Posted by Jeff Williams on Fri, Jan 08, 2010
During economic meltdowns like the one we are currently experiencing, it is tempting for organizations to turn all attention to tactical execution, dropping any activities that are not expected to specifically generate short-term revenues. Take strategic planning, for example. Even during “good times,” many managers view strategy development with a high degree of suspicion . . . and for good reason, I might add!
I can recall many instances in my own experience where, after being instructed to spend quality time crafting a strategic direction and setting stretch goals to grow my division’s business, I ended up receiving what felt like a predetermined budget that totally ignored all the energy my team had put into analyzing the market and articulating a specific strategic plan of attack. So, it is not surprising that when the economy is at a generational low point, many managers are even less inclined to spend any cycles thinking strategically.
However, this is precisely when strategic planning is most critical, because only by preparing for an uncertain future will organizations be positioned to successfully ride the next set of waves that are not yet visible on the horizon.
Am I advocating that managers take their eye off the ball of running the current business and just “go think big thoughts” instead? Certainly not! Planning is not an either/or proposition and does not have to be an arduous and long process. But, it does require some concerted energy. The good news is that the slower pace of today’s marketplace provides a perfect opportunity to carve out some time to look beyond the daily grind of making a quick buck.
To keep the process of planning from mushrooming into an all-consuming exercise, here are a few key principles I have found to lead to successful planning outcomes:
- Simplicity. Although setting strategy in the 21st century depends on an increasingly complex set of variables, it is still possible (and desirable) to complete the planning cycle in a short period of time, so that more of the organization’s energy is spent on executing the plan, not just thinking about it.
- Focus. In my experience working inside leading Global 100 high tech companies, this seems to be the hardest rule to follow. It is so tempting to fall into the trap of thinking, “We have the best and brightest executive team, thus our company can successfully execute on all 28 of our breakthrough objectives.” Yeah, right. That may sound good when it is spun to a group of market analysts, but just try to find an employee or channel partner who can remember that many “critical” objectives, much less act upon them! Winning organizations articulate a crystal clear vision of the desired future, and then a handful of critical objectives to get them there.
- Agility. This was the mantra of the last decade, yet most companies still have no process to accommodate a change of strategy mid-stream. If you want to test the agility of your company, just ask the following question, “What is the process to reallocate significant resources to a new strategic priority after budgets have been distributed for the fiscal year?”
- Alignment. This principle takes the most effort, but can also result in the biggest payback. Alignment starts with being absolutely in tune with your target customers, understanding their critical business problems, and how you help your customers solve them. (Somehow, you knew I would get around to my baseline mantra of being focused Outside->In™, didn’t you?) Once each organization is aligned with its set of customers, the next step is to drive alignment within the company, across the silos. This is where the real magic occurs. By driving alignment around a focused set of objectives across disparate functional organizations, you put all the wood behind the arrow, which can differentiate your organization from the rest.
There are several effective approaches to building a strategic plan, so my recommendation is to find a methodology that includes many of the attributes discussed above, and that is compatible with your company culture and decision making process. But whatever you do, make sure you don’t miss the opportunity to use planning as a strategic weapon to lead your organization out of the recession at the front of the pack!
If you have discovered a planning process that you found particularly useful, I would love to hear from you. Just post a comment.
For readers in the Bay Area, I would like to alert you to a great opportunity to learn more about planning and innovation from thought leader and best-selling author Geoffrey Moore*, on Tuesday evening, January 26, 2010, in Menlo Park, CA. Hosted by the Association for Strategic Planning (ASP), this interactive discussion will include Mr. Moore’s latest thinking on strategic alignment and the dialog that needs to take place at every level of an organization for success in the current economic environment. Don’t miss this rare opportunity to spend time with Geoffrey Moore in an intimate setting.
Register here.
*Best-selling author of:
Dealing with Darwin: How Great Companies Innovate at Every Phase of Their Evolution,
Crossing the Chasm,
Inside the Tornado,
The Gorilla Game,
Living on the Fault Line
Posted by Jeff Williams on Mon, Jun 22, 2009
During tough economic times, companies typically look for any and all ways to cut costs. This is natural, since sales revenue streams diminish rapidly while many fixed costs remain, well, fixed. In a scramble to cut costs, prudent executives begin asking tough questions about each department/organization, namely what value does the function provide and how does it contribute to the bottom line?
This type of “soul searching” is actually very healthy as it tends to put a spotlight on processes and organizations that have grown over the years, but that may no longer be adding maximum value to the business. But before you start swinging the axe, don’t underestimate the impact that cutting customer-facing processes may have on current and future customers. As we have discussed in prior installments of the Outside-In Sales approach to running a business, the overall customer experience is all-important to building loyalty, taking market share from competitors, and driving up margins.
Does this mean that everything should remain status quo in the customer service area while other departments are being cut? Certainly not! But it does mean that the probable consequences on customer buying behavior should be analyzed before making across-the-board budget cuts.
Let’s look at an all too common scenario. In an effort to “spread the pain” evenly across its many functional departments, a cost-cutting decree comes down from the corporate executive team: all organizations will operate within a 10% reduction in budget, effective immediately. Sound familiar? Sound reasonable? Since most departments have a bit of slop in their budgeting process, a 10% reduction should not be catastrophic, right? For example, for a large development team, a 10% reduction in budget could simply mean that the launch date for a new product gets moved out by a few weeks. [In my experience as a product manager, a slip of a few weeks during a major product launch can certainly be annoying, but is all too common, with or without a “full” budget!]
Now let’s see how a 10% reduction impacts a customer support call center of 38 agents. According to a recent study conducted by the International Customer Management Institute, eliminating just four reps in a call center of this size increases the number of customers that are put on hold for four minutes or longer from zero to 80!
How do you like being put on hold?
Posted by Pete Krammer on Fri, May 29, 2009
This past week I had a very enlightening conversation with a friend, Steve Diller, who is a well known market strategy expert and the author of Making Meaning, about go-to-market strategies companies need to employ in this stage of the economic cycle. I think, as many of you will agree, that we seem to have turned the corner toward recovery, and that some, or most companies are starting to see improving sales. His view was that it is fifteen seconds past midnight, or thereabouts, on the new day of the economy and it's time to get prepared for the expansion that is coming next. I think that is a perfect assessment of where we are right now.
The last time the economy was in this exact spot, at least in Silicon Valley, was perhaps June 2002. As I look back over the the past seven years of client work, I see a clear pattern. Companies that got their sales planning together early, and whose sales process, systems, and methodology were in tune, came out of the box early and benefitted the most from the last expansion cycle and have survived the downturn relatively well. Those that dithered, or who tried to squeeze the last ounce from their tired old strategies, are dying. Let's learn from them.
Sales Executives! Your companies are entrusting the successful road through the sales recovery to you. Many things you thought you knew are now in question. And we all know the world has changed in many subtle and not-so-subtle ways since late 2007. Most certainly, the sales methodologies of the big expansion will not work in the recovery phases of the cycle, or not work as well. B2B and B2C buying relationships are greatly altered today. Who would have thought that your credibility may rest in Linked-In or Facebook?
A solid vision, structured sales planning, and a healthy dose of Outside-In sales methodology is critical, perhaps more than anything else right now. If you want to take full advantage of the recovery, make sure you have these pieces in place, or get help from those who can help you most. Most of us prosper on the way up, so throw the covers off your head; it's very early in the morning but it's time to do something.
Posted by Debbie Dickinson on Fri, Apr 10, 2009
With the recession in full tilt, businesses are imploding everyday. But implosion has some positives. Dilapidated systems, out of date process,
unsafe business practices get updated and values recover. Improvements
come out of the dust and rubble with planning and appropriate reactions
to the current state.
Have you watched any of your customers' business implode? If you've been paying attention, you know the reasons businesses are failing.
A key opportunity for these times is to identify how and where we can help our customers through what may be the most difficult challenges they have ever faced. Before you or your sales force next call on that valued customer you want to keep, ask yourself (and answer) these questions:
- Specifically, what business challenge is hurting your customer? (“The recession” is not a specific-enough answer.)
- How would you counsel the leaders in the organization to take a different path?
- What is threatening the leaders of the organization?
- How would your service help minimize or eliminate these threats?
- What are the long term benefits?
- How can your customer implement your service and realize benefits quickly?
Posted by Pete Krammer on Mon, Feb 02, 2009
Consultants are by nature optimists. We see the silver lining that's hidden from our client's view, or one that's seen by very few in our client's companies. Those of us who work with sales organizations inevitably focus on growth - customer acquisition, expansion, and extension. Indeed these things are paramount to long term success (and this feeds our optimistic nature)!
But what to make of these times? On the one hand, we are hammered by bad news. There's plenty of it to go around, a real treasure trove of miasma with its own special mantra: "we've never been here before." (True if you were born after 2002!) On the other hand, hidden below the clouds are changes and innovations, both subtle and massive, new businesses and business models surfacing from nowhere, audacious moves by companies with a bit of cash to spend.
The truth is that many companies aren't growing by leaps and bounds. The bottom of the economic cycle will take out many companies and those of us unlucky enough to work for them will need to find new jobs or careers. The other truth behind this recession, like all of them, is that most companies will survive and thrive again. How they get there will be through regrouping, re-engineering, and reorganizing, and the better ones will use this time to innovate.
Perhaps the news is just the news. And perhaps we've all been here before, too. And perhaps those that focus on this renewal today will prosper sooner rather than later. That's the silver lining!
Posted by Pete Krammer on Mon, Dec 01, 2008
While economists have recently announced that there has been a global recession, and that it will extend into 2009, most business people have seen two dramatic dips, one last year and one now.
As with all recessions, amidst all the doom and gloom, there are interesting opportunities. For entire sectors of the marketplace, in all lines of business, companies and people are taking the steps to remake themselves now, launching the necessary strategies that will initiate a strong recovery. These are smart moves, because any company that wants to stay in business beyond this current economic maelstrom needs to create a plan to find new business and grow.
It could be the recession or just the usual forces that propel change that are stressing your company. Telltale signs might include:
- Sales opportunities of any size become challenging to close, because the market is so volatile;
- Customers are not buying at all; and,
- High commissions have spiraled downward, adding a level of personal stress to salespeople and resulting in them not keeping an eye on the ball.
When times are tough, companies basically fall into two camps: either 1) they cut back to stay profitable; or, 2) they lose the ability to make a profit and have few prospects in the pipeline. Obviously, it’s better to be in the first camp.
Take Action
Here are a few steps you can take during the next six months to navigate this uncertain economic climate.
- Put together a good plan that deals with reality and determines your next arc of growth. Be honest about your company’s current strengths and weaknesses. This is essentially a recovery plan. It needs to be well thought out and well researched. This is a very shrewd investment of time and resources.
- Assign your sales force the tasks to execute this plan. Make this a team effort. Have your sales people use the extra time they may have now to find new markets and do the critical on-the-job research.
- Assess your people and fill the gaps. But, only fill the gaps, focusing on your plan instead of general “need to get better at selling” initiatives.
- Invest in your personal leadership development. This is not the time to start building basic skills in your people – you need to lead them through the battle.