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Strategic Planning Towards 2025 – 2023 Refresh
To get us ready for 2023, in 2020 I wrote a paper focusing on the shifts in Strategic Planning towards 2025, and wanting to write a refresh for 2023, I found the key shifts in planning identified in my 2020 paper are still very relevant. For example agility, incubation and creativity are still critical elements that need to be included in any planning process. There are two additional shifts for 2023 that I have added to the original paper. Positive thinking and mindset, and customer-centricity. Before you embark on the next round of strategic planning have a read of the paper and consider any shifts you need to be making. Feel free to share it with other leaders, and as always, interested in your thoughts and feedback.
How does playing Cluedo help a business Leader?
January 2022
What does Cluedo, Monopoly and Fortnite have in common with your business?
Possibly now nothing but maybe you need to start considering the concept of the behaviour when we are playing games and applying some of these principles to your business.
In 1995 Adam Brandenburger and Barry Nalebuff published an article in the Harvard Business Review, “The Right Game: Use Game Theory to Shape Strategy”.Successful business strategy is about shaping the game you play rather than just playing the game you find. The game of business is all about value – creating it and capturing it.
Get hold of the article if you can, but basically the principles are simple.
- Make sure you are playing the right game e.g., as retail shifts online how relevant is the High St retailer
- Game theory is about standing in the other persons shoes and to look forward and reason backwards e.g., if I want to win a new customer, on a whiteboard map out the Yes/No decision-making process the customer would go through for you to win them over and see how you could “Win/Influence” each step
- Strategies such as “Win/Win” and “Coopetition” are concepts you should understand. For example, Toyota, arguably the most successful car manufacturer on the planet always thinks win/win with their suppliers and not win/lose “how do I screw my suppliers” that we see in many other markets and companies.
- The value net as shown in the model below:
Vertically, suppliers (Including labour and materials) supply us. We then supply our customer with the product or service. Dollars flow back the other way.
Horizontally are players who we interact with but don’t transact. Substitutors are alternative players who our customer might buy from, or our suppliers might provide resource to, while complementors are players who customers might buy complementary products to our product or to whom our suppliers sell complementary resources.
You can see already there are several players and linkages we can “game”, but I find most businesses tend to spend all their time and energy on the customer and only pay lip service or even ignore the other players
What can you do about it?
Step 1 – Draw the value net for your business using the model shownStep 2 – Identify all the parts of the game using the PARTS acronym:
- Players – Customers, suppliers, substitutors and complementors – sometimes it is smart to change who is playing the game including yourself!
- Added Values – what each player brings to the game – can you raise yours and lower others
- Rules – give structure e.g., laws, customer, practicality, or a contract. – can you use existing rules to your advantage, review them or come up with new ones
- Tactics – move used to shape the way players perceive and play the game. Tactics can be used to reduce misperceptions or to create uncertainty
- Scope – The boundaries of the game – can we shrink or expand
Some examples of game theory
Players – Weber choosing to sell to customers through specialist retailers. This avoids price wars and helps promote the exclusivity. Mercedes have partnered with a complementor in sound (Bose).
Added Values – Mercedes Benz and Tesla continually innovate in various aspects of automotive engineering, so competitors, are often playing catch up. For example, Tesla is pushing the boundaries of driverless technology, while Mercedes were the pioneers in passenger comfortRules – In Australia, the federal government is setting policies around indigenous procurement Tactics – Telstra in Australia when communications were deregulated in the late 90s, were facing “lower cost” competitors. Telstra knew they couldn’t compete on cost so a tactic to appear price competitive with Optus, was to compete in selected routes at certain times of the day.Scope – Mercedes Benz have decided to exit the Utility/Pickup truck market (The X Class) due to low market acceptance
Traps of game theory
Finally, what are the traps:
- Think that you must accept the game you are in (In other words do nothing)
- Think that changing the game means others must lose
- Believing that you must find something others can’t
- Failing to see the whole game
- Failing to think methodically about changing the game (e.g., not using the PARTS tool)
So next time you play Cluedo with the kids or are online thinking how good you are at outsmarting other online game players, think how you could be using game theory to change how you see your business.
Align your team and reap the financial reward
October 2018In February 2017 I was fortunate enough to present to three Mindshop “Business Leader” groups the topic of, “Getting Things Done.” (Mindshop leader groups meet quarterly and are themed around the latest challenges that leaders are facing globally).18 months later I have noticed greater alignment amongst one of the CEO attendees and their team. So how has this happened? I will explain later, but first some background.The term “Team Alignment” in Google search gets 116 million results so it is a well-covered topic. Of real interest to me is the business case in terms of what positive impact does team alignment have on the results of a business, otherwise why bother?An early study published in the Strategic Management Journal in 1992 (1), discovered that 30% of the variation in profit between 113 businesses was accounted for by the degree of organisational alignment within those businesses. Later studies have supported the early study. SAP research (2), for example, compared the most and least financially successful of a sample of corporations of different sizes. They found that 44% of the most successful corporations had their managerial goals completely aligned; none of the least successful had such alignment.Many businesses I have watched and worked with over the years have had lots of ideas on alignment and have spent considerable dollars on team building and leadership programs, but in my view, have not really succeeded on the alignment issue. So let’s examine why I started to see changes in one company post the Mindshop workshops.
What was the inspiration for “alignment” at the February 2017 Workshop?
The genesis was the topic Objectives and Key Results (“OKR’s”).
How to introduce OKRs – A Case Study
I will share with you what I thought was the best approach. The business is a privately held mid- market business in the $50m to $500m bracket.The important place to start is ensuring the leadership team understand “the Why” of OKRs. By “the why” we mean that OKRs align teams, and aligned teams lead to a better chance of positive financial results. In this case a session was held with the executive team by the CEO introducing the concept of OKR’s and why alignment is so important. In the session we showed the workshop slides.Secondly, ensure it is easy for the team to understand. Don’t make it complicated. In the training session we showed the following slide which depicts how the OKRs of a General Manager of a USA NFL team would flow through layers of the organisation. Every team member could put his or her hands up, and say that their OKRs directly connect to the GMs. How many organisations can honestly say this? Once people see this slide they get it.
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Thirdly, I would suggest piloting OKRs for 12 months with the senior team or with one vertical team rather than role out to the whole business. It is up to you, but we found that by piloting it with the senior team for 12 months, we found some OKRs weren’t that important and so we deleted them, while others we missed were added in. In the 12 month period we trialled the accountability process and in this case study example we used quarterly reviews of One Page Plans. The pilot also increased the level of understanding of the concept with the executive team. With a year under their belts, the entire executive team felt confident enough to role OKRs out to the rest of the business, which they are in the process of doing at the time of writing this blog.
So if you want to improve your financial results, get better at team alignment. We know the way to get team alignment is to introduce OKRs and reap the reward!.
Mike Burke is an Accredited Mindshop Facilitator and specialises in business and leader success.
mburke@bcag.net.auhttp://www.bcag.net.auhttps://twitter.com/michaelburke173https://www.linkedin.com/in/michaelburke173