Strategic planning using strategic filters and wildly important goals
The strategic planning process can take many paths. It may require months of preparatory analysis or simply use the collective knowledge of the management team. Either method requires the company to make decisions about its future course. In this document, we will show how to use strategic filters as a way to filter the data and make the best decisions. We will then focus these decisions on a few Extremely Important Objectives (WIGs) to be funded and completed.
Strategic Planning: Strategic Filters and Very Important Objectives
- Driving Force Filter: The Competitive Advantage You Can Prove
- Emerging trend filter
- Customer Filter
- extremely important goals
- Strategic map
Driving force filter
The driving force is the key differentiator or competitive advantage of the company. The most important element of the driving force is the test. If you want your employees and customers to believe it, you need to find the data to support your claim.
Here is a list of things that are NOT acceptable examples of driving force:
- informed employees
- Customer service
The reason these are not good examples is that any company can make this claim and everyone is saying it. If everyone says it, then no one will believe it.
Here are some examples of driving force that the market may believe are real differentiators:
- Innovation / Experience – We invented the surgical adhesive to replace sutures. The use of surgical adhesive reduces surgical time by 20 – 90% with less risk of infection.
- Speed - We will produce any custom product in 2 weeks or less vs. our competitors in 6 weeks or more.
- Rugged – We produce the toughest portable power generation equipment for military use. Our mean time between failures is over 10,000 hours.
- Customer Service/Training: Last year we trained 1,580 customer mechanics in service/repair techniques and have two mechanics dedicated to assisting customer mechanics over the phone.
- Product Leadership: We are the only consulting firm in the Midwest with experience applying Quantitative Process Improvement tools to optimize sales and marketing; reduce costs and increase sales.
Once you know and agree with the driving force of your company, you can use it to understand:
- what did you do to be the best
- The core competencies that support your Driving Force
- how do you stay better
Emerging trend filter
Emerging trends are external forces that you cannot control and can affect your business. These may include:
- Economic/monetary trends
- Political/regulatory trends
- Social/demographic trends
- Market conditions
- Customer Attributes/Habits
- Competitor profiles/mix
- evolution of technology
- manufacturing capabilities
- Product design/content
- Sales and marketing methods
- Distribution methods/systems
- Resources – natural/human/financial
We want these to be a strategic filter because they may require you to change your business model beyond internal competencies and customer requirements. They will impact how you:
- acquisition plan
- Develop new products and services
We have lived during a time of great external disturbance. Books and newspapers are a great example. Amazon changed book buying by making nearly every published book available, either new through its warehouses or used through used book partners. Instead of just buying what’s in the bookstore, you can buy what you want, get recommendations for new books based on what you’ve previously bought, and read reviews from other consumers before you buy.
Then Amazon switched again by offering the Kindle e-reader linked to its online bookstore. Now you can have thousands of books 1 minute after shopping delivered wirelessly over cellular networks. Newspapers and magazines are delivered to your Kindle every night at 3:00 am No ink, no printing, no late or missing delivery, no hassle when you’re on the go. Instead, you get perfect service.
Now we have the Apple iPad, which promises to embed graphics and video in books, magazines, and newspapers. This will incorporate the electronic delivery features of the Kindle and make the reading experience completely different.
Printers and publishers needed to see these trends coming in order to survive and prosper. These developments can shut down large companies and make others clear winners.
Other trends to note are environmental/clean technologies, monetary/interest rates, and global markets/supply chains.
Understanding your customers completes the filter-puzzle and will allow you to make the best decisions in your strategic plan. Significant time is spent understanding who your best customers are. We recommend a quantitative approach of choosing the key measurable characteristics that are important to your organization and then using Pareto analysis to rank your customers from best to worst based on these measures.
Once you know who your best customers are, you can determine what characteristics they share. When communicating through the sales force or directly with these customers, you need to ask two critical questions:
- Why do they buy from you?
- What pain do they have?
At the end of the Customer Filter session you will know:
- Who are your best customers?
- The characteristics of the best (what sets them apart from all the rest)
- Why do customers buy from you?
- What pain do customers have that you might be able to fix (with special emphasis on the best customers)
Wildly Important Goals (WIG)
With all the preparatory work complete, you can now create your strategic plan. The best companies always focus on achieving a few very important goals. Everyone in your organization is working on the important things every day. Serve customers, deliver product, train employees, shop, etc. they are all important and need to happen every day, week and month. Strategic Planning looks towards a longer time horizon. Therefore, we need to go beyond the important and focus on a few (3 or less) Wildly Important Goals that will take longer but will deliver breakthrough results for your organization.
This approach gives the plan a sense of reality. Many organizations try to do too much and end up not doing most of it or doing an average job. You want to be cool!
These MCIs may include:
- Acquisitions or diversions
- Large capital expenditures
- product development
- Geographic expansions
- Entirely new companies or brands
- Marketing campaings
- Globalize the supply chain
- Internal process improvement efforts (Lean Six Sigma)
- Implementation of new information technology systems.
- And a host of other ideas
The final step is to align the organization with the Wildly Important Goals. A Strategy Map is a simple tool to visually show how each department will support each MCI.
To see an example of a strategy map, go to http://supplyvelocity.com/whitepapers.asp.
The example you will see is that of a medical technology company whose Wildly Important Goals were to drastically accelerate the development of new products. The map shows how Marketing, Research, Development/Engineering, and Manufacturing support this strategy.