Bold Exec

Take a Detour

We’ve all faced difficult business situations when there are No Good Options. Every way you face presents an un-surmountable barrier. No way forward makes sense. Managers are frozen. Each day that passes the situation worsens. Usually these situations result from years of not-benign neglect; not making the appropriate and necessary smaller decisions along the way. Need an real-life example? Daily headlines and blogs scream one such: our involvement in Iraq. But back to business! Waiting and hoping day by day is a loser; it won’t get you anywhere. There has to be a solution but you may need to search and investigate way outside the current dialogue and debate boundaries. Apply some adventurism to your thinking process, go outside the mainstream of thought, solicit inputs from lower organizational levels-individuals not typically asked and not politically tangled up in the throes of the current debate, take a detour. The following example, highly condensed, illustrates the value of this approach:

Hold the Fort While Facing Changing Technologies

Sometimes there is no true-north strategy available: period. When a company faces changing competitive technology and that change process is fraught with uncertainty there are three options: 1. do nothing; sounds almost ridiculous but sooo many companies have died as they stuck their head in the sand ignoring emerging competitive products or technologies “hoping they would go away”, 2. place a big bet with a major acquisition or large investments on one of the outcomes, or 3. be smart.  Being smart sounds like a good idea; it means thinking two steps ahead, planning on multiple possible outcomes, avoiding picking a winner before you have to, in effect hedging your bets. Applying it usually takes some outside-the-box thinking and creativity; that’s what you’re paid for! Here are two clear-cut examples that demonstrate the wisdom of the third option.

Carefully Define the Critical Problems

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, it is imperative to create a step-change Northwest Strategy. How do you create this Northwest, or “good-enough” strategy, 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! Oh that automotive industry.

“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.

Next week I’ll convey two real-life personally experienced stories how a Northwest Strategy helped create billions of value out of, essentially, nothing. This week another of the same, AMI Semiconductor in 2000.

Forget Brilliance

  Creating a sound but not necessarily brilliant strategy that is relentlessly executed beats a constantly changing (and therefore doomed to poor execution) search for perfection. We'll call that perfect strategy true North. There’s not an executive in the free world who doesn’t at least say he has a strategy. Most of them actually have one, of sorts. It may even be a good one. After all, what is a strategy but a description of a company’s problems and opportunities along with what it takes to solve them?  But the creation of a strategy, whether brilliant or not, is only one small step.

So after considering all the necessary factors, determining a sound strategy and getting it to the “good enough” stage. get on with it. Don’t get bogged down by the worries of this or that issue; work them out as you go. This is your Northwest Strategy.  Everyone (management, directors, owners and security analysts) knows it’s not perfect. Hopefully everyone also knows it’s virtually impossible to have a perfect strategy. But if the course is sound, it makes sense, it contains no non-starters, it fits with the communal knowledge of the various stakeholders, it is describable and communicable, and it creates purpose and eliminates distractions, you and your business will be a winner.