The One Year, Thirty Minute Challenge :: Week Nine :: Strategic Planning :: Staying Even Getting Ahead
This week, The One Year, Thirty Minute Challenge visits my favorite topic – strategic planning. Unfortunately, many owners and managers forego strategic planning because they believe their business isn’t big enough, they don’t know how or it never bubbles to the top of their to-do list.
I’m afraid strategic planning is bit misunderstood (like the fact that tomatoes are a fruit). It’s not mystical and it’s not just for big, publicly traded corporations. It’s for every organization, public or private, big or small, for-profit or not-for-profit. At its core, strategic planning is –
Truthful evaluation, thoughtful options and deliberate actions to move your organization from the current state to the desired state.
We’ll revisit strategic planning a few times during The One Year, Thirty Minute Challenge, providing exercises that will make you think about where you are, where you’d like to be and how you’re going to get from the former to the latter. In each exercise, we’ll keep the scope very narrow, singling out just a single topic that’s usually part of a more overarching strategic planning process.
Let’s jump in.
Organizations operate in rapidly changing environments. Today’s success doesn’t guarantee tomorrow’s success. An organization with expert capabilities today can come up short tomorrow.
Look at the matrix below.
Let’s walk through the four quadrants, starting with the bottom left. Your organization has a set of current capabilities. With those capabilities, you access a certain set of opportunities. That’s your business as it today.
Let’s move to the bottom right. Since the environment in which we work changes rapidly, in the future, you’ll need to add capabilities to access the very same opportunities. Let me quickly illustrate. It wasn’t that many years ago that all you needed to work on a car was a timing light, a dwell meter and a toolbox full of wrenches and screwdrivers. Now what to do you need to work on a car? You need sophisticated diagnostic equipment that plugs into the car’s onboard computer so the car can tell you what’s wrong with itself. Then you need the toolbox full of wrenches and screwdrivers. So, to deliver the same result – a car that runs correctly – you need new capabilities (and in this case new equipment). Just staying even requires new resources and skills.
Let’s move to the top left. There might be the ability to access new opportunities using your existing capabilities or resources. Many years ago, when I worked for The Kansas City Star newspaper, we capitalized on an existing resource by combing through the thousands of pictures in our archives that had been collected over several decades. With them, we produced and sold beautiful coffee table books highlighting things as diverse as the history of the city and a collection of random, unique doors in the city. You might have a similar ability.
Finally, there’s the upper right box – greenfield opportunities. What new opportunities could you access if you added new capabilities? Think back a few years to Microsoft’s entry into gaming. Up until that time they developed software – operating systems, software development tools and office productivity tools. Adding new capabilities (gaming hardware and gaming software development), they were able to access new opportunities (a new gaming platform – Xbox with a killer complimentary product – Halo).
Let’s walk through the steps of this week’s exercise.
What will it take to stay even – to continue delivering the products or services you deliver now to the same set of customers?
- What new knowledge or skills will your existing workforce need to add?
- What new employees with what new skills or abilities will you need to hire?
- What equipment will you need to upgrade or acquire?
- What changes to products, services or customer experience will existing customers expect just to feel like the value proposition is the same as it has been historically?
- Are you at a point where “staying even” means abandoning a current product and adopting a successor product? Think VCR to DVD or video rental to streaming.
- What services or features have been introduced into your industry that have now become “baseline”? The absence of them seems like failure, but the presence of them earns you no brownie points – think WiFi at a hotel or online services at a bank. These must be present as well.
- What new distribution channels or communication channels must be added? Think social media interaction and digital ordering and delivery of products and documentation.
What else can you do with existing capabilities and resources?
- Can you expand to previously untapped geographies?
- Can you access previously untapped markets? For example, producing a consumer version of an existing industrial product.
- Can you deliver a new service with existing capabilities or a new product with existing resources?
- If you have excess capacity, can you act as a subcontractor for another company in the same industry? It could even be a competitor.
- Can you leverage your capabilities to manage a function for another company? If your bandwidth is wide enough and your expertise is deep enough, you could establish a revenue-generating business unit that provides that service. It could be a great way to diversify and provide growth opportunities for talented staff members. And that unit could provide the service back to your parent company.
What greenfield opportunities could you access if you added new capabilities?
- Are there adjacent areas to your existing business? For example, adding commercial roofing to residential roofing. You can capitalize on an existing supplier network and can most likely leverage some of your existing expertise.
- If your company has its own version of 20% time, can you bankroll the work of an existing employee, spin off their creation and become an active shareholder who provides not only capital but coaching?
- Can you acquire another company with complimentary product or service offerings? You can merge and leverage already existing administrative resources or leave it as a wholly owned subsidiary.
- Can you engineer a strategic partnership with a vendor or a trusted partner in an adjacent industry? Together, can you create a product or service that neither one of you could create on your own?
Gather some trusted lieutenants and maybe an outsider or two (your CPA or a consultant) and work through these bullet points. Keep a list of the tasks or ideas that bubble up.
Pay the most immediate attention to the “staying even” list. Begin assembling human resources and reworking processes, products and services. Check competitors, listen to customers, use data and marry all of those with what you know about moving the needle in your industry. Sometimes customers don’t know what they want next until they see it.
Engage your team in identifying promising new opportunities that are accessible with existing capabilities. Craft plans to evaluate the opportunities, then narrow the field, select and begin work on the options with the best ROI.
Finally, challenge your team to identify greenfield opportunities. Pursue those with the biggest potential upside.