Abstract
The strategic planning process can take many paths. It may require months of preparatory analysis or simply using the collective knowledge of the management team. Either method requires the company to make decisions about its future course. In this document, we will show how to use strategic filters as a way to filter data and make the best decisions. We will then focus these decisions on a few Extremely Important Goals (WIGs) to be funded and completed.
Strategic Planning: Strategic Filters and Very Important Objectives
- Driving Force Filter: The Competitive Advantage You Can Prove
- popup trend filter
- customer filter
- tremendously important goals
- Strategic map
Driving force filter
The driving force is the company’s key differentiator or competitive advantage. The most important element of the driving force is the test. If you want your employees and customers to believe it, you need to find the data to back up your claim.
Here is a list of things that are NOT acceptable examples of driving force:
- informed employees
- Customer service
- Quality
- Trust
- Sensitivity
- Reputation
- Innovation
- Etc.
The reason these are not good examples is that any company can claim this and everyone says so. If everyone says it, then no one will believe it.
Here are some driving force examples that the market may believe are real differentiators:
- Innovation / Experience – We invented the surgical adhesive to replace sutures. The use of surgical adhesive reduces surgical time by 20 – 90% with less risk of infection.
- Speed - We will produce any custom product in 2 weeks or less versus our competitors who are 6 weeks or more.
- Rugged – We produce the toughest portable power generation equipment for military use. Our mean time between failures is over 10,000 hours.
- Customer Service/Training: Last year we trained 1,580 customer mechanics in service/repair techniques and have two dedicated mechanics assisting customer mechanics over the phone.
- Product Leadership: We are the only consulting firm in the Midwest with experience applying quantitative process improvement tools to optimize sales and marketing; reduce costs and increase sales.
Once you know and agree with the driving force of your business, you can use it to understand:
- what did you do to be the best
- The core competencies that support your Driving Force
- how you stay better
popup trend filter
Emerging trends are external forces that you cannot control that can affect your business. These may include:
- Economic/currency trends
- Political/regulatory trends
- Social/demographic trends
- Market conditions
- Customer attributes/habits
- Competitor profiles/mix
- Technology evolution
- manufacturing capabilities
- Product design/content
- Sales and Marketing Methods
- Distribution methods/systems
- Resources – natural/human/financial
We want these to be a strategic filter because they may require you to change your business model beyond internal competencies and customer requirements. They will impact how you:
- Sell
- distributes
- buys
- acquisition plan
- Develop new products and services
We have lived during a time of great external disturbance. Books and newspapers are a great example. Amazon changed book buying by making almost all published books available, either new through its warehouses or used through used book partners. Instead of just buying what’s in the bookstore, you can buy what you want, get recommendations for new books based on what you’ve bought before, and read reviews from other consumers before you buy.
Amazon then switched again by offering the Kindle e-reader linked to its online bookstore. Now you can have thousands of books 1 minute after shopping delivered wirelessly over cellular networks. Newspapers and magazines are delivered to your Kindle every night at 3:00 am No ink, no printing, no late or missing delivery service, no hassle when you travel. Instead, you get perfect service.
Now we have Apple’s iPad, which promises to incorporate graphics and video into books, magazines, and newspapers. This will incorporate the electronic delivery features of the Kindle and make the reading experience completely different.
Printers and publishers needed to see these trends coming in order to survive and prosper. These developments can shut down big companies and turn others into clear winners.
Other trends to note are environmental/clean technologies, monetary/interest rates, and global markets/supply chains.
customer filter
Understanding your customers completes the filter-puzzle and will allow you to make the best decisions in your strategic plan. Significant time is spent understanding who your best customers are. We recommend a quantitative approach of choosing the key measurable characteristics that are important to your organization and then using Pareto analysis to rank your customers from best to worst based on these measures.
Once you know who your best customers are, you can determine the characteristics they share. When communicating through the sales force or directly with these customers, you need to ask two critical questions:
- Why do they buy from you?
- What pain do they have?
At the end of the Client Filter session you will know:
- Who are your best customers?
- The characteristics of the best (what sets them apart from everyone else)
- Why customers buy from you
- What pain your customers are having that you might be able to fix (with a special emphasis on your best customers)
Tremendously Important Goals (WIG)
With all the preparatory work complete, you are now ready to create your strategic plan. The best companies are always focused on achieving a few very important goals. Everyone in your organization is working on the important things every day. Serve customers, deliver product, train employees, shop, etc. they are all important and need to happen every day, week and month. Strategic Planning looks towards a longer time horizon. So we need to go beyond the important stuff and focus on a few (3 or less) tremendously important Goals that will take more time but will drive breakthrough results for your organization.
This approach gives the plan a sense of reality. Many organizations try to do too many things and end up not doing most or doing an average job. You want to be great!
These MCIs may include:
- Acquisitions or diversions
- Large capital expenditures
- product development
- geographic expansions
- Completely new companies or brands
- Marketing campaings
- Globalize the supply chain
- Internal process improvement efforts (Lean Six Sigma)
- Implementation of new information technology systems.
- And a host of other ideas
Strategic map
The last step is to align the organization with the tremendously important Goals. A Strategy Map is a simple tool to visually show how each department will support each MCI.
To see an example of a strategy map, go to http://supplyvelocity.com/whitepapers.asp.
The example you’ll see is a medical technology company whose tremendously important Goals were to dramatically accelerate new product development. The map shows how Marketing, Research, Development/Engineering and Manufacturing support this strategy.