Category: Strategy

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If your company is using an outside strategy consulting firm like McKinsey, what is the best step to take after they leave? If their expensive advice is so useful, why might you still require another planning meeting?

Many of the most successful companies around the world avail themselves of the research services provided by firms such as McKinsey & Co, Bain & Company and Boston Consulting Group (BCG). Their formula is often the same: a prospective client presents them with a difficult problem. To find solutions, they assemble a team of young, bright MBA’s who tackle the issue in an intense three to four-month sprint. Working long nights and weekends, they delve into their database of past projects and proprietary data, relying on the stellar advice of their global network of experts.

Compared to the internal resources of the typical client, they have an unmatched ability to bring a firehose of assistance to a threatening blaze.

However, don’t believe for a second that they are providing a complete solution to your troubles. Instead, their final presentation is actually just the start. Here’s why.

#1 – They Solve Narrow Problems

An outside expert isn’t geared to tackle a wide range of your company’s complex issues. They agree to focus on a sharp, well-defined scope: a tight problem definition that is clear to both sides. Given their brief tenure, they define problems that can actually be solved in a short timeframe.

Initially, it may seem strange to you, their client. The consultants appear to be trying to do less, actively resisting the temptation to do more. This sometimes lead to tensions. Some look at the huge price-tag (US$1-2 million) and believe that at that level, every issue should be resolved by their high-powered team.

But that’s not how it works, with good reason.

As expert problem-solvers, they operate a bit like surgeons. Within their narrow specialty, they are called into crisis situations to tackle your organization’s issues no-one else can. They represent an immediate investment of time and money to carry out a critical intervention. As such, it’s unprofitable and unwise for them to “boil the ocean”. Their value lies in their ability to go deep very quickly, not to understand a great deal of complexity.

That’s why, when their job is done, they need to walk away. They should never usurp the responsibility for the long-term health of the company. That should remain the primary job of you, the client. Likewise, the implementation of their recommendations should not be in their role.

#2 – Their Solutions Have an Expiry Date

An outside consultant’s advice might be the best possible answer to a given problem…right up until the date their intervention ends. After that, all bets are off.

Case in point: if COVID-19 has taught us anything, it’s the fact that dramatic disruptions do take place. Imagine if, after receiving a consultants’ report, a pandemic were to break out. The unfortunate timing could render the contents meaningless.

This is why it’s critical for clients to act on specific advice immediately, never allowing it to languish. Does this mean that they should rush to implement the suggestions without question?

#3 – Outside Experts Aren’t Your Company’s Primary Strategists

Ultimately, the fact is that consultants can’t understand the entirety of your business in just a few months. This means they shouldn’t become your organization’s chief strategists. That job remains in the executive team, led by the CEO.

Whether their recommendations confirm, deny or augment prior wisdom, your senior managers should consciously incorporate them into their thinking. But there’s a caveat. Not every recommendation they made is worth pursuing. Why? They simply cannot take into account all the factors necessary to lead your business into the future.

As such, the chances of their report being completely correct are low, especially in the areas in which they tend to be weak: cultural differences, human resources and change management. While their technical analysis might be on point, it won’t be perfect.

Turning their findings into something valuable requires some hard, additional work, regardless of the price-tag paid. Your team’s combined wisdom is needed to treat the expert advice as only a single input among many: an element of the organization’s strategic management, but never a replacement.

The final decisions remain in the hands of your executives. They must now plan a complete strategy, short and long term, that builds on the report. The first post-McKinsey meeting is therefore just the start of a new planning cycle, albeit one that has the advantage of some fresh insights.

This article was originally published in the Jamaica Gleaner.

It’s often said that a good disaster shouldn’t be squandered. If you were to follow this maxim for 2021, how could you make the most of last year’s twin evils: a recession and a worldwide pandemic?

Most executive teams are happy to have survived to the end of 2020 in one piece. Thankfully, their companies are still running and few employees have succumbed to the COVID-19 illness. They feel a sense of achievement at overcoming an unprecedented attack.

However, this is a low standard. In the years to come, some will ask: “What big things did your leaders do with the pandemic?” In other words, how did you take advantage of the dramatic changes underway to ensure the company’s future?

Although most won’t have an answer, here are a few questions you can pose now. Use them to make the most of the havoc wrought by last year’s tumult.

1) Do you have the right talent?

Under normal circumstances, most CEO’s and board chairpersons don’t like to rock the boat. While they may secretly want a company filled with top talent, they decide that it’s just not worth the fight. Instead, they settle for so-so standards, believing that you can’t have an organization of star performers.

Here’s another approach: the best football teams keep a list of potential replacements for every position. Looking forward, they plan for a time when each incumbent cannot improve his/her level of play. As such, no-one is granted an indefinite guarantee. Instead, these organizations continually scan the horizon for potential replacements.

Few local companies challenge their employees in this way: in fact, only a handful conduct proper performance reviews. This failure leaves them short – lacking the systems required to put top talent in seats. Consequently, when the time comes to make dramatic changes due to outside circumstances, they falter.

For example, in 2021 few companies escape the need for an urgent digital transformation. However, only a handful have the capacity needed to convert this strategic imperative into a reality. If your company has no active plan to upgrade its human resource strength, change your approach now, before the next interruption occurs.

2) Are you innovating enough?

Some time ago, an executive complained to me about the lack of a critical input to their company’s business. While it could be acquired locally, it was only available sporadically. We talked informally about taking strides to secure a steady supply.

Today, a decade later, the firm remains in the same spot. They failed to craft the strategy required, a weakness that COVID has “attacked”. If they had only taken the right steps at the right time, this would not be a concern. In fact, it would be an enormous source of competitive advantage leading to happier customers.

In my company, we were too slow in our pivot to offer an online version of our 2-day strategic planning retreat. Believing that COVID would pass in the near future, we waited…but now we expect companies to ask for lower cost, virtual retreats as a matter of course. We learned that innovation is easier to teach than to apply.

The truth is, when only a trickle of evidence is available, you need tremendous creativity to imagine what your customers and suppliers will need. Yet, there are standard, proven approaches to produce reliable, game-changing innovations. For example, use the Jobs to Be Done technique I mentioned in a Gleaner column from Nov 18 2016.

Here is a test – if you don’t have a list of practical innovations lined up for possible execution in 2021, you probably aren’t taking advantage of the pandemic. Teach your staff how to use the latest techniques and apply them even when it’s hard.

3) A Culture of Proactive Resilience

Jamaican companies know how to react to disasters: they are tough survivors. But few can make repeated operational changes which create room for transformational shifts. Unfortunately, CEO’s often behave as if their job is only about capably adjusting to outside fluctuations.

However, there is another approach: to always look to do more with less, thereby preparing your company to tackle the next disaster before it even appears.

The fact is that today’s pandemic is tomorrow’s hurricane, fire, or new digital competitor. These are just a few disruptions which can do serious damage to your enterprise. Consequently, you should be prepared by driving an enduring culture of continuous improvement.

Ultimately, this self-renewing corporate culture is more likely to succeed against rude surprises. It prepares your staff to tackle challenges effectively. This is the only way to ensure your firm’s success: the kind of place which sees the next disruption as an opportunity to transform itself for the better. Far from being wasted, it’s welcomed.

In these distressed times, should your company be focused on more than its survival? While this approach may get you through months of struggle , it could be the recipe for your eventual demise.

Many executives are exhausted. All they can do each night is drag themselves from their laptops to their beds. The demand to keep their organizations afloat is at its peak and they give it their all: energized by the immediate challenge.

But lurking in the background is a future they believe they just don’t have time to consider. In fact, they see energy spent focused on the long term as a competitor to the job of saving their organization from destruction. It’s something to put off for later, when more hours become available.

However, if articles like the Board of Innovation’s “Low Touch Economy Report” are to be believed, there are permanent changes underway. Economic, health and behavioral trends are overtaking Jamaican economies. Some just won’t make it.

The fact is, there is a long term, low touch reality that COVID-19 has imposed on us. Consequently, companies which are too busy, distracted or weak to re-define themselves are going to lose. In effect, they have focused on an old habit: developing coping tactics rather than breakthrough strategies. This is a favorite excuse of local executives who scoff at looking at anything other than short-term tactics because “things change so fast.”

Their need to be right about their predictions clouds their judgement. They don’t understand that envisioning a preferred future is all about choosing a specific long-term outcome, rather than allowing circumstances to dictate it.

Case in point: GraceKennedy’s 2020 vision, created back in 1995/96. While there have been numerous devaluations, recessions, hurricanes and pestilences in the last 25 years the company is currently celebrating the successful completion of the two+ decade effort. Significantly, the competitors who failed to engage in the same exercise have either shrunk, collapsed or disappeared into other industries. The company’s P/E Ratio, profits and shareholder value have made quantum gains.

As Douglas Orane, former CEO, shared in a recent webinar, the vision led the company to stay focused even in turbulent times. Having a pre-defined, 25 year outcome helped allay fears when a number of rude surprises popped up.

However, the act of creating a credible 20-30 year vision is just one (necessary) element of a breakthrough strategy. Here are two others you could use.

Crossing Functions

While it’s possible for your CEO/MD to create a breakthrough strategy on his/her own, or hire consultants to do the same, there’s a pitfall. No single person (or outside outfit) is able to understand the limits of what can be implemented in your company.

The number of potential bottlenecks which exist are numerous. In an organization of 50 people or more, there are facts which cannot be known by those at the top which must be included in the deliberations.

Furthermore, excluding your leaders from the process means that they will have to be sold (or told) at a later date. They would need to understand the underlying rational for the strategy, then convinced to play their part.

Unfortunately, even if they do their best, their second-hand knowledge is likely to become an impediment. In other words, you would not produce a breakthrough strategy.

Crossing Levels

Now more than ever, it’s important for your organization to include employees at multiple levels.

Without their inclusion, your company would probably just take the lazy approach: use what has worked in the past, then project it into the future. For most companies, these coping tactics offer little more than a continuation of business-as-usual.

COVID-19 offers you a significant opportunity. This is a global pandemic: a once in a lifetime chance to engage workers in a grand reset. The fact is, staff is already concerned about the future of their organization and your leaders should leverage this attention.

But how can this be done at scale?

Use focus groups and surveys to poll employees regarding their view of the future, and the role the organisation should play. While every staff member may not have an insightful opinion, my experience shows that the act of asking for input is, by itself, empowering. Furthermore, it grants each of your people a certain level of respect.

Ultimately you’ll demonstrate that the organization isn’t relying on a few (older) leaders to produce a breakthrough. Instead, it’s everyone’s job: a way for each person to arrive at the future destination (like GraceKennedy 2020) and say “We have done it ourselves.” If those who achieved such results are to be believed, this is the kind of inspiring outcome that people long to experience.

What’s an easy step to begin your company’s digital transformation? This may sound simplistic: Start by collecting your customers’ contact information.

Why is this a powerful place to begin?

Think of what it’s like to meet someone for the first time and quickly develop a romantic interest. In order to develop a multi-faceted relationship in which you could get to know each other, you need contact information. It’s a signal that you want to go further than the immediate moment, in order to learn more about his/her life and vice versa.

After all, who wants to date someone who is one-dimensional? And who wants to do business with companies that can only do one thing?

The best organizations understand the need to go much further: instead, they re-invent themselves using the idea that companies offer several categories or dimensions of offerings.

Four Dimensions

1. a product – a tangible or digital object.

2. a service – an act performed on the customer’s behalf.

3. a relationship – a partnership for mutual gain.

4. a transformation – a learning experience which improves the customers’ intrinsic capabilities.

For example, a company that sells exercise equipment (a kind of product) could add offerings such as:

– assistance in helping customers set up their home gyms safely and efficiently (a service)

– two months of participation in a weight-loss boot camp with a group of similar people (a relationship)

– a training programme that teaches them how to vary their exercise regime with age (a transformation)

These three additional dimensions can be used to convert a single, momentary transaction into an ongoing source of revenue. It may seem paradoxical, but a company which thinks about these dimensions is more likely to ask for contact information. Why is that? Like serious dating, knowing how to reach the customer is the way for them to build a mutually beneficial, multi-faceted relationship.

However, here’s the baffling reality: most companies don’t even ask for this information. Instead, they focus on whoever happens to walk in next,

If your organization isn’t executing this important function, perhaps one of the reasons below might apply.

1. The Overall Mission is Lacking

Asking for contact information from a stranger is a delicate matter. It’s somewhat intrusive, and a customer service representative (CSR) in your company who can foresee a possible rejection is likely to skip this step. Why?

More often than not, they simply don’t appreciate the importance. After all, the person who wants the data is far away in your marketing department. The CSR doesn’t report to them and has probably never been given the big-picture point of view.

Consequently, when the customer asks, “What do you want my contact information for?” they are met with a blank look. Your CSR’s have not been prepared with an answer.

2. The Means Aren’t Provided

A company that provides its staff with only a clipboard, paper and pencil to collect contact information has done the bare minimum. However, it creates a problem for someone who must enter the data at a later date. Furthermore, they send a signal to the customer that the effort isn’t a serious one.

Instead, your organization should set up a landing page on its website, and supply its staff with a tablet or smartphone to be used on the spot. This solves many problems at once and allows the customer to receive a response in real-time.

3. A Focus on Mass Marketing

In most companies, the marketing department hasn’t made the transition to thinking about its customers as the single best source of future business. Instead, your company may still see advertising to the public as the primary channel. However, if it were to make the switch, then finding more about customers’ specific, future needs would be a critical objective.

Reconsider the case of the gym equipment store. If the managers have a hard time imagining services, relationships and transformations to offer, then it could simply ask its past customers: “Thanks for shopping with us. We are interested to know what you might want next in your journey towards a fitter version of yourself. Please answer a few questions to help us meet your needs.”

As ordinary as these ideas may sound, I can’t think of three local companies who use them. Even those who have my information don’t contact me as a prior customer: I find out about their offerings from the newspapers, television or internet.

I imagine that they are wasting millions, reinventing one campaign after another, chasing after the same members of the public each time. The solution to this dilemma? Collect contact information from their customers and use it to develop deeper relationships. This approach may kick-start the digital transformation that keeps them alive.

There’s a whole school of thought which states that boards should leave strategic thinking to executives. Instead, board members should only provide oversight. Does this point of view have merit?

The COVID pandemic has thrown companies’ strategies in disarray, whether they are NGO’s, public or private sector organizations. Suddenly, reliable bedrock beliefs have been suspended as evidence pours in that a new normal is being born.

Too many boards are caught off-guard. Believing that strategic concerns are the purview of executives, they have taken a hands-off approach to recent events. For some time, many have never been regular attendees at their own board meetings. In some of our strategic planning retreats, they either decline to attend, fail to show up, arrive late, leave early, or spend the entire caucus distracted by email.

In other words, pre-COVID, they stopped providing strategic direction. Unfortunately, too many of them are public sector bodies.

Instead, they offer to ensure that the resulting plan is faithfully followed. They don’t want to “interfere.”

The folly of this thinking has recently become apparent. Here’s why.

1) COVID has collapsed the future

Our approach to running strategic planning retreats encourages companies to look 15-30 years into the future. Sometimes over protest, we explain the pros and cons of looking too far out, vs. not far enough. The key is to choose a “Goldilocks” planning horizon: one that’s just right.

Pity the companies which have chosen a horizon which is too short. Why? They’ll have to restart their planning process.

The truth is that organizations who chose long horizons already planned for the changes COVID has made urgent. The only difference is that the pandemic has brought the future closer: collapsing it. All they need to do is change the timeline. 

However, a company with a too-short strategy would miss the ball entirely. They’d have to rethink everything simply because of a tactical error in forming their plan. This is where board members make a difference:  they are usually the ones pushing for longer horizons. Their absence makes this mistake more likely to occur.

2) Fresh New Eyes Are Necessary at the Top

The pandemic has shown us what it’s like to be completely blindsided. However, it should also predict which individuals will rebound first.

Those who are younger and newer to the organization have an advantage. Just observe how they adapt themselves to the use of an app such as Zoom which has assumed a central role in most companies.

Contrast this reality with some leaders. I once worked with the head of communications of a large company who hid a big secret – he didn’t know how to use Powerpoint. How he got to that position without picking up a basic tool of the trade remained a mystery.

Boards need to challenge executives to keep developing themselves. They should also welcome fresher, younger eyes into their ranks to prevent companies from becoming stale.

As such, boards need to properly estimate how in touch they are. Unfortunately, many fail to include digital strategists in the boardroom so it becomes difficult to provide proper guidance on the most challenging issues of the day.

3) Bringing Back the Best Employees

Today, CEOs’ are looking around the office, shaking their heads and wondering: “Why did I ever think we needed so many people?” Now, their suspicions have been confirmed: when some employees stayed home, and contributed little, they weren’t missed. In other words, their absence wasn’t a problem.

Can organizations simply cherry-pick the best employees, pay them a bit more and let go of the rest?

I predict that the new normal will force them to do so, within the limits of the labour laws. Outsiders may complain that they are just being greedy. However, board members may

point to the need to survive the first worldwide disruption in business to occur in our lifetime.

They are more likely to switch to a more digitally-savvy workforce that can manage itself without being watched. Individual salaries may rise by so doing, but the number of total employees may fall. Overall productivity should increase even as payroll costs are cut.

Boards should also prevent executives from rushing to return to a pre-COVID status quo which wouldn’t be sustainable. They should have a well-established point of view developed from seeing the inside operations of other companies.

These are trying times, and the cozy collegiality of the board room must give way to the committed few who are willing to take a stand in an effort to keep companies afloat.

Organizations need their boards to jump into the fray wholeheartedly. They must intervene to make the best of a messy situation and play their part in crafting a strategy that serves all concerned.

Is your company being undermined by obsolete assumptions held by some of your leaders? To move forward, they must be challenged.

In our work to develop clients’ breakthrough strategies, we try to highlight such hidden assumptions. These are often unspoken, clashing ideas which undermine the corporate strategy. When the plan needs revision, the team should uncover and sort out these differences to act as one.

Unfortunately, most companies were rushed to respond to COVID-19 and created little more than a bunch of survival tactics. Now that the lockdown is being phased out, organizations must find a way to achieve their “new normal” if they hope to thrive.

However, as they do so, they need to look past the relatively simple task of putting people back in front of their desks safely. A fresh strategy is required to suit the times. One approach is to explore the foundation assumptions which are now embedded in their old business model. For example, they should date the following common, future milestones.

• New Coronovirus Case Level-Off Day
• Active Case Reduction Day
• Curfew Lifting Day
• Employee Separation Day
• Remaining Employee Return Day
• Customer Re-Opening Day
• Border Re-Opening Day
• International Flight Resumption Day
• End of Social Distancing Day
• Ro Below 1.0 Day (A measure of COVID-19’s contagiousness.)

Each of these public events signals a turning point in the crisis. While they are unknowable with absolute certainty, that’s not the main challenge. The problem is that executives in your company are likely to hold different estimates for each milestone. This discrepancy could just be an interesting curiosity, except that each individual is making daily decisions based on their personal understanding.

For example, if HR believes that Employee Return Day is on June 15th, but Customer Service commits to a Customer Re-Opening Day on June 1st, there’s a big problem. The company can waste time, effort and money if the two plans aren’t synchronized.

But this list of key dates is just a start. There are a number of other assumptions which only apply to your industry, or company which need to be unearthed. Here are some of the questions I have been urging clients to ask themselves. 

Q1 – What material changes have occurred in our business? Here, I recommend you brainstorm individually and then as a team. It’s no place for group-think – the tendency for people to conform to majority thinking. Focus on concrete changes which are tangible and can be measured.

Q2 – Why does the change matter? Here you must confront aspects of your business model which can no longer work. Query what will happen if you continue the old model in this new environment.

Q3 – If the change is permanent, what were the original assumptions that must be challenged? These were embedded in the old business model, perhaps never discussed. Now, you must make them explicit.

Q4 – What are the new assumptions? Given the data you have on hand, what will you assume moving forward?

Furthermore, to make sense of your predictions, also think in terms of “confidence”. For example, if your team believes that Border Re-Opening Day will be on September 30th, apply a confidence interval to this date. You may state: “We are 50% sure that the date will fall between September 1st and October 31st.” That’s very different from being “90% sure it will fall between September 25th and October 5th. “

This additional information helps you make better decisions, introducing added flexibility where it may be needed. Of course, this is just the beginning. You should continue the regular strategic planning process I have summarized in prior articles:

1. Create a current snapshot
2. Set a target month/year that will allow a breakthrough to manifest
3. Craft measurable outcomes
4. Backcast from the future to 2020, filling the gap with necessary actions and milestones
5. Finally, ensure that the context of the discussion is one of exploration and innovation. The fact is, there will probably never be another moment like this in your business. Discontinuities of this magnitude rarely occur more than once in a lifetime.

Needless to say, companies that don’t revise their baseline hypotheses will be left at the starting line. In like manner, those who allow their CEO to set a bunch of flaky assumptions by himself will also run last.

Take the opportunity to make the most of this crisis by challenging the assumptions that render your old business model and strategy obsolete. Get all the members of your executive team talking to arrive at a new baseline.

Feels uncomfortable? The fact is that you are making an educated guess, then taking a bet that you are right. Regardless, your organization needs you to make such commitments so it can find success within this pandemic. 

http://jamaica-gleaner.com/article/business/20200516/francis-wade-post-covid-assumptions

While your company awaits a return to business as usual, should your leadership be thinking about revisiting its strategy? Does the current pandemic mean that you should start the process all over again?

To say that the coronavirus has disrupted business is an understatement. Even if you are still operating at this time of lockdowns and curfews, you are probably doing so under duress. Nevertheless, you must look ahead.

At some point in the future, employees will have returned to their jobs, continuing to work in the old way. However, it would be a mistake to put your effort into “returning things to normal.” Chances are, there is a new normal and you should adjust to it, rather than seek to drag your business back to an obsolete state.

For example, take the case of an owner of a funeral parlour in New York City. As an essential service, the company has not closed down. In fact, like many morticians who are willing to deal with COVID casualties, the owner is overwhelmed by the volume of deceased persons being brought in.

While this could be treated as a windfall, the long-term question is “What does this mean for business?” In other words, is there an assumption that needs to be re-examined now that funerals are being conducted so quickly, in small groups, without a service, in large numbers?

Like this company, it might be time for your team to re-examine the assumptions behind its strategic plan. Here are three steps for engaging your executives and board members.

Part 1 – Enumerate the Disruptions 

Start by making a list of the most obvious changes. When the big-ticket items are out of the way, look for the ones that are harder to see but may be just as important.

One method is to begin with a single pronounced item but then ask “Why” to determine the reasons things have changed. Then repeat the process asking “Why?” five more times, until no more answers can be found.

Leave room to add other big items as you continue, but pull them together into new strategic themes before the next step.

Part 2 – Tear-down the Old Plan

Here, you are looking for concrete reasons why the current plan won’t work. Use the results of the prior exercise if needed, but in this phase you should be ruthless. Identify the assumptions (unstated or unimagined) which have been violated by the new normal.

At this moment, you need to bring your team to a consensus point of view regarding the plan’s gaps, seeking to go as deep as possible into long-term changes. For example, have your customers come to expect a higher standard that you never predicted? Has a new technology been introduced that you simply can no longer ignore? Have you fallen behind a nimble competitor?

Part 3 Assess the Plan’s Viability

In this final step, you decide whether or not the current plan needs to be changed and to what degree.

In some cases, your plan may have anticipated the disruptions which are underway as a result of COVID-19. For example, perhaps you contemplated that within five years you would be delivering service to customers remotely using a tool like Zoom or WhatsApp.

Now, you realize, you need to do so immediately just to keep up.

Or, you may have learned that the time horizon on your old plan was too short – a common occurrence. The changes that you see happening in the next year are so dramatic, they render your plan obsolete. A brand new, long-term destination is needed.

However you assess your current strategy, the final step is to conduct a joint activity to bring it up to date. This may mean starting from ground zero.

If you believe you can escape this kind of re-examination or leave it up to the CEO or Chair to do it alone, think again. Consider that this global disruption might be the single most impactful event in your lifetime.

The fact is, some assumptions in your industry have been unfrozen. Consequently, your firm has the chance to stick a wedge into a sliver of opportunity and turn it into a crack that will never be closed. If you move quickly, you can be the first (and only) company to capitalize.

The only difference is that these things usually happen slowly, over a decade or more. Now, for a change, they are happening with lightning speed.

The ideal way for your team to respond is not to sit back, wait and see what happens next. Instead, pull together your best minds to understand the entirety of the new normal so that you can craft a fresh strategy.

http://jamaica-gleaner.com/article/business/20200419/francis-wade-what-do-when-covid-ruins-your-perfect-strategic-plan?