STRATEGY – ARE YOU PLAYING ALONG OR PLAYING TO WIN?

25 02 2011

“Told you so.”  It’s never a nice thing to have to say to someone but every now and then, for their own benefit, some people need reminding of things you had previously told them which they chose to ignore. So when we came across some research which supports our stance that most organisations do not understand how to properly develop successful strategies we couldn’t resist a little “told you so” of our own. Will you listen? That’s up to you.

Which road is your strategy taking you down?

Here at Cowan Global we come into contact with all sorts of organisations and their strategies, from sporting bodies to large corporations and from one man bands to the third sector.

The fact that most of these organisations come to us when they find their strategy simply isn’t working probably gives us a fairly negative view of the quality of planning across all industries but our gut instinct has always been that here in the UK and in Europe we are pretty poor when it comes to strategy.

Part of the problem has seemed to be that, for many, they know they should have a strategy and so create one that is a strategy for the sake of being a strategy, probably a fill in of a template borrowed from some other company that hadn’t realised strategy is personal and therefore template sharing is not a good thing.

The reason behind having a good strategy is to be better, to win, to improve market share, to identify new markets, to grow. It is not an exercise in (yawn) ticking the right (yawn) boxes, putting the right phrase (yawn) in the right column and (yawn) hey presto, we have a strategy (not).

There has been research, but little of the robust variety, suggesting that anywhere between 40% and 90% of corporate CEOs don’t understand strategy. There has also been research (but not sound research) suggesting that Board level understanding of what strategy is, is (politely) low.

Now the McKinsey Quarterly have tested the theories, our gut feel, the varying levels of prior research with their own survey and are reporting that creating a winning strategy is a struggle for most companies. So, the good news is, you’re not alone but that’s hardly the attitude to apply to growing your business!

In a survey covering 2135 companies across Europe, North America, India and China they have found, “only 53% of executives characterize their companies’ strategies as emphasizing the creation of relative advantage over competitors; the rest say their strategies are better described as matching industry best practices and delivering operational imperatives—in other words, just playing along.”

Forty Seven percent are playing along; they have a strategy because, well, erm, they should! We are surprised that as many as 47% admit to this and suggest the true figure may even be higher.

For those reading this in Europe, it gets worse. From a list of ten test statements describing their strategies, European companies scored lowest on 9 out of the ten. Only 25% agreed that ‘our strategy consists on decisions based on vigorous debate about alternatives.’ Take a second to digest that figure. Seventy Five percent of European corporate strategies do not vigorously consider alternatives.

It gets worse. Only 13% of Europeans passed the test of ‘our strategy relies on novel data and insights not available to competitors.’ Please, take another moment. Read that again. Eighty seven percent are planning to go into competition based only on intelligence they share with their competitors. What of the insights that will allow them to differentiate themselves from their competitors? What of consultation and research independent of that available to rivals? What of planning for success instead of mediocrity!

The report makes fascinating reading for us, especially in that it supports much we have been saying about how little the development of quality strategy is understood. It should also make fascinating reading for ALL organisations who are striving for success because it is an alarm bell, a warning but also an opportunity. You can do much better than you are.

Now, how do you break it all down into English, into bite size, understandable, achievable chunks which can be understood from Boardroom through management to delivery? That’s where we come in, why not get in touch? It’s your future; we’d like to help you ensure it’s a successful one.

To read the full report; ‘Putting Strategies to the Test: McKinsey Global Survey Results’ click here.

© Jim Cowan, Cowan Global Limited, February 2011

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DO YOU KNOW WHY THEY ARE YOUR CUSTOMERS?

20 02 2011

Regular readers will know the importance of asking the right questions in order to make the intelligence that informs strategy relevant. For example, even if you know who your customers are, if you don’t also understand why they are your customers it won’t only undermine your marketing strategy it will undermine the entire company strategy. How? Read on…..

Herb Kelleher. Knows the value of knowing.

Consultation is often performed as little more than lip service, as a misunderstood ‘must do but don’t really understand how or why’ exercise before the ‘clever’ people get down to creating the strategy.

And yet, many strategies which look great at first read are doomed before they are even launched because corners were cut during consultation and they fail to understand or reflect reality.

One example is in establishing who your customer is, on the face of it quite a simple thing to research. That extends to who your potential customers are. Again, not exactly a stretch and once known we can plan how to go after them. Not forgetting, as too many do, the retention of your current customers!

Fine. Tick the box. Get on with the strategy.

Wait!

You forgot to find out why they are your customers.

A great example of the value of understanding why they are your customer is frequently relayed by Herb Kelleher, one of the founders of Southwest Airlines in the USA and their former CEO and Chairman. The way he tells the story it is one of knowing who you are in competition with but, as you will see, it is also one of knowing why your customer is your customer.

Southwest Airlines are famous for their really low fares which made Kelleher very popular with travellers but less so with his shareholders. In fact Southwest’s shareholders could not understand why they were only charging $79 for a ticket from Los Angeles to Las Vegas when their nearest rival was charging almost double that.

Those shareholders asked Kelleher to explain why they couldn’t charge $129? They would still be the cheapest available flight but profits would surely be higher?

But Kelleher had done his research; he had consulted properly and had asked the right questions. He knew that such a hike in price could hurt Southwest. How?

When Southwest set their ticket at $79 it was no accident. $79 was the cost of driving from Los Angeles to Las Vegas (factoring in maintenance and the like). Kelleher realised that as well as being in competition with other airlines, if Southwest set their ticket price right, they could also compete with the car. He knew that if they raised their prices they would still be cheaper than other airlines but would no longer be able to compete with the car.

Kelleher saw it as knowing his competition (the car) but it was also knowing why those ticket purchasers were Southwest customers. For many it was because they could fly as cheaply as they could drive. Without knowing that, Southwest might have followed their shareholders wishes and raised prices and then wondered why business had fallen.

Now, take a look at your own strategy. Is it based on the shareholders assumption or Kelleher’s intelligence? Is it based on sound consultation and research or was one (or more) vital question omitted leaving it standing on foundations of sand?

You cut corners when consulting at your (and your business’s) peril.

© Jim Cowan, Cowan Global Limited, 2011

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NOW THE STADIUM IS DECIDED CAN WE PLEASE DEBATE THE LEGACY?

13 02 2011

An Olympic Stadium with an athletics track. But what of legacy?

It felt a bit anti-climatic didn’t it? By the time it was announced, West Ham’s win over Tottenham hardly seemed like news anymore, it had been so widely leaked. The nation breathed a sigh of relief, the track would remain in the Olympic Stadium and the legacy was safe.

Only it isn’t. That whole West Ham verses Tottenham thing was a smokescreen, the legacy is far from safe and no one, least of all the media seem to care.

Let’s rewind to the days before the announcement that the 2012 Games would come to London and look at what was being described as ‘Legacy’ by the London team.

Previous Games had promised that what they built would provide a legacy for future generations, that the buildings they created would somehow, magically inspire future generations. Unfortunately, as the London team, the Government and many others pointed out, this had not been the case. They pointed at Barcelona and Sydney and told us that London would learn from their mistakes. They told us that relying on buildings to motivate did not work and that Stratford would not become home to such ‘white elephants’.

That is why the stadium legacy promised to the IOC as part of London’s bid was one of athletics legacy not of a building legacy. It was one of a reduced capacity (25,000 seats) stadium, home to athletics. Not a stadium at which athletics is very much the junior partner and which will host a minimal amount of athletics competition and little (if any) training due to its newly found commitments to football, music, cricket and a whole host of other attractions.

But what of legacy?

The London team were selling a legacy built on far more than a building when they won the right to host the Games, so what was it they were selling?

The principle strand of legacy was not one of erecting buildings in which to watch sport, it was one of inspiring people to take up sport. And even if West Ham and Newham Council find a way to make the athletics track at the Stratford Stadium accessible to coaches and athletes, their clubs and local schools on a regular, daily basis the surface of the promised legacy has not even been scratched.

Much has been made of West Ham’s laudable desire to allow ‘community usage’ of the Stadium and to keep it ‘in the community’. But which community exactly? How accessible is Stratford from Sheffield or Cardiff or Dundee? How many communities across the UK have no or poor athletics facilities while the Lea Valley Athletics Centre and the Olympic Stadium sit barely six miles apart?

Which community was legacy promised to and what was that legacy?

Perhaps the best place to find the answer and to establish what was promised is to view the video the London 2012 team put together for their presentation to the IOC, the presentation which was used to argue for London getting the Games.

“Our aim is to inspire young people across Britain and the world to take up sport”. Those words were said by Sue Barker who presented the video. Not just football and athletics in Newham and Stratford but across Britain and the world.

The video urged the IOC’s members to; “Choose London and inspire young people to choose Olympic Sport”.

Tony Blair appeared promising the IOC that his Government and all opposition parties backed the London bid 100%. “It is the nation’s bid” Blair told them.

Blair went on; “our vision is to see millions more young people in Britain and across the world participating in sport and improving their lives as a result of that participation.”

It got repetitive but the point was made; the legacy that 2012 was offering wasn’t one of bricks and mortar, it was one of inspiring people to take up sport.

And so what of that Legacy?

Unlike many European countries sport in the UK does not benefit from statutory protection*. Many local facilities, local clubs and local sports development have no guarantee of a future especially during a time of financial hardship where it is the non-statutory requirements local authorities will cut.

Planning for the development of sport in the UK is laughable, equating to little more than having a dream and then crossing your fingers. Successive Governments have thrown a succession of initiatives at the issue while it’s agency in England, Sport England, has never yet been left alone long enough by Ministers to see to a conclusion any of the three-year plans Government has required of it (to deliver Government agenda, not to develop sport).

What of legacy? Thanks to the bid video we know we had a vision, we know what we wanted to achieve but what of the strategy to deliver that vision?

What of legacy? Well, we have a stadium with an athletics track. Thank God for that, the future of sport in the UK can sleep safely tonight!

(*Playing fields benefit from a requirement of Sport England to act as a statutory consultee on planning applications that affect them)

© Jim Cowan, Cowan Global Limited, 2011 

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“BIG SOCIETY HAS NO STRATEGY” – BUT WHY NOT?

10 02 2011

“Big Society has no strategy” – Although I agree, those aren’t my words; they are those of Dame Elisabeth Hoodless, Executive Director of Community Service Volunteers (CSV). In this Blog I have highlighted lack of Government strategy before and although they deny it, they continue to offer no evidence that said strategies exist.

Rather than continuing to lambast the Government for lack of strategy, I felt it was time to take a look why I say there is no strategy using the ‘Big Society’ as my example. Hopefully, some of what I say will be of far wider use than solely in Westminster.

Dame Elisabeth Hoodless: "Big Society has no strategy"

Let’s start at the beginning. In order to create a strategy which will define the actions which will enable something to happen, we have to first know what that ‘something’ is.

It’s just like making a journey, before setting out it is useful to know where we are intending to end up!

Now, what of Big Society? It’s all a little vague isn’t it? The Prime Minister seems to know what it is but hasn’t explained it in terms understood by many and there are plenty, even in his own party, when asked don’t seem to be able to define it. And then of course, it keeps changing too. Every negative news story seems to bring a fresh, but still vague, explanation from Government representatives.

It’s a little like picking up Mercury. It’s there, you know it’s there, but it continues to elude your grasp. And until they have a clear, understandable definition of what it is, what Big Society should look like, they can’t possibly put a strategy in place to make it happen. They can claim they have and they can even have documents which say; ‘Big Society Strategy’ on the cover but that won’t mean they have a strategy; it won’t magically turn those documents into functional tools.

Having said all of that, let’s ignore it! Let’s assume that somewhere in Westminster there is a firm, clear definition of what Big Society looks like which just hasn’t been shared very well.

Do we then have a strategy?

Erm, no.

And it is actually on this point that not only Government but also many other organisations fall down. I have lost count of the number of times I have been proudly presented with a ‘strategy’ which was, in reality, little more than a list of aspirations.

No matter how many times the word ‘strategy’ is used to describe something, unless it clearly describes the ‘how’ and that ‘how’ is supported by sound method, it is not a strategy. It is a dream, a fantasy. To use the travel analogy applied above, it is knowing the destination we aspire to but to lack the means of travel, or even knowledge of what travel is.

This is not a peculiarly Coalition Government issue, their predecessors were probably worse. Minister for Sport Hugh Robertson famously described their policies as ‘Initiative-itis’ by which he meant for every issue a new initiative was thrown at the problem but no strategy was put in place, no cohesive thinking. Unfortunately, Robertson is one of the current Government’s Ministers who keeps reassuring us he has a strategy (for the development of sport) in place but when challenged has yet to produce it and who appears to be employing a policy of (by his own definition) ‘Initiative-itis’.

I have focused on the ‘what?’ and the ‘how?’ both key elements for any strategy. When you consider your own strategy don’t also forget to consider ‘what’ and ‘how’s’ close relations; ‘when’, ‘why’, ‘where’ and ‘who’ – for the same applies to them in that their absence from strategy stops it being strategy, prevents it being a functional tool.

It is said that Society (big or small) gets the politicians it deserves. Bearing that in mind, next time you are looking at your corporate or sporting or charity or whatever organisation you work for’s strategy; ask yourself, is ours any better?

© Jim Cowan, Cowan Global Limited, 2011

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CAMERON’S NHS? BEWARE THE MODERNISER!

5 02 2011

As all good Strategy Consultants will tell you; cut corners when consulting and your vision of the future will be undermined leading to a strategy built on a flawed process pointing in too vague a direction.

But what of cutting out consultation altogether? Politicians have a tried and tested tool for doing just that…..

Classic 'Modernisers'.

Only a couple of weeks ago we published a blog titled;The Importance Of Asking The Right Question’. The article was intended to point out how simply asking questions when consulting, researching or seeking evidence is not enough. Those questions need to be the right questions or the information gathered is insufficient, flawed or irrelevant.

We also warned against the tactic increasingly employed by so called ‘Modernisers’ in which they deliberately ignore using sound consultation techniques in order to push through their own view of the future and to seem reasonable in doing so.

Skilfully employed, this tactic soon becomes one of seemingly reasonable argument about the need for change versus seemingly unreasonable argument about the need for status quo. You are either for ‘Modernisation’ or you are a dinosaur. And who wants to be a dinosaur?

New Labour when in Government was extremely adept at using this tactic and it was rare that other visions of the future were given a hearing. This tactic excludes that, in being for change you are offered only the ‘Modernisers’ picture of the future.

It would now appear that David Cameron studied New Labour closely and learned well. For despite all the promises of proper consultation on change, of a Big Society being asked about its own future, he has struck the classic ‘Moderniser’ stance over the Coalition’s NHS reforms. He even uses the word ‘modernise’ knowing few right minded individuals will argue, the NHS does need reform, it does need change.

Anyone opposed to the proposed reforms of the NHS has been told to grow up, has been belittled for believing in some unsustainable status quo and has been lectured on the need for change. New Labour would be proud, it’s all part of being painted the dinosaur, of allowing no valid alternative view.

But the only version of change on offer is the Government’s. Cameron tells us we can’t afford not to ‘modernise’ (that word again), he asks if not now, then when? He tells us we can’t put it off any longer. He sounds almost reasonable; I mean, who in their right mind would oppose ‘modernisation’ of something we all agree needs reforming?

As a nation we fall for it time and time again. You don’t want to be a dinosaur so although you don’t agree with the changes offered, you stay quiet.

But what of the promised Big Society? What of the proper consultation with communities having a say in such things? What of options, what of the other visions of the future which might exist?

We should remind ourselves that the reason for change is not simply for the sake of it. No, it is to improve. And to maximise improvement we need to know which routes to improvement are open to us.

Beware the ‘Moderniser’ for genuine modernisation (read change) in the best way is not their aim. There is no need for the right question, for proper consultation for their way is a far more selfish, far less intelligent, ‘I know best and you’re a fool to suggest otherwise’ simplified to the more palatable  question, ‘are you in favour of modernisation or are you a dinosaur?’

Consultation plays no part.

Big Society? It feels more like Big State all over again.

© Jim Cowan, Cowan Global Limited, 2011

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