1. The secrets of a great strategy Rise Above with Reynolds Consulting Membership Program Webinar May 18, 2011
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3. The Enterprise Model (Proprietary) Culture and Leadership The Market Environment Business Processes Human Capital Knowledge/ Information Management Organizational Structure Goals and Measures Strategy Business Capabilities
This chart shows the role that strategy has in the Organization It Is informed by our market environment Drives our business functions Determines our goals and measures In must operate successfully in our culture
Not all unmet needs are opportunities---need to do your homework Accurate information about your market and your customer Trends: what is changing? Does that play to your stengths? Share shifts: where is the growth? Are you strong in that segment? Get specific: segment level analysis—the more granular the more definitive and the more specific you can get --think about growth options—stimulate natural market growth (portfolio momentum), MandA, share growth vs others (need advantage founded on distinctive trait—Dell and distribution, Toyata—lean manufacturing to enter new segments and countries) Technology: Banking –Check 21; remote deposit Package delivery; order tracking
Market orientation is key-explain outside in. See your business through the eyes of your customers These are solutions to customers problems…and created new products or segments Avoid me-tooism. The spiral of competitive one up manship They do it so I must….expensive and creates competition on price (example: Southwest Airlines, Target, Plastic Enterprises choice of dairy, ) You can probably gain temporary advantage but growth is more commonly found in growing adjacencies to core business
According to Jim Collins it is the best returning publicly traded company over the period 1972-2002 No other major airline has brought more value to budget conscious travelers 31 consecutive profitable years and driven a lower fare model industry wide In 60 cities Leads in on time performance and has one of the newest fleets—still innovator PEOPLE GROAN b’c not the target That is why we are looking at SW Air—let me explain the tool: Horizontal axis –from customer eyes (assumes you know your target customers and what they value) Vertical axis—how much emphasis Chart competitors How much do you look just like them---OR do you have a breakthrough value proposition that looks different Generally first time through lines on charts don’t show much divergence—ask yourself what do YOUR target customers want
Jim Collins encouraged us to look at this way….Passion Matters as much as the other two! Because without it we don’t fight as hard for What we want to accomplish. Always bumps in the road—we need to overcome.
So what keeps us thinking in short term increments? Economic pressures--Declining markets; loan availability Time: Irv Hockaday story (over ½ vs 1/3 today) Success/Habit:Most of you likely have businesses in the growth stage of the lifecycle curve in which case success and habit may be good—many of my clients are not so lucky Newspaper publishing Senior care facilities Hallmark greeting cards Resource allocation: moves by inches What else? Fear of Risk
According to HBR article, most strategies only deliver about 63% of their value—the rest is lost. How is it lost?
While these reflect averages and each situation is slightly different --the biggest offender is improper allocation of resources —another trouble spot is poor communication. When plans are approved, if they are not communicated, resources are not aligned and appropriate actions not taken People don’t know what is expected of them, what they are to do differently and so they go back to what they did yesterday If performance isn’t monitored and people not held accountable…well we just rewrite the plan next year!
So what keeps us thinking in short term increments? Economic pressures--Declining markets; loan availability Time: Irv Hockaday story (over ½ vs 1/3 today) Success/Habit:Most of you likely have businesses in the growth stage of the lifecycle curve in which case success and habit may be good—many of my clients are not so lucky Newspaper publishing Senior care facilities Hallmark greeting cards Resource allocation: moves by inches What else? Fear of Risk
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