Strategic Case Blog
"The Business Growth Matrix" Revealed!
|Posted on September 9, 2016 at 2:20 PM||comments (0)|
Attention IT Buyers and Sellers!
How do Buyers know which tech options are best for their company? There are so many considerations to sort through. Scalability, mobility, cloud migration, security, collaboration, compatibility, capital costs, operating costs, technical risks, pros and cons of tech maturity. It can really make your head spin!
How do Sellers justify expenses to buyers? Typically, by stating a value proposition. But the value proposition rarely goes beyond the IT related goals. Realistically, there are far greater positive and potentially negative ramifications to the larger business.
When these larger business pros and cons are not analyzed, the CIO can be missing opportunities to help the company grow. The CIO can also be missing critical issues that may directly cause harm to the business. That’s when CIO morphs into “Career Is Over”.
So what is a responsible CIO to do? The decisions are already complex. So how do you add in top level business considerations without muddying the waters? Use a process. Use a process that will quantify strategic business implications both positive and negative. The process for this is not unlike existing technical assessments that are routinely performed for technical implementation considerations. Except that the format and objectives are structured to address the top level business risks and opportunities.
Making the right decisions can change a career ending project into a significant prosperity event. You may even justify a larger budget if the benefits are there. After all, IT has to be a strategic asset.
Ingenuity Risk AssessmentTM is based on the “9 Pillars” of Business Strategy. No business risk or opportunity exists outside of the "9-Pillar" confines. A well-crafted strategy assessment can highlight fatal issues or great benefits to the top or bottom line of the business. The assessment can also include the typical technical factors required for a solid implementation program. Two birds, one stone.
The business strategy assessment also looks at far more than just “Value”, “Value” is only one of the 9 strategic pillars for business success. There are 8 other strategic measurements that need to be done to drive top and bottom line improvement.
The takeaways here are to:
1.) Integrate the needs of the IT group with the needs of the larger business with a comprehensive strategic assessment.
2.) Collaborate strategically with a process to drive growth and profits, this will propel your success.
For more on Strategic Assessments contact [email protected] or visit www.ai-strategy.com
|Posted on June 27, 2016 at 10:50 PM||comments (0)|
In the immortal words of Kevin O’Leary a.k.a. “Mr. Wonderful”, of the hit TV series Shark Tank, “Your dead to me.” captures our sentiment of SWOT and after a few “aha” discussions, our clients seem to agree.
"Strengths may have waning demand in the market, and Opportunities may be fraught with costs and risks."
The GOOD- Simple, Easy to build consensus
When I first heard of SWOT in the 80’s, it sounded great. What a simple and succinct way to organize and galvanize random thoughts in a board room about significant factors and traits of a business and it’s environment. I still hear company leaders many of whom are very intelligent discussing SWOT as part of their strategic planning efforts. I can’t blame them, I used SWOT extensively through the 90’s.
When I engage executives about SWOT, they quickly admit that “it’s a tool that helps us organize the basics then we fine tune our plans afterwards”. But why use a tool at all that can unilaterally generate pitfalls that need to be shored up afterwards if they are spotted at all?
The BAD- Random, Sets up hidden hazards within your strategy
Strengths, Weaknesses, Opportunities, and Threats form nice neat quadrant cells that tend to oversimplify and trap anything placed in each respective box. I don’t take issue with Weaknesses and Threats so much. I take issue with the misleading coronation of Strengths and Opportunities. Strengths are immediately assumed as something we need to run with, same goes for Opportunities. But Strengths may have waning demand in the market, and Opportunities may be fraught with costs and risks.
Perception can set up an organization to be blind-sided by business risks that they didn’t explore because their strategic planning efforts were flawed with over-confidence in their Strength and Opportunity boxes.
If a process is random and rife with hazards then use a better process.
The UGLY- Overconfidence, Hidden hazards hurt your business
So here’s what happens. Optimism reigns for Strengths and Opportunities, meanwhile there are overlooked risks that aren’t considered deeply. Tactical problems that were never contemplated bubble up when the strategic plan is executed.
It happens all the time. Problems surface. People get frustrated, embarrassed, productivity tanks and business takes a hit. Time for damage control, hopefully customers and significant stakeholders aren’t impacted. Distractions from productive activities are everywhere. The SWOT based strategy is looked at as a failing strategy and possibly for the wrong reasons. There may have been some great parts of the strategy that will be cast out with the bath water. Time for a new strategy, let’s pull out SWOT again!
A Better Way
SWOT never clearly calls out risks, only Weaknesses (things you don’t do well), and Threats (presumably attacks by outside sources). A SWOT analysis never even examines why customers like your products or services. So don’t use it, its’s dead because newer and better strategic planning technology is available.
IRA investigates and quantifies why your business is successful, what makes it tick, why it’s appealing and what a great acquisition might look like. It examines how customers behave and what they value. Then it systematically seeks risks that can undermine your business, by challenging the 9 essential parameters of a successful business. It highlights and scores those aspects of your business that can go wrong, that are not well understood, or that can generally inhibit growth.
The 9-point score that results clearly shows where improvements and innovation are needed and the path for growth. Your strategic plan comes to life.
It’s fundamentally a different approach from SWOT, it’s not just a tool it’s a system. It’s been in practice for over a decade creating high value offerings that the market needs while identifying and reducing hazards to achieve goals.
For more information please visit www.ai-strategy.com
|Posted on June 21, 2016 at 7:30 AM||comments (0)|
The Wedoit Company has been growing steadily at about 7% per year bringing on 5-8 new customers annually. It has been growing because it has quick response times and competitive pricin for its custom metal products. But the market growth potential is limited and margins are narrowing. Management is considering various options for new growth direction.
A.) Add in new types of products for their existing customer base.
B.) Acquire a company with a standard product line that fits with their existing mfg operations.
C.) Acquire a company that is focused on rapid prototyping services.
Which path should the executives of Wedoit choose?
The revenues of Options B and C are similar as are the current profitability. Option A requires very little investment, so the initial thought is that Option A has the lowest risk but after conducting an IRA planning project we see that’s clearly not the case.
This scenario happens every day in the US as companies wrestle with growth and change. Using the IRA strategic planning process, we can evaluate the entire business scenario of each option and deliver a 9 point score that will quickly highlight the most successful option for Wedoit.
The Issues become very clear.
A. If Wedoit Offers new and different products (Option A) , they would be choosing the highest risk option. This is the least likely success path. Although their organization is familiar with the approach the market demand is not great.
B. Acquisition of a product that fits into their existing operations (Option B). In this scenario their organization is geared up for the work they would just have to adjust their sales and marketing structure. But the target acquisition is selling out because the product line is no longer the front runner in their space. Wedoit can remove some overhead costs after the acquisition to improve operating profit, but that doesn’t change market and competitive conditions.
C. The best choice, (Option C) has growing demand in the market and is a service that requires similar skillsets to their existing organization. The slightly lower score for the organization is due to the learning curve with the new markets and technology. But most importantly, Option C represents a stronger market where differentiation is rewarded. This option also helps the company to sell its existing products by being more responsive and opens new market segments to Wedoit.
|Posted on June 15, 2016 at 7:40 AM||comments (5)|
A 90-day plan is important for your new leader to align with the company, set expectations for early stage activities, as well as, learning and integration. However, in light of career expectations of the new leader and strategic expectations of the company, there needs to be a much broader and reaching approach to give the most to your new CxO and get the most from them.
Often companies will look at the new addition during the hiring process to determine what they bring in terms of skillsets, contacts, past history with prior companies to determine what their new leader brings to the table. That is all well and good, and essential to the selection and on-boarding processes.
A characteristic of top successful organizations is the ability to go far beyond analyzing what they bring to the table. Market leading companies will seek vibrant change and impact to their overall business. A top recruit, the right person, should be able to bring this level of impact to your company. If they don’t, then either they are not the right person, or you haven’t created the environment where this can occur.
A strategic assessment of the overall business impacts that are needed for growth of the company is an essential part of making this process successful. The strategic assessment will identify the opportunities and risks not just of the functional area of your new CEO, CFO, COO, CIO, CRO, or Chief Engineer, but of the overall business. Keep in mind that the business includes all stakeholders, not just your immediate organization. As a result, now there will be a plan for overall business impact vs just improvement of a single functional area.
Strategy development can start either in the functional area or at the top business level. Don't gnash your teeth over which to start with first. Choose the starting point that makes most sense. The important point is to start. A strategic plan should always come first, otherwise you are relegated to just reacting as best as you can.