Wednesday, June 6, 2012

Strategic Planning Analogy #454: Strategy Cut-Outs

A couple of years ago, I was at a tourist location while on vacation.  There was a section of the area devoted to souvenir shops.  These shops had quite a variety of souvenirs to offer—everything from T-shirts to antiques.  Most of the items had something printed on them referring to the phenomenon which drew tourists to the location in the first place.

But there was one store which stood out.  It was selling life-sized photographs of famous celebrities, cut and mounted on wood so that you could have them stand next to you.  In particular, the store was pushing life-size cut-outs of Justin Bieber, the hottest celebrity of that moment.

I thought it might be interesting to have one of these in my home (until I saw how expensive they were). 

But it got me thinking.  What if I had one of these Justin Bieber cut-outs in my house and suddenly the real Justin Bieber showed up?  The natural reaction would be to ignore the cut-out and pay attention to the real person.  All that money paid for the cut-out would have been a waste, because it has very little value when you have access to the real thing.

And if you saw someone ignore the real Justin Bieber to spend time with the cut-out photograph, you’d think they were a little bit crazy.

Sometimes, I think strategic planners can get a little crazy, like someone who would rather hang out with a photograph of Justin Bieber than the real person.

Strategic plans are an attempt to represent what is going on in the environment and how we would like to change it for our company’s benefit.  They are not reality themselves, but merely a representation of that reality (and the future reality we desire).  They are a “cut-out” rather than the real thing. 

But, as strategist, we tend to love those planning documents.  There can be great joy in getting such a document completed.  And sometimes strategists can get all caught up with all their other documents, and data, and graphs, and spreadsheets.  There’s just so much of it to occupy our time that there is no need to ever leave the office.

But reality takes place outside the office out in the marketplace.  We can go out there and see our real Justin Bieber (the world we compete in) any time we want.  But instead, we seem content to embrace our hand-made cut-out version of Justin Bieber and never leave the office.

Yeah, the cut-out is nice, but isn’t visiting the real thing occasionally even nicer?

The principle here is that great strategic planning goes beyond dreaming up great theories in offices or in printing up thick strategy books.  The best strategies are most in tune with the marketplace.  Therefore, it is helpful if the planning process spends time interacting with the marketplace where the strategy gets played out.

1) Get Out in the Field
When was the last time your strategists went on a sales call with your sales team, or spent time listening in at the call center, or visited (or worked at) the factory, or spent time in direct contact with your customers?  These are the types of places where your strategy either succeeds or fails.  The better you understand them, the better you can prepare to win there.

At most of the retail companies where I have worked, I have insisted that whenever my team traveled on business, they should carve out extra time to get out and experience the local marketplace.  I told them to visit our stores, the stores of competition and even stores that had nothing to do with us.  After all, you never know where you will learn something new that will be useful in strategy.

I was appalled one time when a retailer I worked for opened up the first prototype for a new retail concept.  The top executives got on the corporate jet and then drove directly to the store.  They cut the ribbon for the grand opening and then went directly back home.  No time was spent observing or talking to customers.  No time was spent visiting the competition.  What a missed opportunity to learn.

When H. Ross Perot was placed on the board of directors for General Motors, one of the first things he did was go to a GM dealership to buy a car.  He wanted to experience what consumers experienced when buying a car.  He also wanted to own and drive a GM car to better understand the product.  Later, Perot was shocked to find out that many of the other board members no longer bought cars—they were given to them by the company.  And most of them no longer drove cars—they had drivers.  And at least one no longer even had a valid driver’s license.  How do you build strategies for the marketplace when you are so out of touch with the marketplace?

Granted, you cannot go everywhere and see everything.  But you should at least spend some time experiencing the world of the line employees and your customers.  This gives you some “real life” context for evaluating strategic options.  And just as you can learn more spending time with the real Justin Bieber than you can with a photo cut-out of Justin Bieber, you can learn things out in the field that would never show up just looking at numbers and documents in your office.

And to supplement personal experience, include more input from those who live out in the field.  Invite input from line employees, customers, suppliers and distributors.  With all the social media tools out there, it has never been easier to include all the voices of the marketplace in your planning process.  Not only will this allow you to learn more for strategy design, but it will create greater buy-in and cooperation from the field during strategy execution (because they were part of the design process).

2) We’re Not in the Publishing Business
A lot of strategists get upset when all of their strategy documents and presentations get ignored.  After the strategy meetings, everything given to the leaders gets put on their shelf, never to be touched again.

Why does this happen?  To a lot of the leaders, all that material is like the photo cut-out of Justin Bieber—not quite fully real to their regular day job.   After the planning meeting, they have to go back to living life out in the field with the real Justin Bieber.  And given the choice of spending time with the cut-out or the real thing, they naturally opt for the real thing. 

Remember, a company’s strategy is not what is put in a book, but is the result of all the daily decisions made throughout the organization.  If the written strategy is not made real at the point where all the decisions are made, then it is not the real strategy.

Strategists are not publishers.  Our end products are not books, Powerpoint decks, budgets and so on.  Our end product is a transformed company which is moving in the direction of the vision.  Therefore, to succeed, we need to make our strategy relevant in the minds of the people making the daily decisions.  To do that, the strategy needs to get translated into the context of the reality of where decisions are made.

To do that, strategists need to spend time at the beginning out in the field so as to understand that
context.  In addition, strategists need to spend time out in the field after the strategy is crafted, helping the decision-makers see how to relate the strategy to their daily decisions.  And that cannot be done by just hanging around your office.

Successful strategies are the ones which impact what happens out in the marketplace.  That impact is increased when a) the strategy is built upon the knowledge of the realities of the marketplace; and b) those who are making the daily decisions out in the marketplace understand how the strategy is relevant to the choices they make.  This requires that strategist do more than just produce books, spreadsheets and Powerpoint decks.  They need to spend time out in the reality of the marketplace.

All of this is not to imply that analytics, budgets, spreadsheets, presentations, strategy books and vision statements are a waste of time.  No, they help to quantify and communicate the core strategy.  They also help to flesh out strategic insights and concepts.  But unless one has a deeper, more intimate knowledge of the reality of the marketplace—something that cannot be found just studying sterile numbers—you will not fully comprehend the context and relevancy of that information.

It is like designing a house without understanding the terrain the house is to be built on.  It may look great on the blueprint, but it cannot become a reality because it is inappropriate for the terrain.  First, go out to the site and learn the terrain, so that the house you design on the blueprint can actually be built and be the right structure for that location.

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