I'm about to embark on a strategic planning effort for my department at work. In preparation for this effort, I'm going back and re-reading Peter Drucker's classic book, Management. Mr. Drucker leads you through a series of questions in the process of answering the big question: "What is our business?"
One of the lead-up questions is: "What is value to the customer?" That's the one I will be focusing on at work. Some people confuse value with low price. It's not the same. Here's an example discussing what "low price" means in terms of a component of home construction.
Electrical equipment such as fuse boxes or circuit breakers are paid for by the homeowner but selected and bought by the electrical contractor. What is price to the electrical contractor is not the manufacturer's price for the product. It is the price of the manufacturer plus the cost of installation - for that, of course, is price to his customer, the homeowner. Contractors are notoriously price-conscious. Yet, a high-priced maker of fuse boxes and circuit breakers is the market leader in the U.S. To the contractor this line is actually low-priced because it is engineered to be installed fast by relatively unskilled labor.Where I work, we have several groups who are deeply confused about this point. One group produces Lotus Domino team sites for free. The sites are loathed by all because they are practically unusable. Information stored on these sites is nearly impossible to find. While the site is free, the cost of using it is enormous.
That group never answered the question, "What is value to the customer?" In that case, "value" is sharing information. An expensive site that allowed them to share and collaborate quickly and easily would "cost" far less than a free Lotus Domino site. In their case, that group has implicitly decided that their business is the creation of Lotus Domino sites and not helping the workforce collaborate. If they worked in the commercial world, they would have gone out of business long ago because they never asked themselves the right questions.
3 comments:
Brings to mind - "you get what you pay for."
Strategic planning is the fairly new buzz word for all businesses these days.
Good luck - been involved with several for a national association. Well worth the effort because at least it is a plan or direction to head towards
Is the problem Domino or the people creating the web pages?
I've never used Domino so I don't really know.
We have a wiki with all our documentation. For me it's great, but then I wrote 80-85% of it, so I know where it is. It is useful to the people in my immediate group, but I'm not sure beyond that. The target really is my immediate group.
Do you know of an organization that performs extremely well during a crisis? Maybe your own?
Organizations do well during times of crisis because executives, managers, and individual contributors all gain clarity of purpose, action, and expectation. Clarity, along with a sense of urgency, breaks down organizational barriers allowing people to work together efficiently towards the singular goal. These factors enable the organization to resolve the crisis quickly and return to normal operations.
On a day-to-day basis, especially during a period of continuous success, organizations tend to lose clarity of purpose and the sense of urgency. Over time, bureaucracy builds as a diminished focus on the organization’s mission prevents well intentioned executives and managers from relentlessly eliminating resource waste. Bloated processes make cross-organizational execution more difficult; driving employees to focus on their personal performance and success instead of that of the organization. Silos form and performance declines. Therefore, it is critically important for leaders to clearly define the organization’s goals and actions and to instill the sense of urgency that motivates employees to work effectively and efficiently together in pursuit of mission objectives.
Strategic planning provides the foundation for creating clarity of purpose and action on a day-to-day basis. A well defined, measureable mission supported by specific organizational objectives and reinforced by vertically cascaded, horizontally shared performance measures and effective executive and managerial oversight creates and maintains the clarity of purpose needed for continuous success. Without the unifying vision provided by strategic planning, an organization may lose sight of its goals, stray from the road to success, stumble, and ultimately fall; failing to keep pace with competitors in today’s extremely aggressive marketplace.
Final Thought…
Some organizations become victims to cyclic performance. When this occurs, the downward slide is typically viewed as a crisis for which the organization rallies to improve performance. Having realized a performance upswing, the organization becomes complacent, losing its focus and once again falling behind the competition. This cycle is often the product of ineffective strategic planning and will likely continue until a strong, unified vision is created and embraced by all members of the organization.
It is the hope of all StrategyDriven contributors that the concepts and materials provided on our website (www.StrategyDriven.com) will help you to develop and communicate the unified vision needed to make your organization truly StrategyDriven.
All the Best,
Nathan Ives
Principal Contributor and
co-Host, StrategyDriven Podcast
StrategyDriven
www.StrategyDriven.com
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