW you go to the market place. Thirdly, they force leadership to make choices, choices about WHAT to do or NOT to do. First brainstorm a list of key Business Drivers ie. Operational Excellence, Customer Intimacy, Products/Services Leadership, Profit/Return, Knowledge Management, Technological Excellence, Low Cost Production Capability, Supply Chain Excellence, Market Served, etc. Identify your Primary and Secondary Business Drivers. Second, identify one Primary and two Secondary Business Drivers. The three most common Business Drivers are: Operational Excellence, Products/Services Leadership and Customer Intimacy (not the same as Customer Service). E iv. Key Success Factors. Key Success Factors are the one thing that an organization does that its customers value the most ie. Operational Excellence and Quality, Knowledge Management and Employee Development, Products/Services Leadership and Innovation, etc. Note: Always identify at least one important Key Success Factor for each Business Driver. E v. Strategic Thrusts. Strategic Thrusts cascade out of all the work you’ve done up to now and your last step prior to crafting your Vision Statement. It consists of a matrix with the Business Drivers on the vertical axis and your Key Result Areas (KRAs) ie. Internal Stakeholders (the Employee), External Stakeholders (the Customer), Shareholder Value on your horizontal axis. Strategic Thrust example: Business Driver-Products/Services Leadership and Internal Stakeholders-Culture Alignment, Products/Services Leadership and External Stakeholders-gain Customer Loyalty, Products/Services Leadership and Shareholder Value-increase profit margin.
E vi. Craft your Vision Statement based on the aforementioned points E i to E vi. A good Vision Statement is segmented by your Business Drivers with clear Strategic Goals (Strategic Thrusts written as a Strategic Goal ie. Culture Alignment-To ensure cultural alignment across all our SBUs.). It should be written in such a way that it paints a picture for the reader that he or she can see exactly where the organization is going. It should excite the membership and create a “call to action.” It’s ultimately a journey everyone knows they play an important part in its success.
Sony Vision Example
We will create products that become pervasive around the world. We will be the first Japanese company to go into the United States market and distribute directly. We will succeed with innovations that US companies have failed at. Fifty years from now our company name will signify innovation and quality that rival the most innovative companies anywhere. “Made in Japan” will mean something fine, not something shoddy.
When one considers that this Vision Statement followed a devastating and humiliating loss after the Second World War of territorial power, human life, its country-wide governance model, and national identity; it’s an extraordinary Vision. They accomplished all that they set out to do. One can clearly see where they’re going as an organization and what their Business Drivers are: Products/Services Leadership (Primary), Market Served (Secondary) and Operational Excellence (Secondary).
E vii. Organization Design. Decide on an Organization Design to best deliver on your organization’s Competitive Strategy. Key questions to answer: 1. What are we trying to accomplish with our organization design? 2. What stakeholders do we need to meet their needs through our organization design? 3. What restraints might exist that potentially negatively impact on our organization design? 4. How will we know when we have accomplished what we set out to do with our organization design? 5. What resources will we need to accomplish our organization design?
Different kinds of Organization Design: 1. Functional Business Unit structure-traditional organization structure based on functional BUs. 2. Products/Services structure-organized around the delivery of your Products and Services. 3. Customer Intimacy structure-organized around the needs of your customer. 4. Cross-Functional Team structure-complex delivery of Strategic Goals required. 5. Matrix structure-an employee has two immediate supervisors in an organization. 6. Hybrid structure-a mixture of the different structures.
E viii. Catalytic Mechanism * based on research by Jim Collins. A Catalytic Mechanism is a way to steer the actions of your employees towards achieving your Strategic Goals. It’s a powerful management tool that translates your Strategic Goals into rock solid outcomes. They are the bridge between your BUs Operational Goals and employee performance. Example of a Catalytic Mechanism: Introducing a Matrix structure and Matrix Finance model into the Human Resources Division for the delivery of the SBU’s Products and Services.
The Five Characteristics of Catalytic Mechanism: 1. They deliver on your Strategic Goals. 2. They distribute power across the organization, sometimes to the dislike of traditional power brokers. 3. They have ‘bite.” 4. They expose people who really don’t believe in or adhere to your Mission and Core Values. 5. They fundamentally change the way you do business in the future.
