How is NewEdge’ Strategic Planning different?
NewEdge brings in an extremely strong marketing perspective to strategic planning. Too often it has been the domain of management consultants when in reality the strategic plan is about resource allocation and resource allocation ought to be grounded within very strong realities of the market place today and in the future. NewEdge brings this critical market perspective to strategic planning.
A lot of firms have a single approach using tools such as Porters 5 Forces or SWOT analysis when in reality strategic planning for a multi-national corporation versus a public utility versus a high tech start-up, ought to be a very different process. The needs of the organization are affected by the maturity of the markets they serve and the products they produce as well as the maturity of the organizational dynamics, the organization structure and the challenges facing the organization. For this reason NewEdge uses a variety of tools, customizing the process based on an assessment of the organization.
Responsive to markets and competitors NewEdge’s strategic and growth planning is grounded in markets, their behaviors, emerging trends, and the behavior of competitors. NewEdge brings extensive experience in a wide range of markets to this exercise as well as the ability to make sense of large and varied quantities of market insights the organization has gained. Market needs are then mapped onto organizational capabilities and resources to create practical strategic plans.
Actionable Strategic Planning
Too often strategic plans are extremely time consuming but not necessarily actionable. NewEdge seeks to minimize the time of top level executives while maximizing the development of an actionable plan. The leap between strategic planning and implementation is often challenging for firms. This step is made easier if the strategies are designed with action in mind. Keeping strategic plans simple enough to be remembered without referencing huge documents, developing action plans that are directly linked to the strategies, and working through the challenges of allocation of resources at the time the strategies are formulated all make the plan more actionable.
Here is a sample of the beginning of one of our strategic planning processes:
- Devise a plan to accomplish the goals of the organization
- Re-allocation of resources
- Re-structuring of organization, duties, or work flow
- In order to be accomplished, strategy must be part of daily organizational life
Then we determine with the organization what are the:
- Major goals
- Minor goals
- Short term goals
- Long term goals
- Preparation for the future
- What is the number one, non-negotiable goal?
- What is the biggest risk for survival?
More than vision – real change
There is a popular phrase in management regarding strategy, namely “Structure follows strategy,” it means that the structure of an organizations resources – time usage, marketing and R&D dollars, staff, budgets– should be based on strategy. This statement encourages organizations to determine their strategy before trying to solve problems by restructuring.
Surprisingly though, strategic planning often stops at formulating a strategy but not following through to make the structural changes needed to support the strategy. If structural changes are not made to support a new strategy, the strategy is nothing more than wishful thinking. NewEdge looks carefully at structural changes that may need to occur in order to implement a strategy. While firms tend to be quick to restructure organizations, NewEdge has found that the most impact is achieved by reducing distractions from strategy for upper management, followed by re-allocation of marketing and R&D resources, and finally the changes to the organizational structure.
Strategies the competition is overlooking
Strategies are of little value if they fail to give you some sort of competitive edge. Therefore, NewEdge works with clients to identify opportunities their competitors are overlooking.
One of the keys to identifying opportunities the competition is overlooking is to avoid starting with what is, and focus on what is not. We can define what is in terms of a) current competition, b) current products, and c) current customers.
Don’t start with the competition
It would seem logical that the first step to identifying opportunities the competition is overlooking would be to figure out where they are looking and then look elsewhere. But this is precisely the approach that should not be taken. The reason is that to the extent that we define the competition as our starting point, we will inherently limit the outcome. The majority of market intelligence today focuses on what the competition is doing which automatically evokes a drive to respond to the actions of the competition rather than find opportunities outside of their frame of reference.
Don’t start with your current products
The second place you should NOT start is by focusing on current products and trying to find markets for them. Just as we don’t want to start at the point of where the competition is focused, we also don’t want to start with where we are focused. Where we have been focused is on the products we sell. This is precisely the wrong place to begin. Current products reflect a development trajectory that will limit what we create. In addition, our current products are within the line of sight of the competition thus reducing the likelihood that we will identify an opportunity they are overlooking.
Don’t start with your current customers
Finally, you should NOT overly focus on current customers. While there will certainly be opportunities to be found there, and we will discuss how to identify those, opportunities in new markets have been shown to yield higher growth and higher profits.
The bottom line is that focusing on what is will limit our investigation of what could be. And yet surprisingly, this is where most market research and strategy devleopment starts. Market research is typically comprised of competitive intelligence or customer surveys. Such research yields opportunities that the competition may be aware of or can easily respond to. No wonder there is a crisis in market research. Recent reports show that most companies do little research and those that do conduct research find the results disappointing. Despite the importance of comprehensive research for identifying growth opportunities, recent studies show that organizations conduct very little research and do not find useful the research they do conduct, leading to frequent failures to identify opportunities (Adams, Day and Dougherty 1998; Day 1994; Dickson 1992; Hamel and Prahalad 1994; Jaworski and Kohli 1993; Mahajan and Wind 1999; Slater and Narver 1995; Webster 1992). Leaders in the field of market research suggest that this lack of research is because current methods fail to properly diagnose all elements of markets, investigate customers’ problems and unarticulated needs, and integrate multiple types of qualitative and quantitative information in a timely fashion in a way that produces trustworthy, strategically relevant results for firms (Mahajan and Wind 1999). Additionally, concern has been raised that current methods do not overcome the constraining influence of managers’ mental models (Day and Nedungadi 1994).