“Follow the plan; don’t get distracted by seemingly large opportunities,” replied one CEO when asked the question: What was one key learning from following a systematic approach to strategic planning. How did he learn this? The hard way, of course.
For years, this CEO and his team used a systematic approach to strategic planning. That approach uses data and information to help teams focus on the areas that will optimize their future results. In his case, we identified small-medium sized organizations as one target segment. We also identified that the larger organizations in this industry had requirements that were beyond our core capabilities. By focusing our efforts on the smaller organizations we would match our core capabilities with the requirements of this business segments. This strategy proved to be successful.
What happened subsequently?
Well, a Board member had connections to a large prestigious organization and wanted the CEO’s company to become its supplier. The opportunity for revenue growth was significant; the Board member pushed and this CEO’s company took on the large organization as a customer
Outcome
Resources were pulled from all areas of the company to meet this large organization’s requirements – pulled away from serving the smaller targeted organizations. The large organization may have increased top line growth, but it had a significantly negative impact on the bottom line and hurt relationships with the customers that we had determined were the best fit with our core capabilities.
Lessons Learned
It is important to stick with your strategy unless something has changed in the business environment and/or your core capabilities.
Can You Make Exceptions?
Of course, but ensure that your exception make sense. For instance, in this example the following question should have been asked:
- Do the requirements of this large prestigious organization map to what the requirements of large organization or small-medium sized organizations?
If the answer is the requirements look like the large segment, then we should say no. If the answer is the requirements look like the ones we usually find in our small-medium sized organizations and map with our core capabilities, then this exception is acceptable.
Sticking to your strategy may require discipline in the face of a large revenue opportunity. Use your strategy to determine its fit with your organization’s capabilities. Once you have a strategy, use it to assess a specific situation to see if an exception is warranted.
For information on strategy development please contact Denise Harrison at: 910-763-5194 or harrison@thestratplan.com.
©2015 Spex, Inc., Wilmington, NC 28401
Reprint permission granted, with attribution.
Excellent post, thank you!!