Wednesday, March 11, 2009

Strategic Planning Analogy #245: It's an Emergency!


There's been lots of discussion over the years about a need to overhaul the US health care system.  One of the complaints centers around the bias the system has against preventive medicine.  There are studies showing that preventative health care and early diagnosis are very cost efficient—if you catch a medical problem early, it is cheaper to fix.


Unfortunately, for many poor people, they typically get into the health care system by waiting until they are already terribly ill and then going to the emergency room of a hospital.  This is the most expensive way to provide health care.


So why do the poor tend to migrate to the least efficient method of providing health care?  Because it is the most efficient for them.  Due to their circumstances, the poor often cannot get traditional doctor's appointments.  Emergency rooms, however, are required to treat them.  It is the easiest way for the poor to get into the health care system.  So we are rewarding bad behavior.


Worse yet, I have heard of multiple cases where poor people have intentionally committed a crime, just so they could spend time in prison, where they can have access to free prison health care.   The logic is that it is better to spend a little time in prison and get free health care than to be free, but have no health care.  They're just working the system to their advantage.



When it comes to strategic planning, businesses often seem to operate like the broken health care system. 


For example, one key part of strategic planning is to look into the future, to find the changing trends to the landscape in which one competes.  By anticipating change, one can create strategies to take advantage of that change.  This is like preventative care—preventing future problems by addressing environmental concerns early, adjusting before the change has a chance to do irreparable harm.


Another key part of strategic planning has to do with regularly examining one's strengths and weaknesses—some form of a SWOT analysis.  This is like early diagnosis—understanding what is wrong with a company's health while the problem is still small and manageable.  


Unfortunately, businesses tend to be focused on the "Tyranny of the Immediate."  The top priority seems to revolve around putting out the biggest fires consuming them at that instant.  Long-term issues cannot get proper attention.  This is like the inefficiencies of a hospital emergency room.  We don't get around to treating anything at the company until it reaches crisis proportion.   


Any good strategist will tell you that strategic planning is most effective when done like preventative health care and early diagnosis.  The problems are easier to solve.  The customers are more willing to cooperate.  You can avoid all of the time and money needed to correct an image disaster.  Yet the business system seems to favor trying to repair things after the disaster has occurred.


What is the strategist to do?  Learn from how the poor use health care.



Occasionally, we have looked at the topic of "stealth strategy."  This is the concept of trying to get companies to pay the proper attention to strategic issues when they really don't want to.  You need to use stealth in order to sneak the agenda onto the table. 


As we have discussed, businesses tend to prefer dealing with repairing emergencies rather than preventing emergencies.  Business procedures tend to resemble a hospital emergency room rather than a doctor's examination room.  It is not conducive to a long-term strategic agenda.  So how do we get the proper attention?  By using the system to our advantage.


Poor people know that even though it is not the preferred method, their best access into the health care system is through emergency room.  Then, once in the system, they try to get the system to work for them.  Sometimes, strategists must do the same thing—get onto the agenda by going through the emergency room (stealth strategy).


I'm not saying that we should just wait around until the company falls completely apart and then try to do strategic planning.  That is irresponsible...and unnecessary.  Fortunately, there almost always seems to be some sort of emergency already taking place. The tyranny of the immediate has already put something on the emergency room table.  All you need to do is go along for the ride.


Once getting in through the emergency room door, you can use the opportunity to shift the discussion in a more strategic direction.  There are two main approaches you can use:  Dr. Doom and Dr. Diagnosis. 


1. Dr. Diagnosis

If you want to solve a problem, it helps to know the cause.  When a problem hits the business emergency room, strategists should be volunteering to be the ones to diagnose the cause.  The more control strategists have over determining the cause, the more they can stealthily steer the discussion to deeper, more strategic causes.  Deeper, more strategic causes lead to deeper, more strategic solutions.


For example, let's say that the latest sales report comes in a little sickly.  A narrow diagnosis would say that the cause is a lack of sufficient sales promotions.  This would lead to a small, tactical response—a new sales promotion—which may be of dubious long term benefit.


However, a strategist might diagnose this same problem as being a poor positioning with the consumer.  This could lead to more strategic cures, like changing the consumer focus, repositioning the offering, changing approaches which work against the global consumer strategy, and so on.


Being a part of how the problem is framed may be one of the most valuable tasks a strategist can perform.  By volunteering to be Dr. Diagnosis, you can frame the problem in a manner that forces management to apply a more strategic solution.


2  Dr. Doom

Dr. Doom uses the emergency to build a doomsday scenario.  The idea is to get people to see that this is not an isolated problem.  Instead, this could be the beginning of a plague. 


The point here is to try to steer the discussion to a broader, more strategic perspective.  Get management to see the whole forest instead of just the one tree in front of them.  The broader and more encompassing you can make the disease, the broader and more encompassing will be the approach towards curing it.  By getting people to think broadly, you have stealthily move the discussion to a more strategic level than it would have otherwise been.


This method is most effective when you believe that it is time for the company to undergo a major repositioning of its strategy.  Management is reluctant to undergo a major change in strategy if they are comfortable where they are at.  Dr. Doom makes the current situation less comfortable.  If a plague is coming, it's time to move…NOW!


This is often referred to as the "burning platform."  If management believes the company is sitting on a burning platform (fire is destroying the very foundation of the firm), then there is no option but to look for the best way to jump off the platform.  Now the ears are ready to hear the strategic analysis that tells them which way to jump.


Some might argue that this is the approach being used by Obama.  He is saying that the current situation is so bad that we need to spend money to build a whole new social agenda (broadening the discussion beyond just the economy).  Whether you agree with his point of view or not, he did use the economic crisis to get the larger social agenda on the table for discussion.



The business world tends to focus on the near-term, fixing the crisis of today. Strategists tend to focus on the long-term, preventing even bigger problems tomorrow.  In order to get the attention of near-term management, strategists should use the near-term problems as launching points for a long-term discussion.  This is done by either:


a) Broadening the definition of the cause of today's problem to something bigger and more strategic (Dr. Diagnosis); or


b) Broadening the definition of the effect of today's problem to something bigger and more strategic (Dr. Doom).



This discussion has been about a powerful strategic tool.  Be careful how you use it.  If you treat every little thing as always being the plague, you become like the boy who cried "wolf!" too often.  People will stop listening to you.  So pick your battles carefully.

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