If you’ve been in a CEO or general manager position for a while, it may be appropriate to take a step-back and gain a step-change in performance via creating and implementing a Northwest Strategy. If you have just arrived at a new CEO or general manager post, create a "good-enough" Northwest Strategy. How do you create this Northwest, and get major and rapid results? The first step, rather than doing market studies, competitive analysis, or strategic planning exercises, is to carefully define the critical problems. The second step is to fix them. Easy; right?? Let’s review every word of the title as they are important (except the “the”).
“Carefully Define” means just that, thinking beyond the obvious so you attack the cause not the effect. High admin expenses may not be simply due to a bloated staff, but rather too many sku’s. High manufacturing costs may not be a design or operational problem, but rather caused by marketing promises such as lead times that are inefficiently short or catering to customers’ every possible whim. An example of both is the 2007 Dodge Nitro, available in 167,000 different combinations (color, trim, etc.) while selling about 37,000 units!
“Critical Problems” also means just that. Any business will face a laundry list, such as product costs, expense levels, product line proliferation, too many facilities, inadequate management, estranged customers, or employee morale. You can’t fix everything at once. Do the tough work of determining those several that are critical, testing against these three factors: (a) “do or die”, gotta fix this one, (b) fixability, don’t tilt at windmills, and (c) impact—including solving multiple problems with one action. Those problems can be multidimensional, and usually are. They can be somewhat complicated, and usually are. If not, they would’ve likely been fixed by now.