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Recently I have been helping a company formulate a new strategic direction. The companies primary shareholder has had a major shift in their thinking and wants the company to shift their focus to a new customer segment, pretty much a 180 degree shift.
Now it is easy enough to develop a new strategy, objectives and milestones to meet the new mission but it isn’t easy to get the plan into action. Why?
Put simply the managment of the company has built a very strong culture, over more than a quarter of a century of existence, around the old product and market set. They have engaged staff in that journey and employed people who fit well within that framework. And they have used performance systems and rewards that are intimately linked to the old ways. Unfortunately there is now a lot of resistance to what the shareholder wants. Many companies have found themselves in such a position where a major change is required due to whatever pressures, have failed to adapt and have fallen by the wayside. Polariod is an excellent case study.
Well what I am sure of is that taking your key shareholder head on is certainly not going to be a winning strategy!
So here are the steps I have recommended.
Make the new role report directly to the CEO, and have the CEO give it strong and visible support.
Pick the most patient, most persistent and most energetic manager to fill the position – certainly one who embraces the new direction and importantly one known for getting results.
Establish the outcomes, timeframes and responsibilites for delivery of the action and execution plans – do this in a collaborative framework utilising staff from all levels, agree what must be done, by when and by whom.
Have timeframes short and make goals as simple as practical – it is easier then to ensure no claw back to the old ways, changes are sustained.
Establish transparent reporting arrangements – make it easy to know how the change is actually going. This will conteract those peddling bad news.
Communicate, communicate and communicate – the new direction, the reasons behind the change, the progress and the good news stories, have an open door so those seeking the real answers can get them and thus shut down the water cooler conversations.
Celebrate the successes and reward those who make a positive difference.
This will generate energy and energise those who are ready to adopt the new direction. New opportunities, new ideas and a penchant to try them can make for an exciting place to work.
Of course some people will never change. Sadly, no matter how good they are at there job, it is best for them to move on.
Turning the ship requires a strong hand on the wheel and a close watch on drive train.
When I was in charge of organisation development in a major company I had to undertake exit interviews when staff left our employment.
I can still remember one young employee, one very good at his job, telling me he couldn’t work for his boss anymore. He explained it was like sitting in the back seat of a car with his boss driving but looking out the back window of the car rather than the windscreen.
A little more research told me he wasn’t making it up. I moved his boss into a new role and put someone in charge of those staff who could lead.
So what is the story here?
Well, in this fast paced changing world you can’t be someone who is looking out the rear window. Sure it has some lessons you can learn but don’t spend too much time there, just use the rearview to seek predictable patterns, particularly from more mature markets! You need to be future ready not past wise.
Being future ready means searching out innovation and innovative ideas, collaborating with colleagues and peers and testing theories and models, particularly with your customers.
Testing means destroying mind sets and challenging sacred cows. Testing means looking at new business models, new markets, new entrants, new pricing structures, resource failures or constraints, partner failures …………… Lots of looking up the road asking what if?
There has been some on-line discussion about the difference between buisness strategy and business modelling.
Well clearly there is a difference. Strategy is around the tactics and actions you are going to put into place to reach your goals and objectives. Modelling is around how all the “operational” components of your business fit together, customers, channels, relationships, resources, activities and partners all linked through your value proposition(s) to deliver your goals and objectives. See the connection?
The best business modelling tool I have used is the Business Model Canvas developed by Alex Osterwalder. Here is a link to a great two minute video showing all about it. I strongly recommend you take the time to look at it.
What is evident is, that to develop sound strategies for the medium to long term you need to innovate your business model.
Broadly speaking you need to take the Canvas and firstly build the model as it is today. You then dissect & innovate the “as is” model having reviewed your business environment to develop a hypothesis, or two or three, on what tomorrows environment might look like. This is then translated into the Canvas, or a number of Canvases to present visual representation(s) of potential future business model(s). Preferably, if practical, you then test the model(s) and ultimately choose one. You then translate the preferred hypothesis into the new business strategy. One based upon logical analysis which has challenged the status quo.
Once you have innovated your business model you are in a position to develop the pathways to success and the strategies you need to reach the goals and objectives.
Sure, there are lots of ways of developing business strategy, but a disciplined approach using business model innovation within a collaborative framework does, based on our experience, elicit some of the best plans.
So yes, business strategy and business modelling are different, but they go together like a hand fits in a glove!
We are passionate about strategic planning and business model innovation, your questions are always gladly received.