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Strategic Planning: Are Your Decisions Based on Facts or Opinions?

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President and CEO, Spex, Inc

 By Denise Harrison, Strategic Planning and Execution

Many people return from a strategic planning retreat frustrated, often asking: Were we really concentrating on what is important or were we focusing on what was “top of mind”? Did we make the right decisions or were we swayed by the most persuasive person?

A Better Way to Make Decisions: Thoughtful Consideration Based on Research

One way to prevent making decisions based on opinions and “top of mind” thinking would be to split your strategic planning process into three steps:

  1. Situation Analysis and Research Identification
  2. Strategic Formulation (based on the above research)
  3. Implementation – Turning Strategy into Action

Critically, Step 1 starts your strategic planning process off on solid footing, focusing on the current situation and identifying the important areas of research. These should include:

  • Current business segments: Are we positioned to meet their future needs? How are we differentiated?
  • Competition: What are they up to? How are they positioned in the market?
  • Other considerations that can change the competitive landscape: technology, suppliers, economy and regulations?
  • Opportunities: What are they? What is each one’s potential? What is the downside risk?

Taking time to research these topics and any others that your team deems worthy of research before the strategy formulation session allows for better decisions in which all team members are equipped to participate . It will enable your team to develop a strategy that will really differentiate you from the competition and set you on the path for future success.

What else?

Another important component of the research phase is to have the research collected in a consistent format. Having a template for the business segment, competitor and opportunity research is particularly important. This consistent format allows you to compare each topic given the same information rather than miscellaneous bits and pieces pulled together to present the researcher’s thoughts in a favorable light. This consistency allows for rigorous discussion of where to spend your company’s resources in order to achieve the best possible benefit.

If you would like to know how to make your strategic planning sessions more fact-based please contact me at harrison@thestratplan.com.

(c) Spex, Inc. Wilmington, NC, 2015.  Reprint permission granted with attribution.

Choosing a Road Less Traveled Is Best

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by Denise Harrison, President and CEO, Spex, Inc.

Many readers are confronted with 800 pound gorillas in their market place – how should they compete? Should they follow the leader or devise a strategy that capitalizes on their unique capabilities?

Choose the Road Less Traveled

Many readers fondly remember Piedmont Airlines. When airline deregulation looked Piedmont in the face Piedmont knew that in this new competitive environment they would face challenges from larger, better financed airlines. How could they compete?

Larger airlines chose to compete in the busiest airports. This head to head competition led to inevitable price wars. Piedmont, on the other hand, continued to build its network in the southeast servicing many airports that other airlines would not even consider. This strategy paid off as the company was voted ”Best Airline”, clearly differentiating the airline as the high quality service provider in the industry. Next, US Airways purchased them, and you know the rest of the story!

Market trends are some of the key factors to look at when developing a strategic plan. But in addition to looking at the market attractiveness a company must also look inside and assess its own strengths and weaknesses. Compete on strengths and avoid areas of weakness. All of the airlines developed their respective strategies by evaluating the markets, looking at demographics and transportation trends. Piedmont chose to avoid competing with better-financed airlines in popular hubs. Instead it looked to service the area where it was already well established and an area that was less attractive to its larger competitors.

During the 90′s many companies saw the Internet expansion as a key trend to enhance growth. Pundits argued that the new economy was immune to business cycles – the new management mantra was ”get big fast – or go home”. Webvan embodied that mantra – to what end?
”Webvan Group, Inc. said it shut down its online grocery-delivery service and will file for Chapter 11, marking one of the most spectacular and expensive failures of the Internet era…. Webvan poured …$830 million… into high technology warehouse facilities and a 26-city expansion plan that most observers have since said was too ambitious.”(Wall Street Journal, July 10, 2001)

This is only one example of how companies assumed the Internet was the ”land of opportunity” pouring millions of dollars into plans that were ill-conceived and based on invalid business models.

Intelligent Information Systems, Durham, NC

During this dot.com boom Intelligent Information Systems (IIS), a software-consulting firm, was evaluating different potential growth strategies. IIS was clearly differentiated by its high quality standards and its commitment to total customer satisfaction. To many, ”quality” and ”total customer satisfaction” are just buzz words, but to the team at IIS these phrases are driving principles. While many technology firms in the Research Triangle Park were taking advantage of the lucrative public offerings, the senior management team at IIS knew that a public offering would cause the team to lose its focus on customer satisfaction and zero defects. After a public offering, associates would be imagining what they could do with their newfound wealth, watching the stock price daily, hourly, assessing minute to minute his or her net worth. This myopic self-interest would cause the company to lose its competitive advantage. A difficult decision to make during a critical time frame, but 20/20 hindsight shows that the IIS team chose the optimal course and direction for their firm by focusing on the key areas that set the company apart from the competition.

When developing your company’s strategy look for ways your company can capitalize on its unique mix of assets and capabilities. Do not follow the leader; choose the road that works best for your company – often the road less traveled.

Denise Harrison is President & CEO of Spex, Inc.: Strategic Planning and Execution. She can be reached at  harrison@thestratplan.com.

© Copyright 2014 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.