Planning is planning and strategy is strategy, but to say that planning strategically, or “strategic planning” is a call of management is a bit of an oxy moron or at least a practice for the moronic. People claiming to be consultants who facilitate strategic planning probably don’t know the most rudimentary aspects of business strategy nor management. Beware of the “Strategic Planning” expert.
Rather than “strateegery” and the latest management fad mumbo jumbo, decisions must be made about your strategy to compete and position in the marketplace but this process is more about assessing your potential and position in the marketplace from the perspective of the customer than “strategic planning.”
The more apt term for the process an organization needs is that of self-assessment and it begins with your:
Market & Marketing Objectives
Market-related objectives should only be set after you have asked these two questions first:
- What is your decision on concentration? What is your competitive advantage, and in what areas of the market can you be most successful?
Answering these questions accurately helps to ensure that your market focus and positioning strategies are most effective and thus helps you to win what to your company will be the lowest hanging yet most luscious fruits of customers and for customers.
- What is your decision on your ideal market standing?
There can be great dangers to having an 85 percent market share, just as having too small of a market share could be proof of gross ineffectiveness and lead to great vulnerability. It is better for you to have 50 percent of 250 than 85 percent of 100. Companies that are near monopoly face significant growth pressures and usually cannot effectively innovate. Choosing the most market share is not the objective; choosing the optimal market share is your objective. You must determine what is optimal.
Only after answering the above can you most effectively ask questions like these:
- What is your business, and what should it be? What is the result that customers buy from you, or what is the job they want accomplished?
These questions can be an opportunity of great innovation and repositioning for you in the marketplace. GE Aircraft Engines made a significant leap in the marketplace and in profits when they realized that rather than selling engines, parts and services that what the customer would value more would be “power by the hour.” This all in one offering at a unified price empowered airlines to better align costs and gain a new advantage.
- What areas might you not be adequately serving?
- What businesses, products, or practices, if you weren’t in them today, would you still choose to get into? Which ones would you not enter, and thus, what markets might you need to exit, or what practices might you need to abandon?
- What new products and services for existing markets does the customer value, and how should you prioritize your actions for preparing delivery of them?
- How do you prioritize potential new markets, and what are the triggers that signal that you should enter them?
- What are all of the potential distribution channels you could employ? What are the advantages of each, and where might you consider changing your distributive organization?
- What is your customers’ perception of your service, and how do you compare to their alternatives? What is the optimal service standard and performance you need to aim for, and how do you best leverage this strategic choice in the marketplace?
Begin a process of ongoing self-assessment and refinement of the above and other questions behind the process and you can transform the opportunities and growth of your organization…but whatever you do, don’t fall for strategic planning!
About the Author
Since 1990 Mark Faust has been CEO of Echelon Management International a growth advisory firm. He has been an adjunct professor at University of Cincinnati and Ohio University. His book Growth or Bust! Proven Turnaround Strategies to Grow Your Business has been featured and quoted in the WSJ, MSNBC, Forbes and many other magazines and outlets. Mark is also a syndicated columnist and speaker to CEO groups and associations.