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Many executives today are disillusioned with traditional approaches to strategy, or fearful about the cost in time, effort, and money. They need practical, simple tools that will lead to positive action and performance. The purpose of this book is to take over 50 years of combined experience in developing strategy for organizations and provide managers with effective tools that work and will enable people to act in ways that will drive outcomes. We structured this book around some of the most common questions executives ask in developing the strategy. For each question we provide a strategy tool and guidelines on how to properly use the tool to answer the key strategy questions. The goal for each tool is meaningful and actionable results in hours and days, instead of the more typical weeks and months. We provide guidelines for gathering and analyzing necessary data, how to present the data in a meaningful way that will drive decision making, and an example of how the tool was used successfully by an actual organization.
Strategy Question: Is there a way to help me follow through on the changes I personally need to make?
Summary: You are not doing yourself or your organization a favor by neglecting changes you need to make to be more effective. You know what you really need to work on. If not, your boss, Board or peer group can probably help you. The Ten-Quarter Tool provides a simple method to identify a behavior you want to change, forces you to be aware of it throughout your day, and gives you a method to reinforce repetition. Here is how it works. You determine the behavior you want to improve. You take 10 quarters and put them in your left pocket. Your goal is to do the new behavior 10 times each day. Every time you do it, you move one quarter from your left to your right pocket. At the end of the day your goal is to have all 10 quarters in your right pocket. Kind of simple, right? Yet it works. You jingle a bit when you walk, but the weight of 10 quarters and the noise emanating from your pocket reminds you of the task at hand.
Strategy Question: How do we effectively communicate our brand to our customers and our market?
Summary: Many firms have a sense of the organization’s “brand.” We define brand as “the promise of an experience” to the customers. Firms need to identify the elements of the customer experience that are valued by the customer and determine the brand experience the organization wishes to convey is consistent with the experience of the customer. This tool uses a simple survey process methodology to determine whether the brand experience the organization wishes to convey is consistent with the experience of the customer. A simple X/Y chart is used to array the firm’s offerings based upon the customer’s perception of the brand experience. Comparisons with competitive firms can be included in the analysis. The results provide insight into the effectiveness of promotional and communication efforts intended to develop brand awareness among customers.
Strategy Question: How do I develop an effective plan and strategy in an environment that is highly uncertain, turbulent, and unpredictable?Summary: An organization exists…
Strategy Question: How do I develop an effective plan and strategy in an environment that is highly uncertain, turbulent, and unpredictable?
Summary: An organization exists as a subset of numerous spheres of influence, including the overall environment, the economic forces within that, and the industry forces within that. The Strategic Environmental Scan (SES) uses a structured approach to survey each of those areas, compile responses, sort responses, forecast impacts of those issues seen as higher probability, and highlight those issues for plan consideration. Since a strategist can’t control these forces, it is important to understand the environmental forces to develop real-time course corrections within the planning horizon. The tool consists of a basic one-page framework along with a process to gather, assess, and organize information that the strategist can use to determine what environmental issues deserve serious attention in the development of the strategy and plan, which issues need to be monitored, and which can be ignored (for the time being). This tool builds upon Dr. Michael Porter’s gold standard Five Forces Industry Analysis and employs stakeholder input to ensure a full appreciation of the broad environmental factors.
Strategy Question: How do I better understand the make-up of my overall market?Summary: Assuming that the market has been properly sized, it is important to also spend…
Strategy Question: How do I better understand the make-up of my overall market?
Summary: Assuming that the market has been properly sized, it is important to also spend similar effort to define segments and size these appropriately. This tool basically mirrors the approach of the Bottom-up Market Sizing Tool. At this stage, emphasis turns to breaking the overall market into actionable segments. Two to three iterations again are common to improve accuracy. The tool output casts the segments as a rectangular graphic, made up of one column for each segment. Segment width is representative of its size relative to the other segments. The width of all segment columns, added together, ties back and equals the overall size of the markets. The result provides guidelines for determining strategic market segments and niches, and how to best position the firm within those segments.
Strategy Question: Is there a simple yet comprehensive way to characterize the business health of my markets, segments, and niches?
Summary: Now that we have the markets segmented and niched, we need to research each segment relative to attractiveness. This can be simply an indication of segment growth prospects in the chosen planning horizon, or it can be a conglomeration of key elements important to the organization (market strength, opportunity for growth, margin yield opportunity, etc.). This tool takes the user through ways to evaluate the segments for use in prioritizing the importance of various segments to product/service and channel actions. We build on either the Market Segmentation Tool or the Segment Niching Tool by assigning an attractiveness code to the column heading (green, yellow, or red). We then recommend the organization rank order the segments, with the one chosen most attractive positioned on the far left, and those next bests located in decreasing order to the right. We have found the resulting one-page Market Map Tool output extremely helpful in simply conveying what is usually a difficult and very complex picture to explain and communicate.
Strategy Question: How do I assess the “business health” of my products or services?Summary: The Product–Volume–Margin Chart tool is used to construct a picture of the…
Strategy Question: How do I assess the “business health” of my products or services?
Summary: The Product–Volume–Margin Chart tool is used to construct a picture of the “business health” of a product or service. The one-page chart is designed to provide a clear and concise “current state” business profitability picture by casting revenue of key product/service forms in Pareto fashion against a corresponding profit metric for each (we use Gross Margin) plotted in bullet point form. Concurrently the chart structure provides a means for quickly developing a deeper insight to product/service profitability issues that may exist. The PVM analysis is among the most helpful tools in our arsenal, and is one of the first, if not the first tool we use entering a new situation. Many companies we encounter simply have not pulled information together in this way, for a variety of reasons (numbers being held close to the vest, legacy ERP shortcomings, sales reporting buckets being different, etc.) The tool shows the user, especially those who have never done a comparison like this, how to structure the product/service forms, how to choose profit metrics and construct them if necessary.