It continues to amaze me that companies keeping doing the same things in the same way and expect to get better results. Doing without thinking is easy to fall into where regimented processes lead to regimented thinking.
Take strategic planning. More often than not, the process starts with the CFO who provides this year’s sales targets and last years’s data to the troops, then asks for a bottom up review of everyone’s resource needs to meet targets, followed by a back and forth tug of war. Inevitably, the ingoing targets for the new year do not change and the troops who have to meet them are disgruntled and usually fail to make the numbers given inadequate resources in people and money. Wrong process!
Before getting to operational planning in the guise of strategic planning, one needs to do genuine strategic planning from an outside in perspective. Start with what categories are we in, and are they growing-flat-declining. What are the fast growth categories and can we leverage our own capabilities to enter those markets, or buy our way in? Category Power reflects what’s hot and what’s not. Don’t invest in what’s not under the guise of fair share allocations. Market Power reflects your share of a target segment. Are you in Tier 1 with the winners and seeking to grow there? Are you in Tier 2 with products that make money but aren’t among the elite? If so, you need a breakout plan to win your Tier before you compete against the Tier 1 players, as you don’t simply jump tiers. If you are in Tier 3 which many OEMs are, invest appropriately. Offer Power asks if you have a breakout advantage with your current product. For your potential hits, have you differentiated enough? For proven hits, have you neutralized your reference competitors’ innovations sufficiently sustain our established differentiation? And for your product line fillers, have you optimized these to the maximum for gains in resource utilization and cost reduction?
Thinking prior to operational planning is imperative to ensure you are putting precious resources in the right places. Understanding where the next hits will come from and making assymetrical bets on them with a longer term view may be the correct way to go. Think and Doo-Fus…don’t let this happen to you.