BB155 p18-19 strategy_
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18 % 0191 461 8000 www.better-business.co.uk Better Business No 155 Business strategy pricing, advertising and PR, as well as the efforts and plans of our competitors. The answer to the question, “How do we see ourselves?” makes a statement about the uniqueness, desirability and competitiveness of our products and services, as well as the efficiency with which we are developing and promoting them. It also helps to define our core competencies, our abilities that are difficult or impossible for others to emulate and that give us an advantage over the competition, and the characteristics that our buying public most appreciate. How do we see the future? We can’t predict the future, but we can imagine it. One way of looking down the road is to ask, “What are the driving forces (technological, business and economic, political, human and social, and environmental) that will shape our industry in the future? What elements move our industry?” Examples of driving forces include new technology, a growing expectation of high levels of customer service, etc. Next, we fit our driving forces into three future scenarios: ‡ A dog-eat-dog environment where competition in our industry will be more fierce than ever; ‡ An industry that is fundamentally changed in some significant way; ‡ An industry that is the same as now, only more dynamic. We need to think about what our organisation would have to look like to compete in each of these three scenarios. What technology would we have to use? What kinds of products and services would we need to provide? What abilities would our personnel need? We should also carry out a thorough SWOT analysis – identify our strengths, E ven though difficult times may lie ahead over the coming year, you can not only survive but thrive if you plan your business strategy carefully. What are the steps involved in developing a comprehensive strategic plan? And once developed, how do you ensure your plan will be put into use and not gather dust on the proverbial shelf? Before undertaking a strategic planning process, you must first understand that unless you involve everyone in the business, the plan won’t work. Your commitment to growth and change breathes life into strategic planning. Without it, planning is empty. For staff to identify with the goals of ownership, they, too, must play their part in helping to develop the strategy. With this in mind, strategic planning involves answering at least four questions. How do customers see us? How do our customers see us, our products and our service? Too often we assume we know what customers want without asking them. Or we depend on our salespeople to tell us. Some owners use surveys to try to understand what their customers are thinking. But the return rates on those surveys tend to be skimpy, and those customers who do return questionnaires rarely reflect the entire range of opinion. Even more problematic is the fact that we often don’t know the views of our lost customers – those who won’t come back to buy, and those desirable customers who have never bought from us in the first place. Therefore, an early step in the planning process involves interviewing a sampling of three critical customer/client groups: current customers, the ones we have lost, and the ones in our target group who have never bought from us. The goal? To find out what they think of our organisation, our products and services, and our competitors in comparison to us. Also, to identify what they will need from us in the future. ‘Most great ‘plans’ are just nice ideas. Calling something a strategic initiative doesn't make it one’ How do we see ourselves? How do we see ourselves and our business environment? This portion of planning comes in two parts: an overview of our firm’s structure and systems, and an analysis of our business and industry, including our competitors. There will always be a discrepancy between how we see ourselves and how others see us, between what we intend and what others infer about our intentions and expectations. In addition, how we think we run our business will differ from how our staff see it. As a result, we need to find out their perceptions and their recommendations for change. We have to ask them in a risk-free environment, while guaranteeing confidentiality. This process of asking employees is an important ingredient to winning their full co-operation with our goals. Without this knowledge, many organisations will stall in their growth. The second part entails looking at our present and future markets, the products and services we provide now and could provide in the future, and the resources (financial, technical, and human) we have available to bring our product and services to market. It also involves examining our methods of distribution, We face uncertain economic times and it’s essential to plan ahead. Colin Thompson looks at how to put together a strategic plan for the future of your business. Time to create a strategy for survival
Transcript of BB155 p18-19 strategy_
18 % 0191 461 8000 www.better-business.co.uk Better Business No 155
� Business strategy
pricing, advertising and PR, as well as theefforts and plans of our competitors.
The answer to the question, “How dowe see ourselves?” makes a statementabout the uniqueness, desirability andcompetitiveness of our products andservices, as well as the efficiency withwhich we are developing and promotingthem. It also helps to define our corecompetencies, our abilities that aredifficult or impossible for others toemulate and that give us an advantageover the competition, and thecharacteristics that our buying public mostappreciate.
How do we see the future? We can’t predict the future, but we canimagine it. One way of looking down theroad is to ask, “What are the drivingforces (technological, business andeconomic, political, human and social, andenvironmental) that will shape ourindustry in the future? What elementsmove our industry?”
Examples of driving forces include newtechnology, a growing expectation of highlevels of customer service, etc.
Next, we fit our driving forces intothree future scenarios: ‡ A dog-eat-dog environment where
competition in our industry will bemore fierce than ever;
‡ An industry that is fundamentallychanged in some significant way;
‡ An industry that is the same as now,only more dynamic.
We need to think about what ourorganisation would have to look like tocompete in each of these three scenarios.What technology would we have to use?What kinds of products and serviceswould we need to provide? What abilitieswould our personnel need?
We should also carry out a thoroughSWOT analysis – identify our strengths,
Even though difficult timesmay lie ahead over thecoming year, you can not
only survive but thrive if youplan your business strategycarefully.
What are the steps involved indeveloping a comprehensive strategicplan? And once developed, how do youensure your plan will be put into use andnot gather dust on the proverbial shelf ?
Before undertaking a strategic planningprocess, you must first understand thatunless you involve everyone in thebusiness, the plan won’t work.
Your commitment to growth andchange breathes life into strategic planning.Without it, planning is empty. For staff toidentify with the goals of ownership, they,too, must play their part in helping todevelop the strategy.
With this in mind, strategic planninginvolves answering at least four questions.
How do customers see us? How do our customers see us, ourproducts and our service? Too often weassume we know what customers wantwithout asking them. Or we depend onour salespeople to tell us. Some ownersuse surveys to try to understand whattheir customers are thinking. But thereturn rates on those surveys tend to beskimpy, and those customers who doreturn questionnaires rarely reflect theentire range of opinion.
Even more problematic is the fact thatwe often don’t know the views of our lostcustomers – those who won’t come backto buy, and those desirable customerswho have never bought from us in thefirst place. Therefore, an early step in theplanning process involves interviewing asampling of three critical customer/clientgroups: current customers, the ones wehave lost, and the ones in our targetgroup who have never bought from us.
The goal? To find out what they thinkof our organisation, our products andservices, and our competitors incomparison to us. Also, to identify whatthey will need from us in the future.
‘Most great ‘plans’are just nice ideas.Calling something astrategic initiativedoesn't make itone’
How do we see ourselves?How do we see ourselves and ourbusiness environment? This portion ofplanning comes in two parts: an overviewof our firm’s structure and systems, andan analysis of our business and industry,including our competitors.
There will always be a discrepancybetween how we see ourselves and howothers see us, between what we intendand what others infer about ourintentions and expectations. In addition,how we think we run our business willdiffer from how our staff see it.
As a result, we need to find out theirperceptions and their recommendationsfor change. We have to ask them in arisk-free environment, while guaranteeingconfidentiality. This process of askingemployees is an important ingredient towinning their full co-operation with ourgoals. Without this knowledge, manyorganisations will stall in their growth.
The second part entails looking at ourpresent and future markets, the productsand services we provide now and couldprovide in the future, and the resources(financial, technical, and human) we haveavailable to bring our product andservices to market. It also involvesexamining our methods of distribution,
We face uncertain economic times and it’sessential to plan ahead. Colin Thompson looksat how to put together a strategic plan for thefuture of your business.
Time to create astrategy for survival
Better Business No 155 % 0191 461 8000 www.better-business.co.uk 19
�Business strategy
InfobankColin Thompson has over 25years’ experience in business
management, including businessturnarounds and takeovers. Heis also an international speaker
and university professor and haswritten numerous researchreports, articles and books,
which are available from his website.
%0121 244 1802 [email protected]
weaknesses, opportunities and threats.The essence of the SWOT analysis is todiscover what we do well, how we couldimprove, whether we are making themost of the opportunities around us, andwhether there are any changes in themarket that may require correspondingchanges in our business.
This analysis can also show potentialinvestors that all options open to, oraffecting, a business at a given time, havebeen considered.
What are we going to do?We now have three sets of data: howour customers perceive us, how ourorganisation is actually working and thecompetencies we have in place, and whatwe think our business needs to look likein the future to remain competitive. Whatdo we do with it all?
By now it should be clear that we can’tplan strategy by ourselves. Not only is it aheavy burden for one or two people, butimplementation is problematic at best ifthe people who have to carry it out arenot included in the process from thebeginning.
For these reasons, planning requiresdifferent meetings between differentgroups of people at different times.Besides our staff, this could include get-togethers with suppliers and distributors,customer focus groups, and other localbusinesses to see if there areopportunities for strategic alliances.
A staff meeting, preferably away fromthe office, to lay out the informationgathered so far would be the next step.The task will be to lay out what the
business should look like in five years’time, given the information in hand.
This should include the size of theorganisation, the products and services,the various markets, delivery processes,etc. Then the group needs to define whatthe firm would need to look like in two-and-a-half years to serve as a platform forthe five-year plan.
Most of the time is spent planning theupcoming year of business, keeping inmind the need to create a platform forthe two-and-a-half year vision as well asthe constraints and opportunities ofwhere the business is now. This planshould be specific in terms of targetmarkets, financial goals, specific actionplans to reach these goals, and theresources that will be needed.
So far, so good, but we’re not doneyet. The strategy has to be cascadeddown to an individual level until everyoneis going in the same direction. This step iscrucial to ensure that the strategic planwill actually take hold and propel theventure forward.
Involving all your staff in the processwill dramatically engage their loyalty andboost productivity.
Plan carefullyIt’s important your strategic plan is justthat – a plan. Most great ‘plans’ are justnice, high-level ideas. Calling something astrategic initiative doesn’t make it one.
It seems that many of our strategicplanning sessions stop half-way, beforethere is a plan. Very little planning, if any,goes into the implementation process.Frequently the person with the great idea
is not an execution giant. A strategydocument almost never actually stateswhat is to be done from day to day orlays down a way for employees to tracktheir actual progress. Most strategies stopat the conceptual stage rather thanactually give very specific tasks to bedone.
Don’t assume that things will runthemselves after we get them started,which is about as likely as being hit bylightning while being eaten by a shark!Instead, I suggest that implementingstrategic plans is more like keeping platesspinning on top of pointed sticks.
If we don’t put forth a regular effort tokeep them spinning, the plates will falldown and the sticks will end up inuncomfortable places.
Strategic planning may sound onerous,but it’s not if we keep it constantly underreview. With a good plan and the rightattitude, we will not only survive anystorms that lie ahead, but prosper v
