You’ve worked for months. Spent endless hours in airports and bland hotel rooms around the world to meet with customers to understand their issues and needs. Poured over market data and read countless 10-Ks and analyst reports in order to calculate market sizes and market growth rates. Business development, finance and regulatory affairs staff provided their expectations for government regulations, socioeconomic issues, political changes and the environment. Your teams also studied the competition, their products, strengths and vulnerabilities. Finally, you have a strategic plan that clearly articulates where your company wants to compete and how you will win. Now what?
A strategic plan that sits on the shelf is of no use. Company executives need to develop the actions and management processes to drive business growth and achieve a sustainable competitive advantage. We recommend some basic steps that companies should follow to ensure that implementation is successful.
Step 1: Breakthrough Thinking
Clearly articulate the measureable goals of the strategic plan and the time period. The goals should be BOLD and require breakthrough thinking and actions. For example, say the market is growing at a compound annual growth rate (CAGR) of 5 percent. If your company is growing at 4 percent, it would be losing market share. So one goal could be to grow faster than the market (e.g. 6 to 8 percent), which means taking share from your competition. Other goals may include improving quality and customer satisfaction. Remember the goal of the strategic plan is to win! Go bold or go home!
Step 2: How Far?
Most strategic plans are long-term (three to seven years). As an example, a number of years ago, my company at the time had annual sales of ~$40m and we were a blip on a competitive map. Our strategic plan was to become one of the top three competitors in our target market and grow at three times the market CAGR achieving more than $700m in 7 years. How would we achieve that goal and how would we know if we were making progress? It is important to identify a target with a shorter time horizon. In this example, picking an annual target seems to make sense. Carefully consider how far you need to reach in the first year in order to achieve the three-to-seven-year objectives. In our example, while a 50 percent growth in the first year seems bold, some quick math would show that the team would be far behind its seven-year goal. So in our example, a bolder target is 100 percent growth to $100m. Clearly, that is a breakthrough annual objective that would require revolutionary thinking and actions!
Step 3: How? Which key processes?
Now comes the hard part. Once you have a clear idea of the short-term measureable goals, the team needs to identify the “how.” What are the processes that need to be developed or improved that will deliver sustainable results? This is where many companies make a big mistake. Rather than improving processes, companies try to “brute force” their way to achieving results. Management thinks they know what is “broken” and therefore how to “fix it.” All they need is to throw resources at the issue or change the team.
It would be great if that were true. But let’s ask an obvious question: If management knows what is broken, why haven’t they fixed it already? Also, adding staff costs more money than companies can afford. In reality, the root causes are much harder to identify. So before the team can determine what to improve, some work needs to be performed to determine what isn’t working (or needs to be improved) in order to achieve the goal. Management should focus on processes that will lead to the creation of sustainable results, not short-term wins. Don’t try to boil the ocean. Sure, all processes can be improved. Rather, focus on only a few critical, measureable processes that will have big impacts. In our example, we found that our sales force was unable to meet with all of the potential customers for our products. We were competing in only 50 percent of the available sales opportunities. Deeper analysis uncovered an inefficient lead generation and funnel management process. It was clear that generating more leads and implementing robust funnel management would lead to more sales opportunities and more wins.
Step 4: How much? What are the measures?
Step 5: Who is accountable?
Next, determine who needs to lead the initiative and her/his team members. Most processes are “team projects.” For example, increasing leads per rep may require improving website design and functionality, conference planning and execution, key opinion leader identification, etc. It isn’t just a marketing function. In this example, a marketing manager may take the lead, but IT, sales, R&D, and strategy staff could be part of the team. Management also should consider including the initiative results as part of the incentive compensation for the team.
The initiative teams are in place, and now it’s time for the real work to begin. Each initiative team should develop its norms, action plans, and accountabilities—normal processes for every team. At a minimum, we recommend teams meet weekly to review actions. Metrics should be reviewed each month. Most importantly, the team needs to assess their progress versus monthly targets and take corrective action if results are less than expected. We use the following project scorecard to track progress on our initiatives. Also shown is a template for action planning.
Senior management also must become part of the process. Clearly, a senior executive should be part of each initiative team either as a leader or a team member. Each initiative also should be reviewed at the standard monthly management meetings. Leadership needs to carefully consider how to run these meetings. Strategy is hard. Unlearning bad habits and learning new processes are difficult. At their worst, monthly strategy deployment reviews can become a toxic caldron of blame and shame. However, great leaders know that these are the meetings for motivating teams to learn and grow. Good luck and good learning!
Please access the excel templates below on strategy deployment, the project scorecard and action planning.