Tag Archives: business strategy

Are You Preventing Your Company from Growing? How You and Your Leadership Team Could Be Causing Bottlenecks

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strategic planning graphic2By Denise Harrison

One CEO complained that his financial person was preventing his company from growing. How was that possible? Over the years when issues arose, the financial person would develop a system of checks and balances that would prevent the issue from occurring again. While conceptually it is good to have policies and procedure to prevent issues from arising, continuously adding more and more can simply become cumbersome and impede forward motion. The CEO knew the solution to cut through the red tape was to automate the check and balance systems and to delegate the responsibility so that more than one person was responsible. The financial person had trouble giving up the responsibility and did not want to change. Eventually the CEO hired a coach to help the financial person accept and embrace the required changes.

What about us? What can we learn?

While this looks like an obvious problem, are we guilty of similar behavior? Do we create bottlenecks to our organization’s growth and success?

• Are we stuck doing things the way we have always done them, or do we continuously look for better ways? Do we listen to others’ solutions?
• Do we hold on to responsibility, stalling the growth of those who could use the challenges for professional development?
• Have we really assessed the risk and put the right amount of effort in prevention – rather than too much effort, given the risk associated with a negative outcome?
• Are we tied up in the day-to-day rather than focusing on the big areas that will really position the company for future success?

Suggested Course of Action

If you find that you are constantly being pulled into the day-to-day firefighting or that you are the rate-determining step for moving things forward, you need to reassess: what is the best use of your time? Then develop a list of:

1. What will you start doing? (E.g. more time on long-term strategic projects.)
2. What will you stop doing? (E.g., resolving minor customer service issues, rather than allowing your customer service representatives to make decisions up to a certain amount.)
3. What will you continue doing? (E.g. continue speaking at industry events to raise your company’s visibility.)

A Second Step

Have your direct reports develop a similar list. Will they be able to handle (start) some of the tasks you want to stop doing? These tasks should appear on their “start” list. Are there “stop” tasks being delegated to their direct reports?

Developing a START/STOP/CONTINUE LIST will cause you to reflect on how you spend your time and how you should be spending your time. By comparing your list with others, you will be able to have constructive dialogue on tasks that need to be delegated and what skills need to be enhanced in order to do these well. These discussions will help the senior management team cease to be an impediment to growth, but rather, free up their time to focus on the strategic projects, while enhancing middle management’s ability to participate and develop the skills needed to move into leadership positions.

To contact Denise Harrison:  harrison@thestratplan.com  or call 910-763-5194.

(c)Spex, Inc. 2016 Reprint permission granted with full attribution.

Strategic Planning: What Did You Learn? How One Company Went Off Course

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“Follow the plan; don’t get distracted by seemingly large opportunities,” replied one CEO when asked the question: What was one key learning from following a systematic approach to strategic planning. How did he learn this? The hard way, of course.

For years, this CEO and his team used a systematic approach to strategic planning.  That approach uses data and information to help teams focus on the areas that will optimize their future results.  In his case, we identified small-medium sized organizations as one target segment.  We also identified that the larger organizations in this industry had requirements that were beyond our core capabilities.  By focusing our efforts on the smaller organizations we would match our core capabilities with the requirements of this business segments.  This strategy proved to be successful.

 What happened subsequently?

Well, a Board member had connections to a large prestigious organization and wanted the CEO’s company to become its supplier.  The opportunity for revenue growth was significant; the Board member pushed and this CEO’s company took on the large organization as a customer

 Outcome

Resources were pulled from all areas of the company to meet this large organization’s requirements – pulled away from serving the smaller targeted organizations.  The large organization may have increased top line growth, but it had a significantly negative impact on the bottom line and hurt relationships with the customers that we had determined were the best fit with our core capabilities.

Lessons Learned

It is important to stick with your strategy unless something has changed in the business environment and/or your core capabilities.

 Can You Make Exceptions?

Of course, but ensure that your exception make sense.  For instance, in this example the following question should have been asked:

  •  Do the requirements of this large prestigious organization map to what the requirements of large organization or small-medium sized organizations?

If the answer is the requirements look like the large segment, then we should say no. If the answer is the requirements look like the ones we usually find in our small-medium sized organizations and map with our core capabilities, then this exception is acceptable.

Sticking to your strategy may require discipline in the face of a large revenue opportunity. Use your strategy to determine its fit with your organization’s capabilities.  Once you have a strategy, use it to assess a specific situation to see if an exception is warranted.

For information on strategy development please contact Denise Harrison at: 910-763-5194 or harrison@thestratplan.com.

©2015 Spex, Inc., Wilmington, NC 28401

Reprint permission granted, with attribution.

Overcoming Strategic Gaps–an Optics Design Case

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Optics Photo 2015By Denise Harrison, President, Strategic Planning & Execution, Spex, Inc.

 Would integrated circuits be constrained by what could physically fit on a chip? Heat and size issues were becoming constraints to what was possible with traditional technology. Synopsys, a world leader in software and IP for semiconductor design and verification manufacturing, saw that its customers’ applications required more and more functionality in ever-decreasing size and understood that traditional technology would no longer fit the bill. They observed that recent breakthroughs in the optics world would enable more functionality on chips, using light and lasers rather than traditional wiring.

But how could Synopsys develop a core competency in this area? The team at Synopsys knew there was significant “know-how” being developed in this area that would be important to providing the solutions for which their customers were looking. In order to find the leading scientists in optics they searched patents and found that one name appeared again and again, Optical Research Associates. The folks at Optical Research not only understood the technology, but were continuing to develop breakthroughs in this area of optics design and engineering. Synopsys saw that a partnership with Optical Research Associates would be beneficial to their future success and embarked on a successful acquisition campaign. Now Optical Research (renamed Synopsys Optical Solutions) is a business unit within Synopsys and this important technology is enabling Synopsys to meet its customers’ goal of developing continually smaller chips while increasing the functionality.

Lessons Learned:

1. Have a clear vision of where you want to go and what your company needs to look like in order to be successful in the future.
2. Develop the list of characteristics that will be needed to achieve that future vision.
3. Understand which of these characteristics you have and which you need to develop. Don’t pretend you are better than you are with regard to the characteristics required for success.
4. Decide whether to make or buy the skills required. Developing the skills will take time, but acquisitions often do not deliver as expected.
5. Develop a plan to acquire/develop the skills.
6. Monitor to make sure you stay on track.

Understanding where you want to go and what gaps you have to fill to get there are important parts of strategic planning. Without a clear vision of the future, companies often flounder and try to go after too many choices. With a clear vision of the future, your team will understand the 2-3 important gaps that you need to work on in order reach the desired end-state. Trying to be everything to everybody will not allow you to truly be successful in the few areas that will make a difference.

If you would like to discuss ways to enhance your strategic planning efforts please call: Denise Harrison, 910-763-5194; harrison@thestratplan

©Spex, Inc. Wilimington, NC, 2015

The Importance of Scenarios when Dealing with Uncertainty

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Denise Harrison                                                                                                                       President, Strategic Planning and Execution, Spex, Inc. 

How can we better deal with uncertainty when we develop our strategic plan? Many strategic planning teams struggle with this issue. While it is important to understand what you know as facts and what your assumptions for the future are, I have found that some good scenario planning helps a team prepare for a wider range of possibilities that might occur in the future. By looking at different scenarios, the team can assess what will work in each scenario and then select the approach that will benefit the company in the most likely scenario, but still balance that approach by not closing out options that will work if another scenario unfolds.

Generating Different Scenarios

Some teams generate a probable scenario and then move to generate an upside and downside. For example, the probable scenario is that we achieve 10% growth and the upside is 12.5% and downside in 8%. While this works, I find that high performing teams that discuss actual events/trends and then develop scenarios corresponding to possible outcomes, is a better way of generating scenarios. Some examples of trends and events include:

  1. Product launch is delayed by 12 months.
  2. Oil prices plummet and stay down longer than our probable scenario (this could be good or bad depending on what your company does and who your customers are).
  3. Acquisition has unexpected fall-out and customers leave and go to competitors.
  4. Customers’ preferences change faster than we anticipate (Blackberry).

You should have your team members come up with ideas for different scenarios. Generate what these environments will look like out 5-10 years. Ask the question: What will we need to do to be successful if this is the competitive landscape? You will notice before you start working, that several of the outcomes will have similar results. Select scenarios that will generate different actions.

Once you have generated different “success” strategies, then evaluate which scenario is most probable, and then look to see what you can do to accommodate other “success” strategies so that you maintain your flexibility moving forward.   While you may not be able to keep all options open, you may be able to keep some avenues open until time passes and you have a better view of what the future has in store for your company.

Another benefit of this exercise is it allows the team to think more broadly and be more aware of the external factors that impact your business. This will help the team deal with the changes that will inevitably happen during the planning horizon. As you start to see movement that makes another scenario unfold, bring the team back together and recast your strategy. If you anticipate this movement faster than your competition, it will help position your company to gain market share or weather an industry downturn better than your competitors.

If you are interested in discussion more about how to generate scenarios that will enhance your team’s flexibility please give me a call at: 910-763-5194 or email me at harrison@thestratplan.com.

(c) 2015 Spex, Inc. Strategic Planning and Execution

Listening: An Important Skill for Successful Strategic Planning

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by Denise Harrison, President, Strategic Planning and Execution, Spex, Inc.

Recently I spoke with a CEO and found that the most important thing that his team learned during strategic planning was the importance of listening. This was an unusual answer to my question asking how his team had benefitted from the strategic planning process, so I asked him to explain his answer. He said that his company was full of “idea” people who spent so much time talking about their ideas that they failed to listen to others. Without solving this problem, his company would have been stuck in the mud and perhaps gone out of business because nothing moved forward – each person was his/her own island.

Listening: An important skill for strategic planning

One of the benefits of presenting research on key topics during strategic planning is to ensure that all of the team members have a shared base of knowledge from which to make decisions. By listening to all of the research and ideas, the team can have constructive discussion concerning what is the best course and direction.   The ability to listen allows each team member to thoughtfully consider what the company should say “yes” to and, more importantly, what it should say “no” to. Important facets of listening include:

  1.  Allowing all team members to develop a shared base of knowledge, broadening their understanding of the business and the possible choices the company can make.
  2. Allowing for better discussions and the development of a broader range of solutions, due to the shared base of knowledge.
  3. Allowing each team member to better understand the impact of a variety of different forces on a particular idea, as each idea is looked at from different points of view (financial, customer, product development, production)
  4. Allowing the CEO to sit back and watch the team develop their strategic thinking skills instead of always being the one with the answer. Strategic thinking is like a muscle – the muscle develops with use, but atrophies if it is unused.
  5. Allowing the team to hear what customers have to say, rather than just presenting solutions. This listening skill can enable the company to develop a better understanding of their customers’ businesses enabling better future solutions.

Considerations for your strategic planning process

As you go through your next strategic planning process, remember the importance of listening. Remind team members that it is not only important to have good ideas, but also important to listen to other’s thoughts. It is the team’s combined thinking that generates a great strategic plan.

Interested in how you can get your strategic planning team to listen better and to capitalize on  team-building benefits of strategic planning? Please contact me at harrison@thestratplan.com .

Strategic Planning: Are Your Decisions Based on Facts or Opinions?

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President and CEO, Spex, Inc

 By Denise Harrison, Strategic Planning and Execution

Many people return from a strategic planning retreat frustrated, often asking: Were we really concentrating on what is important or were we focusing on what was “top of mind”? Did we make the right decisions or were we swayed by the most persuasive person?

A Better Way to Make Decisions: Thoughtful Consideration Based on Research

One way to prevent making decisions based on opinions and “top of mind” thinking would be to split your strategic planning process into three steps:

  1. Situation Analysis and Research Identification
  2. Strategic Formulation (based on the above research)
  3. Implementation – Turning Strategy into Action

Critically, Step 1 starts your strategic planning process off on solid footing, focusing on the current situation and identifying the important areas of research. These should include:

  • Current business segments: Are we positioned to meet their future needs? How are we differentiated?
  • Competition: What are they up to? How are they positioned in the market?
  • Other considerations that can change the competitive landscape: technology, suppliers, economy and regulations?
  • Opportunities: What are they? What is each one’s potential? What is the downside risk?

Taking time to research these topics and any others that your team deems worthy of research before the strategy formulation session allows for better decisions in which all team members are equipped to participate . It will enable your team to develop a strategy that will really differentiate you from the competition and set you on the path for future success.

What else?

Another important component of the research phase is to have the research collected in a consistent format. Having a template for the business segment, competitor and opportunity research is particularly important. This consistent format allows you to compare each topic given the same information rather than miscellaneous bits and pieces pulled together to present the researcher’s thoughts in a favorable light. This consistency allows for rigorous discussion of where to spend your company’s resources in order to achieve the best possible benefit.

If you would like to know how to make your strategic planning sessions more fact-based please contact me at harrison@thestratplan.com.

(c) Spex, Inc. Wilmington, NC, 2015.  Reprint permission granted with attribution.

Innovation: Blue Sky vs. Short Term ROI

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What is the Right Trade-Off for Your Company?
Denise Harrison, President & CEO, Spex, Inc.

How much time should your company spend on “blue sky” opportunities and how much should you invest in opportunities with a short-term ROI? Many teams face this question as they select the projects they want to focus on for the next several years. Often a short-term results focus causes the “blue sky” opportunities to be put on the back burner. This may work in the short-term – but will it position your firm for long-term success?

In 1996, Apple faced a devastating loss of $816 million – did they pull back and focus on the short-term? No, in 1997 they launched an initiative that was to transform how people bought, sold and listened to music. There was no clear path for how this would happen, no easy technology solutions, no short-term ROI – just a lot of questions and a vision.  Even with poor financial results, Apple invested in a vision and transformed the way we buy and listen to music with the iPod ™ and iTunes ™.

Strategic planning teams are often confronted with various and often competing investment decisions as they select the “few” things that need to move forward. It is often easier to select product enhancements and product line extensions with low risk and short-term payoff, rather than investing in the higher risk “blue sky” alternative. The “blue sky” alternative can require significant investment in both time and money and often has a lower probability of success – but if successful, it is often transformational for both the company and the industry. Breakthrough innovation will give your company a sustainable competitive advantage that will give a significant boost to your bottom line – but do you and your investors have the patience?

What should you do?

There is no one simple answer that fits all companies, but here are some ways to think through the choices that your company faces. Yes, it is important to select the few projects that need to move forward; simply adding a few “blue sky” projects to an already long list of “to dos” is a recipe for disaster. By choosing too many projects you will simply lower the probability of success for all projects. Instead, you should look at your choices as a portfolio. Much like investing, you will want short-term, medium term and long-term returns.

  • Short-term: often product line extensions and enhanced features are the quick hits. These have clearly definable direction and lower risk and offer short-term return.
  • Medium-term: often new platforms can offer significantly enhanced performance/lower cost/greater ease of use. These typically require higher investment, more time and have higher risk because the outcome is less certain – but the benefit of a new platform that offers significantly enhanced capabilities is typically rewarded in the marketplace.
  • Long-term: the “blue sky” innovation targeting a problem with no clear solution, but if one is found will allow your company to leapfrog the competition.

What mix is right for your company? Well, again there is no easy answer – some companies, particularly technology companies, must invest heavily in the “blue sky”. Look what has happened to RIM, with its Blackberry eclipsed by Apple’s iPhone. RIM once provided the new platform that leapfrogged its competitors, but that advantage did not last long. Other industries may select a different mix of short/medium/long-term projects; but remember even an industry with a slower rate of change, can still be transformed. Look how Amazon changed the way we buy and read books with its Kindle. Yes, Barnes & Noble has copied the technology and was first to come out with a color version – but Borders, unable to keep up, is out of business.

How do you ensure that investments are made for the long-term “blue sky” projects?

Many companies take their long-term projects and earmark a certain percentage of their development budget to be spent on “blue sky” projects. This way the projects are not “voted off the island” because their returns are far into the future and uncertain at best. But once you set the money aside, how do you decide what projects to fund? Some companies look at a technology and think of ways to commercialize it – but this often results in a solution looking for a problem. A better way to manage the long-term portfolio is to define the problem(s) to be solved. Don’t provide the solution – this will stifle the creativity. Instead nurture the ideas and let them grow. “The fastest way to kill an idea is to criticize it,” says Scott Crump, Chairman of Stratasys. Stratasys is a market leader in the world in 3D printing – taking CAD drawings and turning them into functional prototypes, assembly tools (jigs, fixtures, patterns) and production parts, enabling their customers to accelerate their time-to-market. Crump credits Stratasys’ investment in long-term projects for developing the transformational platforms/technology that continue to position Stratasys as a technology leader in this market. These projects reaped rewards after traveling through a maze of twists, turns and dead-ends – and finally victory.

For short and mid-term projects, quantifiable selection based on risk and reward makes sense. For longer term “blue sky” projects, you should consider putting a certain amount of money aside to work on clearly defined problems. Finding these solutions will allow you to leapfrog your competition. But keep in mind the journey will not be straight and will require perseverance.

How does your company balance long-term opportunities with short-term quick hits?

For more information on innovation please read: Innovation: Where to Look for It. If you are looking for ways to add more innovation to your strategic planning process please contact me at harrison@thestratplan.com

© Copyright 2015 by Spex, Inc. Wilmington, NC — Reprint permission granted with full attribution.