2 | Planning
Sustainability Forces Wheel
In strategic planning, the quality of the plan depends on the quality of the information collected and analyzed to guide the plan. The Baldrige Criteria ask how you collect and analyze information about your strengths, weaknesses, opportunities, and threats; early indications of major shifts in technology, markets, products, customer preferences, competition, or the regulatory environment; long-term organizational sustainability; and your ability to execute your strategic plan.
The goal is to build a sustainable organization that can survive change in whatever form it takes. Andrew Winston has created a tool to help navigate the forces that may affect your organization’s survival. He calls it the Sustainability Forces Wheel.
In “A New Tool for Understanding Sustainability Drivers” (HBR, July 13, 2010), Winston describes the three rings that make up his wheel and his idea to “spin” the wheel to line up different forces on each ring, which could then spur discussion among leaders about what that combination might mean for their organization. For example, he looks at the issues that currently line up at 9:00: “Consumers increasingly want to know what’s in products and where they come from; technology is enabling more data on a product’s origins; and there’s no denying the rising concerns about chemicals and toxics in our bodies and our children’s bodies. If your company operates in the consumer products world, how are you handling this trifecta of concerns?”
From a Baldrige standpoint, your strategic planning process should include a systematic approach to identifying the factors that are likely to impact your short-term…
13Jul2010 | Steve George | 1 comment | ContinuedThe Most Important Question in Strategy
One of the key issues in strategic planning is not directly addressed by the Baldrige Criteria. It occurs during the strategy development phase of the process as participants analyze relevant data and information about factors that will shape the plan and then use their analysis to agree on what should be in the plan. Coming to agreement can be a contentious debate, one opinion competing with another, with decisions made based on who ranks the highest or makes the best argument or outlasts opposing views.
It’s not the best way to chart a course.
Roger Martin is Dean of the Rotman School of Management at the University of Toronto. He has facilitatestrategic planning sessions. In “My Eureka Moment with Strategy” (HBR, May 3, 2010), he tells the story of a planning session with ten mining company executives that “quickly descended into adversarial position-taking and I could tell it was going nowhere.”
He stopped the descent by asking the executives a different question. Instead of one person making his case and everyone else telling him why he was wrong, Martin asked the executives “to specify what would have to be true for the option on the table to be a fantastic choice.” Instead of competitors, they became collaborators. Each had expertise to contribute to the cause. They discussed five options and what had to be true for each to make it the best choice, and they agreed at the end of one day to analyze those items they had reservations about and meet again to…
6Jul2010 | Steve George | 0 comments | ContinuedRevolutionary Thinking
The ability to disrupt your industry is something you want to possess but fear someone else may already have. The Baldrige Criteria address disruptive change indirectly in several places by asking about any changes taking place that affect your competitive situation, what your key strategic challenges and advantages are, how you identify potential blind spots, and how your planning process detects early indications of major shifts in technology, markets, products, etc.
Having systematic processes in place to answer these questions may help you spot a disruptive change in time to counteract it but none of the questions really explores your processes for developing your own disruptive change. A recent post by Umair Haque on HBR provides an interesting perspective on this subject, using Apple as an example, by explaining “How to Challenge Your Industry Dogma”:
- Challenge products. Offer an alternative that gets people to rethink what such a product can be used for, as Apple has done with the iPad.
- Challenge strategy: Find an area that your competitors are ignoring and become the best at it, as Apple has done with the design of electronic gadgets.
- Challenge distribution. Look for innovative new ways to distribute your products or services, as Apple did with iTunes.
- Challenge business models. Companies protected how their products are used until Apple introduced a new business model: The App Store gives software developers a huge market for their new products, making Apple’s products more valuable as a result.
- Challenge sales and service. At the Apple Store, “the act of exchange became personal,…
Planning for 2035
The U.S. Energy Information Administration (EIA), which is the statistical agency of the U.S. Department of Energy, reported today that world energy consumption is expected to increase by nearly 50% by 2035. Asia in general and China and India in particular will account for most of the increase. Together, they accounted for 20% of total world energy consumption in 2007. Their combined energy use more than doubles by 2035 while world energy consumption by the U.S. would decline from 21% in 2007 to 16% in 2035, although actual consumption would increase.
Where is that energy going to come from? Who will control the sources? How much will it cost? How will it affect your organization? How will it affect consumer needs, governments, healthcare, and education? Since the increase will be steady for the next 25 years, the impact will be felt along the way and not just in 2035. Your strategic planning process should consider that impact.
Of course, any increase in energy usage means an increase in carbon dioxide emissions, which is a key cause of global warming. The EIA predicts such emissions will jump by 43%.
How will global warming affect your organization? How will it affect your customers, employees, and suppliers? Your strategic planning process should consider this, too.
The EIA’s report is based on the assumption that current policies are unchanged. That seems to be a safe bet, at least until we’re faced with an end-of-the-world-as-we-know-it scenario. Based on its recent history, the U.S. government will drag its heels until…
26May2010 | Steve George | 0 comments | ContinuedBe Prepared
I haven’t referred to a Rosabeth Moss Kanter blog for a couple of months so it’s time for a Kanter fix. She’s a professor at Harvard Business School and the author of several popular business books, which is an accomplishment in itself. This week she reflects on the volcano in Iceland in “Surprise! Four Strategies for Coping with Disruptions” (HBR, April 19, 2010).
Her four strategies are:
- Backup. Even in a recession, it’s a good idea to build some overlap and redundancy into your organization to make it easier to respond to disruptions. “Great companies stress efficiency but build in slack and cross-train their people,” she writes.
- Communication. If you’ve developed systems to spread information virally, such as through social networks, you can keep the communication lines open and fast when disruption occurs.
- Collaboration. “Human relationships, commitment, and resiliency help companies recover quickly,” writes Kanter. She points to the efforts of Continental Airlines employees during the power outage that closed airports in the Northeast in 2003 and the creative solutions they came up with to keep their planes flying while other airlines were grounded.
- Values and Principles. I’ve talked about this a lot on Baldrige.com because it’s a common characteristic of Baldrige organizations. Guided by a shared vision and clear values and standards, “people know the right thing to do without being told and without waiting for permission.” An empowered workforce can act much quicker during a disruption than employees who have to wait for instructions and permission from above.
While there are some disruptions you cannot…
19Apr2010 | Steve George | 0 comments | ContinuedCost Is One Factor
If you were going to build a 70,000 square-foot headquarters for 325 workers, where would you construct it? New York or Sioux Falls, South Dakota? San Francisco or Little Rock? Minneapolis or Oklahoma City?
What factors would you consider in your decision? The availability and educational level of potential workers might be an issue. Quality of life could be important. Access to global markets, major transportation systems, research universities, large customer groups, or diverse employee candidates may be valuable.
Another factor is cost. For those narrow-minded organizations that think cost is all that matters—or that cheaper trumps everything—Boyd Co. Inc. has a list for you. According to Boyd, the most expensive U.S. cities to put 325 employees into a 70,000 square-foot headquarters are New York, San Francisco, Stamford (CT), San Jose, and Newark. The cheapest are Sioux Falls, Little Rock, Virginia Beach, Oklahoma City, and Columbus, South Carolina. The difference between New York, the most expensive at $30.7 million a year, and Sioux Falls, the cheapest at $21.1 million, is significant. And yet more companies choose New York than Sioux Falls because, as noted, cost is just one factor in the equation.
By the way, Minneapolis ranked fifteenth on the list of 50 cities at $26.2 million. Sure, you have to pay about $5 million more than you would in Sioux Falls, but you’ll save $4.5 million over New York while enjoying a metropolitan area with several universities, professional sports, theater and art, an entrepreneurial spirit, and headquarters for several global leaders including…
12Apr2010 | Steve George | 0 comments | ContinuedIdentifying Potential Blind Spots
As your organization plans for the future, how do you identify potential blind spots? It’s a Baldrige question that high-performing organizations typically answer with comprehensive approaches to finding, collecting, and analyzing information about their industries.
If you do this, you’re in good shape because you know the road that lies before you, the twists and turns, the hills to climb and the straightaways. You can proceed confidently toward your destination—unless a boulder blindsides you.
That boulder rolled out of a blind spot. It’s impossible to anticipate, but organizations can do a better job of recognizing when they are in boulder territory. In “Six Ways to Prevent Corporate Tunnel Vision,” Adrian Ott lists six questions you can ask to uncover hidden risks and opportunities. (Fast Company, April 5, 2010)
Can a competitor with a new business model explode the economics of your industry? The incumbent business model can feel like the way things are done until a better model blows it up.
Do you evaluate the same competitors now as you did three years ago? Companies are expanding into new markets—and those markets may include yours.
Can your category be simplified? Companies like Southwest and Costco have succeeded b simplifying what they offer.
How well do you evaluate the broader customer context independent of your products? Evaluate your customers from a 360 degree view including sequential tasks and simultaneous activity.
Do you regularly seek the next wave of technology or methods to serve customers, even when they will make your current products obsolete? Think Blockbuster and Netflix.
Do you have the same channel partner portfolio…
9Apr2010 | Steve George | 0 comments | Continued
