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The first of a ten part guide series on how to tackle the often complex challenges companies face when they are growing

Posted in Business

By Dean Ellwood*

When Hillary conquered Everest in 1953 it marked one of the great achievements of human courage and endurance.

It also showed how success comes from careful planning, risk assessment and analysis, knowing the competition (in Hillary’s case this included knowing himself) and above all having the determination to carry out his vision right to the wire no matter how difficult it might become.

They’re the same kind of challenges faced by every growth business; where do I want to go, how will I get there, and what do I need on the journey?

At the heart of Hillary’s plan lay an executable strategy, founded on vision, planning and commitment.

He also had unstinting support from Tenzing; a sounding board who could encourage, support and help guide the way to the top.

Sound familiar? You’re right – they’re the same ingredients you’ve probably identified as essential to your success.

Should I or shouldn’t I ... have a strategic plan?

Of course you should.

How else are you going to make your vision a reality? Developing a plan that turns a good business into an awesome business is not rocket science, but it requires realism and aspiration in equal measure.

A strategic plan is the beginning, not the end, of a never-ending growth cycle.

It’s a blueprint for action that should influence every action of every person in your organisation every day.

Don’t be bamboozled by the jargon – this is your common sense guide on how to succeed at being awesome. It’s about growing your business faster in your target market.

Your blueprint

To start with, take a critical look at what’s happening outside your business (see Figure 2).

Ask yourself:

1. What’s happening in the market?
2. What are my competitors up to?
3. Where’s the technology going, and what effect is it having?
4. What legislation or regulatory issues are coming up; could they make or break us?

Sounds simple? It is and it isn’t. Here are some tips for making the process easier:

Get your best people to help you Motivate them. Take them off for a free-wheeling, creative session and work them hard
Unlock the potential They've all got valuable perspectives on the industry so ask them to be candid and tell you, including what makes one competitor a star and the other less so.
Think outside the square Competitors who have been in the market for a long time tend to get compacent and rarely drill down to untapped markets and emerging opportunities.
Make it fun! Encourage immagination and innovation - insist that your people explore every opportunity to take the business to the next level.

The goal is to work out how to make the most of what you do best and to compensate for what you’re not so good at.

Work through the risk and rewards of each scenario and prioritise what is important and what isn’t.

So where to from here?

What’s happening inside?

Face up to the mirror.

You know what’s happening in your market: what competitors are up to, how technology is changing, and which way the regulatory wind is blowing. It’s time to do some serious – and honest – navel-gazing and look at your business from the inside out. This is not the time for rose-coloured glasses or pandering to large egos.

You’re not there to bond; you’re there to ruthlessly work out what you do well, where the business plan lacks substance, and what you need to do to bridge the gap.

Be ruthless and be prepared: this is not always a popular process. You might need a good facilitator to help work through the resource, infrastructure, product and customer issues (see Figure 3).

If the facilitator is good, you’ll know at the end of the process what you do better than anyone else and how you can use these strengths to best effect.

Now you and the team can develop key insights with a shared understanding of your strengths, weaknesses, opportunities and threats, as well as areas where you can exploit your competitive advantage and stretch industry boundaries.

Down to the wire

So, how do you choose between all the strategic possibilities that will have emerged from these exercises? Here are a few tips to help you maintain the momentum and focus your plan:

- brainstorm every idea, then debate the pros and cons. Don’t hold back – the smallest idea can provide a platform to build sound growth.

- recognise that building upon what you’re already good at, or can be good at, will give you an edge.

- understand who you have in your business, and their potential to take it where you want it to go. Do you want to shape the future of your industry? Do you want to adapt to it? Or do you just want to play in the same sandpit?

- work through the risk factors of your ideas; for example, aiming to shape the future of an industry is high-risk, high-reward stuff (see Figure 4).

- benchmark every strategy against your vision and goals. Will they help you achieve them?

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Still on the wire

You’ve narrowed the options, so picking the best one is the next challenge. This can be a tough process, because it may mean rejecting what appear to be convincing business options with great potential.

But the rewards are well worth it: commitment to a goal, and a solid foundation to build a strategy.

Analyse the risks and rewards of every option from a market perspective and your capacity to deliver.

Keep in mind the market risks associated with positioning your business – many of which are beyond your direct control.

However, remember you can almost always control the implementation risks: you manage the resources, infrastructure, intellectual property and everything else that you need to make it happen.

The wire stops here

With options and a strategic direction emerging, the next step is to work out how to go from good to great. We call this the value proposition (see Figure 5).

The chart above gives you a pretty good idea of what sort of outcomes you could reasonably expect.

This is when it becomes really important to align the resources you’ve got inside the company with the opportunities that lie outside. Get this wrong and you’ll pay the price for years to come.

Other traps you should be wary of include:

- trying to be all things to all people

- confusing customers by offering very different products or services at the same time

- temptation to stray from the blueprint and race off in a new direction. If you’ve aligned everything and everyone in the organisation to deliver something better than any of your competitors, stick to your plan and see it through.

It’s crunch time

So where to from here? You’ve put in the hard yards, developed a focused plan of action and motivated the team. It should be all plain sailing from here – right?

Well, you’ve done the easy part compared to what lies ahead. Fail to get the next bit right and you’re doomed. To succeed, you need to communicate passion and energy from the top.

Senior managers can’t pass the buck – they’ve got to communicate the strategy.

In most successful organisations, senior people are the internal sales people that infuse staff with a passion for success. In addition to the chart opposite (see Figure 6) effective communication includes:

- telling everyone what you’re doing and why you’re doing it

- putting in place continuous education programs that give your people the skills to do what you want them to do

- establishing goal-setting programs that keep everyone focused on the main game

- reinforcing these goals with motivating remuneration and reward systems.

You’ve nailed the blueprint

Time for action

Once you’re sure your people know where the organisation is headed, it’s time to show them how to get there. This means demonstrating how people, money and other resources will come together to achieve the plan, including:

- developing schedules of action for what happens when

- making sure that all parts of the business, including financial resources, are focused on implementing the plan

- linking people’s goals and job descriptions with the blueprint for action

- making the blueprint the yardstick for performance. If people implement it well, reward them accordingly. If they don’t… well, that’s another story

- putting in place effective monitoring procedures to track how everything is going.

In the wake of all successful, fast growing companies are the remains of senior managers who failed to make the blueprint a reality.

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Dean Ellwood is a partner at Deloitte NZ. You can contact him here »

This Guide is part one of a series. It is used here with permission.

Part one is about Strategic Planning and is here »
Part two is about Alliances and is here »
Part three is about Managing Risk and is here »
Part four is about Raising capital in New Zealand and is here »
Part five is about Marketing and is here »
Part six is about Outsourcing and is here »

 

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