Did a talk this morning at Minnesota Manufacturing Group - the "7 Mistakes" talk from July, slightly revised.
Tremendously experienced and sharp group, asked some great questions - like how to measure and find the discipline of execution. like how to keep strategic plans from being perceived as "same old, same old," like the time horizon of long-term plans, like how to optimize ownership and accountability at the right levels. Reflecting on the answers will take several blogs!
Some organizations do carry their strategic plans over from year to year. If it's working, that's great. But the question is how do you know it's working, and that gets to metrics.
A strategy without a dashboard is almost useless - and creating the dashboard is where the first hard work comes in. There should only be a few metrics, since humans can focus on a few things, especially for a prolonged period of time.
And if there's only a few, then they'd better be good ones!
What makes good dashboard metrics?
They're forward-looking. On sales, for instance, you need good information about what's in the funnel (or pipeline) several months out, with appropriately cautious metrics that there won't be many surprises.
They're timely. On customer satisfaction or employee experience, an annual survey is too long to wait to find out if there's a problem! Better to have smaller samplings more often to keep a finger on the pulse so that corrections can be made when needed.
They measure what matters, rather than what's easy or traditional to measure. When a call center realized what pressuring to reduce time-on-call meant for customer satisfaction (strong negative correlation), they switched to randomly sampling customer satisfaction, without pressuring agents to get off the phone quickly.
They're trustworthy. The old adage of "garbage in, garbage out" is as true today as when the phrase was first used in the 70's - you can't make good decisions on bad data. If a key data source is compromised, leaders need to clean it up or find other data to inform the same objective.
They're strategically consistent. One person from Minnesota Manufacturing Group told the story of an organization he knew that measured salespeople on gross revenue, and production on cost-savings. Can you guess what these competing metrics created?
Next strategy blog - how to avoid "same old same old"
Showing posts with label strategic. Show all posts
Showing posts with label strategic. Show all posts
Tuesday, November 8, 2011
Monday, February 1, 2010
"Strategy is dead" RIP, and long live AGILE strategy!
Last week, the Wall St. Journal featured an article saying “Strategic Plans Lose Favor” with larger companies (read).
The article reports that companies like Home Depot, Spartan Motors, and (surprisingly!) Accenture think “Strategy, as we knew it, is dead.”
I say “Rest in peace!” -- for the sort of strategic planning that Accenture has specialized in, and that most larger companies have practiced.
Strategic planning can be, and has been, a massively analytical undertaking. Large consulting firms, like Accenture, can spend months of effort and hundreds of thousands of dollars developing an exquisitely detailed strategic plan based on massive analysis. Sometimes they’ll deliver it in nice leather binders so it looks great on the executives’ bookshelves.
In an economy with lots of surprises, such strategic plans can be obsolete before they’re printed.
One manufacturing company spent months developing a plan to achieve ambitious growth over a 3-year period. Within the first 2 quarters, sales dried up and they went into survival mode. As for the strategic plan? “Well, we haven’t looked at it in quite a while.”
So does that mean that strategic planning is dead, killed by the accelerating pace of change?
By no means! But the analytical behemoths may go extinct, while more agile approaches will flourish.
To be useful in turbulent and difficult times, strategic plans need to be flexible and adaptive, open to rapid learning from the environment.
If a strategic plan is not agile, it’s dead, worthless, money very poorly spent for “SPOTS” (Strategic Plan On The Shelf).
So how can a strategic plan be agile? See my next blog.
The article reports that companies like Home Depot, Spartan Motors, and (surprisingly!) Accenture think “Strategy, as we knew it, is dead.”
I say “Rest in peace!” -- for the sort of strategic planning that Accenture has specialized in, and that most larger companies have practiced.
Strategic planning can be, and has been, a massively analytical undertaking. Large consulting firms, like Accenture, can spend months of effort and hundreds of thousands of dollars developing an exquisitely detailed strategic plan based on massive analysis. Sometimes they’ll deliver it in nice leather binders so it looks great on the executives’ bookshelves.
In an economy with lots of surprises, such strategic plans can be obsolete before they’re printed.
One manufacturing company spent months developing a plan to achieve ambitious growth over a 3-year period. Within the first 2 quarters, sales dried up and they went into survival mode. As for the strategic plan? “Well, we haven’t looked at it in quite a while.”
So does that mean that strategic planning is dead, killed by the accelerating pace of change?
By no means! But the analytical behemoths may go extinct, while more agile approaches will flourish.
To be useful in turbulent and difficult times, strategic plans need to be flexible and adaptive, open to rapid learning from the environment.
If a strategic plan is not agile, it’s dead, worthless, money very poorly spent for “SPOTS” (Strategic Plan On The Shelf).
So how can a strategic plan be agile? See my next blog.
Wednesday, December 16, 2009
How to map to the future
Once your future’s envisioned, the harder work begins. Envisioning the future state as powerfully, vividly, viscerally as possible is creative, inspiring fun. (If it’s not, you’re not doing it right!)
This step’s much harder, and comes with a tide of hard questions. The first and hardest is, where are you now, really?
To get to that envisioned, inspiring future, you need a cold hard look at exactly what your present reality is.
That assessment includes (but, as a lawyer would say, “…is not limited to…”) –
• What’s your product and service mix? What do you do now to make enough money to pay the bills?
• What’s your brand, and how’s it doing in the marketplace?
• What are your financial resources and liabilities?
• What’s your current inventory, equipment, licenses, productive capacity…?
• What skills, talents, gifts does your staff currently have – and use?
• How well do they understand how their current roles fit the current reality? How engaged are they?
• What is your competition, and how’s the contest? When they win, how do they win?
With a little imagination, these actually apply to individuals as well as to organizations.
They’re hard questions that need honest answers, and these take a little time and wrestling to realistically assess.
But until you do, you can’t go on – because you can’t build a useful map based on any delusions. You have to know where you are, first, before you set your course to your future.
Next blog post – How to get there, from here...
This step’s much harder, and comes with a tide of hard questions. The first and hardest is, where are you now, really?
To get to that envisioned, inspiring future, you need a cold hard look at exactly what your present reality is.
That assessment includes (but, as a lawyer would say, “…is not limited to…”) –
• What’s your product and service mix? What do you do now to make enough money to pay the bills?
• What’s your brand, and how’s it doing in the marketplace?
• What are your financial resources and liabilities?
• What’s your current inventory, equipment, licenses, productive capacity…?
• What skills, talents, gifts does your staff currently have – and use?
• How well do they understand how their current roles fit the current reality? How engaged are they?
• What is your competition, and how’s the contest? When they win, how do they win?
With a little imagination, these actually apply to individuals as well as to organizations.
They’re hard questions that need honest answers, and these take a little time and wrestling to realistically assess.
But until you do, you can’t go on – because you can’t build a useful map based on any delusions. You have to know where you are, first, before you set your course to your future.
Next blog post – How to get there, from here...
Wednesday, November 18, 2009
How can you create your future?
Previous entry left with “Plan your future to create it. Envision the future you want, map how to get there, set goals and achieve them.”
It’s not really as easy as that sounds. If it were, everybody would do it, all the time. As is, very few do. Both organizations and individuals are more frequently reactive than planful.
But those that are actively engaged in creating their future are more successful and satisfied than the rest.
Step 1 is to envision the future you want.
When operating reactively, under stress, just coping, that can be a great challenge.
It requires a decision to put the present “on hold” for short period, to disconnect from the stress, to recognize that the all-consuming crises will have to wait a bit.
The important work of envisioning the future has to take priority over the urgent, if only for a little while.
Is "a little while" all this takes?!?
Well, that depends – on how many people need to be involved. When an individual creates her own vision of the future, is can be pretty quick, with guidance and attention.
When a small organization envisions its future, those various views need to be reconciled to a meaningful consensus. That takes longer, but still can be achieved in a morning.
When a larger organization does this, more people need to be involved and engaged, and it becomes an ongoing process. The senior leadership creates the vision, and then needs to engage the rest of the organization. While more time on the calendar will pass, it’s still just a very few hours at a time, spread over several weeks.
Is it worth the time and effort?
When you consider that the alternative is staying reactive, and what that costs, it certainly is.
It’s not really as easy as that sounds. If it were, everybody would do it, all the time. As is, very few do. Both organizations and individuals are more frequently reactive than planful.
But those that are actively engaged in creating their future are more successful and satisfied than the rest.
Step 1 is to envision the future you want.
When operating reactively, under stress, just coping, that can be a great challenge.
It requires a decision to put the present “on hold” for short period, to disconnect from the stress, to recognize that the all-consuming crises will have to wait a bit.
The important work of envisioning the future has to take priority over the urgent, if only for a little while.
Is "a little while" all this takes?!?
Well, that depends – on how many people need to be involved. When an individual creates her own vision of the future, is can be pretty quick, with guidance and attention.
When a small organization envisions its future, those various views need to be reconciled to a meaningful consensus. That takes longer, but still can be achieved in a morning.
When a larger organization does this, more people need to be involved and engaged, and it becomes an ongoing process. The senior leadership creates the vision, and then needs to engage the rest of the organization. While more time on the calendar will pass, it’s still just a very few hours at a time, spread over several weeks.
Is it worth the time and effort?
When you consider that the alternative is staying reactive, and what that costs, it certainly is.
Tuesday, November 10, 2009
5 problems with reactive mode
“Failing to plan is planning to fail.” We all know, intuitively, that if we don’t make and follow some sort of plan, we get stuck in a reactive mode.
Operating reactively has five specific disadvantages or risks.
1) Progress is unknown. If we don’t know where we’re going, how would we know if we’re getting closer, or farther away?
2) Satisfaction is elusive. Absent knowledge of progress, the best that can be said of a day might be “Nothing went haywire that we couldn’t fix!” While that can be an expression of relief, it’s different from satisfaction.
3) Decision quality is at risk. Without the context and guidance of a known strategy or goal, there’s no way to be sure we make right decisions. We may guess right most of the time, but it’s riskier.
4) Attention is scattered. By necessity, we focus on the urgent – and that may not be what’s most important. Operating without plans or goals leads to more - and more varied - things becoming urgent, until we’re overwhelmed and barely coping.
5) Stress levels rise. Productivity in organizations is at a very high level, as members cope with a long season of “do more, with less” as the guiding principal. When members leave, survivors take on as much of their jobs as can’t be left undone. But how long is that sustainable?
So, what to do?
Plan your future to create it. Envision the future you want, map how to get there, set goals and achieve them.
Is it that simple?
See my next blog for that.
Operating reactively has five specific disadvantages or risks.
1) Progress is unknown. If we don’t know where we’re going, how would we know if we’re getting closer, or farther away?
2) Satisfaction is elusive. Absent knowledge of progress, the best that can be said of a day might be “Nothing went haywire that we couldn’t fix!” While that can be an expression of relief, it’s different from satisfaction.
3) Decision quality is at risk. Without the context and guidance of a known strategy or goal, there’s no way to be sure we make right decisions. We may guess right most of the time, but it’s riskier.
4) Attention is scattered. By necessity, we focus on the urgent – and that may not be what’s most important. Operating without plans or goals leads to more - and more varied - things becoming urgent, until we’re overwhelmed and barely coping.
5) Stress levels rise. Productivity in organizations is at a very high level, as members cope with a long season of “do more, with less” as the guiding principal. When members leave, survivors take on as much of their jobs as can’t be left undone. But how long is that sustainable?
So, what to do?
Plan your future to create it. Envision the future you want, map how to get there, set goals and achieve them.
Is it that simple?
See my next blog for that.
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