Geoff Anderson back for another round of the Technology Marketing Center Leader's Blog. It is March, fresh growth is peeking out, and spring is around the corner. Must be time for Strategic Planning to begin. This time, instead of mundane and arcane process, I am going to talk about bold strategy changes, and why they are more difficult than they seem up front.
First, let's set the tone. Strategic planning, formal strategic planning, is often undertaken by the core leadership of a business. Marketing brings market knowledge, and sales trends, as well as competitive insight. Engineering brings a "what can we do, and when", assessing the skills and quantity of work that can be accomplished. Finance will bring rigor to the projections, and (hopefully) some realism. Add to this mix the general manager or responsible VP who leads the process, and keeps it strategic.
Nearly universal is the recognition that unless you are new to your current product/markets, the grownth potential for the business is not outstanding. Either you are bare knuckle brawling for share (great if you are in 3rd or lower position competitively, less great if you are defending against the ankle biters), or you are stuck with your place in the landscape, and look to finding underserved regions or segments to address. This is safe, but boring, low growth, and ultimately unsatisfying.
Often the team will come up with a bright idea: let's do something radical, let's go after some completely new market. Often this is spurred by something that the GM/VP read, or heard among his peers (no kidding, this is how a group I worked with pivoted to focus exclusively on photovoltaics).
Sounds great, and everyone gets energized, but often it fails miserably for a variety of predictable reasons:
Executive commitment - While this is commonly tossed out by a senior executive, they don't accept ownership for driving it. This is doubly true if your executive doesn't sit with the group (very common in large companies). Big, audacious strategy shifts require executive support, and engagement. Without that, they will not get off the ground.
Lack of skills - Particularly if you are developing a new product or technology. While your engineering team might be fabulous at developing, extending and enhancing your core technology, odds are good that they will struggle with adding a new plank. You can work to develop those new skills (but be aware that it isn't a quick ramp), or you can acquire them (hire people with the right skills and set them up for success). Yet, often there aren't any formal adjustments to staffing and skill. There is some mystical belief that the knowledge will manifest itself.
Lack of follow-through - Change is hard. People resist change. Even if everyone in the room nods their head affirmative that they agree to the new strategy, they are wondering how in the heck they will accomplish this. Marketing will look to see how engineering proceeds. Engineering will see if anyone in Marketing is adjusting their knowledge. Finance will continue to do their usual tracking, and stay above the fray. And the next planning session will come around with little or no progress, and lots of blame shifting.
Unrealistic schedule/expectations - Big strategy changes, like big product development efforts take time. Time measured in years, not months. If you expect a huge effort to bear fruit in 3 fiscal quarters, you should not be surprised when that fails to materialize. More than just institutional inertia, finding and exploiting new markets/regions/applications is neither quick nor easy. Do you have the right sales channel? How do you gain market credibility in a new market? Think how long it took you to really gain traction where you currently sell. Why do you think it will take less in a new market? (ditto with new product)
How can strategic realignment succeed?
Strategic realignment is difficult. It is the most challenging type of change to manage, and potentially the most rewarding. Success requires consistent, strong guidance from an executive level. It will require either more resources (aka people), or resources that can do the "new" things. It will almost certainly take more than one strategic planning cycle to begin to bear fruit.
Sadly, most big strategic realignments fail. Don't let yours fail. Keep executives involved, alter your organization for success (hire the right people), keep the organization focused, and don't make too unrealistic time scales. Be certain that you have executive aircover for the shift. Get the entire organization involved, from the lowest level technician up to the CEO.
Until next time, happy marketing!