Tag Archives: strategic planning

BIV Boardroom Strategy: star power: how to tackle first things first on your company’s strategic objectives list

When you start working on the action plans for your strategic objectives for the year, one of the most important steps is to understand the order of priority of your objectives.

You might think you know what needs to happen first, but your team might not agree with you. The key is to spend time together as a team to rank the order of your objectives using a technique called the Hoshin Star (a variation of matched-pair analysis).

Originally developed for total quality management, the Hoshin Star helps leaders understand the cause and effect connection between objectives to determine the underlying order of importance.

Using this tool to prioritize strategic objectives can serve two purposes: Continue reading

BIV Boardroom Strategy: how to executive corporate action plans effectively

The last step in the strategic planning process is often overlooked, and yet, it’s one of the most important: the action steps that will lead to the successful completion of your objectives.

But we need well-formed objectives before we can map out action steps.

Here are eight things we need to consider for solid action plans:

Ownership: one person must be responsible and accountable for tracing the progress toward each objective, keeping the team informed, ensuring timely action steps are occurring and adjusting the actions as reality teaches us what needs to shift.

Action steps: each objective needs to have a series of action steps that lay out a clear path throughout the year on how it can be achieved. If the objective is the “what,” then the action steps are the “hows.” It’s critical that the action steps are clear and actionable steps versus vague ideas or thoughts.

Continue reading

BIV Boardroom Strategy: How to build a corporate culture that effectively executes strategic plans

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Over the years, I’ve become convinced that the “10/90 rule” is the best guide for dividing your time and energy between strategy and execution: 10% of the value of strategic planning is in the creation of a plan that outlines direction and priorities for the coming year; 90% of the plan’s value comes from an organization’s ability to effectively execute that plan.

If your organization is like many, once the executive team leaves the room after strategic planning, the daily grind takes over, the months start to tick away and before you know it you’re partway through the year and have made virtually no headway in executing on your strategy.

The reality is, there can be a giant gap between what needs to be done to execute a plan successfully and the potential of the organization to make it happen; it’s about more than resources and capabilities. It’s about culture.

The truth is that cultural norms can make execution far more challenging than it needs to be. Execution takes buy-in, emotional commitment to the plan and discipline. But the one element that has the greatest impact on successful implementation is your organizational culture.

Here are a few ways you can begin to shift the culture of your organization toward one that’s focused on execution. Continue reading

BIV Boardroom Strategy: Your company’s strategic plan needs a solid framework

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A successful strategic plan design keeps two things in mind: focus driven by simplicity and clarity and engagement of the people who will be held accountable for the results.

The more complex the plan, the less likely anyone in your organization will read it or, even worse, take action from it.

Here is a framework and process for your strategic plan that will ensure you focus on what’s important, narrowing down the details to the critical pieces around which your team can rally. Using this framework with your team to build a plan will dramatically increase engagement and accountability.

Wildly Courageous Decision (WCD). As CEO, you are the chief dreamer, schemer and long-term thinker. Before engaging your team in a strategic planning experience, carve out some time from your schedule to dream 10 to 25 years ahead from today. What courageous direction can you passionately make a decision to take your organization in? Think of this as the North Star you are navigating toward: a simple statement that sets a long-term perspective that everyone can rally behind.

Mission. If your wildly courageous decision is the “what” then think of your mission as the “how”: what behaviours and actions over time will lead to your organization realizing its WCD?

Strengths, weakness, opportunities, threats and vulnerabilities. Have you, your team members, and their direct reports list out what your organization is truly strong at, weak at, where the market opportunities lie, what external forces can threaten your success and where you are vulnerable to inside and outside forces – your company’s Achilles Heal.

Rhinos, whinos, sacred cows and hidden agendas.Rhinos are the large, dirty, messy issues that are hiding under your boardroom table causing big distraction, wasted resources and energy, and yet everyone is pretending they’re not in the room. Whinos are the issues team members consistently whine about that never seem to get dealt with. Sacred cows are the core tenets in your business that you’re not willing to compromise on or change: they’re part of the secret sauce of your success. Hidden agendas are the plans that people are not disclosing, instead they’re secretly working on building alliances and putting significant energy into something that may or may not be right for your organization. (The Lexus ISF is a good example of a hidden agenda of an engineer at Lexus. It was built in secret in a remote warehouse behind the head office by a skunk-works team and unveiled to Toyota’s CEO after the final prototype was complete.)

Values and core purpose. What core values are forming the concrete foundation upon which your organization is built? These are the values driving key decisions made at a senior level within your business, not values you may aspire to. What is the core purpose for your company existing in the world? Why will the world be a better place as a result of your long-term success?

Objectives. Use the information you uncover in the sections above to craft a series of five to 10 key objectives that your organization will achieve over the next 12 months. The easiest way to know whether you have a well-framed objective is to ask, “How will we know when this objective is complete and would we throw a party to celebrate achieving it?” If the answer is unclear then you’re likely missing a deadline, a clear success measure or the objective is not specific, reasonable or challenging enough.

Owners. “The executive team” is not the answer to effective accountability for strategic objectives. Each objective should have an accountable champion who ensures that the executive team is kept up to speed on progress and the road blocks along the way.

Action steps. Many companies stop at the objective stage and the result is low clarity on the first move and subsequent steps. The result is a sandbagged plan. Create an action-step plan for each objective that answers the statement, “When these steps are complete, the objective will be successful.”

Communication. Without a communication plan that shares the strategic plan, the reality is the same as winking at someone in the dark: you know what you’re doing but they haven’t a clue. Decide as an executive team what consistent, concise and compelling messages you plan to share with the rest of the organization, including reporting on results throughout the year, and what mediums have the best chance of reaching the widest audience. Using the steps

we’ve walked through will provide a solid framework to build your strategic plan, ensure that year after year you have a consistent way of describing the path for your business and engage your team in executing the plan effectively.

As the Cheshire Cat said to Alice, “If you don’t know where you’re going, then any road will take you there.”

BIV Boardroom Strategy – Solid Strategic Plan – Jan 2011

BIV Boardroom Strategy: Contemplation and reflection are key to strategic corporate planning

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In preparing for your annual strategic planning session your role as CEO is to take some time to contemplate where your organization is today, what challenges and opportunities it is facing, where you see the future of the organization, and roughly what the path forward looks like. A key portion of your time should be spent in what can best be described as day dreaming: scheming and dreaming about the near-term and long term future of your business.

 Now that you have your thoughts in order, let’s think about your team. A great deal of time is usually wasted in strategic planning experiences in drawn-out group discussions simply due to inadequate preparation. By spending time preparing in advance of the session there is considerably more time available for clarification, discussion and active debate in the actual planning.

 Mindstorm. The key to leveraging the collective brainpower of your senior team during the planning experience is to have them mindstorm in advance. Mindstorming is similar to brainstorming except that it’s done on your own. Mindstorming helps reduce the effects of groupthink and allow the participants to truly clarify their own thoughts prior to the experience.

 Gain insight. Here is a list of insightful questions for you and each member of your team to consider before stepping into a strategic planning experience: What changes in competition, the industry, key customers, the market, or the economy have the biggest potential for harm to our organization? What is the likelihood that each will occur?  Considering this past year in general and our last strategic plan: What worked well? What needs improvement? What’s missing? What resources or situations are holding me back from being most effective in my role? What are the critical issues that we’re ignoring that are getting in the way of our success? What issues do we complain the most about in our organization that never seem to get fixed? What am I hoping to accomplish in the strategic planning that no one knows about? What does success look like for me in this business or organization this year? What are our organization’s biggest strengths, weaknesses opportunities, and threats (SWOT)? What will our business or organization will look like in 5-10 years?

 Engage your direct reports. In order to get an even wider and more robust view of the current situation have your team poll their direct reports for their answers to the questions above. This not only prepares your executive team for strategic planning, it also engages their teams in providing critical raw data to the experience, helps illuminate potential blind spots and missed opportunities, and reduces the “black box” effect that teams sometimes feel when their leaders return from strategic sessions.

 Choose one big question. After contemplating these questions, ask your team to help identify the right question overall: the strategic question your organization most needs to be asking at this time. One of the key success factors for strategic planning is identifying the right questions to ask so that strategic planning can be focused and relevant.

 Leverage collective brainpower. You may have noticed that as part of the prep work we have not yet requested people to come forward with solutions to the challenges they see the organization facing today. When executives leap directly to solutions instead of bringing a blend of meaningful raw data and questions, the result can be a discussion focused on comparing myopic solutions, skewed by each executive’s perspective within the organization. The value of bringing together the team in a strategic session is to leverage the collective brainpower in the room on a common set of agreed upon inputs, towards creative well thought out solutions and strategies.

 A thoughtful, consistent approach to your team preparing for a strategic planning experience, combined with quarterly reviews of the plan throughout the year, helps raise the level of accountability, connection to reality, and engagement in the overall strategic direction that you choose to take.

PDF of original column in BIV Nov 2010 

BIV Boardroom Strategy: Why your strategic plan is stale and what you can do about it

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If the last time you thought about your strategic plan you couldn’t immediately recall what was in it, couldn’t remember where the binder was, and then needed to dust the binder off once you found it…my guess is your strategic plan was stale.

 One of the core challenges to effective strategic planning is building in a frequent review process to ensure that your plan stays relevant, you are tracking progress and accountabilities, and there is a clear line of sight between the ongoing operations of the business and your long-term destination as an organization.

 Now the word frequent means different things at different stages of your business growth. In start-up mode the shear number of shiny objects you have to choose from means a monthly review of the plan is appropriate. In our discussion we’re going to focus on established companies and organizations that are well past the start-up phase, and as a result, quarterly follow-ups to the strategic plan are appropriate. 

About every three to four months changes in people, the economy, competitors, your market, the industry, customers, or technology will put pressure against your strategy to the point that your strategic plan no longer feels relevant and timely. At this point, most organizations will shelve the plan due to lack of relevance to the current situation and, inevitably, all of the hard work, energy, and enthusiasm that went into creating the annual plan falls short with 75% of the year still left to unfold.

 Bringing your team together to go through your strategic plan for a few hours on a quarterly basis is the surest way I know to revitalize your plan and maintain its relevance all year. Here is a four-step process to facilitating your own quarterly strategic planning follow-up session:

 Step 1 – Evaluation. Start your session by evaluating your plan using the following questions: What’s working well? What needs improvement? What’s missing from the plan? How have we been celebrating our success along the way? The answers to these four questions will provide an overarching view of the validity of your plan, where it needs to be changed, and what things need to be added that you didn’t know about when you first built the plan.

Step 2 – Review. For each of the three to seven core objectives you are focused on this year, ask the person responsible to walk the group through their action steps and to update the team on progress, delays, missed targets, unrealistic timelines, and finally, new actions. The rest of the team will provide insight, support, and feedback to help ensure that everyone understands the current status and how they can support their peer moving forward.

 Step 3 – Revise. If an objective needs to be removed or reprioritized or a new objective needs to be formed based on new data, this is the time to engage the team in discussion, frame the objective, choose an owner, and build an action plan with accountabilities and timelines. If you’re not sure whether or not your objectives are properly framed, here’s a quick test: if there’s no way to measure your objective so we can throw a party to celebrate completing it, it’s not an objective. The most common framework used to test an objective is SMART: is the objective Specific, Measureable, Attainable, Relevant, and Timely?

 Step 4 – Next Review. With the team together, now is the best time to select a date for the next quarterly review. It might seem strange to make this a step, yet in my experience without getting a date in the calendar now, the quarterly sessions can end up being semi-annual instead.

 Whenever I’m asked what the number one thing a CEO can do with their team to improve the quality of their annual strategic planning process my answer is always the same: review it more frequently and at a mininum, once a quarter.

PDF of original column in BIV Oct 2010 

Stop chasing shiny objects and focus on your core business

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Stagnation is the enemy of progress and growth but chasing after every opportunity that comes your way can be just as detrimental to your business. I have a name for these myriad choices that appear like opportunities but in most cases are distracters: shiny objects.

When I ask leaders where they expect their future growth to come from, quite frequently I hear the response, “we have so many opportunities for growth that it’s difficult to stay focused.” Therein lies the rub. Most opportunities are simply mislabeled as such and end up using up valuable time, money, and people resources within organizations. These shiny objects are difficult to choose between because no filter is in place to help evaluate the difference between them and an actual opportunity that the business should go after.

Here are four questions you can ask yourself that will act as a filtering mechanism to differentiate between shiny objects and opportunities:

What are the realities of our business today? We’re taking facts, not opinions here. What is our SWOT+V: break down our strengths, weakness, opportunities, threats, and vulnerabilities? In case you’re wondering, the difference between a threat and vulnerability is that a vulnerability can take your business its knees whereas a weakness is an area where we are not able to compete readily against our competitors. This question can only be answered properly in a culture of candour – a culture where the truth is spoken and can be heard. As difficult as it can be for a senior team to face up to the shortcoming of the business, it’s the only way to truly create a solid plan for the future.

What are the simple, underlying patterns, hidden in the complexity of our business, that make us great at what we do? If we were to capitalize on our greatest strength, what can (not want) we become world class at and as a result we can we not be world class at? What is the single denominator in the key economic equation for our business success, usually stated as “profit per X” [Good to Great, by Jim Collins. New York: Harper Collins Publishers, 2001]. Finally, what does our business stand for that we are truly passionate about?

Do we have access to the resources of money, people, and time? Many a great idea has been stalled by a lack of access to, or an underestimation of, resources. Passion without the ability to execute is daydreaming. For each opportunity before you, review the necessary action steps and time frames that would be required to reach the end goal. Then take stock of the budget required to support these action plans. Finally, determine whether or not you have the right people in your organization to tackle the necessary action steps, or whether you have the ability to hire from outside the business.

If I say yes to this, what am I saying no to? With limited resources available executives need to learn the skill of appropriately, with purpose and clear communication, stopping a project from moving forward, or preventing one from even getting off the ground when it does not fit within the strategic framework. Resources misallocated to objectives that should have died on the vine are being taken away from the core opportunities that will help create a more compelling future for the business.

As a leader, working through the answers to these questions with your team to distill down to the core opportunities you should focus on is far more compelling and inspiring than the alternative – reacting by gut feeling to initiatives that you don’t feel fit the business, without having a clear reason why. The difference in the engagement level of your team will be huge.

BIV Boardroom Strategy – Shiny Objects – July 2010

BIV Boardroom Strategy: Uncovering your strategic plan’s hidden innovation.

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If you have done a strategic planning session in your organization then you’re familiar with SWOT analysis: uncovering the inherent strengths, weakness, opportunities and threats that form the basis for a situational analysis of where your company is at today both internally and externally.

In many cases the SWOT analysis is simply part of the raw data included in the pre-reading or pre-work for the session and usually ends up in the final document to disclose the background assumptions that underlie the plan.

Standard practice in strategic planning is to discuss the SWOT as part of the context setting for the strategic session, ensuring that everyone is working from the same set of base assumptions.

There is a less commonly known way to leverage this analysis to uncover hidden opportunities for innovation and growth that is grounded in reality instead of hubris: the TOWS matrix.

Originally designed by Heinz Weihrich, professor of management at the University of San Francisco, the TOWS matrix (also referred to as the SWOT matrix), is a simple and effective way to leverage your SWOT analysis as a tool for bridging the gap between your organization’s current state and the opportunities for growth and innovation that leverage your current environment.

Not unlike a SWOT analysis, the TOWS matrix looks at strengths, weaknesses, opportunities and threats, but takes it one step further to create four unique quadrants of analysis: strengths and opportunities, strengths and threats, weaknesses and opportunities and weaknesses and threats.

Here are the four quadrants of the TOWS matrix in detail.

Strengths and opportunities

The SO quadrant examines how we can use our strengths to take advantage of key op- portunities in the market today. If your company has significant experience with outsourcing production and low-cost foreign producers begin to enter your market- place you can move deeper into outsourcing to further re- duce your cost of goods sold.

Strengths and threats

The ST quadrant includes strategies that use our strengths to take advantage of the core threats that we’re facing from outside the company today – from market to industry, economic and competitive forces. If one of your strengths is customer relationships and you have identified a low barrier to entry into your industry, then one approach you can take is to look for opportunities to take your customer experience to a level that is difficult for a new competitor to replicate.

Weaknesses and opportunities

The WO quadrant contributes strategies that allow your company to work around a weakness to take advantage of an opportunity in the market- place. A company that sees the opportunity to use technology to step ahead of the competition but does not have the internal resources to pull it off might use the approach of collaborating with a supplier or technology partner that does have the in-house expertise.

Weaknesses and threats

In terms of strategic leverage, the WT quadrant is the least attractive of the four quadrants. When your or- ganization has a weakness that corresponds to a strong threat it can require drastic action to respond. The Tesla Motors/Toyota partnership is an excellent example of a strategy that leverages weaknesses and threats. Tesla’s weaknesses were a lack of mass production capability and volume price discounts from suppliers. Combine that weakness with the threat of the large automobile manu- facturers launching hybrids and all-electric vehicles like the Chevy Volt and Tesla was struggling to come up with a way to compete. The introduction of Toyota’s manufacturing expertise, volume pur- chasing, kaizen philosophy and quality standards level the playing field for Tesla.

The TOWS matrix looks at strengths, weaknesses, opportunities and threats, but takes it one step further.

To truly take advantage of the power of the TOWS matrix, the key is to carefully compare each of the multiple strengths and weaknesses to each of the opportunities and threats. An easy way to keep track of the matched pairs is to nickname each of the different data points with a number, for example, S1 versus O1 (the first strength we recognize as compared with the first opportunity we have uncovered), W2 versus O1, etc. This will ensure that you have looked at all the different strategic possibilities.

The value behind the TOWS matrix is that it takes a traditional SWOT and makes it actionable. By com- paring internal strengths and weaknesses with external threats and opportunities, you can create specific actions, grounded in reality, that turn challenges into opportunities.

If you would like to learn about more about the complete matrix, I have posted an in-depth article by Weihrich on my blog at www.mikedesjardins.com.

BIV Boardroom Strategy – TOWS Matrix – June 2010

TOWS Matrix Instructions

Here are the instructions for completing the TOWS Matrix that I outlined in my June 2010, Business in Vancouver: Boardroom Strategy column.

BIV Boardroom Strategy: How to measure your company against the competition

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Why do your customers choose you over your competitors? What is it that makes you stand out in your industry?

Let’s look at sustainable competitive advantage – understanding what yours is and how it positions your business in the marketplace.

“A firm is said to have a competitive advantage when it is implementing a value- creating strategy not simultaneously being implemented by any current or potential player,” according to Managerial and Decision Economics author Jay Barney. Where many firms miss out is the sustainable part of the equation. A competitive advantage that is easily duplicated by a competitor is not sustainable or an advantage.

The theory of competitive advantage was first postulated in Michael Porter’s 1985 book, Competitive Advantage: Creating and Sustaining Superior Performance. Porter’s definition of “superior” is favourable (when compared with your competitors), profitable and sustainable.

Using Porter’s five competitive forces model, here is a series of questions to ask yourself as a way of determining where your organization sits in terms of its competitive advantage.

Threat of new entry. Don’t underestimate the possibility that others can enter easily into your market. Consider the effect online gambling had on the traditional console and PC game market: traditional retailers could be bypassed. Take the time to get clear on how big the threat of new entrants really is. What are the capital cost requirements of entering into your industry? How easy is it for your customers to switch from your product or service to that of your competitors? How much weight do your customers put on brand equity?

Supplier power. Understanding the power your suppliers hold over you is key to assessing your competitive edge. Are there a few or many suppliers in your industry? What is the cost to switching from one supplier to another? How important is volume-buying to your suppliers? How much of the cost of your goods or services is connected to your suppliers? Are your suppliers capable of becoming competitors, should they choose to, with relative ease? How is your purchasing power when compared with the overall industry? Are your raw materials available to be bought from multiple suppliers? We only need to look at the computer chip market to see an example of this force. If Intel and AMD decide they don’t want to sell a manufacturer their chips there are few other choices for supply.

Buyer power. Take a look at your customer base. Do you have a few large customers or is your revenue split between many buyers? How easy is it for your customers to substitute your product or service for your competitors’? How much information do your buyers have about your product or service as it compares with the rest of the industry? How sensitive are buyers to the price of your product? What incentive do decision-makers have to buy from you? How does your product or service quality affect your buyer? In a commodity business, for example, understanding buyer power is key. When buyers know your product is aging or becoming dated, the key to your success might just be to avoid desperation selling by saying “no” to customers who want to grind you on price.

Threat of substitutes. In a perfect world, your product or service would be so unique that nothing else could achieve the same result. Smart strategies include an understanding of how easily your customers can find another way to do what your product or service is d ing for them. Does a shift in price lead buyers to consider alternatives? How often do buyers switch suppliers? What is the cost to your buyer associated with switching to another supplier? For example, Palm owned the PDA marketplace until smart phones came into play and made it easier for customers to switch over to other devices with greater functionality.

“A competitive advantage that is easily duplicated by a competitor is not sustainable or an advantage.”

Industry competitors. How intense is the rivalry between competitors in your industry today? How likely are competitors to react to your strategic direction? How easy is it for your competitors to copy your innovations? How strong is your brand compared with your competitors’ (from your clients’ perspectives)? Are you growing faster than the industry’s growth rate?

Answering these questions will help you understand your current position in the competitive landscape and the strength of your competitive advantage. You can also use what you discover from your answers to assess a strategic move before you make it. From here, take some time to review your current plan and decide how you can shore up areas of weakness to build a sustainable competitive advantage.

Mike Desjardins is the CEO at ViRTUS (www.virtusinc. com), an organizational development consulting firm with expertise in strategic planning and implementation, leadership development, change management and suc- cession planning for medium to large organizations. This column was co-written by Glenn Wong, a mentor at ViRTUS.

BIV Boardroom Strategy – May 11-17, 2010