Strategy and planning in a fast changing world

STRATEGY & PLANNINGIN A FAST-CHANGING WORLDCarlos Henao

MEET JOHN:

THE SUCCESSFULCEO OF A MANUFACTURING

COMPANY

AT LEAST, UNTIL THE PAST FEW

MONTHS…

PROFITS DETERIORATED

PRICES DECLINEDREVENUE CAME EXCLUSIVELYFROM OLD MARKETS AND PRODUCTS

MEANWHILE, COMPETITORS HAD BETTER PRODUCTS,

PRICES, AND MARGINS

THE BOARDAPPROACHED JOHN,CONCERNED WITH HISABILITY TO HANDLE THISSITUATION

DURING A SLEEPLESS NIGHT, JOHN REALIZED WHAT WAS WRONG

WITH THE COMPANY’S STRATEGY

THEY GOT FIXATED IN COMPETITORS AND IN MAKING MONEY,

AND FORGOT WHO THEY WERE AND HOW THEY CREATED UNIQUE, SIGNIFICANT VALUE TO THEIR

CUSTOMERS

IT COULD BE SUMMARIZED AS

“EVERYTHING TO EVERYBODY”WITHOUT TRADE-OFFS, TO KEEP OPTIONS OPEN

THE COMPANY WOULD

RUN AFTER EVERY OPORTUNITY,

EVEN IF DISJOINTED,DILUTING ITS CAPABILITIES AND

LIMITING LEARNING

RESOURCES & BUDGET WERE

DISTRIBUTED EVENLY, BASED SOLELY IN FINANCIAL METRICS,

NOT STRATEGICALLY, ACROSS TOO MANY INITIATIVES

THE FOCUS WAS ON DOING THINGS

RIGHT IN THE SHORT TERM,NOT ON DOING THE RIGHT THING,

ALSO FOR THE LONG RUN

JOHN ALSO REALIZED THAT THERE

WAS A DISCONNECT BETWEENFORMULATION & EXECUTION

HE NEEDED TO RETHINKTHE COMPANY’S STRATEGY& PLANNING, AND THE WAY TO DO IT, BUT HE DID NOT LIKE IT, BECAUSE IT’S A FAST-CHANGING WORLD

Bad strategy and planning Good strategy and planning

Strategy & no plan OR plan & no strategy Strategy, with a plan to make it true

Existing value, short term Focused on the present and the future, short and long term

Without clear choices or trade-offs Hard choices and trade-offs

Inward focused Inward and outward focused

Slow and inflexible Agile and dynamic

Full of data, with little direction Data to support direction

One-time project, closed-door Continuous process, participative (though not democratic)

ASPIRATIONS

COMPETITIVEARENAS

DIFFERENTIATORS

CAPABILITIES

THE COMPANY’S ASPIRATIONS:KEY MOTIVATIONS & OBJECTIVES

THE COMPETITIVE ARENASINCLUDING CUSTOMER SEGMENTS, GEOGRAPHIES,

PRODUCT CATEGORIES, CHANNELS & VERTICAL PRODUCTION STAGES

DIFFERENTIATORSTHE COMPANY’SUNIQUE VALUEPROPOSITION

AND CAPABILITIES3-6 INDEPENDENT & REINFORCING

CAPABILITIES IN ORDER TO CREATE UNIQUE VALUE

AFTER BRAINSTORMINGOVER THE COURSE OFTHE NIGHT, JOHN WASREADY TO ACT AND DEFINED HOW TO DO IT

HE INVOLVED THE BOARDFROM THE BEGINNING, AS WELL AS A GROUP

OF PEOPLE AT DIFFERENT LEVELS WHO

COULD CONTRIBUTE

HE MADE EVERYTHING ABOUT STRATEGY

PEOPLE

PROCESSES &TECHNOLOGY

GOVERNANCE

ORGANIZATIONALSTRUCTURE

CONTEXT STRATEGY PLAN

IMPLEMENTING THE PLAN IN 3 STEPS

IT WAS HARD WORK & REQUIRED

DIFFICULT DECISIONS:

ESPECIALLY TRADE-OFFS

BUT IT WAS WORTH IT:ALL ARE FOCUSED IN

CREATING UNIQUE VALUE TO

THEIR CUSTOMERS

HOW CAN YOUSTART TO EFFECTIVELYFORMULATE & PLANSTRATEGY?Carlos Henao: Managing Partner

E-mail: ch@caplica.com

Phone: 574-386-0999 - Mobile: 310-359-5905