Thursday, April 16, 2009
Strategic Planning Analogy #253: Sailing Into Headwinds
One time I was on an executive retreat and had the opportunity to go sailing in San Diego Bay. That sounded like a pleasant and relaxing way to spend an afternoon, so I signed up. When I got to the boat yard, I found out that I was going to one of the leading schools in the nation for teaching how to race sailboats competitively. Well, so much for relaxing.
We got a brief lecture on how to race sailboats (way too short for me) and then we were out in the water. I was relatively clueless about what was going on, but a least we had a good teacher on this large sailboat (or so I thought).
Well, we lost the race, but at least once it was over I thought I could get that relaxing boat ride I had wanted. The teacher said it should be very pleasant, since it never rains that time of year in San Diego. Shortly thereafter, it started to rain.
As the teacher was moving the sail to catch some wind, he unknowingly tried to place the crossbeam in the same location as where my head was. I was knocked flat on my back and almost fell into the bay. Fortunately, the only thing that went into the water was my hat. We got to watch it sink into the bay.
With a sore head, I was ready to go back to shore. Unfortunately, at this point the wind totally disappeared. We were stranded and couldn’t go anywhere. We waited what seemed to me to be forever. The wind never returned. Finally, the teacher decided to call to shore to get a motorized boat to tow us in.
What a crazy day. I haven’t gone sailing since.
Strategic Planning is a lot like sailing a boat. In both cases, you have a team of people trying to move from one location to another. In a racing sailboat, the goal is to get to the finish line before anyone else. In strategic planning, the goal is to reach and own a winning position before anyone else.
If your sailing team doesn’t know how to get a sailboat moving, you will not achieve your race goal. Similarly, if your business does not know how to get a company moving, it will not successfully achieve its strategic goal. Therefore, this blog will look at what we can learn from sailing success and apply it to strategic success.
The principle here has to do with motion. Without the right kind of movement, you will not achieve your goal. In sailing, motion depends upon harnessing the power of the wind. The wind is an external force, over which the sailor has very limited control. A similar force is at work in business—it is the movement of the marketplace.
The marketplace is made up of a variety of trends. They could be things like demographic trends, lifestyle trends, governmental trends, attitudinal trends, and economic trends. Sometimes the trends are moving up, sometimes they are moving down. For example, in demographics you may see an increase in the elderly or an increase in young Hispanics or a decrease in traditional families.
Whatever direction the trends are moving in, it is movement. It is this movement that changes the direction in which money is spent. Like the wind, the directional movement of how money is being spent in the marketplace tosses around the fortunes of businesses like a boat. Also, like the wind, these market forces are external to your business and you have only limited control over them.
Good sailors know how to harness that wind to their advantage. Good strategists need to do the same. So what can we learn from these sailors?
1. It is Easier to Adjust to the Wind Than to Get The Wind To Adjust to You
Racing sailboats have all kinds of ropes, pulleys and gears. These are used to reposition all of the sails in order to catch the wind. The idea is that although the wind is essential for moving the boat, if you want the boat to move in the proper direction, you need to adjust the location of the sails.
In the current economic difficulties, many managers are blaming the economy for their poor performance. They refer to the recession is a “strong headwind” which is holding them back from achieving their goals. A good sailor wouldn’t use these excuses. They would instead adjust their sails to use that headwind to their advantage.
This doesn’t mean that you necessarily have to abandon your overall strategy in order to catch some wind. In the case of Target stores, their “Expect More, Pay Less” strategy has had to adjust its sails to be focused a bit less on the “expect more” side and a bit more on the “pay less” in order to catch the winds of the economic downturn. The overall strategy still remains in tact.
On the west coast, many high end restaurants have found that the current economic winds are moving spending away from expensive meals, but still going out for drinks. Therefore, many of these restaurants are adjusting by expanding the size of their bar and cutting way back on seating for meals, but they still want to be seen as high end.
As sailors know, it is easier to adjust the sails to the wind than to command the winds to change to suit your sails. Businesses that are fighting the prevailing long-term trends of the marketplace tend to fail. Just as sailors cannot change the wind, you cannot suddenly change the economy or make baby boomers young again. Being out of touch with the times is hardly a winning strategy and wishing for the times to change doesn’t help. Instead, adjust!
2. Have a Course, But Be Flexible
But what if my strategy wants to take me in the direct opposite direction of the near-term prevailing trends? Well, good sailors know that one can even make forward progress using winds going in nearly the opposite direction. The tactic is called tacking. In tacking, you make forward progress by using a zig-zag motion. The zig-zags provide angles that can catch the wind from alternating sides in a way that combine to still get you going roughly forward.
The idea for business here is that even during rough patches, a strategy can still move forward. However, the exact course may need to adjust a little—perhaps become more zig-zag and less direct. Remember, the goal is not to follow a precise line in your journey. The goal is to reach the finish line. If modifying the path gets you to the finish line faster, than so be it.
What does tacking mean from a business point of view? Well, if the trend’s against you, then zig-zag the agenda of your conversation with the customer. For example, let’s say you want to sell expensive luxury goods in an economic time when customers are cutting back and desiring cheaper items. The customer wants the agenda to be about price. You need to zig-zag around that and use the tough economic times to create an agenda which helps you. Examples:
• Luxury items have a lower total cost of usage because they last longer and need fewer repairs.
• It’s really not price, but value which counts.
Remember that this is a race, so stealing share from the competition may be the best move when the pie stops growing. Zig-zag faster than the competition by adding more service to the package (increasing relative value), or introducing some lower-price entry products, etc.
You can be flexible in the path while keeping the same goal in sight. So don’t just go wherever the wind wants to go. That is randomness that never gets to the goal. Use the wind to go where you want to go, even if it means taking a slightly different path to get there.
3. It takes coordination
When I was sailing that boat in a race, I was not alone. We had a racing team positioned at different spots on the boat to make different adjustments. We had different roles, but we had to work together in order to make the proper adjustments. Our teacher told us what to do so that all of our individual actions added up to the right adjustment.
The same is true in business. Strategic plans need leaders who know what adjustments to make and teams of people who can coordinate their work in order to make that adjustment. Strategies need to be more than platitudes on a piece of paper. They need to embrace action plans.
4. Be Ever Alert
Winds can change in an instant. All it took was two planes ramming into the World Trade towers on 9-11 to instantly cause a major redirection of marketplace trends. Sailors pay attention to the weather to try to anticipate wind changes. We need to do the same by studying trends and doing scenario analyses, so that we can try to spot changes early and have a backup plan in place for when they do.
5. Don’t Just Sit there
When I was in that boat race, we never had a moment to rest. We were continually tightening and loosening ropes. Sometimes we had to change where we sat and lean so that the weight was in the right place. It was tiring work.
The same is true with strategy. It is not something you do once a year for a few days and then ignore for a year. It is an ongoing process that requires action all year long. Adjustments are being made daily. If the strategists are not in on the adjustment discussions, then the adjustments can make the overall strategy obsolete. You need to provide context so that all the adjustments eventually get you to your goal.
And when the winds die, don’t just sit there waiting. Find ways to get towed to where the winds are (spend some capital, reposition). Sometimes the prevailing winds have moved so far from where you are that it is time to refashion an entirely new strategy.
Businesses move on the winds of marketplace trends. These trends direct the way the money flows. If you want that money to flow into your sails, you need to be adjusting your sails on a continual basis. This does not mean randomly drifting with the wind and chasing every fad, but in cleverly using those winds to accomplish your long term goals.
One time I went canoeing a large lake on a very windy day. The wind blew me westwardly across the large lake and quite a ways north. When I tried to turn around and go back, I was not strong enough to fight the wind. It kept pushing me and the canoe back to shore. Eventually I had to get out of the boat and knock on doors until someone could help me call the boathouse to get them bring out a pontoon boat to haul me and the canoe back…another example of the problems which occur if you ignore the wind when planning a journey.