Thursday, August 26, 2010

Strategic Planning Analogy #348: Bigger Vision

Back in the 1980s, David Graham was trying to figure out a way to revive the economy of southwestern Indiana. His conclusion: the economy was poor because there was no interstate highway running through the region.

Mr. Graham tried to get the government to extend interstate 69 from central Indiana to southwestern Indiana. Unfortunately, a 1990 study said that the project didn’t make financial sense. Nobody in government would back the project.

Normally, that would be the end of things, but then Mr. Graham ran into David Reed. Mr. Reed had a broader vision. Interstate 69 already ran from the Canadian border southwesterly towards central Indiana. What if this road was extended all the way to Mexico? It would become the centerpiece symbolically connecting the three countries of the newly being formed North American Free Trade Agreement (NAFTA).

All of the sudden, interstate 69 was getting fans from all over the country. All the politicians from areas located along the pathway to Mexico were rushing to back the plan. Large, national lobbyists were backing the plan. It was getting attention at the nation’s capital.

And, of course, if a road is to be built all the way to Mexico, it will have to go through southwest Indiana.

This story is based on a review of the book “Interstate 69,” which appeared in the Wall Street Journal. The concept here is fascinating. Mssrs. Graham and Reed took a local project which nobody was interested in and made it a national passion all because they found a way to attach their local agenda onto something larger which others could get excited about. Had they stuck to just their own local agenda, nothing would have happened.

Every business has its personal agenda—things which they want their business to accomplish. They may want to increase sales, or increase production or increase profits—something which will benefit the company. However, if a business only promotes its own personal agenda, it may not get much support. Why should others help promote the profitability of any one business if there is nothing beneficial in it for anyone else?

If a business wants assistance in getting its personal goals accomplished, it helps if you can align those goals with a greater purpose which has an established base of supporters. That way, as all the support behind the greater purpose moves forward, you can ride the coattails and get your agenda accomplished as well.

The principle here is that strategic planning often needs to reach beyond just what is in the interest of the company to include a broader base of constituents. Unfortunately, it is easy to get caught in the trap of localism when devising strategic plans. By this, I mean strategic planning which only selfishly looks at what is best for the company. After all, isn’t the primary goal of strategic planning to create a better future for the company? What could be more selfish than to create plans to improve a business’ prospects for success?

However, the irony is that often one can be even more successful if effort is diverted from a purely personal agenda to a larger agenda. Rather than starting a strategic planning process by asking “What will make me better?,” perhaps a better question is “What great, larger cause can I get behind that will open doors of opportunity for my business?” Because Mr. Graham got behind a larger cause of building a route between Mexico and Canada, he significantly increased the likelihood of getting the opportunity to have a major interstate expressway run through southwest Indiana. If he had stayed focused on just what is best for southwest Indiana, the potential of getting that expressway would have been 0%.

Department Store Example
There are many examples of this principle in action. I am reminded of a book called “Merchant Princes,” which came out in the 1980s. This book told the stories of the families which built all of the great local department stores in the U.S. back in the late 1800’s. In almost every case, these leaders spent a great deal of time on projects beyond the scope of their department stores. In particular, they spent a lot of time on projects designed to boost the economies of their local community.

These leaders knew that economic growth is not spread evenly. Some communities grow faster than others. They also knew that there was a greater chance that a community would grow better than average if there were groups designed to proactively promote the community. And if this larger agenda of building a strong, growing community was achieved, there would naturally be greater opportunities for their local department store to take advantage of that growth.

If these department store families went around begging community leaders to make them more profitable, they would not have gotten much support, if any. But by asking people to help them create a better local community, they got a lot of support. That support indirectly benefited the department store.

By contrast, what if these department store leaders had only concentrated on their own local business? They could have built one of the greatest department stores on the planet. However, if they ignored the larger issue, that store could end up located in a small, shrinking, dying economic area. All their effort would be for naught. Without growing populations of prosperous people, there is little chance for those department stores to be successful. It is only by embracing the larger agenda that they could maximize their local agenda.

Automotive Example
A more recent example would be in the automotive industry. The great recession was making it difficult for automotive companies to survive. The industry players needed help. They discovered that they were more likely to get government assistance if they embraced a larger agenda. That larger agenda included things like trying to protect local jobs and trying to move to greener electric automobiles.

A lot of people would be against bailing out wealthy business leaders just so that they can become wealthier. However, if you tell them they are helping to save jobs and save the planet, then you are more likely to get support. And indirectly, that effort to save jobs and save the planet also saved some automotive businesses.

Applying the Principle to Strategic Planning Process
So how do we apply this principle to the strategic planning process? Well, instead of focusing the planning process on one question, we should consider three questions. The one question we usually focus on is “How can I build my business?” This is the selfish, narrow question. To this, I would like to add two more questions:

a) How Can I Build My Base of Alliances? And
b) How Can I Build My Base of Opportunities?

Again, the irony is that if we spend less time focusing on “How to build my business” and divert some of that effort to building alliances and opportunities, we will end up building a more successful business.

Building Alliances
Mr. Graham improved the likelihood of getting his highway when he started moving his focus to building alliances. He started the Mid-Continent Highway Coalition. This became a tool for gathering a broad base of allies. The more allies he had, the more voices there were putting pressure on the government to get the highway built. To get those allies, he had to change his strategic vision to include more than just concern over southwest Indiana.

When you are creating your strategic vision, are you making it broad enough to entice allies to rally around your cause? Are you then building tactics around that vision to proactively seek a broad base of allies? Are you then building tactics to leverage your allies to your mutual benefit?

Building Opportunities
As part of Cisco’s strategy, they spend a great deal of effort sending people to developing nations to teach them about the benefits of investment in telecommunications infrastructure. They are not selling the benefits of Cisco. They are selling the benefits of infrastructure. Cisco points out how telecommunication infrastructure investments can be the best and fastest path to get a developing nation to the next level of prosperity. It will make the leader of that nation a hero.

The goal of these efforts is to build more infrastructure creation opportunities. Cisco does not always win the bid to build that infrastructure when it goes to bid. However, by devoting effort in the strategy to education, Cisco creates more occurrences when a developing country decides to build such an infrastructure. So even if Cisco doesn’t win all the bids, it ends up with more business than it would otherwise have gotten, because it has created more business to bid on.

This is like the department store leaders who worked on building prosperous cities. There was no guarantee that all that prosperity would be spent at their department store, but it certainly increased the potential pool of money that they had the opportunity to go after.

How much of your strategy is spent on building the opportunity pool to extract your business from? Being the best soccer player in the world while working in a country which hates soccer is not nearly as lucrative as being merely a very good soccer player in a country which worships the sport. Just as building the sport builds the player’s potential, spending time building your industry can improve your company’s potential.

The irony is that if you want to selfishly optimize your success, it usually pays to spend less of your strategy time on your selfish ambitions and add to your strategy broader concerns. These broader concerns tend to provide you with more allies and more opportunities, which in the end provide greater potential for those selfish ambitions. This is not about merely doing good for the sake of doing good, but about building a stronger path to a larger pool of profits.

Most of the extension of interstate 69 still isn’t built. Even if you have lots of allies, when money is tight, progress is difficult. However, the state of Indiana has recently started work on extending interstate 69 into southwest Indiana. And that is success that would not otherwise have occurred.


  1. Gerald,
    This is a Gerald’s stuff because of its originality. I read this post many times and each time I find more hidden pearls in it.
    If I want to extend the concept of this post to your goal of writing, I find you are doing what you are advocating. You are building allies with people like me who have become addicted to your writing. You create opportunities for people to widen their knowledge and awareness of strategy. In doing so, these people shall seek your expertise. You are like the departmental stores who helped the city to prosper and this way get more business from financially-capable and grateful customers.
    Gerald, I am not flattering you. This is the truth.

  2. Great job!! This is really a hard work what did you do...
    Thank you for sharing it here..Digital Asset Management

  3. Hello Gerald, Great post! Your strategic planning principle of – “reaching beyond just what is in the interest of the company to include a broader base of the constituents” - reminds me of the way how US positioned the first gulf war strategy as the savior for protecting the larger oil interests of the world (although US was the primary beneficiary) – and hence, was able to secure the larger support from most nations of the world. Likewise, you are absolutely correct that companies must learn to come out of their local mindset and take a systemic mindset for solving these types of big bets or big vision opportunities. In other words, systemic problems need systemic solution – and rightfully so, your strategic planning principle reminds me of the “5P – Purpose Model” concept (Purpose Model, Purpose Platforms, Purpose Portfolios, Purpose Pipeline and Purpose brands) I had proposed in one of my earlier blogs (– and interestingly enough, these principles, by and large, map one-to-one to your “Alliance-Global-Platform-Opportunity-Positioning” scenarios that are emerging from this interstate 69 story.

    - The “Alliance” scenario is in alignment with the “core purpose model” concept. Purpose models are the revolutionary game changing business models that not only reinvent the firm from product and/or business model standpoint, but also mutate the DNA of the brand (similar to how Mr. Reed rebranded the local roadway project as the global interstate 69 project). In other words, business models usually shuffle the value chain activities of the firm within the four walls of the firm (very much like the original scope of the interstate 69 project being just Indiana state) whereas purpose models go few more steps deep - and shuffle not just the value chain activities –but also repurposes the vision/mission of the brand, including the way we go about marketing/selling (similar to how Mr. Reed went about mobilizing larger fans) within the context of the multi- industry/geography boundaries with an externality mindset as it happened in the case of interstate 69 story (i.e. connecting Canada, US and Mexico)
    - The “Platform” scenario is in alignment with the “Purpose Platforms”, the enablers of the purpose models providing the flexible foundation to change the “relevance, access and value” characteristics of the products/services without changing the platform design- very much like how interstate 69 was positioned as a multipurpose platform to link three countries as opposed to just a route connecting central Indiana to south western Indiana.

    - The “Global” scenario is in alignment with the holistic way of looking at the “Purpose brands” - linking product and brand experiences to consumer segment portfolio yet without impacting the global image – very much like how interstate 69 was holistically positioned not only to serve Indiana, but also to connect the 3 countries - and hence serving NAFTA needs with the global brand image.

    - The “Opportunity” scenario are the forward looking ideas within the context of the purpose models that help the firm to constantly change the product characteristics (yet without changing the underlying platform design) in alignment with the “Focus on building platform” principle that is adopted by Cisco when they want to penetrate a emerging country – in terms of their platform education (& not just product pitch).

    - Last, but not least, the experience based “purpose positioning” scenario not only makes us to provide the local “product experiences”, but also global experiences - yet without compromising the quality and safety – i.e. the “low cost/local, does not mean low quality” principle – very much like how interstate 69 was positioned as to connect well developed countries to an emerging country like Mexico – yet without compromising the quality of the end-to-end infrastructure.
    Over all, yet another great story and principle supporting the systemic global mindset!