• The “Financial” perspective indicates whether the company’s strategy, implementation, and execution are contributing to top and bottom line improvement include the following: Cash flow, Sales growth, Market share, and ROE.

• The “Customer” perspective is focused primarily on creating value and differentiation when acquiring, retaining or servicing the customer. This driver deals primarily with gaining and growing customers and market share.

• Focusing on “Internal Processes” in operations has the greatest impact on customer satisfaction. Positive long term results rely on defining the competencies needed to maintain market leadership and maximizing the effectiveness of those internal systems.

• The “People/Learning” perspective relies on a company’s commitment to its greatest resource—people. This area focuses on creating value by developing an environment that fosters learning, innovation, and prioritizing on its “human asset.” The premise is that people drive the other three elements to achieve the company’s goals.

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Every three months or so, evaluate the plan implementation by asking these key questions:

• Will the goals be achieved within the time frame of the plan?  If not, why?
• Should the deadlines be modified?  (Before you modify deadlines, figure out why you’re behind schedule.)
• Do we need to renegotiate when folks from other departments are going to be needed? Why?
• Are the goals and action items still realistic?
• Should the company’s focus be changed to put more focus on achieving the goals?
• Should the goals be changed? (Be careful about making these changes -  know why efforts aren’t achieving the goals before changing the goals.)
• What can be gathered from this adaptation to improve future planning activities?

Adapt your plan accordingly.  Always keep copies of past plans and include an updated date in the footer of the document.

Remember that implementation is the most difficult part of the planning process.  No one factor from the preceding list makes or breaks the successful implementation of the strategic plan.  However, when these areas are considered and acted on, the chances for successful implementation are greatly improved.  Most importantly, a business that has a strategic plan and implements it is ahead of 90% of the companies that have no plan at all.

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• Mission Statement: A statement of purpose and reason why your organization exists. It should be clear and concise and be able to fit on a t-shirt.
• Vision Statement:  This is an explanation of where your organization is heading and aspiring to achieve.
• Values Statement: These are the guiding principles of your organization that never change. The statement(s) address your core values and beliefs and what your people are committed to.
• Objectives: These are your broad statements, B-HAGS (Big, Hairy, Audacious Goals), spanning the length of your plan (3-5 years). They provide a holistic view of your organization.
• Goals: These are the organization (one to three years), department (12 to 18 months) and team member (six to twelve months) goals.
• Performance Measures: The measures/targets are identified, as well as the start/end dates.
• Implementation Process/Planning Calendar: Identifies the who, where, when and how.
  • Strategy Manager: Someone who is responsible for managing the strategic plan
  • Communication: How is the strategic plan being communicated to everyone outside of the management team? Email? All-staff newsletter? Meetings?
  • Accountability: Who is responsible for executing the goal(s) and providing stats on the goals?
  • Frequency:  How often is the status on the goals updated? Monthly, quarterly or weekly?

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Roger Martin says that “strategy is the intersection of two critical dimensions-where you will play and how you will win there.”  Above all, strategy is about choosing to do some things and not others.

1. Choose Where to Play: Since you cannot be everywhere and do everything perfect, you will need to do you research and decide on where you want to play–the market, the region, etc.
2. Find a Distinctive Way to Win: You need to do things differently than your competitors.
3. Match You Choices: Make sure that where you choose to play and how you are going to do it matches up and makes sense.
4. Iterate as Needed: Take your time weighing all the options before making such a big decision.

Creating a good strategy boils down to making sure that the where and what fit together and are in balance.  So the next step you get overwhelmed with the choices and all the clutter that is out there, think about where are you going to play and how are you going to win!

Click here to watch the full video for HBR: The Two Choices to Make in Strategy

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• Differentiate strategy from tactics
• Determine the value-creating strategy for your organization
• Grow your business by using current products and developing new ones

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The foundation of strategic growth identifies opportunities based on what has been experienced to date. It’s the adage of you can’t know where you are going, until you know where you’ve been. This is not just management experiences, but also customer experiences, because if you don’t filter decisions based on how they will be received by customers then you have a rough ride in front of you. Honor thy customer… now let’s move on.

Growth comes from either leveraging your market knowledge or your product knowledge. There are four different strategies that can be employed here, which can then be executed upon with tactics:

1. Concentrate on what you do best.
   Penetrating your existing market strategy by driving more purchases or increasing use of your product or service is good business. Maximize the ways customers can utilize what you are offering. Incentivize the use of what you already offer, maybe through price adjustments or trial periods to lure your competitors’ customers your way.
2. Develop the goods.
   Strategic product development doesn’t have to be about creating brand new things. It can happen by adding to existing product features as well. The underlying premise here is that you have a solid understanding of the market and can either add services to your existing product, develop new models or sizes to your existing line, or you are leveraged enough to develop a totally new product (think Gerber foods producing baby clothes).
3. Take it to the streets.
   Reaching new customers means you are satisfied with your current offer to the market and extending it to new markets is a logical next step. Understanding the market means doing some form of research, as you wouldn’t go into a new neighborhood without a GPS-powered app or old-fashioned directions written down on a scrap of paper. Are time/people/funding resources required lined up in a way that won’t negatively impact your current business advantage?
4. Variety is the spice of life.
   Like ordering dinner that’s the next level of “spicy” at a Thai restaurant (which is a mighty bold thing to do), sometimes you need to try something new. To execute upon this, you usually go through a merger, an acquisition or develop a completely new business venture. A company’s strategic diversification strategy can be either related or unrelated to the original business.

It’s not the employer who pays the wages. Employers only handle the money… It is the customer who pays the wages. -Henry Ford

If this topic is perking your interest, enjoy a free chapter on the topic from our book The Strategic Planning Kit for Dummies, which covers how any market growth strategy nests into an overall corporate-level strategy.

Now, let’s get growing!

- Cammy Elquist LoRé (@cammyelquist) writes the newsletter and is a functional leader of Customer Loyalty Engagement programs for M3 Planning.

StrategyCheck

Are you ready to develop a fresh approach to your market-level strategy?

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The key points to focus on in strategy development are:

• Setting expectations and determining outcomes
• Assessing your current position
• (re)Establish purpose and direction of the organization
• Develop strategic priorities and goals
• Align resources (people & financial)
• Implementation
• Ongoing review and evaluation

Below is an example of such strategy development:

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I know the quote above is generally used to refer to the value of whimsy and humor, but sometimes I wonder if it wouldn’t be better applied to dysfunctional corporate culture.

One nationwide organization, which shall remain nameless to protect the innocent, has implemented a massive undertaking of converting all their paper files into a digitized database. (No, this is not a client of ours.) Currently their employees use five programs for case management. The organization decided to take the admirable action of creating an application that would hopefully take the place of the five programs and streamline the employee work. That’s great goal to shoot for and a reasonable solution worth pursuing. But, the corporate culture’s inability to appropriately deal with honest criticism is stifling effective execution and problem solving.

The simple fact is the new application is nowhere near what it should be for nationwide implementation, yet it’s being continually rolled out to the various stations with barely a word of criticism uttered. That’s surprising considering the application’s major downfalls.

Rather than taking the place of five programs, now employees are using six. When one station manager was asked if he liked the program and found it helpful he simply responded, “I’m not going to comment on that, but you should look at our station stats and draw your own conclusions.” The numbers revealed that the station was getting a third as much work done after implementing the new application.

The fault isn’t with the employees or training, but with an inadequate application. The database contains files on hundreds of thousands of people, yet it forces employees to search for individuals twenty at a time by first name on a laggy server. It won’t search by Social Security number. A number of necessary functions have not been implemented, which requires the employees to continue to use the older legacy programs.

These could be fixable issues. Yet, leadership isn’t hearing about or addressing these legitimate complaints because of the corporate culture. Those who do find the courage to speak up are quickly greeted with a “whack-a-mole” reaction that punishes them for their honesty.

Here’s an example: one of the national leaders has scheduled a conference call with team members who are working with the new program. Normally, I’d say this action is a good way to harvest honest feedback, but what leadership typically does with the information can have a large effect on what feedback is offered.

It can be effective because it’s a great way to cut through the “bozone layer,” which is a wonderful phrase coined by Kayak.com Chairman Terrell Jones to describe an entrenched middle-management that is resistant to change and reluctant to approve ideas produced by their staff. Direct contact with the team members on the front lines can help bring those innovations to the attention of those with the desire and authority to implement them. But, back to the example at hand.

In this organization, the national leader heard the employee’s criticisms about the new application and rather than saying, “That’s interesting. I will examine the application to see if that issue is unresolved, and what it might take to resolve it.” she made the assumption that the station must be implementing the program incorrectly. In fact, during the call, arrangements were made for corporate staff to arrive at the local office to “fix” the office, which is typically a fearful experience for those at the office as finger-pointing is more likely result than actual problem solving. What this fails to recognize is that the lowered productivity is a consistent problem among all the stations implementing the new system.

It’s a failure to look at metrics that mater, and a failure to listen effectively and respond appropriately to the feedback staff provided. Word spread quickly from office to office, that honesty does not result in solutions or help. In fact, it will likely result in the rancor of management and fellow team members.

Thus, a culture of silence and passive agreement is born. Staff that would normally help identify and troubleshoot issues will now stay silent. Without that reality check, organizations could end up making major decisions based on a fantastical fiction that could rival that of the Wonka Chocolate Factory. Don’t let wishful thinking and tacit agreement get in the way of effectively executing strategy at your organization.

Has this been an issue at your office? Weigh in with your comments below.

About Kristin Larsen

Kristin is a recovering adrenaline junkie turned tech geek. To put it simply, she started out as a breaking news reporter and has since dove headlong into the wondrous world of website design, marketing and multimedia production. She’s the web developer and online marketing coordinator for M3 Planning, and occasionally teaches multimedia reporting at the University of Nevada, Reno. She has more than nine years experience in the news and marketing industry as the Web Director for a television station and as a reporter for various other media agencies.

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Thankfully, the real value is not in the data, but the result of what you can get with the data. Here’s the elephant in the room: data is not truth. But using it wisely should provide a strategy foundation that propels organizations to a common understanding for taking action.

Video: Rethinking thinking – Trevor Maber

So if you believe that common understandings are important, and we hope most do, moving information down a framework that is logical for everyone to recognize is key. By doing so, this also helps define what is true to your culture, what can be embraced within your organization, and what will serve you best to fulfill the greater need of your marketplace or community.

Here’s a nod to Chris Argyris, a business school professor who developed a framework for this purpose called the “Ladder of Inference” broken up into rungs that help users climb to clarity:

1st Rung — Facts and Reality: What are the real facts that I should be using?

2nd Rung — Selected Reality: What data have I chosen to use and why?

3rd Rung — Interpreted Reality: How are my thoughts adding meaning to this data?

4th Rung — Assumptions: What am I assuming and why? Are my assumptions valid?

5th Rung — Conclusions: Why did I draw this conclusion? Is it sound?

6th Rung — Beliefs: How does this conclusion apply in the environment around me?

7th Rung — Actions: Is this the right action or decision to make and why?

The fishermen know that the sea is dangerous… but they have never found these dangers sufficient reason for remaining ashore. - Vincent Van Gogh

Our ability to make sense of our world through information alone is foolhardy. We need to acknowledge that all information goes through some kind of filter. Paying attention to how strategic decisions are made is too important to do without a trail of accountable processing steps. Perhaps this ladder can help with not just moving forward with decisions but to a higher plane for connecting with those who see the world through various other filters.

- Cammy Elquist LoRé (@cammyelquist) writes the newsletter and is a functional leader of Customer Loyalty Engagement programs for M3 Planning.

StrategyCheck

Are you confident to explain “and why” to others when you track your decision-making process?

CURE-ing Childhood Disabilities Worldwide

CURE is a non-profit organization that operates hospitals and programs in 27 countries worldwide, treating physically disabled children in the developing world that can be cured through surgery. CURE exists to serve the poorest of the poor that have no access to specialty care. M3 has chosen to sponsor the CURE’s hospital in Honduras. CURE’s hospital in San Pedro Sula is transforming the lives of children with disabilities and their families in Honduras through medical and spiritual healing. For more information: http://cure.org/hospitals/honduras/

*M3 Planning donates 10% of our net profit to non-profit causes.

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