Strategic Planning 101 for Companies in Trouble
At some point in time, every successful business, company, or industry has its very existence challenged by changes in the competitive landscape. It's a fact of business life - competitors hungry for market share and profits mark successful companies or industries with a bulls-eye. That's just the way it is.
I don't care if you're Microsoft or Cisco, Chevron or Wal-Mart; it'll happen.
And when your business is threatened to the point where incremental operating improvements and simple repositioning doesn't help, there's only one thing you can do - reinvent your company. That means finding new reasons for customers to buy your services, inventing new products, coming up with a new business model, whatever makes sense in your situation.
That's what companies do, right? That's what I thought -- until today.
I was just reading Dartmouth professor Syd Finkelstein lash out at the newspaper and magazine industry for whining about all the free content on the Internet and responding with dumb new ways to charge customers. Instead, he says, these companies should be innovating - coming up with new ideas and business models, better reasons for customers to buy their product.
Right on, I thought. Then it hit me. That can't be right. I mean, can all those newspaper executives really just be sitting around, whining about their downward spiral and competitive issues, instead of doing what they're supposed to be doing? Say it ain't so, Syd.
Clearly, that industry's in a world of hurt and it's going to take some serious work to reinvent it. Strategic planning or whatever you want to call it is by no means a simple process, but every single one of those affected companies has to be in the middle of some sort of process to rejuvenate its business, right?
Something a lot like this, I would expect:
Strategic Planning 101
- Get a bunch of smart people in a room together ... without cell phones and Blackberrys
- Have somebody present a completely honest analysis of the competitive situation
- Throw out all the sacred cows and preconceived notions
- Brainstorm new ideas until you can't stand to look at each other anymore
- Vote on them, take the top ten, assign each to an executive to develop a business plan
- Meet back, present the plans, debate, decide on one or two to implement, and execute
For more info, check out 10 Rules for Effective Strategic Planning.