Business Planning is a key performance function for owners and senior managers. How can you lead your organization if you do not know where you are going? Even if you have a clear picture of your destination, how do you reach this destination if you do not have a map to get there? Strategy is your map and applying a variety of planning methods to create strategic direction is creative leadership at the highest level.
If you read our posts, you already know we are fans of strategic anything: planning, innovation, and especially, planning backwards – starting at the end and working back through the value chain. Planning Strategic takes this process to the next level – start with the end or death of a project, major initiative, or proposal and do a postmortem. Perform an autopsy and determine the cause of death (loss). Analyze the completed or failed initiative just like a pathologist would do to determine the root cause of health failure.
What you want to discover when you perform this postmortem planning exercise is not only the cause but what strategies you followed to make the decisions leading to the cause. Let us take a common business example of a lost bidding opportunity. Assume you and your team have worked several months on a proposal that would generate 30% of current year expected profits. There are 5 bidders and you came out 4th highest. The client selected the 2nd lowest price bid.
The first step of this postmortem is getting facts of why the client did not select your proposal. Get the facts and do not speculate or make excuses. Try to avoid blame and rationalizations – put on your scientist (pathologist) hat and perform the business strategic autopsy.
Let us assume you met all the proposal criteria but your price was too high – sound familiar. Work backwards in your delivery chain to see what decisions – what strategies in place – were made that determined your pricing structure. The obvious rational is your competitor is willing to take reduced margins – often the case. However, this is often an excuse for avoiding a critical analysis of your value delivery chain. Perhaps your overhead structure is too high. Perhaps your suppliers are not competitive. Perhaps your business model is outdated – maybe it is combination of all three.
Redesign your value delivery chain and look for outsource opportunities to lower your cost structure. Solicit help from an experienced project provider to help guide the process. Remember, the goal of this planning strategic exercise is the creation of new strategies for future competitive advantage. GMO