Monthly Archives: September 2014

Close the Gap between Planning and Execution – Monitoring Checklist Keeps Execution on Track

By Denise Harrison, President and CEO

Are you achieving your strategy or are you slipping?  How can you keep your team on track?  Monitoring is one of the key aspects of successful execution.  Here is a monitoring checklist – if you can accomplish these items you are well on your way to successful execution:

  1. Meet monthly to discuss progress on key strategic initiatives.
  2. Team leaders should have action plans updated before the meeting.
  3. Ensure that all members of the strategic planning team are present.
    1. Discuss last month’s achievements
    2. Discuss and schedule what is planned for the coming two months
  4. Resolve shortfalls in progress and roadblocks.
    1. Solve the problem (rather than assess blame)
    2. Determine what it will take to get plan back on track and reallocate resources to achieve your desired results and timeframe
  5. Discuss any changes to business conditions – does this require a change in strategy/strategic initiative?  If so, discuss what course corrections are necessary.
    1. Stop/change any strategic initiatives that are no longer deemed important to achieving the strategy.
  6. Review new opportunities
    1. Assess if they need to go on the list by replacing an initiative already on the list
    2. If they are not more important than what has already been selected, then save for the next strategy planning cycle
  7. Walk out of the meeting with a clear picture of what will be accomplished before the next meeting.

If you are able to achieve all of the items on the checklist, you will achieve your strategic objectives faster by executing more efficiently. Potential pitfalls? Here are some pitfalls that I have observed over the years:

  1. Meetings that are held sporadically or infrequently – this makes it harder to get action plans back on track.
  2. Blame rather than problem solving – leaders fix problems rather than point fingers.
  3. Review by exception rather than review of each plan – it is important that each strategic initiative has visibility as a reminder of its importance to achieving the strategy.
  4. Adding strategic initiatives without taking any away.  This results in dilution of resources and often lowers margins and slows execution.
  5. Declaring victory before objective is achieved – yes, it is wonderful to release a new product, but it is better if the new product achieves its revenue and margin goals.

Avoiding these pitfalls by following the checklist will keep your plan on track. Would you like to learn more about executing your strategic plan?  Denise Harrison is President and CEO of Spex, Inc.  She can be reached at  harrison@thestratplan.com.

© Copyright 2013 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.

GE Spins off Major Appliance Division: What Can Your Company Learn from this Divestiture?

By Denise Harrison; President &  CEO

GE is spinning off its Major Appliance division, highlighting the importance of making choices in strategic planning. In this case, Jeff Immelt, GE’s CEO, is making the choice to focus on the higher margin energy, power, aviation, and health care businesses. This decision exemplifies the purpose of strategic planning:

  • Identify sound and appropriate course and direction that will truly optimize your company’s future potential
  • Sharply focus resources in support of that course and direction.

Some comments on GE: Everyone remembers Jack Welch’s focus on being number one or two in an industry or get out. However, this is just a simplistic version of what the analysis looked like. To simply try to be number 1 or 2 in an industry could lead to poor financial performance, as we saw when GM tried to hold on to its number one position by buying market share, which, instead of generating success, led to poor financial performance and bankruptcy.

Choosing Where to Play

In choosing where to play, there are a number of aspects to consider:

  • Assess where you have a competitive advantage – what do you have that has high value to your customers and differentiates you from the competition?
  • What are the growth opportunities for the business? In general, growing markets provide more opportunities to profit than markets that are shrinking. This is, of course, dependent on the uniqueness of your position.
  • What is the profitability of the industry? What is your ability to charge a premium for your products and/or services? Are you charging for the value that you are providing to your customers or are you pricing on a cost plus model?
  • What other choices do you have? Do you have a greater differential advantage in other areas? Is there more profit in other segments?

Let’s look at another GE example – this time, GE Plastics. With its plastics business, GE chose to maintain its market leadership in the engineering plastics niche of the plastics market. This is important – GE did not try to become the market leader in plastics; instead, GE selected a specific segment of the industry where it had differentiated products. Additionally, GE believed that the industry had significant growth potential and due to the uniqueness of its products, GE predicted that it could sustain a competitive advantage.

However, over time its competitive advantage eroded and engineering plastics became a niche where there was less differentiation and lower margins. At that point, GE chose to sell its business to SABIC even though it was still a market leader. GE focused instead on other businesses where its differentiation, profitability and growth were more attractive than in engineered plastics. Note: GE did not wait until its business was in trouble; it made the decision based on optimizing its future success by allocating its resources in areas where it has a higher return.

We see this scenario playing out again with its Major Appliance division. The appliance division is not in trouble, but GE decided that there were other businesses that would achieve higher returns, and thus chose to focus on these businesses. It did not wait until the business was in trouble or losing money, instead it made the decision to re-allocate its resources. By selling a healthy business it was able to achieve a high price and use the proceeds in areas where there was more potential. Being a market leader is not the only criteria for staying in a business; critically, you must also assess whether or not this business provides the highest and best use for your scarce resources.

Lessons Learned:

  • Being big or the market leader in a segment is not necessarily a reason to remain in a particular industry segment – it is only one aspect to consider
  • Selecting a niche where you can be a market leader by having a differential advantage that has high value to the customers and is sustainable, is also important
  • Understanding your choices and focusing on the few, rather than trying to spread resources around, allows you to gain traction faster

Fundamentally it is all about choices. Teams that are able to gather good information about their markets, truly understand market niches and make choices concerning the highest and best use of their resources will achieve higher margins and optimize their future potential than those who stay in businesses where differentiation is eroding.

If you have questions about how to better focus your resources and make right choices during your strategic planning process please email me (Denise Harrison) at: harrison@thestratplan.com .

Copyright 2014 by Spex, Inc. Wilmington, NC — Reprint permission granted with full attribution.