strategy development

© Chris Skinner. All rights reserved.

Chris Skinner

@FSClub and @Chris_Skinnerwww.thefinanser.com


OLITICAL

CONOMIC

OCIETY

ECHNOLOGY


POLITICAL FORCES FOR CHANGE

• What are the industry rules, regulations and governmentalcontrols that affect what you can an cannot do?

• How does our country and government's policies affect ourability to trade domestically, regionally, globally?

• How might governmental policy change in the future?…

• Can we build scenarios of the extremes?


ECONOMIC FORCES FOR CHANGE

• Where are the growth markets for our products and services?Are we positioned well to serve these markets?

• Where are the contracting or weak markets for our productsand services? Are we too strategically positioned in thesemarkets?

• How do we leverage for demand and control supply?• What economic forces will potentially disrupt our value or

supply chains?…

• Can we build scenarios of the extremes?


SOCIAL FORCES FOR CHANGE

• How are our customers changing?• Is our services or product viewed as a force for good oin

society?• Will people still want our product in five years from now and

who will these people be?…

• Can we model the extremes?


TECHNOLOGICAL FORCES FOR CHANGE

• Are technologies going to assist our growth or decimate ourbusiness?

• Can we leverage these technologies in our value and supplychains?

• Can we find new technologies to innovate our offers orenhance our services?

…

• Can we model the extremes?


EconomicAnother Asia Crisis?Industry imageGreenspan policyImpact of EMU - $, ¥, €Reducing MarginsGeographic Border Breakdown

PoliticalECNext US PresidentPensions exposureRegulatory Changes

SocialNew Generation of wireless kidsExtended family unit over timeLongevityGene therapyCustomer Sophistication

TechnologicalIntegration of alternative delivery systemseBusiness/eCommerceTechnology AdvancesWireless FinanceTV and Internet integration

CompetitionForeign PlayersNew EntrantsNew Brands/BrandingIndustry ConsolidationTime to Market

DirectionTaking into accountCulture (from sales culture to dealing with acquisitions)Organization (centralization vs. decentralization)Growth strategiesSales and Channel managementNew Products

Define the Business Issues …… then work on the Strategy


FINANCIAL STRATEGIC PLAN

Aim = maximise the return on investment for StakeholdersMISSION

– Defines the journey; destination and time frame, e.g. to be No. 1 in 3 yearsSTAKEHOLDERS

– For whom in business to serve, eg. Shareholders, Customers, Employees,Suppliers, Local Community

GOALS & OBJECTIVES– Major milestones for achieving the Mission, eg. 30% sales via new channel in

1 yearCRITICAL SUCCESS FACTORS

– What has to happen to achieve Objectives, eg. faster to market by 50%Measured by: FINANCIAL RESULTS

– Delivery of Financial Performance, eg. Expenses, Profit & Loss Account,Balance Sheet

Three Strategic Plans

FinancialCustomer

People


Measured by: FINANCIAL RESULTSBottom-line performance: costs, income, profitability

Benchmarks against the Hotel Industry and other UniversitiesISO9002

Managing Monies for Stakeholders

DESTINATIONCreate the EducationalTheme Park by the year

2000

GOALS & OBJECTIVES- Outperforming every other University

Hospitality in the UK- Being Commercially Viable and Successful

- Leader of a Quality Environment- Providing a Great Quality of Life for Students

CRITICAL SUCCESS FACTORSContribute 17% minimum towards University’s overall income

Grow KUH’s business by 20% year on yearGain economies of scale

MONEY

STAKEHOLDERSThe University, Student Customers,

Commercial Customers, Staff, Suppliers


CUSTOMER STRATEGIC PLANAim = optimising customer retentionRAISON D'ÊTRE

– Nature of and reason for business, eg. Richard Branson -“We fly People, notPlanes”

IDENTITY– A unique and compelling reason to want do business with you, eg.

Convenience, Corporate & Brand ImagORGANISATION

– How to organise to Implement the above , eg. Process Owners, Budgets,Resources, Structure

CAPABILITIES– Products, skills, technologies, that can be learnt or introduced and are

required to deliver the Identity through that Organisation, eg. TeleservicingTraining, Technical Knowledge, Programming,

Measured by: CLIMATE– Strengths, Weaknesses, Opportunities and Threats, eg. Competition,

Government, Press, European market, etc.


CUSTOMERS

Exceeding Customer Expectations

RAISOND'ÊTRE

Providing ourcustomers with“A Lifetime Gain”

Measured by: BUSINESS CLIMATE (SWOT)

IDENTITYQuality of educational experience/Quality of life experience/ Safe and

secure/ The sixth most popular campusin the country/ A cashless society

CAPABILITIESAn Educational Theme Park/ Practical skills/

Facilities for the regular student and the corporatevisitor/ A year round Conference Park facility/Attractive, village atmosphere in an inviting

environment/ The opportunity to meet at a Universityin Quality surroundings/ An Educational Village

providing a range of facilities for a mixed community/Our raw material is beauty of surroundings andenvironment - the rural location/ Create a self-

selecting approach that caters for all markets/ Thebiggest campus in the UK

ORGANISATION


PEOPLE STRATEGIC PLAN

Aim = motivating people to release their full potential)VISION

– A lasting picture inspiring hearts and mindsCHARACTER (Value Gap Analysis)

– Philosophies, Values and Beliefs required to support the Vision, eg. Trust is Vital(philosophy), We Trust our Staff (value), Our Staff are Trustworthy (belief)

COMPETENCIES– The innate qualities required in people to fulfill the Character, eg. Leadership,

Intuition, Initiative, Creativity, EmpathyRECOGNITION AND REWARD

– To support and nurture the Competencies - What gets measured and rewardedfirst gets done first, eg. Quality not Quantity

Measured by: INDIVIDUAL BEHAVIOURS– The culture that determines how people act and react eg. We are never too busy

for our Customers


PEOPLE

Measured by: INDIVIDUAL BEHAVIOURSPerformance measurement

ISO9002Investors in people

Motivating People

CHARACTERFocus upon The Customer/Move frominstitutional to empowered/Ensure rightpeople are in the right job/Be involvedand participate/Manage through inner

strength/Look for the positives/Youmake the difference/Interact, talk,

communicate/ Say what you feel/Thereis no rule book/Have fun/Be a friend

firstCOMPETENCIESCommunicate/Seek opportunity/Common sense

Leadership/Creativity/Enterprise/Vision/Initiative/Dynamism

RECOGNITION AND REWARDReward by Profit Sharing

Recognise the TEAM EFFORT and the INDIVIDUAL EFFORT

INSPIRATIONI am

Extraordinary


Measured by: FINANCIAL RESULTSBottom-line performance: costs, income, profitability

Benchmarks against the Hotel Industry and other UniversitiesISO9002

Managing Monies for Stakeholders

DESTINATIONCreate the Educational

Theme Park by theyear 2000

GOALS & OBJECTIVES- Outperforming every other University

Hospitality in the UK- Being Commercially Viable and Successful

- Leader of a Quality Environment- Providing a Great Quality of Life for Students

CRITICAL SUCCESS FACTORSContribute 17% minimum towards University’s overall income

Grow KUH’s business by 20% year on yearGain economies of scale

MONEY

STAKEHOLDERSThe University, Student Customers,

Commercial Customers, Staff, Suppliers


Money(ROI)

People(Employees)

Customer(Channels)

Direction

Critical Success factorsKey Performance Indicators

Balanced Scorecard

Define the Strategy


Maximise shareholder value by following thesestrategic themes:

leader in chosen marketsfirst choice for our customers

driving down day-to-day operational costs

cost-income ratio

operational standards index

activity migration index (measure ofmoving customer activity to appropriatemeans)

…

staff viewpoint measure

leadership index

empathy index at all levels

staff turnover

...

customer satisfaction indexgroupwide CARE index for allcomplaint monitoringsahre of wallet (average

product holdings)customer attrition...

Money People(Employees)

Customers

Lowest unit cost retaildistribution and branch

service delivery

Well-managed, stronglymotivated people. Createhighly- productive, customer-needs-focused, fully-compliant, salesforce

Continuously improvingquality customer servicecomparable with the bestretailers. Enhance lastingcustomer relationshipsthrough effectivesegmentation.

Direction

Critical Success factors & Key Performance Indicators


Commu- -nicating


“Send three and four pence, we are going to a dance”

“Send reinforcements, we are going to advance”


The Blunt Razor

“The ABC Mach 3 solution provides aninnovation in sharing through the addition of ahighly robust, tungsten steel third blade. Thisthree blades systems is integrated with thelatest technology to enable the user to bring tobear the utensil in such a way as to allowfewer strokes to achieve a close shave. Theresult of the three blades, fixed headintegration is truly innovating in that thereduction of strokes to the face ensures theuser has less irritation when applying thistechnology.”


Razor Sharp Focus

Gillette Mach 3

“3 blades, fewerstrokes, lessirritation”


BLAISE PASCAL 1623-1662 ,(1657), xvi

Why is this so difficult

“I didn’t have time to write ashort letter, so I wrote a longone instead.”Mark Twain

Credibility StatementsCredibility Statements are statements that position corporate strength.They provide key information about the organisation, its size and breadth,the range of customers, the value of revenues, the excellence of itspeople and systems.The aim of these statements is to build trust in the company for investingin their products. These statements should answer the question, “Willthey be around in five years from now if I buy from them today?”Examples:• more than 20,000 clients in over 50 countries• 47 of the world’s 50 largest financial services institutions.• $15 trillion in investment assets worldwide are accounted for and

managed daily our systems

Capability StatementsCapability Statements are statements that position the product anddifferentiate the product from the competition. They tend to be product-centric, and focus upon highlighting the features, functionality, pricingand technical benefits of the product being offered.The aim of these statements is to attack the competitive offerings directand ensure that the product is clearly positioned as differentiated in thecustomer’s mind. These statements should answer the question, “Whyshould I buy this product rather than another one?”Examples:• First database to pass 15 industry standard security evaluations and

first Real Application Clustering• First native XML support in a relational database• First fully integrated relational and multidimensional database

Value StatementsValue Statements focus upon the business benefits of the productsoffered. These are often customer testimonial based and are the mostimportant statements for closing business. Typically, such statementsfocus upon how clients gained cost savings, revenue increases, customerrelationship and retention improvements, employee productivity hikes,and related benefits.The aim of these statements is to demonstrate that not only is theproduct technically superior (capability statements) but also practicallysuperior. These statements should answer the question, “What will thisdo for my business?”Examples:• 50% increase in responses to followed up leads, Advance Bank• Response rates of 38% to 50%, Banco Populare di Navara• 14 million contacts per year, with response rates up from 10% to in

excess of 25%, Royal Bank of Scotland


Example use

“THE BEST A MAN CAN GET”– Credibility Statement– You can trust our brand because we’ve been around for over a cnetury and

we have a globally recognised brand• THREE BLADES

– Capability Statement– Three blades means that you get a 66% closer shave than with one blade– This gives the advantage of:

• FEWER STROKES– Capability and Value Statement– Fewer strokes is provided by the three blades, so you only need to run the

razor over the skin once, which leads to:• LESS IRRITATION

– Value Statement– Less irritation means much nicer skin and better look

Layers of communication

Headline• The Rationale: the Value Proposition and the

Capability, Credibility and Value Statements

Heartline• The Story: the Value Proposition and the

Capability, Credibility and Value Statements


Summary

• Clear Direction – PEST and Competitive Landscape• Clear Internal Communication

– A Financial Mission (the Objective)– A Vision for the People (the Journey)– A Customer Raison D’Etre (the Difference)

• Clear External Communication– Razor sharp value propositions, supported by distinct and

demonstrable• Credibility (The Company),• Capability (The People), and• Value (The Customer) statements


Chris Skinner

@FSClub and @Chris_Skinnerwww.thefinanser.com

strategy development

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