2 | Planning
When Innovation and Planning Collide
Are a systematic strategic planning process and a formal strategic plan detrimental to innovation and agility?
I’ve recently worked with an entrepreneurial company that has more than two thousand employees worldwide and annual revenues approaching a half-billion dollars—and it has no strategic planning process. Its “strategic plan” is whatever the founder and CEO decides to pursue, which means the plan has many consistent elements year to year plus a stream of new ventures that aren’t even on the radar screen when the year begins. It’s a highly innovative, flexible, and agile company that has grown by 15% or more a year for nearly three decades. Such results suggest that its “strategy” is working.
From a Baldrige perspective, however, I can see how a more systematic approach could be beneficial, especially in the areas of:
- Involvement by more participants. More voices in the discussion would help clarify the issues and the opportunities and engage more people in owning the plans they help design.
- Inputs to the process. A more formal approach to gathering and analyzing critical information upon which any plans are based would minimize the risk of missing something important.
- Alignment. A company aligns its people with what it is trying to accomplish through a strategic plan…
Implications of a $300 House
How would the world change if you could build a house for $300? Who would benefit? What would it require? Could it affect your organization?
There is a movement afoot to “bring together people, institutions, and businesses in a ‘creation space’ to turn this idea into a reality and test it out in the field.” Before you dismiss it, check out the Web site devoted to the concept by clicking here.
A lot has been written lately about serving customers at the bottom of the pyramid. Grameen Bank has been doing this since 1976 when Muhammad Yunus pioneered the idea of microfinancing with the goal of helping to eradicate poverty. Today, the bank has more than 7.5 million customers.
That’s the promise of the bottom of the pyramid: millions to billions of potential customers. When you factor in the opportunity to do well by doing good, this market is appealing to many companies.
Whether or not it appeals to you, you will want to consider the impact it may have on your organization. To figure out a way to make low-cost, low-tech, green houses that homeowners can build themselves out of local materials, innovation must take place. Breakthrough processes must emerge. New ways of…
4Oct2010 | Steve George | 1 comment | ContinuedChallenge Your Assumptions
In yesterday’s article about AtlantiCare, I listed its strategic challenges and talked about how similar they are among healthcare organizations. While there may be differences in the challenges other organizations face, one that keeps appearing on most lists is the effect of the economy.
According to economists, the recession has ended. Business is looking up for many companies even if they are slow to rebuild their workforces. So what does mean for your future?
One of the critical elements of effective strategic planning is the quality of the information that feeds the process. You can develop the most elegant and comprehensive plan on the planet and deploy it to everybody in your organization but it will fail if the plan is based on faulty or incomplete information. The Baldrige Criteria ask how you collect and analyze information about your opportunities and threats, major shifts in relevant areas, and your long-term sustainability. The point in the process when you collect and analyze this information and discuss it as a planning team is the best time to challenge your assumptions.
One such assumption is that the end of the recession means that the economy will get back on track and business will return to whatever…
21Sep2010 | Steve George | 0 comments | ContinuedSustainability 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…
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,…
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…
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…
26May2010 | Steve George | 0 comments | Continued
