Gregg Anderson, VisionQuest
For many businesses, strategic planning has become too commonplace. What’s needed is a plan that acutely differentiates you from your rivals and enables your business to survive in the long run.
As they plan for 2013 and the future, many CEOs visualise their companies as concentrating more on satisfying the needs of their customers and shareholders, having a greater market share and operating in emerging markets with robust economies. Does this ring a bell for you? If this is the way your strategic plan is evolving, you have many peers.
And if this is the case, why will you prosper and others fail? After all, we can’t always be winners simply because there is a dearth of available business nowadays.
For many organisations, strategic planning follows the usual traditional path. You begin with the external environment analysis: What’s your competition doing? What does the political landscape look like? How are the regulatory environment and the economy evolving? How will existing and emerging socio-economic factors affect the business? What disruptive technology changes are afoot? Then you conduct an internal analysis: What are our strengths and weaknesses? Where can we discover new growth opportunities? What’s often omitted, of course, is the why. This means that you need to ask yourself: Why am I in this business? And even more importantly: Why should anyone even want to do business with you?
We work with financial services providers clients on their strategic plans to help them hit their targets and thus remain successful. Initially, when we closely scrutinise their vision for the business, their plans to achieve it and their current business model, we frequently see an astonishing resemblance to what’s occurring at other FSPs. Considering the challenges firms encounter nowadays, it’s time to revamp the way you strategise for the company’s survival.
A good strategic plan takes time to prepare – perhaps several months of your senior people’s time. However, consultation with a professional who brings objective, multi-industry experience and novel ideas can help reduce this timeframe. Once completed, you can prepare your annual business plan faster and then use it to gauge the organization’s execution performance.
Rather than starting off with financial targets and assessing specific business offerings or markets for their ability to help you achieve those goals, begin with another set of questions: Do your customers fare better from doing business with you than they would be dealing with another company? This requires taking a longer-term view of your customer relationships and how you can add value to them. For example, in private banking, it’s not about obtaining the best interest rate on a fixed deposit. It’s more about a financial planner who creates a portfolio that includes investments, trusts, and other financial products that helps create and preserve wealth for the high net worth customer. And, due to that professional help the wealth preservation continues for successive generations and thus gives the customer financial peace of mind. The creation of the portfolio will help customers become far more successful than will a low rate fixed deposit – although, conceded, you can’t be too distant from your rivals on these factors.
Does the best talent want to work for you? This is especially crucial today in the “war for talent”. Increased revenue is the key to sustainability and to being able to attract capital as you grow. Despite what many naysayers imply, financial services is a people and relationship business. At least, it will continue to be for the successful long-term service providers.
The good news is that the best talents are more inspired by not only “the money”, for example, career and educational opportunities, work/life balance, job security and enjoying themselves are very important factors. Therefore, you need to cater for these elements in your strategic plan – omit them and pay the penalty on not having the best and the brightest on your team.
Moreover, you need to teach and motivate younger workers about how they can make a significant difference and enjoy important, extremely rewarding careers in financial services. The success stories that depict what FSPs have done for people, businesses and communities have been blanketed by the bad press of recent years. FSPs have to address this, and they can begin in their own courtyard.
Can you execute your strategy? The old adage, which states that “the best laid schemes of mice and men often go awry”, can be a show stopper if your well-laid out strategic plan doesn’t have the resources you need to execute it. Execution is the act of doing something well. When you really focus on execution, you achieve better results. So a vital step in your strategic planning process is to ensure that you have the key financial, human, technical and other resources available to reach your targets. Then manage your execution well by guiding, leading, and inspiring people to outstanding performance versus merely judging their performance occasionally and requesting that they do better next time.
What makes your company “preferred” in the marketplace? It’s vital to pinpoint what is unique and superior about the experience your customers have with your company. If you can’t isolate this, then it must be a central point in your strategic planning activity this year. Currently, and in the near to mid-term future, the customer is king and the king has choices.
If your strategic plan deals these questions, then you’re ahead of the game. You’ll have both a more convincing strategy and a superior chance at success.
Gregg Anderson is the managing partner of VisionQuest Management Services Ltd, a boutique management consultancy.