Incomplete understanding of competitive position and markets
Symptom: Incomplete understanding of true competitive position; lack of market information.
Solutions: Use outsiders to critique the management team's assessment of strengths, weaknesses, and competitive advantages. Invest time to develop “guesstimates” of market size, market share, and market rank.
In many situations, at the time that the strategic plan was developed, managers paid a great deal of attention to the data developed for the process. It provided a sound strategy. But it was only valuable when it was current.
As companies evolve, things change. It's important to maintain a current understanding of your company's strengths, weaknesses, and competitive advantages. Just as important, it's imperative to have a continuous and thorough knowledge of your customers, current markets, and potential market opportunities.
Managers need current, in-depth market knowledge to assess competitive advantages and identify opportunities. Commonly, market share and trends are not analyzed enough, if at all. But without this kind of information, management may miss opportunities or threats.
Each strategic plan has some measurable internal standards and goals. Without these, management teams may often struggle to accurately assess their own business.
For example, competitive advantages such as, “We are the best at customer service,” “We have the best relationships with the most customers,” and “We have a track record for tackling the tough jobs on time,” are very common. But without analysis, these claims are only estimates.
As our industry moves toward performance standards, documenting strengths will become more important. Two businesses in the same market cannot claim identical, unique points of differentiation. A key goal of strategic planning is to identify distinct, competitive advantages that competitors can't duplicate.OBSTACLE 3
Symptom: Strategic plan tends to reinforce the status quo rather than drive the business to higher levels.
Solutions: Study and learn from the strategies of others within and outside the industry. Include employees who think outside the box on the strategic planning team.
Bring in outsiders such as board members and consultants to assist. Modify your planning process to bring more focus to new approaches.
Many companies often adopt a new strategic plan that strongly resembles the old strategic plan. It's similar to taking a trip and going down the same route time and time again. It may feel comfortable and worry-free, but shorter or more rewarding paths may be available.
Bring fresh, innovative thinking and new opportunities and direction to each strategic plan's revision. Just as important, plans must include a financial commitment to innovation and research.
Creating and implementing a winning strategy is a key responsibility of senior managers. By benchmarking your goals and taking steps to overcome obstacles, the quality and effectiveness of your strategic plan will improve, providing a mechanism to transition from status quo to real performance gains.
Once management has taken the time to create or update a sound, long-term plan, the next challenge is implementation. In an upcoming article, I'll provide further suggestions for implementing the strategy and a case study on successfully converting a strategy into action.
— Mike Strain is president of MJS Management Services, a management consulting firm that assists concrete producers to achieve higher performance and profitability. For more information, visit www.mjsmanagement.net, telephone 206-388-5209, or send an e-mail email@example.com.