10 Insights into Strategic Planning

Joan Magretta wrote a guide to strategy guru Michael Porter’s work called Understanding Michael Porter. As she worked on the book, she kept a list of insights, including “that most companies think they have a strategy when they don’t,” as she noted in an article on HBR.

Here are her ten insights and how they relate to the Baldrige model:

1. You gain a competitive advantage by creating unique value for customers. Customer-driven excellence is a Baldrige core value, defined as an organization’s performance and quality being judged by its customers. If customers rate your performance and quality high, you will gain a competitive advantage.
2. Your strategy must also clarify what the organization will not do. The Baldrige model asks several questions about how you develop strategies that will help you prioritize your strategies.
3. “Competition is about profits, not market share,” writes Magretta. You grow a company by increasing profits, not market share.
4. Brilliant strategies will not lead to performance excellence unless you execute them. The Baldrige Criteria devote an entire section to strategy implementation.
5. Good strategies are interconnected and build on core competencies. The Baldrige Criteria ask how your strategic objectives capitalize on your core competencies and balance short- and longer-term challenges and opportunities.
6. While it’s important to be flexible,…

Creating a Customer Culture

It’s always refreshing to hear a company that excels at serving customers describe its approach, especially when that company is in an industry that generally treats its customers like cattle.

Hawaiian Airlines has ranked among the leaders in customer service for years and is routinely ranked first by the US Department of Transportation for on-time performance and fewest cancellations. Charles Nardello oversees aircraft, flight, and customer service operations at Hawaiian Airlines. In a recent article on the HBR Blog Network, he discusses how the airline improved operational performance while maintaining service excellence, citing three things a company must do well “to maintain an unbeatable level of operational excellence: (1) Get very close to their customer; (2) Benchmark against itself on a consistent basis; and, (3) Empower employees to address the unexpected.”

A customer focus permeates Hawaiian Airlines. “For every decision we make, from the most basic to the complex, the customer always comes first—they are the driver of our decision-making and strategic planning,” writes Nardello. A culture that brings the customer perspective to every decision acts far differently than a company where customers are an afterthought or are only considered when addressing customer issues.

Hawaiian Airlines has an independent agency survey customers every month…

How Well Do You Leverage Metrics?

One of the strengths of Baldrige Award winners is alignment. Strategies and goals are aligned with the organization’s mission and vision. Action plans are aligned with strategies and goals. The performance measurement and performance management systems are aligned with strategies, goals, and action plans. As a result, everyone in the organization is contributing to achieving the organization’s mission and vision. On every project. Every day.

The power of alignment can be seen in the results Baldrige Award winners deliver, a sampling of which you can review here. These organizations prove that alignment is critical to performance excellence.

A recent study by IndustryWeek and MESA International showed the frequent disconnect between objectives and metrics throughout manufacturing companies. The chart shows that only about a third of respondents believe their objectives and metrics are well or very well aligned across their companies. In which category would your organization fall?

One of the interesting results of the survey was the discrepancy among positions of those who “always” leverage metrics to improve performance: 28% of senior leaders said they did, 35% of department heads, and 50% of team leaders or supervisors. At the “staff” level, 40% claimed they always leveraged metrics. IndustryWeek tried to explain the low figure for senior…

7 Rules for an Effective SWOT Analysis

The Baldrige Criteria ask how, as part of your strategic planning process, you collect and analyze relevant data and information pertaining to your organization’s strengths, weaknesses, opportunities, and threats (SWOT).

Strengths and weaknesses are internal factors; opportunities and threats are external factors. A post on RapidBI describes the characteristics of each:

• Strengths are positive tangible and intangible attributes, internal to your organization, that are within its control.
• Weaknesses are factors within your control that detract from your ability to attain your goal, but that you could improve performance on.
• Opportunities represent the reason for your organization to exist and develop; identify them by time frames.
• Threats are beyond your organization’s control, which could place your mission or operation at risk. Classify them by their seriousness and probability of occurrence and develop contingency plans to address them if they occur.

RapidBI describes two acronyms for identifying the factors to address in your SWOT analysis:

• PRIMO-F for strengths and weaknesses: People, Resources, Innovation/Ideas, Marketing, Operations, and Finance
• PESTLE for opportunities and threats: Political, Economic, Social, Technological, Legal, and Environmental

The post offers simple rules for a successful SWOT analysis:

1. Be realistic about the strengths and weaknesses of your organization
2. Distinguish between where your organization is today and where it could be in the future
3. Be…