Part four: the benefits of the strategy process
01-Nov-2007
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By Jennifer Kirkby, consulting editor
Many companies skip strategic planning, deeming it a “waste of effort” in the race to do, do, do.
At best they miss out and at worst they create chaos: the effort of creating an adaptive customer strategy delivers ten major benefits to a company.
The ten major benefits of strategic marketing planning
1. Forces big picture, systems thinking - for external scenarios and internal workings.
2. Enables a through review of customer assets and stakeholders.
3. Creates internal collaboration between functions.
4. Generates an extraordinary enthusiasm that improves creativity.
5. Allocates resources to impact on the most profitable potential.
6. Creates a blueprint and benchmarks for evolving company capabilities in tandem.
7. Connects a company to its ever changing market, allowing outside–in thinking.
8. Elicits improved supplier/partner fit and collaboration.
9. Enables faster front line decision on day to day activity.
10. Saves substantial management time and stress during implementation stages.
However, different types of organisation will major on different parts of the process depending on the amount of change in their market and the complexity of the organisation – something Charles Handy pointed out in the 1970s.
• Small companies in growing markets may well focus on choosing value; leaving the design and creating stages as an on going process for a non-hierarchal, customer enthusiastic culture or high flyers. But collaboration is vital for this to work; internal politics a death knell.
• Complex companies in more mature markets should be especially good at the planning stages of design and create. But they have to make sure everyone is engaged at the ensuring stage otherwise strategies become ivory tower tomes, and the company stagnates in bureaucracy and operational efficiency.
• Large organisations in competitive markets may choose to focus heavily on the ensuring and designing value stage, constantly running a programme of R&D pilots to move strategy along quickly. But they can come unstuck if they have a blame culture rather than a fully involved leadership in for the long haul.
According to recent research by Brian Smith at Cranfield Business School successful ‘customer’ strategies have five key features, They:
1. Anticipate the future needs of the market, rather than focus on what is.
2. Build and use company strengths (or capabilities) to effect and minimise weakness.
3. Target specific groups of people in the market who think alike – not everyone.
4. Tailor the proposition to different groups that provide the greatest value.
5. Differentiate in their market, rather than tackle competitors head on.
In the coming weeks MyCustomer will look in more detail at some of the key components of successful adaptive customer strategies.
• The maturity of customer management capabilities after 10 years of action.
• Ways to make different types of customer segmentation more actionable
• Methods for encouraging cultural innovation in order to differentiate.
It may not prove seminal, but we hope it will be useful for your particular customer focused evolution.
Further Reading
Understanding organizations – Charles Handy
Why strategy implementations fail – Brian Smith
In the dark – Deloitte
Total integrated marketing – Hulbert, Capon and Piercy
Translating customer experience jargon into sense
Making the business case for customer relationships
Death of a salesman
Seducing your ideal customers
Forget leaders we need inspiration
Change management
This month's stories:
Customer strategy maturity
The challenges and opportunities underpinning customer strategies
Customer strategy: the Direct approach
Innovation
Can open innovation save the West?
Plugging into co-creation's potential
Segmentation
Squeezing customers together with segmentation
The seven perils of segmentation
Customer objectives
Making the economics of customer recruitment and retention add up
Lock the customer, not the phone: stopping telco churn
MyCustomer.com 01-Nov-2007
Story read 5525 times
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Don't forget Haeckel - father of the Adaptive Enterprise/Sense-and-Respond
Another idea with long legs is the Adaptive Enterprise is in danger of being hijacked by technology companies, but was first postulated by Stephan Haeckel who coincidentally ran IBM's Advanced Business School in the 1990's.
His premise was that the 5 year plan was doomed to fail given the rapidity of discontinuous change - would Microsoft's strategy with respect to Google have been different if 5 years ago they felt Google would be a $200bn behemoth?
Haeckel's view was that competitive advantage comes from knowing earlier what is happening now.
I bet there are many major banks that wished they had that immediacy of knowledge, given the current financial eruptions. Would 5 year PEST analysis have helped? I'm not sure.
Haeckel also identifies the conditions in which a 'customer-back' and 'Adaptive' organisation can flourish.
Leadership (CEO) sets the context and boundaries and focuses on providing enabling capabilities - not by any means just technology, but even more crucially cross-functional collaboration with a focus on agreed outcomes, very strong externally focussed sensing capabilities, the ability to reconfigure value by recombining the value creation networks within and outside the organisation.
I can only think that the implications of such a transformation are too rich for many CEOs of large companies, who perhaps have shorter horizons. Perhaps this is why his ideas have been largely overshadowed by the promising silver bullets of CRM/CEM. Although to be fair surely those underpinned with the 'keep customers' imperative would have provided some of the flesh and sinews to enable the Adpative Enterprise.
Anyway if anyone wants to find out more, Stephan who now runs a successful consulting/coaching firm can take a look at this site where you will find many useful articles. http://senseandrespond.com/
It seems to me that for Strategic Marketing Planning to add real value it must synthesize what is happening now and make that available to mgt so they can make informed choices and build appropriate strategies. If it just looks at the traditional PEST/PEEST factors then it may suffer the charge of crystal ball gazing whilst today customers are leaking away through frustration and dissatisfaction.
CustomerSat which I represent is definitely in the business of helping firms know earlier what is happening now and helping them manage the follow-up so they can make a good fist of fulfilling the second part of Drucker's imperative.