Strategic planning happens each year in the early fall. Whether you are a large multi-billion-dollar corporation or a small business, the importance of doing the strategic planning process correctly is crucial to your success. I have helped dozens of companies structure their strategic planning process over the years, and some do it well (meaning they outperform the industry when the plan is executed), while others go through the motions and end up with little to act upon to create business momentum.
For those who struggle in the process, a few things are pretty common.
First is what I call the phantom end-user syndrome. When you don’t deeply know your customer or the value chain, your strategy is formed using merely internally focused data points. Some leaders create a strategy with limited end-user data and more of an audacious goal (“if we could only get 25% of this market, we would fill up our plant”). Some focus on leveraging only what their plants can make easily (“this is another product that fits well on our manufacturing line”), an “if we make it, they will come” mentality.
But the issue for these company-centric approaches is that they don’t start the process with understanding end users’ needs. We need to know what their unfulfilled needs are, why they’d even want the product, and what they’d be willing to pay for the value (if there is any) provided. Just because your existing manufacturing assets can make a product doesn’t mean it will sell. You cannot build a strategy on a phantom end user. Before you put any slides together, do the hard work of knowing your customer inside and out, as well as uncovering important trends that could impact your industry, your customers or your product category.
The second is that it’s not about the presentation. Some companies fixate on those damn PowerPoint slides, how they look, number of slides (always way too many), and spending most of their time parsing each statement to make sure each word is perfect. They get lost in words versus true strategy. Perfect in my mind is demonstrating confidence and clarity. If you can’t articulate your story in 10 slides or less, you clearly don’t have a defined strategy. Be concise and make it simple, for the leadership and for your team that you will eventually share it with. For our clients, we actually help them create a “strategy on a page” (yes, one page) that the whole organization can align on and execute from. It becomes their map for their strategic game plan and a filter for decision-making.
Next, the past no longer defines the future. Those that don’t look forward get left in the past. Ten years ago, we thought things were dramatically changing—I like to say we were in the dog years, where for every 1 year we saw 7 years’ worth of change. In today’s world, we are now in mouse years, where every year is like 30 years of change. If you aren’t looking at your strategy that way, you will ride with the market, at best growing or declining with whatever the market gives you and underperforming your competition.
Lastly, pressure test your strategy. From the beginning, each strategy team should have at least one unconventional person who will stretch the team, make them uncomfortable and push them beyond what they know to be true or comfortable. They will keep looking at what’s possible, and also keep asking why we think this is a winning strategy—for the end user, the channel and the manufacturer.
One way to ensure you are creating a differentiated and relevant strategy is to make sure you can answer with confidence the three following questions.
This is a critical question you should ask yourself to start your strategic planning process, and use as a filter to identify the investments you will make in human capital, capital expenditures and selling, general and administrative expenses. And a hint: your answer shouldn’t be “We’re in the business of manufacturing _____________”. Manufacturing is merely one of the means of fulfilling a need for the market.
Take Kodak for example. When they were doing strategic planning in the 1990s, the way they answered this question was “We are in the film making business.” Yes, they had the majority share of how “they” defined the market. But they failed to restate their purpose and failed to see the technology and consumer trends. Instead, Kodak should have answered this question thinking bigger and more purposefully: “We are in the business of helping people capture memories.”
With this question, you need to stay first at a high level, versus going right to your existing products. You must uncover how the different audiences you serve do business or live their lives. What are their pain points, how do they define success? Truly create a deep understanding of their journey (we call it a JourneyPath™) and understand that not all customers are the same. Segment them into personas so your sales, marketing, and innovation teams know who to focus on and what their specific needs are.
If you start with your existing products, all your answers will only include the current stuff you make on your manufacturing line. When you start with customer needs in mind, and then add in forecasted trends, you may find that your existing products no longer meet the future needs. This may lead to an acquisition or using your capex investments in a different way.
This is a great question Dave Brown, former CEO at Owens Corning during my tenure there, would ask during every strategic planning presentation. What he was getting at is, are we just doing the same exact thing as our competitors? Are we making the same or very similar products? If so, then our only purpose is providing capacity for commodity products in the market. Others can invest in more capacity. If we have no clear reason to exist (i.e., if we haven’t truly defined our purpose), then it becomes a market share game and most customers will make their decision based upon the lowest common denominator: price.
This year don’t just go through the motions by dusting off last year’s PowerPoint deck and updating some numbers. Be more thoughtful in how you define your customer’s needs and your reason for being. You are not a manufacturer; you are the provider of something much more. In the end, you will always differentiate yourself when your planning process is more “people purposed” versus merely product purposed.
Constant evolution isn’t just a luxury in brand management, it’s a requirement; your brand must align with your target demographic’s changing generations, not vice versa. Here, Interrupt’s Executive Creative Director and Brand Strategist Anita Holman explains how brands can evolve their strategy to capture new consumers entering their target demographic and avoid being overtaken by more agile marketers.
If you’re a manufacturer of American-made goods, you already know the value of the “Made in America” claim has ebbed and flowed over the past few decades. Recently, however, it seems to be making a comeback. Bill Rossiter, agency owner and principal, discusses Morning Consult’s “Made in America” report and shares how you can leverage the power of Made in the USA on your own homegrown products.
Mentorship efforts in many companies can look like rigid and formal programs. While those efforts are important, for a game-changing effect, you need to embed mentorship into your culture and the way your team relates to each other. Here, Agency Principal Bill Rossiter’s reviews the do's and don’ts of effective mentorship.