(This is part two of a two part post on How to Outthink and Outperform Your Competitors)
Here are the 5 steps that are required to create a comprehensive and practical plan for your business:
1.Identify your vision and clarify your values
Research shows that vision-driven leaders and their companies significantly outperform their competitors. Your vision has 2 functions. First, it serves as a source of information, involvement, and motivation. Second, it both informs and guides your decisions and the choices of your staff. For example, I have a client whose vision is to “Automate, innovate, integrate, and simplify.” After the management team communicated the vision clearly to the organization, it began to impact the myriad of day-to-day decisions and choices they and their people were making – moving them toward their objectives.
If vision is the “what” you are trying to achieve, then your values are “how” you expect your organization to behave along the way.
They serve as guide posts for the members of your staff who, through their individual efforts, will collectively achieve your goals. Values are the principles by which you do business and, once established, should be non-negotiable. As you think about your values, consider what you know to be right, as well as how you want to be perceived by others. Values are demonstrated through behavior, and behavior creates lasting perceptions. Examples of core values are: trustworthy, we do what we say, fun, customers first, and respect for individuals.
Your vision and your values cannot be over communicated to your staff! In addition, they should directly influence your thinking in the 4 remaining steps of the planning process.
2. Assess external market and competitive conditions and trends
The first area to explore in the external assessment is customer segmentation. That is, who your customers are now and who you want to have as your customers in the future. Thee are many dimensions to consider here depending upon the nature of your business, for example, industry, revenue, and location for B-to-B, and income, home value, and number of children for B-to-C – just to name a few. With deliberate focus onsegmentation and the needs and expectations of each segment, you will see opportunities more clearly.
Once you’ve clearly identified your customer segments, it is time to focus on your competition. In doing this, there is value to looking at comparative strengths and weaknesses – both yours and theirs! The ultimate objective is to find ways to leverage your key strengths against their weaknesses. Although this exercise can be painful, understanding how you measure-up in terms of products, service, response time, sales skills, convenience, and value-added knowledge exposes opportunities and potential liabilities that your plan should address.
The final component of the external assessment is trend analysis. Here you’ll be striving to understand the trends that are taking place – in your industry, among your customers, in our nation, around the world – that could have an impact on your business. What is changing around you and how can you adapt? You’ll pick this up in your trend analysis and it will help you minimize the impact of external events and capitalize on favorable developments.
3. Assess internal structure and resources
Your organization must be structured to respond rapidly to the needs of your customers. Sounds great, but is it? In evaluating your organization you may want to ask yourself some of these questions: Are we easy to do business with? Do we really add value, or just talk about it? How do we react when we make a mistake? The structure of your organization and the clarity of roles, responsibilities, and processes within it have a direct impact on your ability to provide value and positive, differentiated customer experiences.
When you consider your available resources, don’t just think about people. The resources at your disposal might also include real estate, equipment, growth capacity, service, technology, capital, intellectual capital, and expertise. How you utilize them in aggregate is critical to understand, since business results are directly linked to your choices of how you acquire and deploy resources. Understanding your market segments is another important dimension in the evaluation of your resources. Think back to customer segmentation and ask yourself: Do I have the right resources in place to meet my customers’ needs? Are my sales producers and service staff sufficiently experienced in the segments we serve?
4. Document Your SLOT (strengths, limitations, opportunities, threats)
Your external and internal appraisals identified concerns to be addressed and strengths upon which you can build. The thinking you did about your competition, trends, organization structure, and resources highlighted areas that will have an impact on your ability to succeed in your chosen market segments. Your SLOT analysis will help you summarize these issues and begin to conceive actionable ideas to maximize your strengths and opportunities, while minimizing your limitations and threats.
Strengths are defined as areas where your organization excels. Limitations are usually weak points. Opportunities represent significant and favorable situations in your markets that can help you be more successful. Threats are like ticking time bombs that must be defused before they explode and do their damage. While you may be tempted to focus on eliminating limitations, be sure to place an equal – if not greater – emphasis on exploiting your strengths. This is how competitive advantages are built!
5. Identify critical success factors (CSFs) and tactical goals
CSFs are the categories of things that must happen or must be in place for you to achieve your desired results. Ask yourself: What broad elements are necessary and sufficient to achieve my overall objectives? Some examples of CSFs are: Customer Service, Book Growth, Technology, Staff Development, New Market Penetration, and Sales Effectiveness. Ideally, your business should have 4-7 critical goal categories to support your plan.
Your goals should be recorded in a spreadsheet, within CSF, including due dates, and – for each individual goal – the name of the person who will be held accountable to complete it. The results of steps 1-4 can now be converted into specific, measurable, and attainable goals for your agency, forming the tactical road map – perfectly aligned with your strategic thinking – that will lead you to the results you seek.
As Confucius said, “A man who does not think and plan long ahead will find trouble right at his door.” Centuries later, his wisdom still holds true – particularly for many companies in today’s waffling economy. Whether you employ 6 or 600, a right-sized, well thought, appropriately executed plan will dramatically improve your competitive positioning and your performance regardless of market conditions.
Find a way to remove the obstacles that are preventing you from investing an appropriate amount of time in a disciplined thinking and planning process for your business. Your ability to outthink and outperform your competitors depends on it.
