Monday, November 29, 2010

Business is Unforgiving. Get Used to It

“Life isn’t just about what you want to be. It’s about what you are.” I read this quote from John Rowe, the CEO of Exelon, a Chicago based energy provider in a recent BusinessWeek. His comment got me thinking about how important it is in strategy development to know your starting point.

I’m a right-brained thinker so big ideas, conceptualizing and embracing change are my natural starting points. Nothing is more exciting than new flip charts, fresh white boards and eager faces, ready to brainstorm the heck out of the future.

But wait…that’s a ready/fire/aim approach and because business owners and leaders are more risk averse than ever, it’s essential to use a structured process for evaluating strategic issues in the right sequence to give equal prominence to all aspects of thinking about the present and the future.

1. Frame the issue(s): this first step includes asking the “where are we now” question as well as understanding why we are considering a change in direction (what we want to be).
2. Generate ideas that answer the above questions.
3. Evaluate the options based on facts (resources, competition, etc.)
4. Consider the options based on perceived level of organizational change required and amount of buy-in necessary to be successful. (Do we really want to change and can we sell it to others?)
5. Develop “what-if” scenarios for each option to refine the degree of difficulty and to assess the risk management/risk mitigation challenges. (Where are our back-up plans?)
6. Agree on best course of action based on Steps 1 through 5.
7. Create an action plan designed for implementation, that is, one with timelines, accountabilities, ownership and success metrics.

In the current business climate, we can be too timid, because the future has so many unknown variables OR too bold because our strategic process doesn’t start with "what we are now". Being clear about our present doesn’t diminish our ability to generate innovative ideas for our future; being grounded in reality actually ensures that ideas become more than dreams.

Tuesday, November 2, 2010

5 Tips to Take Your Strategy Beyond "Hope"

I just returned from a two-day planning session with my business partner. As I said in a recent blog, a plan is nothing; planning is everything. This is the season of the budget and also, hopefully, strategy development, so I’d like to offer my perspective on the things that can make your strategy discussions more productive:

Get away if you can: staying in the office is a terrible idea, mostly because there is a clash of priorities; and the immediate and urgent (but not necessarily the critical) almost always win.

Begin with the end in mind: Thank you, Stephen Covey. For our business, this meant going out to 2014 for a lot of good reasons, including succession planning. Many initiatives can take several years to get right and leaving them until they are urgent is risky in today’s business environment.

Swim into a Blue Ocean: even if it’s going to take longer than 12 months (which may be a long time in American business), dare to create scenarios where your business is doing new and innovative things. This kind of activity expands your thinking and generates more options. Without ideation, your "ocean" gets redder by the minute, as the sharks circle the boat. By the way, reading Blue Ocean Strategy is good preparation for a strategic retreat.

Bite the bullet and take on the tough stuff: Effective strategic thinking means putting the skunk on the table. If you don’t talk about what’s hard, opportunities may never present themselves and, at the same time, challenges are never articulated until they rear up and bite you. Then you’re stuck spending a lot of useless time cleaning up after the skunk.

Boil down your strategy into a memorable sentence: a strategy statement by its nature can be complex and the risk is that a critical piece of your business becomes lost in verbiage. Try explaining two paragraphs of strategic direction to your employees and watch their eyes glaze over. We got ours down to “In It to Win It”. It means something to our company and it’s a lot easier to make decisions when judging them against an easy-to-recall strategy sentence.

The first step in any strategic thinking is to leave the spreadsheets and PowerPoints at the office and focus on the future. Whether your company is large or small; whether you head up a department or the entire business, strategy demands attention and dialogue. Are you using this budget season to take your thinking about your company to a new level?