The Importance of Dealing with Uncertainty

Different Scenarios Enable Successful Strategic  Planning

By Denise Harrison

How can we better deal with uncertainty when we develop our strategic plan?  Many strategic planning teams struggle with this issue.  While it is important to understand what you know as facts and what your assumptions for the future are, I have found that some good scenario planning helps a team prepare for a wider range of possibilities that might occur in the future.  By looking at different scenarios, the team can assess what will work in each scenario and then select the approach that will benefit the company in the most likely scenario, but still balance that approach by not closing out options that will work if another scenario unfolds.

Generating different scenarios

Some teams generate a probable scenario and then move to generate an upside and downside.  For example, the probable scenario is that we achieve 10% growth and the upside is 12.5% and downside in 8%.  While this works, I find that high performing teams that discuss actual events/trends and then develop scenarios corresponding to possible outcomes is a better way of generating scenarios.  Some examples of trends and events include:

  1. Product launch is delayed by 12 months.
  2. Tariffs continue or are raised significantly.
  3. Oil prices stay down longer than our probable scenario (this could be good or bad depending on what your company does and who your customers are).
  4. Economic recession.
  5. Acquisition has unexpected fall-out and customers leave and go to competitors.
  6. Customers’ preferences change faster than we anticipate (Blackberry) or customers do not change as quickly as anticipated (Uber).

You should have your team members come up with ideas for different scenarios.  Generate what these environments will look like out 5-10 years.  Ask the question: What will we need to do to be successful if this is the competitive landscape?  You will notice before you start working, that several of the outcomes will have similar results.  Select scenarios that will generate different actions.

Once you have generated different “success” strategies, then evaluate which scenario is most probable, and then look to see what you can do to accommodate other “success” strategies so that you maintain your flexibility moving forward.   While you may not be able to keep all options open, you may be able to keep some avenues open until time passes and you have a better view of what the future has in store for your company.

Another benefit of this exercise is it allows the team to think more broadly and be more aware of the external factors that impact your business.  This will help the team deal with the changes that will inevitably happen during the planning horizon.  As you start to see movement that makes another scenario unfold, bring the team back together and recast your strategy.  If you anticipate this movement faster than your competition, it will help position your company to gain market share or weather an industry downturn better than your competitors.

If you are interested in discussing more about how to generate scenarios that will enhance your team’s flexibility, please give me a call at: 910-763-5194 or email me at harrison@thestratplan.com .

Denise Harrison is the president of Spex, Inc. Strategic Planning and Execution.

Strategic Planning is Messy

Author: Denise Harrison

“Strategic planning is messy” declared one CEO as a team member expressed a desire for a more linear approach, frustrated because he couldn’t see the end game.  The CEO went on to say, “It’s okay that it is messy – we have to consider many alternatives and new information before we funnel down to the few things that we will select to do.”  I find that when people embark on strategic planning, they want the process to be simple and linear; some want the answers to be obvious.  So why is strategic planning messy?

Contemplating the external factors that impact your business – gathering information and creating a shared base of knowledge

When your team starts its strategic planning journey, it should first identify the topics worthy of research, before the team can make informed decision about the course and direction of the company.  This research allows the team to make decisions based on facts and information, rather than on opinions and top-of-mind thinking.  Typically, information will be collected about:

  • Core business segments – our customers
  • Competitors
  • Technology
  • Suppliers
  • Economic and Industry Trends
  • Regulations
  • Human resource availability
  • Potential new opportunities

Once the information has been gathered in a consistent format, it is shared with the team, so now each team member has a foundation for decision making.

Still, even with this shared base of knowledge, people interpret information differently and give different weights to the information.  But with this base, your team needs to decide:

  • Which of our core businesses should get the most emphasis?
  • What opportunities should we pursue?
  • How can we enhance the way we differentiate ourselves in the market?
  • What do we need to develop internally to get where we want to go?

There are many steps to take to sort out these questions – you often drill down, make selections and then cycle back.  During a recent planning session, we started out reviewing research on 14 opportunities to significantly enhance the company’s growth.  Next, we developed a profile of an industry leader, looking out five to ten years.  Then we screened the opportunities, using the research provided and our vision of the industry leader as a backdrop as we went through the screening process.  We easily selected the top three opportunities – by a landslide!  Next, we discussed the three opportunities and it quickly became obvious that one was not as good as the others.  What was next? Just drill down on the two? No, it was not that easy.  As we discussed the two, we found that we had two ways to pursue each one and thus, we were back up to four.  We then looked at the benefits and costs of each choice and we were able to come back to two.  Now each of the options was well developed and there was consensus that these were the two that needed the team’s effort during the next year.

Was the process pretty?  No, along the way, many voiced frustrations during the journey, sensing that we would never get to a conclusion.  But in the end, all the team members embraced the process and said they wouldn’t have guessed the team would have made the progress that it did coming to a consensus and a clear direction as quickly as we did.  While the process was messy, when it came down to selecting top picks, the list narrowed down quickly.  As the team went through the final discussions, it was able to dig deep and get to the heart of the issue.  Good information enabled the team to sort through what was important and to have a deep dive discussion on the opportunities that rose to the top.  When the team left the meeting, everyone was firmly behind the topics selected and ready to work on developing action plans to achieve success.

But we didn’t use all the information gathered!

Yes, this is often the case; but how do you know what is important when you start?  After researching certain topics, you may conclude that the topic will not impact the strategy for this round of strategic planning.  But, you don’t know this when you start and sometimes a topic may not be relevant, but it will spur discussion on another topic that is important, or it may be important to future strategic planning sessions, so starting people thinking about it see can have some value.

The hardest part of strategic planning is what you say “no” to

As mentioned above, during strategic planning, you will consider a great deal of information and many options to develop the strategic planning that best positions your company for success.  During the life of your company, you will focus in different areas to achieve success.  For instance, take the case where you are having difficulty meeting your delivery schedules and/or have issues with product quality that are causing your company to lose market share.  While it may be fun to think about product innovation, if you can’t get the product out the door with the customer-required quality, all the innovation will go unnoticed or noticed and copied by your competition.  You may have to say “no” to some good ideas until you get to a place where your company is truly able to capitalize on its innovation.  This doesn’t mean you stop innovating, it is simply a question of emphasis.  Sometimes you need to build the foundation for growth to occur.  Unfortunately, this sometimes makes strategic planning seem messy, as people don’t see things happening that are important to them. Making the hard decisions as to what must come first can cause a great deal of discussion and healthy disagreement.  It is through these conversations that the course and direction are selected, and the key strategic initiatives selected – all selected to further position the corporation for future success.  Is fixing production fun?  Enhancing quality sexy?  But often if these aspects are not fixed, we may not have the platform to launch our innovative products and services.

Messy, but thorough

So, no, strategic planning is not necessarily a linear process.  It allows for ideas to come in from multiple sources.  It generates discussions about multiple options, often cycling around and discussing them again.  Then, the actual strategy summarizes what the team has discussed, the course and direction for the next 3-5 years for your core business segments, the new opportunities you want to pursue and what you need to develop internally to get where you want to go.  Then you take it down to tactics – what turns strategy into action:  what are the 6-10 key strategic initiatives the team would like to accomplish in order to move the strategy forward for the next 12 to 18 months.

If you have questions about strategic planning, please contact: Denise Harrison, harrison@thestratplan.com

How Do You Turn Sheets from a Commodity to a Cost Saving Product?

By Denise Harrison 

Before leaving a commodity or price sensitive segment of your business you should ask: is there any way we can add value to our products and services so that customers will pay a premium?  To do this, you must understand what your customers’ needs and preferences truly are and what you can do to add/change your products and services.

Bed sheets: A price sensitive product – how can you differentiate?

Standard Textile was faced with this dilemma – in particular, hotels and hospitals kept going with the vendor with the lowest price.  How could they break the cycle?

Hospitals:

What are the key concerns that hospitals face as regulations increase and hospitals are graded on their healthcare outcomes?  One of the issues that continues to plague hospital patients are bed sores.  How can sheets help prevent bed sores?  The team at Standard Textile aimed to find out.  Here is what they found:  bed sores fester when there is a great deal of moisture and heat generated by the patient’s body.  Once a sore begins to form is further irritated by the friction generated by moving around in a hospital bed.  Standard Textile help resolve this by developing sheets that were cleaner, dryer and smoother.

Bed sores? Ugh! Bed sores impact 2.5 million patients annually and incur $9-11.5 billion/year in health care costs.  The National Pressure Advisory Panel Guidelines: “Consider using a silk like fabric instead of cotton or cotton blend to reduce shear and friction”.

The hospital bed problem:

  • Moisture associated skin damage
  • Excessive moisture and odor
  • Patients that are difficult to move and position

Standard Textile’s solution was DermaTherapy®, sheets that are FDA-approved for atopic dermatitis (bed sores).  These sheets help control moisture, friction and shear.

Now hospitals desiring to lower bed sore occurrences, flock to the Standard Textile sheets to lower the incidence of bed sores, thereby raising their patient outcomes scores and lowering overall system costs.

Hotels:

Over the years, hotels have used bed and bedding materials to differentiate their brands, but what could Standard Textile do to further optimize the hospitality industry’s operating costs? Here is what they found:

  • Hotel’s wash new sheets before they are used for the first time
  • They wanted premium but durable towels that were not only soft, but absorbent
  • Bedcovers – now washed, but how can we get the covers back on the beds after washing without ironing, but still have them look good?

Standard Textile solutions included:

  • Room Ready for You®; sheets that arrive already washed and ready for use
  • Towels that are more absorbent, durable and soft using patented weaving technology
  • Cumulus® Bedcovers: waffle-design bed covers that are room-ready after washing (Cumulus®)

How does Standard Textile turn typically price-sensitive products into value added products? In short, the company works to truly understand customer issues, and then leverages its technical competencies in weaving, textile materials and laundering, to develop products and services that significantly lower their customers operating costs.

What are you doing to lower your customers’ operating costs and thereby raising the value (and potentially, the price) of your formerly price sensitive product?  A true understanding of the issues that your customers face will help you develop products and services that provide more value to your customers’ processes.

If you have questions about turning your price sensitive product into a value-added product, please contact:  Denise Harrison, harrison@thestratplan.com, 910-763-5194.

(c) Spex, Inc., Wilmington, NC, 2018

Stuck in the mud? What can you do to return focus to execution?

What do you do when progress is slowing on your key strategic initiatives?  Leaving your strategic planning session, your team was motivated to get the key strategic initiatives completed.  Action plans complete, resources allocated, and everything was moving forward.  But now, after several months, forward progress has slowed.  Team members have gotten bogged down by the day-to-day requirements of their job.  What can you do to re-invigorate your team? Some thoughts:

Author, Denise Harrison

Have one action plan team report per meeting

Most teams use a monitoring meeting to report on their activity monthly – this group is made up of the senior management team and is an effective way to keep action plans on track. However, if you are looking to re-invigorate, you should have one action plan team report per meeting, getting the whole action plan team involved.  When the action plan team prepares to present, they typically will make more progress so that they look better in front of the senior management team.  You will also find that that team is more committed leaving the meeting.  This is also good two-way exposure for action plan team members with the senior management team.

Ask challenging questions for re-invigorating strategic initiatives:

  1. If we wanted to complete this project three months earlier, what would we need to do?
  2. If we hired an intern to help you on this project, how much sooner would the plan be complete?
  3. What is the expertise you need to move the action plan forward?

Have the team re-write the action plan

Have the team re-write the action plan, clearing out completed items and re-writing future steps.  This will help people get focused on the future and help them discuss any issues that come up as they re-think what is needed for completion.

Talk to the team about what should be delegated

Sometimes we see that the enemy is us…. what are we doing/not doing that is getting in the way?  Talk to the team about what should be delegated, so that they can spend more time on the strategic rather than the tactical.

These are some possible actions that I have seen work successfully.  What other actions have you tried?  If you have additional questions about developing a strategy or executing strategy, please call me, Denise Harrison:  910-264-1350 or harrision@thestratplan.com.

(c) Spex, Inc.  Wilmington, NC 28401

Boiling down IOT (Internet of Things) into Something Useful

By Denise Harrison

Is your company seeing these trends?

  • Many experienced workers are retiring from the workforce, often taking tribal knowledge with them.
  • Hiring difficulty: especially among the skilled trades.

Well, your customers also face these trends – how can you help?  Can you design products/services that will help alleviate these issues for your customers?  Technology can be key to providing the solution.  Yes, you have heard the buzz words “big data” and IOT (Internet of Things) – but how can these technological advances work for you?   Is there a way that you can install sensors in your equipment to have alerts when the systems need maintenance or parts need to be replaced?  Would this ability help streamline and extend your customer’s maintenance department?  (Maintenance departments are one of the areas where there is a shortage of skilled labor.)  Could you add a service that would provide maintenance when these alerts are raised?  This could be onsite service or remote service, directing the plant personnel on what needs to be done.  Would resolving these issues for your customers give you a competitive advantage?

How do you get started?

Start by using sensors and collecting data within your own organization.  Start small (say air compressors); understand what is possible, then assess how you can use this knowledge to provide value to your customers. Starting with an in-house function allows your team to work on the kinks before you get an application into the field.  Your first thoughts on customer applications may change after you have seen the impact of technology in-house.

Buzz words and bite sized chunks

Buzz words like IOT (Internet of Things) can be meaningless unless you cut them down into bite sized chunks, small applications where you can test how they perform.  As you learn by using the technology, you will create a more efficient manufacturing facility as you link operations and then can look at “big data”.  Starting small allows the team not to be overwhelmed by the amount of data generated.  As you develop this knowledge, you will be able to apply it to your products, service and your internal processes.

Technology, one of Michael Porter’s five forces, can be harnessed to give you a significant competitive advantage.  As you develop a strategic plan, be sure to look at emerging technologies and how you can leverage them to provide a competitive advantage.

To learn about how to look at technology in your strategic planning process please contact Denise Harrison: harrison@thestratplan.com.

Everyone Knows Execution is Important – So Why Do We Fail to Execute?

By Denise Harrison

Execute strategy: we know it is important, but why doesn’t it happen? Based on my experience working with over 100 companies on strategy development there are four key areas that lead to execution success.

  1. Focus on the few:
    1. Select a few – 8-10 key strategic objectives to accomplish in the next 12 – 18 months. No more than 10! Don’t fall into the trap of “We have to do this!” and end up with 12 to 15. It is better to work on a few rather than work on everything and get nothing completed. Four to six is even better, especially if the objectives are large.
    2. Once you have selected the key objectives, then develop action plans that are detailed roadmaps of how you will accomplish these objectives:
      1. What are the action steps (granular detail)?
      2. Who is involved with/responsible for each step?
      3. How much time will each step take?
      4. How much money will each step cost?
  2. Balance your resources:
    1. Now you know the amount of time and money for each objective, do you have enough resources? Do you have the right resources?
      1. Often the required financial resources are clarified in the budgeting process
      2. The human resource aspect is often lightly considered (if at all) and this is where many implementation plans go off-track.
        1. Understand that your people have day-to-day activities that help the business run in addition to the projects that will position the company for future growth; you have to balance these requirements so that both are accomplished.
        2. If you find that you do not have the resources to accomplish your action plans, evaluate how you can
          1. Delegate (both routine as well as project activities)
          2. Eliminate (routine and/or project)
          3. Reduce (routine and/or project)
          4. Postpone (project only – you can’t postpone routine activities; they just don’t happen)
        3. The operative word here is balance!
  3. Monitor your progress:
    1. Monthly have your action plan team leaders report on their progress to the strategic planning team
      1. Work with the team to relieve bottlenecks if projects are behind
      2. The strategic planning team should be able to help reduce bottlenecks – use this meeting as a solution-finding meeting rather than a way to assess blame. The team should be working together to move things forward.
    2. If new projects come up, then evaluate each project in the context of what has already been selected.
      1. If the new project is more important than one of the current key objectives, then add it, but be sure to take one away.
      2. Do not pile objectives on top of one another – sometimes we assume that we have hatched new resources during the year.
      3. Do not evaluate new projects in isolation – evaluate them in the context of the projects that are already on your plate. If the current projects need to stay on the list, save the new one for next year’s strategic planning.
  4. Communicate early and often
    1. Communicate the strategy and key objectives to all employees
      1. Make sure that communication is clear and concise
      2. Make sure the communication is two-way (see article: Lessons Learned in Aligning an Organization -Two Way Communication is Key)
        1. Give employees a way to react
        2. Have them prepare what their departments are going to do in support of the strategy and key objects – make sure the communication is two-way.
    2. Communicate frequently and update when changes occur.
    3. If everyone in the boat has his/her oar in the water and everyone is rowing in the same direction as the company, it will move forward quickly – outpacing the competition.

Efficient strategic execution is paramount to outperforming your competition during this recovery phase of the economy.  If you accomplish these four steps you should achieve over 90% of your objectives within the timeframe selected.

Denise Harrison is President of Strategic Planning and Execution, Spex, Inc. She can be reached at harrison@thestratplan.com or 910-763-5194.

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Setting the Tone from the Top: Safety and Operational Excellence

By Denise Harrison 

This answer reminded me of former Alcoa CEO, Paul O’Neill, just after he had taken the helm of the floundering aluminum manufacturer.  At his first shareholder meeting he stated, “I intend to make Alcoa the safest company in America.  I intend to go for zero injuries.”  The stock dropped – this statement was not exactly what investors wanted the new CEO to be focused on.  While the stock plunged in the short-term, long-term O’Neill increased profits by 500% during his 12-year tenure.“How do you balance worker safety and overall production goals?”, asked an audience member at the CEG SMART Manufacturing Conference. Dennis A. Muilenburg, Boeing CEO, answered without hesitation, “We work safely before we think about production.”

Why safety?

  • Safety goals are one area on which both management and union/line employees can agree. A common goal that enhances teamwork among disparate groups – basically a people first philosophy.
  • The focus on zero injuries changes the culture from one that tolerates mistakes to one that focuses on improving processes and operational excellence.
  • The safety focus enhances accountability throughout the organization.

Why is this a CEO issue?

Recently I spoke with a group of CEOs about safety:  they agreed companies either have safety as part of their culture, or safety is a regulatory or customer requirement that they must comply with.  The group agreed that those with safety ingrained in their culture saw better teamwork and a sharper focus on continuous improvement.

What can you do to make safety part of your culture?

  • The message must come from the top; with a clear focus on what is best for the employee:
    • We want you safe.
    • We want your family safe.
    • We want your co-workers safe.
  • Critically, employees must be given the tools to be safe:
    • Effective training
    • Proper equipment (An example: investing in robots for lifting heavy loads to aid the aging workforce.)

To ensure your training is effective, remember that 70% of training is forgotten in 24 hours (source: SafetyNow, Rick Tobin) – so repetition is important.  Training programs that offer periodic follow-up activities after the initial training event, increase retention significantly.   Additionally, many programs are now incorporating game-like elements, so that employees remain engaged during their safety training. In any case, it is important to review your safety training to make sure you are achieving the desired results.

Bottom Line

A strong message about the importance of safety sends the signal that employees are important to the company.  This message should not be delegated.  However, a message from the top is not enough: employees must have the education, equipment and technology to function safely.  The good news is that when safety becomes part of the culture, employees feel valued and become more focused on overall operational excellence.

Are you interested in enhancing your strategic planning process?  If so, please contact me at: harrison@thestratplan.com or 910-763-5194.  I look forward to hearing from you.

Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack a Systematic Approach

By Denise Harrison

Many senior executives struggle to define a consistent approach to strategic planning.  How does it all fit together?  What information is necessary?  How do we prevent the process from becoming analysis/paralysis?

Executives want a consistent process that:

  • Looks systematically at external factors that influence the organization
  • Evaluates internal strengths, weaknesses and competitive differentiators
  • Evaluates opportunities consistently
  • Allows for decisions to be made based on information and research. rather than “top of mind thinking”
  • Allows the team to make and agree on decisions on where the company’s resources should be focused (i.e., Focus on the few.)
  • Results in action plans that achieve the company’s strategic initiatives
  • Develops a monitoring schedule to stay on track and make course corrections when business conditions change

There are many books on strategic planning, but few address the structure of the strategic planning process itself.  After years of experience working with many clients, we found the following approach achieves the best results: three session focusing on:

  1. Situation Analysis
  2. Strategy Formulation
  3. Implementation

Situation Analysis

Start by agreeing on where the organization is today and identifying what research is required to make good decisions in the strategy formulation meeting.  This includes:

  • Current situation: What are we good at? (strengths) What are we not so good at? (weaknesses) What differentiates us from the competition? (competencies)
  • Research: Typically includes research on: Core businesses, new opportunities and other external factors, such as: competition, technology, trends and regulations.

During the meeting, you select topics in each of these areas to be researched before the next meeting.  Research typically takes four to eight weeks.

Strategy Formation

During this meeting, you will make decisions on where to focus your resources to achieve the best results.  In strategic planning the easy part is saying “yes”; the hard part is saying “no” to good ideas, but ones that are not as good as the ones selected.  You will start the session reviewing the research so that the team has a shared base of knowledge with which to make good judgments.  With this shared base of knowledge, you then define what the leading company will look like in the future.  With this long-term vision in mind, you will start making decisions on what core businesses should receive the most emphasis and what opportunities to pursue.  You will discuss strategic issues that come up (e.g., should we exit this business?) and assess the threats facing the organization.  Once you have covered the above, you will summarize your decisions in a strategy documents that covers:

  1. What you are going to do in each of your core businesses
  2. What new opportunities you are going to pursue.
  3. What you need to do internally to get where you want to go.

Once the summary strategy document is developed, the team will select 6-10 strategic initiatives to accomplish in the 12-18 months.  The assignment for the next meeting is to develop action plans to accomplish each of these strategic initiatives. Each action plan will have clear action steps including who is responsible, how much it will cost and how much time it will take.  With these plans, a preliminary budget is developed.

Implementation

During this meeting the action plans are reviewed to answer such questions as: If we complete this action plan will we achieve the objective?  Do we have enough resources (human and financial) to complete all the initiatives on our plate?  Finally, you set the monitoring schedule to ensure that the team stays on track with its initiatives and allows for course corrections when business conditions change.

Structure

While many balk at the formal structure, that we use, this strategic planning structure allows for decisions to be based on information and research rather than top of mind thinking. It develops a shared base of knowledge within in the team and allows for the development of a well thought out strategy with tactical plans the ensure execution.  The team will support the strategy since they will have developed the data used to make the decisions on where to focus the team’s efforts.

If you have questions about the structure or would like to know how you can tailor the structure to meet your firm’s specific requirements, please contact me at: harrison@thestratplan.com  or 910-763-5194.

© Copyright 2017 by Spex, Inc., Wilmington, NC — Reprint permission granted with full attribution.

Strategic Planning: A Time for Reflection

Denise Harrison

In today’s fast paced economy, we often find that executives think that they don’t have the time to reflect on their business.  While quick decision-making is important, taking the time to reflect on the possible choices and looking at long-term implications will set your business on a course to achieve long-term success. 

Reflection: What does this mean?

 There are three areas that we often find are missing when teams develop a strategic plan: 

  • Discussion of topics for research
  • Collection of research in a consistent format
  • Analysis tools that help the team think through what is the best use of the company’s resources

 Topics for Research

Many teams have a two to three-day retreat to develop a strategy; this is a good time for team building and gets ideas out on the table.  But if your strategic planning is done during this retreat, we often find that the team does not have all the information to make good decisions.  Our recommendation is a more-robust three-step process:

1.       Situation Analysis

Select the topics that require further research (markets, competition, opportunities, etc.)  Selecting these topics and then developing research allows the team to have better information for decision-making when they get to the next step.

2.       Strategy Formulation

Review the information to have a shared base of knowledge and make decision based in this information. Now you can select the strategies and the strategic initiatives that are most likely to position your company for future success. Take the time to develop action plans for your strategic initiatives so that you know what steps need to be undertaken, who is responsible and how much time and money each step will take.

3.       Implementation

Vet the action plans to ensure that accomplishing the steps will achieve the objective and assess whether the company has enough and the right talent and financial resources to accomplish the task set out in the action plans. 

 A three-step process allows your company to reflect on the correct topics to research.  Once the research is completed, the team can reflect on the information gathered to make informed decisions concerning the future direction of the company.

Consistent Format

After you select the topics for research and develop the research, it is important that the information is collected in a consistent format.  Having templates that aid in consistent information development allows for better analysis as your team develops its strategy.  For example, without a consistent format, you will get different information regarding opportunities to be researched and this will make it hard to compare options because the data is inconsistent.

Analysis

Once you have reviewed the research and the team has a shared base of knowledge, it is important to use analytical tools to assess where the best opportunities lie in your business. Tools include the Growth/Share matrix (often associated with Jack Welch) to assess which of your core business should get the most emphasis.  Analytical tools pull out the key variables and help the team better understand the information that has been gathered.

 If you would like to learn more about a structured process, with templates for research and analytical tools to help digest the information please call or email me: Denise Harrison, 910-763-5194 or harrison@thestratplan.com.

© Copyright 2017 by Spex, Inc., Wilmington, NC — Reprint permission granted with full attribution.

Fitbit Focuses on Corporate Clients to Generate Growth

By Denise Harrison

Fitbit’s personal activity tracking device started with simple functionality – tracking steps taken during a day – now added functionality includes a heart rate monitor, sleep tracker, calorie calculator among other features.  While the trackers are not perfect (not good with stationery bicycles) the monitors give the user a better idea of their activity during the day.  Since I began using my Fitbit I found myself walking through airports rather than using the electric sidewalks to meet my step goal for the day.

Why would businesses be interested in purchasing Fitbits?

Corporate HR officers began calling Fitbit to discuss how they could incorporate fitness trackers into their wellness programs.  Fitbit, originally focused on consumers, had to change gears to better understand the corporate requirements.  Corporations, looking to enhance the wellness of their employees saw Fitbit activity trackers as a way to encourage activity.  The desired benefits included:

  • Healthier employees
  • Safety benefits
  • Lower insurance rates
  • Enhanced productivity

A Duke University study calculated that obesity cost American businesses $73 billion per year in lost productivity and medical expenses.  Using this information, Fitbit started collecting data on the activity trackers use and found that wearing an activity tracker improved health outcomes and increased participation in wellness programs.  As employers were able to track wellness participation they were able to negotiate lower insurance rates.

In order to support the corporate wellness campaigns Fitbit became compliant with HIPPA regulations to ensure the privacy of the individuals using the Fitbit trackers.  Adding this feature enabled the Fitbit team to better serve its corporate customers.

Key Take-aways

  • Keep alert to emerging markets, users may find other applications for your products and services – you may have an underserved market out there.
  • Be cognizant of different market requirements when you find an unexplored segment – don’t assume that needs and preferences will be the same.
  • When you find a potentially new segment make a go/no go decision as to whether or not you will serve this market – do you have the capabilities to serve this market? Is it a distraction?  Make a firm decision – don’t straddle the fence.

Denise Harrison can be reached at harrison@thestratplan.com if you have questions about how you can enhance your strategic plan.

© Copyright 2016 by Spex, Inc. — Reprint permission granted with full attribution.