According to Fortune, 70% of today's companies fail at controlling their strategic planning process. This statistic suggests that companies are highly inefficient at strategic planning, so how can a business effectively plan for growth and confidently execute those plans to deliver the required results?
Ways to generate growth:
There are numerous routes to businesses growth creation such as one-off activities like mergers, acquisitions or strategic alliances, and then the repetitive planning activities required for achieving organic growth. Simplistically expressed, all growth activities can be summarized as following the core objectives:
- developing and commercializing existing products into existing or new markets;
- developing and commercializing new products/services into existing or new markets;
Companies are often disoriented in approaching these challenges and lack formal solutions to be successful at it ongoing.
At Enable Growth, we believe that companies should focus on establishing a dynamic strategic framework. Let's take 3 common primary strategic pillars: Products, Markets and Customers
1. Products (& Services) are always core, as the sales of these are ultimately accountable for delivering company profits. Product /Service related activities e.g. research, development, market/customer application, manufacturing (products), and delivery (services) require alignment to growth objectives, strategy and daily business activity.
More fundamentally, all of the above require alignment to market and customer needs, and an awareness of the competitor landscape of product/service supply.
2. Market (i.e. End-Use-Markets) vision is a core requirement of strategy development, yet is generally the most neglected area when looking at growth architecture. Without understanding and considering the architecture of the End-Use-Market or Markets, a business currently serves or may serve in the future businesses will always be limited in sustaining their current position or identifying growth potential. This simple but overlooked truth is that a business needs to know the past, present and future market size, market prices and market costs to serve of the market that your business is operating in, or is targeting. The process of understanding and tracking these factors is crucial in order to continually align your product and service portfolio to end user needs. This is a dynamic landscape where Markets, Customers, and Products interact to create an environment of continuous change. Ultimately, successful strategic planning for business growth brings together both front-end strategic market vision, and back end product/service development, aligned to specific market relevance.
3. Customers are often the source and focus of many business strategy discussions. However customers cannot be viewed in isolation, as generally they operate in single or multiple End-Use-Markets as do their competitors.
An End-Use-Market therefore can be defined as a group of customers with the same need, which is the environment defined by the products and services they have developed/sold together, with the additional dimensions of geography and channel.
Now that we have identified these multiple dimensions, how are they connected to each other to identify potential and generate growth?
People and process are the links between these pillars
Ultimately a business' organizational structure (People) connects the dots between strategic pillars (e.g. Product, Market and Customer)
Conventionally, organizations define people by a job title (e.g. Marketing Director, Sales Manager, Account Manager, R&D Manager) rather than the activities that they are responsible for. Organizational charts are an endless list of job titles displayed in shapes of pyramid, matrix or circle, which is totally disconnected to growth drivers discussed earlier.
It all comes down to a simple fact, that the main shortcoming of job titles is that you (generally) have only one. Job title rarely relates to various roles and responsibilities that individuals are required to perform. This view is simply suboptimal in managing and leveraging growth drivers, (i.e. connecting the dots between Product, Market and Customer). Most jobs involve performing a range of roles, but are rarely recognized or connected formally with growth drivers.
Organizational structures are in constant mutation; this is a prerequisite to face new threats and to realize new opportunities. This is why roles aligned formally to organizational structure provide the most optimal way to run today's businesses. People within these evolving organizational structures are working more and more in cross line management relationships vs. the traditional direct line ‘boss to subordinate’ relationship. In searching for new growth opportunities, businesses need to adapt to a role-driven organizational structure, where people create value and enable projects and strategies to be delivered.
How best to run a role-based organization? It is through responsibilities (know what you do), reports (measure what you do) and rewards (be incentivized on what you do).
If you ask any employee of an organization what he/she does, in most cases they will start by their title and tell you which business segment they are operating in. However, if you spend about an hour with this individual, you could actually divide his/her responsibilities into multiple roles, and each of those roles will have a different scope, objective and set of deliverables.
To deliver growth, an organization needs to create a structure of roles which can enable growth objectives to be identified and met via the creation of appropriate strategies.
Now, once you set the right architecture [of roles] and you identify your strategic pillars (Product, Market, Customer), how do you cope with the strategic content, the “meat on the bone”:
How do you address the potential lack of strategic experience and focus of the people within the structure? Can you specially train all existing business managers to be strategic and act strategically? Do you need to set-up a department of strategic specialists? Do you need to contract strategic consultants?
All of the above can applied, but coming back to the Forbes statistic, not many companies get this right.
Strategists are by nature either generalists (they know strategic planning process steps and certain theoretical tools, but lack the business content ie product/market/customer), or they are content specialists (product or market or customer), but lack strategic planning process steps, understanding and practical tools.
If organizations are structured to align roles and responsibilities to enable growth activities across the matrices of Product, Markets and Customers, then you can set-up your organization optimally to strategically action those levers to generate growth.
Once the above is set up and the strategies are being created, the process of strategy execution follows. Executing without the framework, just to do so, is problematic and generally leads to failure. Successful execution is also about setting clear roles.
Process directs and manages people, activities, tasks and responsibilities.
Once roles are set-up (product, market, customer roles) how can you ensure that the growth strategies are created and delivered, tracked, reviewed, refreshed and amended in real-time? As markets rarely stand still for any length of time, the organization needs to flex strategy accordingly. This requires strategic activity to be a repetitive action, so that the right levers of growth are constantly focused with the collective aim of enabling growth to be realized. This is all about creating a routine process for strategic planning.
By their nature, businesses keep forgetting what strategy is all about as they get focused on ‘running the business’ on a daily basis. How many times have you seen your company conducting one-off strategic initiatives which lead to production of a report or a presentation that remains static with slow or no result, or becomes obsolete, as soon it has been presented for implementation?
So why do companies keep creating static strategy?
One of the main reasons is that there is no process automation enabler that helps business to consistently perform strategic planning in a systematic fashion.
Businesses need to automate strategic planning in a controlled way, as without control it cannot deliver steady growth, keep ahead of the curve, and understand the market of today and tomorrow.
Automation of the strategic process is fundamental as a business needs to: share real-time relevant information amongst the management; define roles responsible for continuous growth delivery in a timely and responsible manner; record progress on actions which are being managed to deliver that growth.
Enable Growth provides solutions to generate the optimal balance of business content, formalized through a strategic planning process and embedded into a roles and responsibility matrix. Strategic planning becomes part of a routine activity where a company’s current growth potential keeps evolving with its product (service), and where market and customer needs are identified.
- Continuous strategic planning enabled by roles within your business segmented by your company strategic pillars (product, market, customer)
- Dynamic Strategy - turn static into live strategy. A business that can do this is in control of its future.
- Action Management: without actions measurement and management an organization becomes static and will under-perform. The best action driven companies carry the entrepreneurial culture but with control. This is why dynamic strategic planning needs strong action management within a controlled framework geared towards growth.