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Volume III Issue 4
"What's your strategy?"
by Jack Miller
Strategy is one thing; strategic plans are something else.
It’s easy to write a strategic plan. First, you decide how fast you want to
grow. 8% per year sounds about right. Then you take your market and
segment. Big customers. Little customers. Eastern customers. Western
customers. Then you make a nice list of each type of customer, and decide
which ones you think can grow by more than 8%, and which ones will grow
by less than 8%, while making sure the math adds up to 8% overall.
By now, you have 27 Powerpoint slides. You only need about 60 more.
Analyze the market trends. Get into detail. Is the market growing 2.4%, or is
it growing at only 2.3%? Do you know how to calculate CAGR? Do you know
how to pronounce CAGR?
Okay, you’ve been there and you've done that. You get the point.
There’s wishful thinking and hockey stick forecasting. There’s paralysis by
analysis. There’s death by detail.
I remember one exercise where our team was struggling. At meeting after
meeting, we thought of more data that we needed – no, check that – we
thought of more data that we could collect. At one point I suggested that
we try to write the strategy with what we had at that point, and see where
we got into trouble. Then we could get the data we needed to resolve
whatever questions or disagreements arose. That’s one way to separate
“need to know” information from “nice to know.”
Sometimes data isn’t the issue, it’s simply a judgment call. One company
wants a lot of small customers, another wants a few large customers. What
data would tell you which is the better strategy? Most likely, there is no hard
data that will give you the answer, but there are many things to consider.
Service levels. Competition. Pricing. What are your competitors strategies?
What services can you provide that the small customers need but the large
ones don’t? How much cost can you cut if you have fewer customers? The
list goes on.
But once the strategy is in place you need to execute. What are the key
success factors? What are the challenges? Objectively, what is the
likelihood of success? What will you do if the plan doesn’t succeed? The
execution plan and contingency plan are important parts of a good strategic
All too often, strategic plans are really just forecasts that look good because
they are backed up with a lot of detail. And, all too often, these forecasts are
too optimistic. Let me assume a little bit of volume growth, and a little bit of
price improvement, and I can make any strategic plan look good.
If your returns have not been satisfactory, it’s easy to forecast higher prices,
implement cost reduction programs, and make profound statements about
your plans for a glorious future, but is this realistic? If a plan is not realistic, it
can be politically incorrect for team members to say so. Sometimes, you
need an objective outsider to challenge your assumptions.
Whether it’s a corporate strategy, a sustainability strategy, a strategy for a
new product launch or foray into a new market, or even if you just need an
objective outsider to challenge your assumptions, Market-Intell can help.
For more information call Jack Miller at 203 925 0326 or email jack.
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Copyright 2007, Jack Miller
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