Strategy is probably one of the most used terms, yet most unachieved aspects in business today. Even with a defined strategy, the percentage of realising it is, at best, extremely low. Try looking at some historical (3-5 year old) business strategies and forecasts in this industry if you need proof as to their success. ‘We want to open X number of shops, consistently deliver the best products, which operate well and earn X net profits”, usually fail to deliver.
The biggest and arguably only reason that strategies are not realised is because executive teams and businesses do not compliment them with the right competences, systems and processes (people, processes and IT) in a short enough time period. Effective execution of strategy depends on effective project management, delegated and aligned accountabilities throughout the organisation, communication channels and methods, performance measures, ability to execute (competences) and know-how to name only a few dependencies. An achievable strategy also needs to be realistic in terms of capacity planning. In other words, a business owner / operator needs the experience of knowing how many improvements can be realistically absorbed into the workforce and by when. Keep in mind; it’s better to deeply embed fewer improvements than to thinly spread numerous improvements.
In this post, we’ve been asked to outline some exercises in order to create a strategy. Prior to that, it’s important to know that a strategy is only as good as the infrastructure you build to enable your workforce to achieve it. Chris Woodhouse, Chairman of Gondola Group says it best in his 2009 Annual Investors Report:
“We continue to make investments in the recruitment, training and development of all people at all levels across each of our businesses. PizzaExpress implemented a Leadership Development Programme that will filter down to the rest of the business through the senior management teams. Its aim is to develop and retain its best people. A Customer Service Project was also set up to ensure PizzaExpress delivers the best customer service on the high street.
ASK continued to consolidate ways of working across operations to drive consistency throughout the business. This included a Balanced Scorecard approach to measuring restaurant performance against broad business objectives and the development of a communications programme to enable effective execution across all sites. Great progress was made in the Training function with particular emphasis on the development of new managers via induction.
Zizzi has bedded down a new, clear operational structure across the business. For each restaurant a ‘familytree’ (or an organisational structure) has been developed to support recruitment and succession planning. New training programmes have been introduced that affect all operators, from restaurant teams to General Managers, to increase awareness and knowledge of Zizzi’s superior food offering.”
In other words, Chris and the team at Gondola are putting in place the right pieces of infrastructure in order to realise their strategic intent. Keep in mind, high-performing operations equate to higher revenues and profits.
The key to building a 3-5 year strategy is being realistic and most importantly, honest with both yourself and your executive team. Shoot for the stars and don’t restrict yourself from greatness. We can always align strategic intent with time, money and resources later on in the process. What strategy does not do is determine how the organisation should get to the future vision, while restricting itself to a time-frame; it can be for both short and long-term periods and it does not rely solely on quantitative variables to draw conclusions.
Finally, keep it simple. It’s better to execute 3-5 things really well rather than attempting to execute 5-10 things poorly.
During strategy development workshops there will be a number of breakout sessions, where each provide an opportunity for thoughtful debate and discussion to generate ideas about the company’s overall future. It’s a good idea to use a facilitator to work with the most senior 2 or 3 people individually and then bring the executive / ownership team together to agree on one common vision and strategy to ensure honesty of goals and alignment.
Other roles of the facilitator are to:
- Manage time so that all topics can be covered and deliverables created
- Keep answers focused to issue at hand
- Avoid detailed digressions which do not pertain to intent of exercise
- Encourage idea generation through examples
- Allow executives to generate ideas alone and save personal ideas until later in the discussion
Here are a few exercises which we use with business executives to help define their next 3-5 years of strategy.
Exercise 1 – Visioning:
There are two exercises for this breakout: ‘Place Your Bets’ and ‘Crystal Ball’
- ‘Place Your Bets’ allows participant(s) to invest a hypothetical £10 million into the company. They can invest in existing or new areas. The purpose of the exercise if for participants to think about what areas of the company deserve and do not deserve investment.
- ‘Crystal Ball’ follows up on the previous exercise by challenging participant(s) to write newspaper articles which would reflect their future vision of the company in five years. It builds on the first exercise by allowing participants an opportunity to realise the success of their hypothetical investments in actual words. A good technique is to write a headline and leading paragraph for a newspaper article which you would like to see in your favorite daily in the next five years. Ie. “Conran Group buys our company for £10million pounds…and here’s what happened...”.
Exercise 2 - SWOT
I realise that this technique is cliché in business, but there’s a reason for it. The first is that everyone is familiar with it and the second is because it works, so ‘if it ain’t broke, don’t fix it’. Being honest about your Strengths, Weaknesses, Opportunities and Threats is a good way to lay it all on the table and build agreement / alignment amongst the executive team, which will then cascade throughout the organisation.
Identify company Strengths
§ What is the company’s advantage(s)?
§ What do you do well?
Identify company Weaknesses
§ What could be improved? Think about customer requirements, distribution requirements, etc.
§ What is done poorly at the company?
§ What should be avoided?
Identify Threats to company
§ What obstacles does the company face?
§ What is the competitor doing?
§ Are the required specifications for your products/services changing?
§ Is technology threatening your position?
Identify Opportunities for the company
§ What are the good chances facing the company?
§ What are the interesting trends?
SWOT’s are not only good for aligning executives, but it also helps the management team focus on the weaknesses so you can re-visit it an a year to tick off the challenges which you’ve overcome in the last 12 months. It’s quite a rewarding experience. As a rule, do a SWOT yearly in order to help focus on the years priorities.
Exercise 3 – Establishing your driving force
What is the single, fundamental element which drives the success of the business? Key outputs of this helps to align all infrastructure and staff towards a common set of performance objectives via training, performance management and culture by building the aforementioned to ensure your workforce is best enabled to achieve your business drivers.
Step 4 – Establishing your point of difference in the market place
There are three potential exercises, including: ‘Competitive Attributes’, ‘Competitor Positioning’, and ‘The Company’s Differentiation’. The goal of these exercises is to produce 2-3 bullet points on what the company should do to be differentiated in marketplace.
- ‘Competitive Attributes’ encourages participants to brainstorm attributes upon which the company competes. These can be attributes upon which the company currently competes or they can be attributes which the company will need to compete in the future; e.g., meeting customer requirements, meeting distribution requirements, etc.
- ‘Competitor Positioning’ asks participants to map the company and its competitors along the attributes brainstormed in the first exercise.
- ‘The Company’s Differentiation’ challenges participants to detail how the company can migrate to more differentiated position along the competitor positioning profile. This differentiation should be sustainable as well as unique.
Exercise 4 – Defining your target market
• What products will we offer? Don’t forget to do some NPD visioning (New product development) as well. Investors really like to see this.
• Which customer demographic groups will we pursue? Make sure all of your external and internal offerings, training and infrastructure are geared toward these groups.
• Which geographic markets will we pursue? Keep in mind, that it’s not always the high-street locations which make money. Be creative and forward thinking and look at lower rent areas which can help with profit margins.
Exercise 5 – Establishing your delivery capability (areas of excellence)
Areas of excellence are a set of describable skills, competencies or capabilities. They are deliberately cultivated over time to a level of proficiency greater than anything else your company does and to a greater proficiency than your competitors.
Companies generally pursue 2 - 3 areas of excellence. These should receive preferential treatment during resource allocation and spend due to their underlying importance to the company’s driving force. The key rules are to ensure it is given more money in good times and they are the last areas to be cut in bad times.
These exercises are designed for every business to use, non-dependant on size. Truly understanding, agreeing and communicating your strategy will help the whole company work towards it, whether it be 5 people or 5000.
For more information about David Gibson or the team at GBI, please visit www.gibsoninfrastructures.com
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