John Courtney, founder and chief executive of Boardroom Advisors will give you insight in this webinar about Business Strategy during the Covid-19 crisis.
Hello and welcome to the second in the In touch Covid-19 Webinar Series. I’m Annette Berry from The Intouch Content team. And today I’m joined by John Courtney who will be presenting on Business Strategy during the Covid-19 crisis.
If you missed the first installment in the series from Sally Feld, thought we will be able to watch the recording on bright talk. And it’s really interesting all about stakeholder engagement.
Slides will be sent out after the webinar today and we’ll be holding a Q&A after the main presentation. So please do submit your questions. If you have any technical issues, please refresh your browser and if they still remain just let me know in the chat function.
I’ll hand over to John now for the main presentation.
Thanks very much and good afternoon everybody. My name is John Courtney. I’m founder and chief executive of Boardroom Advisors, and just a tiny bit of background about me before we start.
So I’ve been lucky enough to have seven businesses over the past 40 years and Boardroom Advisors, the current one, has been going for five years. We provide part-time executive directors and we have 14 regional directors and 60 advisors throughout the United Kingdom.
And we advise people on many things and one of the most common is, business strategy and obviously with the current situation perhaps with people’s pipelines getting a little thinner perhaps with more time to consider things.
It’s maybe a good time to be having a look at and reassessing your business strategy for going forward, for coming out of lockdown. And that’s basically what we’re going to have a look at today. So with no further ado we’ll go to the slides, hopefully that gets the slide up.
So Growth Strategy to Maximize Opportunities after Lockdown. As I say, with perhaps a lull in business, its a great time to be having a look and seeing whether your business strategy is relevant and current for the “new normal” as they call it and that’s really what we’re going to be tackling.
And when we’re talking to clients, we look at strategy and strategic direction and we ask these sort of questions…. do clients look at strategy?
Typically, well there’s all shapes and sizes, but many clients do look at strategy. Typically the larger ones do it on a much more formal basis, annual strategic reviews and this sort of thing. Smaller ones perhaps a little less so, perhaps it’s on paper, perhaps it’s just in the founders head sometimes.
So as I say, all shapes and sizes, what often happens though, is that strategy and implementation of strategy are often completely disconnected. So there’s a strategic review, there’s a document perhaps, put together, everybody discusses it for a time and then it almost goes into the proverbial drawer to be hooked out again in another year’s time.
Now strategy obviously shouldn’t be like that and strategic documents should really be living breathing documents and adjusted as we go. One of the things we’re going to have a look at is exactly how to do that.
We also talk to clients about who discusses strategic direction, often this should be the directors, that’s in a board situation. That’s kind of their role, but sometimes other people involve department heads and so on for larger companies. For smaller companies, it’s the founder, the founder’s wife and so on.
And we often ask how the client goes about analyzing strategic direction and using tools. And we’re going to cover some in today’s webinar, it’s a very useful way of doing it.
Strategic directions are way too difficult to do in isolation, to do without a structure and a process and that’s why management tools are really useful to do that. They don’t necessarily answer all the questions but they give you a framework in which to tackle some of the issues.
And we often ask is strategic direction done through the with a broad advisor or non exec director or some external third-party and management consultants, a very useful process that sometimes if you’re in a company, you’re a little too close to things to perhaps see all the various options. So having somebody to facilitate a round of management structure is a very useful way of doing it. And so what we’re going to cover is, if some of those tools might be of use and how to use them.
So why look at strategy? Well first and foremost, it gives the company clear purpose and direction really. And as I say various tools are there, we’re going to look at three of them.
We’re going to look at SWOT, which is a very common tool lots of people know this. So we’re not going to cover, well won’t spend too long on that but we are going to cover it. A crisis assessment which obviously in today’s environment is particularly useful. And MOST analysis which I personally trained as a strategy consultant a long time ago now, but it’s very useful helping organizations get from where they are now to where they want to be, and that’s what strategy is all about. And it really is a single most important thing advisors can help with.
Right, so no further ado let’s look at the easy one. So SWOT as I say lots of people know this: Strengths, Weaknesses, Opportunities and Threats. It’s really useful, it’s been around a while but it’s a very very useful tool for helping to get issues out on the table. What it doesn’t do is then take any of those issues and do something with them, but a really useful starting point for strategic review. Best done in a group, best done as a brainstorming exercise rather than people doing it in isolation and you know perhaps coming to a review with their list. Much better everybody comes with a blank mind and a blank sheet of paper.
Hopefully, there’s a facilitator, or a non exec director or consultant or whatever. And goes through this as a brainstorming exercise. With brainstorming certain rules apply; so that is no criticism, you give ideas off the top of your head, you shout them out around the room, it’s top of the head stuff. And at least at the beginning it’s not thinking and analyzing criticizing, particularly not criticizing, it’s getting the ideas out, getting all of them, not worrying if they’re a bit wacky.
Blue sky as the consultants say, get the ideas out, get them on the board, get a long list and only when you start to run dry to then start to analyze. And so this little grid just gives you an idea, left-hand side really just showing that the strengths and the weaknesses should be internal things.
So for example we have a perceived weakness on our financial control, that would be an internal issue, that would be a weakness. Opportunities and threats, external threat well okay COVID19 there’s an obvious one. you need to be a little bit more precise than about what the threat of COVID-19 is but however we will come to that just an idea of something that is external to your organization, that’s what we mean by that. And you can see at the top, these things strengths, weaknesses, opportunities and threats should be either helpful or harmful to achieving objectives. So you’ve done brainstorming, you’ve got a long list, you’d beat them around the room, people are starting to run dry, what do you do then?
Well let’s say we’re dealing with weaknesses; so you’ve then analyze and start to look at perhaps some of the smaller weaknesses, some of the little ones, perhaps join two or three together to make something a little bit bigger. Try and get a sense of scale, try and get a sense of importance. So what are the big ones? what are the big weaknesses that you really need to work on? Because if you’ve got a list of 10-15 things when you’re not going to be able to work on all of them. So we are and you are related tools and we are going to have a look at those main items, what are the big things that we’re actually going to work on? What’s going to move the doll, so getting some sort of sense of scale I think and importance on all of these things.
So you start with strengths, strengths are actually quite difficult to do, but weaknesses, most companies find really easy, there’s lots of things to complain about. Opportunities, yes there’s all often some gems in there. Threats tend to get a bit woolly, you know Brexit, COVID, trying to be quite precise about what those threats are often helps.
So we’ve done a SWOT analysis, we’ve got a sense of scale, what are the important issues. But as I say the SWOT has only got us so far, it hasn’t actually done anything with these things. So what do we do?
Well, let’s have a look at the next slide because as you can see bottom left we’re going to park SWOT. And we’re going to look at another tool and then we’re going to look at a third tool in order to bring it all together. So we’re just in the park SWOT, we will come back to it.
Let’s just have a look at a crisis strategy assessment and these are really just a set of questions. And you can come up with different questions but it’s really to try and work out how the crisis might affect your business but we need to do it at a high level. And this can be applied to any crisis. It could have been the financial crisis 2008, could be Covid now, let’s hope there isn’t something major for the wrong.
So defining the crisis in one sentence. What exactly is the crisis? By that I don’t mean technically but describing and putting it down in one sentence, so you’re quite clear about what it is you’re trying to deal with, relatively easy in the current circumstances. And then have a look at what will change in the world, by that I mean the world in general not necessarily just in business or in your business but actually in the world. What sort of major changes might come about and you know have to use educated guesswork in order to do this because we don’t have a crystal ball.
But for example, you might find that there might be less foreign travel, at least for a period of time that’s just an example of what might be changing in the world as a whole but lots of lots of different things. And bring it down more closer, focus to you, what is likely to change in your industry, as a result of the changes in the world and as a result of the crisis, are there any particular things for your industry?
So for example if you’re in the travel industry or hospitality industry then less foreign travel is a major factor. You can see the connection there, there may be some connections or maybe some changes for your industry in particular there may not be, it’s just asking the question. And then looking at other things how might this affect your own revenue streams. Again if you’re in the tourism industry you can see that this might be quite substantial and you might or is it going to have or what have you; try to put some parameters on it.
And looking at your value proposition, how might this change, might it change? it might be exactly the same, it might completely stand it on its head, it might force you to go back to looking at your value proposition and whether you have one but that’s a side issue. And how might it alter your customer segments and the relationships that you have with your customers and your clients? Are you going to be selling to the same types of people that you have been before? Or is that actually now going to change a little. And is your relationship going to be the same? Or is it going to be different, just thinking through the consequences really and how will it alter the distribution channels and the partners that you have.
Is it more likely that you’re going to go direct, is it more likely to have different channel partners. And how are your resources? Is it going to change? Are you going to need less people? Are you going to need fewer systems or more complicated systems or more people? Perhaps you’re ramping up as a result of this particular crisis, it’s actually being a force for good for your particular business and you might need to ramp up and have more people.
What about your cost structure? Again the resources and cost structure are closely associated. But thinking it through how are things likely to be different in the new normal now? Again you don’t have the crystal ball it’s a matter of making an educated guess at some of these things but better than not having a plan in place not trying to think it through and then letting circumstances dictate and then perhaps you’re being a little late to the game.
So that’s just kind of it’s a few relatively obvious questions but it’s designed to define what the situation is, to see how it results in changes in your industry, see how it might result in changes in your business ,what do you need to do differently as a result? And you can apply this to any particular crisis.
So we’ve now looked at two tools and we’ve got a lot of stuff here haven’t we, but actually we still haven’t put a plan in together and we haven’t yet tried to tie the theory of the strategy together with putting it into implementation.
So what I want to share with you now is, the MOST analysis and I was very lucky to train it as a Strategy Consultant a few years back now. And this is one of the major things that I took from that training. And I’ve helped probably over a hundred companies look at this strategic direction and plan how things are going to be put into practice.
The benefits of this particular management tool is that it takes everything down to a level where things go on people’s tasks lists so everything that you do helps you achieve your mission.
Let’s start with a beginning so MOST obviously stands you can see the four boxes there but mission, objectives, strategies and tactics. Looks quite simple like SWOT doesn’t it? In fact, MOST is quite it’s kind of a bit like an onion when you start to peel back the layers, it’s not quite as simple as it sounds.
So let me just talk you through it, so we start with Mission. And when we’re doing this for companies often half the time we’re allocated be that half a day or a day is generally spent on the mission. Because what you need to do is to get the directors, those that are responsible for the strategy in the company, aligned and all wanting to go to the same place in the same time scale.
So the first thing that you do is to set time scales so what period are we covering here, you want something of substance. So perhaps a year, you can go as far as three years, five years these days that will move too quickly really and sometimes clients have two timescales. They might say we’re going to go get to x by the end of year one and y by the end of year three. So you have a longer-term time scale and a shorter term which is fine.
And by mission by the organization’s purpose by this I mean, business mission, it’s hard business facts. We’re not talking about a vision statement, we want to be the best in the industry and so; we’re talking about hard-nosed business with how much sales, so what’s the turnover and what’s the profit.
And I suggest for this purpose there’s a lot more to businesses organization’s purpose but for this purpose, for the purpose of MOST analysis I suggest we stick just with sales and profit. Because it keeps a very high-level focus on where it is we want to go and what it is we want to achieve in that particular time scale.
Now strategy is about where you are now and where you want to get to and then how you get from A to B. So step number one really is looking at where you are now, so you have to go back to your financial data and say well, where are we now?. What is our current position on sales and turnover? Sometimes that can be tricky. we’ve got a client at the moment that isn’t exactly sure about what their financial position is. They know what was filed at the company’s house a year or so ago but in the interim period they haven’t perhaps got the financial control that they want or need. So obviously that’s a weakness in the organisation that appeared on the SWOT analysis.
However, you have to make a best guess of what your current financial position is if you’re not on firm ground. and then around the table the group of the directors, deciding let’s take that example, in one year in three year what the company wants to achieve over that period of time. Now the speed at which you want to develop gow, let’s say, determines the scale, which in turn determines how many things you have to do.
So for example, if in one year’s time you want to grow the business by three percent in terms of sales and profit then actually you probably don’t need to do a whole heap in order to do three percent growth. If however you want fifty percent growth that period of time, you can tell logically that you’re likely to have to do a lot of stuff. So this the speed at which you want to grow determines the scale at which you’re going to do things and perhaps the volume in which you’re going to do things.
The important thing here is to get consensus; it just necessary right being three percent and fifty percent just use those as examples. What’s important is that there is consensus and the difficulty often comes because the directors are often of different ages. They want different things, perhaps they want to exit at different times, exit the company and so on. So everybody has slightly different personal agendas, that’s just a human nature.
So getting that consensus can be a little tricky, that’s why it takes perhaps the most time but consensus you have to get even if it’s included it’s taking most of the time.; because everything else is built on sand if that isn’t achieved. And perhaps there’s a little bit of compromise needed but you need to set that. And you know, you might as I say I have a one-year or three-year or both, the idea is just to agree.
The idea is that the MOST analysis that everything ties together, so from the mission we go to the objectives. and these are the key goals, the key things, the key planks, it doesn’t matter what word you use but it’s the key things that will help achieve the mission. If you go around to the other boxes, the strategies are options to achieve those objectives. And finally, tactics how the strategies will be put into action. Everything ties in together from mission round to tactics.
So if we have a look at objectives, what are the key things that will help achieve the mission? Let’s say was 50% but let’s say that’s 50% over three years perhaps a more realistic timescale for that safe size of growth unless you’re a very early stage business. How do you get these key things? What are the key things? It’s very difficult to think of these things in isolation on top of the head, it’s you know having to scratch your head. and the easy way around this is to go back to the SWOT analysis.
So we’re going to use the key things from the SWOT analysis to turn them into objectives for MOST. So if you remember we had a list, let’s take the weaknesses. With a list of weaknesses and we think we’ve worked out which are the stronger ones the more important ones. Now overall if we’re going to come out with some objectives we’re going to take them from the SWOT analysis then we don’t want too many things to work on. We obviously want to correct some weaknesses and want to make the most of opportunities that are out there.
So there’s probably the two boxes that are most important to us but then may be a strength that is so important that it’s fundamental to the business that if we lost that we might lose everything or we might lose a substantial portion of our turnover or something. so we mustn’t forget strengths but you know, perhaps there might be one strength in our list of half a dozen or so objectives.
We might take one from strengths threats again and there might be one or two big ones in there but the general catch-all of competition, best avoided. There’s always competition no matter what you come up with. So we want to take the big issues from these things and convert them into opportunities. So how do we do that?
So let’s take the example we had a weakness earlier we just invented it is top of a head, so the weakness was a perceived weakness in financial strength. So that might be a weakness, it might be real or whatever but it’s certainly perceived and we might consider that to be a really important weakness. so when we’re converting this into an objective in MOST. If we’re converting it into an objective then we just need to turn it round so you know we reverse it as a weakness.
So we want to strengthen our perceived financial position. It’s easy but we need to do just a little bit more than that because that’s to be a reason, as to be a little bit more detailed. And one of the ways of doing that is just having the catch phrase which will, not much of a catchy phrase is it? But improve the perceived financial position which will, let’s say perhaps and I’m making this up allow us to take on more enterprise clients. You might guess that enterprise coins would do financial checks on the company and if there’s a perceived financial weakness they might not pick up those clients.
So that just gives it a bit more definition, puts it more in focus sharpens it a little bit. So that’s kind of the process, you go to each of the major strengths, weaknesses, opportunities and threats, turn them around, convert them into our objective. Give them some definition and focus, by adding the phrase which will or something similar. It doesn’t have to be those particular words but you’re just trying to get more definition and that kind of seems to do the job.
So now you’ve got let’s say let’s guess you’ve got one key strength, a couple of absolute key weaknesses, a couple of really big opportunities and a really nasty threat. All kinds of converted now and into objectives, have you done the job? Well, there’s always an acid test at each one of these boxes. The objectives, they’re key goals that will help achieve the mission so you need to ask yourself acid test if I get these things in place.
If in that example, if I resolve our perceived financial weakness, are we more or less likely to get to our mission. Now we get through all of these objectives, am I likely to get at all very close to the mission that we’ve set ourselves which example is 50% over three years. If the answer is no, then well perhaps you haven’t drilled down enough, perhaps you don’t have enough objectives, perhaps you’re missing a key one but again I stress try not to have too many. You can’t work on too many things at once and if you try to, you lose to focus and then you’re working on smaller objects instead of big ones.
Okay so we’ve now got half a dozen objectives, so far so good. So what we are now gonna do? Now can do well for each one of those who moved to their box marked strategies, for each one of those objectives we’re going to look at options to achieve them. And that’s the key word is options, strategies are options. That’s all they are, they’re not necessarily the right route, they’re not necessarily the magic pill, a golden bullet whatever it’s they are just options.
And so here we are we’re back in brain storming the territory. People sometimes said to me you know strategy can be really boring, when it can be but actually bits of strategy. I find it really exciting and interesting and one of those is looking at strategies. It’s brainstorming for each one of these objectives, what are our options, what things could we put into place that might change that objective, that might help us achieve that objective.
So let’s take the example we have earlier, the perceived weakness’ financial position. And we’re going to alter that to be an improved financial position which will get us some more enterprise flights but what are our options, what can we do? again it brainstorming around the table come on guys, what ideas what can we do? And you can imagine one or two ideas that might come back perhaps might shore up the financial position by getting investors on board.
Okay what’s an option remember it’s brainstorming without criticizing, we’re not analyzing, we’re just getting it out there. There’s one another one might be getting, perhaps you don’t have a financial director, getting a financial director it’s somebody who’s respected I don’t know. In order to boost the perceived weakness of the financial position, so there’s two suggestions and again around the room there might be half a dozen different suggestions, options that will help you achieve that particular objective. And then guess what as you start to run dry as you start to scrape the barrel, you then start to analyze and to criticize and perhaps pull the weaker of those options together to make a stronger one. And then you have to decide you have to because you’re gonna put some things into action here. This isn’t just a theoretical plan which of these strategies, which of these options are we actually going to try now.
If you’ve got half a dozen different ideas it’s going to be very difficult to put half a dozen into practice. You want one or possibly I would suggest at most two options to be running with at any one time, you don’t necessarily know what’s going to work so it’s using best guess, best estimate as to what are the most likely to succeed. And you can get consensus around the table and perhaps in the example we’ve got we’ve chosen the two that I’ve given perhaps we’re going to get some investment onboard and at the same time we’re going to get a financial director perhaps a part-time one.
And we’re going to see if those two strategies achieved the objective. And the other four ideas that would come up with perhaps were lesser ones and we’re going to ditch them completely. We’re going to keep a record of them. We may go back to them because at some stage through analysis, we may find that the strategies we’ve put into place but neither of them are working terribly well. Sometimes you don’t know until they’re trying actively, trying to put them in action and they want a place to go back to, in case these options don’t work terribly well. That’s one of the great things about the MOST analysis you’ve got places to go back to if things aren’t working out. As well as you’d like but let’s choose those two strategies that’s what we’re going to try because that’s what we think is the best option.
We would do those for each of those objectives, so we then move to the fourth box tactics and how the strategies will be put into action. This is one of the great things about the Most analysis because so far we’ve really been talking theoretical. Theory about the mission. it’s the theory about the key objectives,, the theory about the strategic options to investigate but now we’re actually going to do some stuff. And we’re gonna see if some of these things work and some will and some won’t.
Tactics are about how the strategies will be put into action and the key things here are around having an owner and having time scale. So let’s take the example to make that live, so we’re going to investigate having a financial director for the company. So who’s going to organize that? Well so looking around the table and perhaps it’s the Chairman’s job or the founder in a smaller company, so perhaps the founder is going to do several actions isn’t he. He’s going to perhaps I’m making this up but perhaps he’s going to be investigating the marketplace, he’s going to be pulling people in for an interview and then perhaps the third tactic might be that the board as a whole will then make a final decision on who to appoint.
So there’s three perhaps tactics, two of which are owned by the founder or the chairman in a larger company and then perhaps the last one by the board as a whole. Now that’s just an example obviously but it shows that what happens at this level, is that then things from the tactics go on people’s to-do lists, task lists, whatever you call them.
So, the founder now has two actions on his to-do list: he’s got to research the marketplace and he’s got to interview people. And by doing that, we’ve got a time scale anyway so in what time scale do we agree on the table? well okay perhaps it’s next month he’s reviewing the marketplace, the month afterwards he’s interviewing and the third month the border appointing so it’s a three month process. So that’s obviously not a startup business so you’ve got time scales and you’ve got owners and it’s going on some of these to-do lists so then actually things are going to happen because things are going to be driven forward from the task list.
And again the acid test are these the right tactics, well we’re not certain but if these tactics work, is the strategy likely to be achieved? If the strategies work, the objectives are going to be achieved. The objectives’ work is the mission likely to have been close to or achieved, that’s always the acid test.
For me, the great thing about this MOST analysis is two things, one is the tactics mean that things get done because you need to review the MOST analysis. It must not, must not, be shoved in a drawer and picked up a year later, it must be on a regular review.
Now perhaps for smaller companies it should be about quarterly review, perhaps for larger companies, perhaps it’s a monthly review. And that review obviously people are looking at the tasks that people who have done. “so Mr. Founder, did you manage to research the marketplace?” “oh I haven’t quite got around to it yet oops”. There’s a self-check in there isn’t there about people getting things done, so reviewed on a regular basis.
This is the MOST analysis presented in a slightly different format; just bullet points starting mission at top tactical bottom. As you can see, with just some little checkpoints in there so with the mission, where are you going and what’s the time scale, so just eight memoirs. Objectives take them from the SWOT analysis, convert them, turn them around and say which will to give it definition. Strategies are all about options and tactics, always to have tasks and timescales. So that’s basically about MOST analysis.
Key things review, on a regular basis but in the diaries when you do this, when you complete this and go back because if you find that some of the strategies you put into place aren’t working terribly well; then you have a decision: do you ditch them or do you adjust them slightly. If you ditch them so let’s say that the options we chose of getting investors on board. “how’s it going” “not very well” “you know we’ve got no investors with, we’re not moving the doll” then you can go back to some of the other options that you looked at. well let’s not throw the baby out with the bathwater. We still need to strengthen our perceived financial position. What other options did we look at?
Let’s go back, revisit those, make me one or two of those other options are better for us than the ones we chose, let’s go back and have a look. And in MOST analysis allows you so much somewhere to go back to without throwing as I say the baby out with the bathwater. And the second thing of course is tactics and timescales.
Okay so that’s kind of MOST analysis that’s the third of our three tools to have a look at strategic review. And that’s really the end of the presentation as such, but looking at the screen up and seeing we’ve got some questions coming up, which I haven’t had a chance to look at.
So I just wanted first of all, I wanted to thank you and put my details up there and we’ll come back to that at the end. There’s my LinkedIn profile, email address and the web address but we’ll come back to that at the end but I think we have some questions.
Question 1: Okay first one that came in was, how do you gain consensus on strategy when situations force you to move so reactively and quickly?
Answer: it’s tricky and often it requires a little diplomacy, it’s one of the reasons we’re having a third party to facilitate round a management structure like one of these it is handy. If you’ve got somebody doing it internally, then you know they have an agenda and you know there might be seem to be pushing their agenda or focusing more on what they consider to be important. If you have a third party there whoever it is then they can be independent and neutral and they can you know try and get a more balanced view, but the answer is generally about, around discussion and then compromise. There’s no no easy answer to that.
Question 2: I’m worried that my board has been so complacent in terms of risk on scenario planning. We are way behind dealing with the effects the pandemic or do you suggest should be our first move.
Answer: Well yes, I guess there might be a few companies like this but this is why we’re doing webinars like this. Well it’s difficult if you’re not on the board, then it’s very difficult to persuade them to do that. If you are on the board, then it’s a matter of perhaps talking to colleagues and getting them to have a review, to do it urgently. Most people, at least companies that perhaps are suffering from coronavirus, are likely to have a little bit of time on the hands. It’s a great time to review, get somebody in to do it externally. If you can’t, get your chairman, get a consultant, get somebody external to facilitate it. They can hit the ground running, they’ve got processes and structures like I’ve gone through. There are many of them, you know these are the ones I like, but use some of the externals who uses management processes.
Question 3: To what degree will the regular performance KPI reports to the board during the COVID-19 help assess the structure that needs to be changed? After SWOT, won’t risk assessment combined with the optional appraisal of the strategic goals of the strategic goals or he insists to you how to get the board to understand and agree the degree to which an organization structure needs change.
Answer: Okay two questions there let’s tackle the first one because I was thinking so much about that one I kind of lost the second one. So KPI is always useful, if you can measure something then you can see whether the doll is being moved or not. So you’ve got to think for each strategy, how are you going to measure it? Now it may be a black and white thing like we’re going to get a financial director on board. Well you can’t really KPI that can you, it’s you either have or you haven’t so it’s very black and white.
And the objective in that example, is difficult to KPI but others might be easy because it might be about increasing sales by 10%, it might be, by you know if perhaps a weaknesses that you’re losing staff. Well what’s the measurement of losing staff, you know you’ve turnover is X percent and therefore to measure an improvement, it’s X minus 20% or something. You have a KPI in there in order to measure whether the success of something is what you want. And you can use it to define an objective, so the objective might be to reduce a staff attrition by 20 percent over X period. So you use KPIs in order to define things more, and so the second part of that I kind of lost.
Question: In support of SWOT want to risk assessment, combined with an option appraisal of the strategic goals already in situ before Covid 19 helped to influence the ball to understand the degree to which an organization strategy needs to change so fundamentally what was already in place you know how much more work you need to do around that
Answer: Yes, listen the more work you can do the better prepared you are, it’s difficult going you’re drilling into that without specific examples. So I would probably ease up with the timing restraints we’re probably best looking at though there’s another one.
Question: It’s looking like we’ll be having significant redundancies but many of our workers are at least semi skilled, I wonder when demand picks off, we won’t have to work or we will not have a workforce.
Answer: Tricky, well that’s one of the reasons that the furlough scheme exists. Try and deal exactly with that problem so you can furlough people and announce an extension of sort of sure most people are aware. So you can furlough people so you’re not necessarily making redundancy and then as hopefully as business picks up, you can take some of those people off the furlough. Now it may be some hard decisions made and some people are made redundant and those decisions might have to be made. And then as any business, if you downsize and then sales pick up, you have to take staff back on and you may not get as many staff as you need. They may not be as skilled or as experienced it’s not something the management, the directors have to weigh up. You know the cost of keeping people on when perhaps the volume of business, against the part there is a cost of taking people back on or training new people, in order to do that role if business does pick up. It’s the risk and reward months that all directors have to get you know at every month really but particularly now.
Question: There hasn’t yet been any mention of the business product, goods and services as part of strategic analysis running and evaluating. As to where the products fit into the current marketplace, i.e. how far into its life cycle?
Answer: Yes okay good point. I’m doing two of these talks for in touch networks and the second one is about growth and how to address growth in the new normal. And so that’s perhaps where you drill into. I certainly cover that in that particular discussion so I don’t really want to open that now. It’s a bit of a tricky subject bead, it’s rather detailed thing to go into in a QA but yes you certainly need to assess not only your business proposition, the USP you have in the marketplace but every section of your marketing be that the product life cycle, the value proposition, the messaging, you need to drill into a lot of that in order to make sure that it’s relevant for the current situation.
So what we’ve been talking about today’s is the business strategy at the top but then there are subsections and growth strategy or marketing strategy, it kind of comes to the next level down. So come on the next webinar and we’ll tackle that.
Question: Should effective financial management be at the heart of any business planning and strategy? Without it how can the business effectively understand where its starting point is, develop its track
Answer: Yes, so the easy answer is that. Of course, absolutely. And that’s management on the board and that’s management in level down from the board depending on the size of the company. Yes unless you’ve got the right people and the right products and services. And you have a value proposition and something that’s unique about the company and so on and so on then actually everything the company is built and sent.
Question: What is the risk of relying on information, especially internal information of previous years and trends to make strategic decisions in the situation obviously disrupted and is very different.
Answer: Yeah for a question. Listen, you can only, strategy is about where you are now and where you want to get to. So the way you are now has to be based on historical information. There’s no problem with that way, where you want to get to and how you’re going to get there has to be as I said earlier, a lot of it is educated guess. We don’t know the answers, we don’t even know how deep the recessions going to be, we don’t know how long the virus is going to be around, so we don’t have the crystal balls so it’s a matter of educated guess, Make the best guess that you can based on the knowledge that you have and the experience that you and your colleagues have, that’s the best that you can do.
And then people saying to me, you know we talked about budgeting or on a different webinar people say well surely budgets are just guesses aren’t they? And the answer is yes, they are the best guess. They’re educated guesses – given all the information that you have both historical and current. You make an educated guess and that’s the best that you can do. And sometimes you get it right and sometimes, you’re wider than the mark. And that’s why strategy needs to review, be reviewed on a regular basis. Because then, you can know if you’re putting the ship in this direction and if things don’t work out quite as you see, you can quite work out to adjust slightly or if you’re completely wrong that you can scrap it and start again.
Question: Would you ever use a balance scorecard model
Answer: Yeah I listen we’ve been through three three management structures here processes. Balanced scorecard is really useful, there’s lots of really useful processes out there. You’ve got to work with what you know, what you’re comfortable with. The process isn’t so important,you know, I use these because I like them and I’m used to using them. And if I get my knickers in a twist or if the clients at the table have some difficulties or issues, I’ve got a good idea how to get out of that. So you’ve got to use the tools that you’re comfortable with really, like a balanced scorecard. Yeah, some people really like it.
Question: What is the optimum number of objectives a company should be working on at any one time?
Answer: Yeah and I think that’s a fair question, not too many. Let me give you a number for no other reason and then you kind of want a number to hang on. Six, why? If you have less than that, are you really tackling them? Maybe there’s only four, maybe there’s eight but if you get to eight, you know you’re gonna don’t try and bite off more than you can chew. Better to go for the big four and get the big four done, than trying to eighth and end up with only doing four but there’s not necessarily the biggest fall. So don’t try and do too much.
Question: I work for a not-for-profit organization who have suddenly found ourselves having to deliver services we never have before, due to the pandemic. Can you say how we should deal with it? This is obviously something we’ve never strategize before.
Answer: Well that’s great but maybe stop and strategize and figure out whether what you’re now doing is actually what you should be doing. And if you should in the future be doing more or less of it, sometimes there’s a knee-jerk reaction as a situation “gosh we’ve got to do this” without perhaps sometimes thinking it all the way through. Stop, take a breath, get around the table, get the whiteboard out. Is this what we should be doing? Is this just a short-term thing? Or is this what we want to be doing on a long-term basis? Just stop, take a breath and see if it fits in the plan.
Question: So for a larger company, a lot of these sound like it fits well in the scenario, fine, especially given the scale of uncertainty of changes we are currently facing. Does that resonate?
Answer: Yes but equally true for smaller companies, you know it’s just kind of on a smaller scale, isn’t it? But also on a faster time scale because smaller companies work so quickly and things change so rapidly. Now we’re all in a rapid change situation with the virus, so we all have to be reviewing our strategies very quickly; but yes of course it’s very well with scenario planning and big companies. The difference is that where I’ve advised some larger companies, a lot of plans go into the drawer and don’t get looked at and don’t get reviewed,so that’s the mistake that bigger companies make and small ones too, like us.
So thanks to John, I think that’s been really informative and interesting. As he says, there is a second part of this webinar series that John is doing and that’s next Tuesday at 5:00 p.m. So please do join us for that. Slides will be sent out after my email to all registrants and if you could give feedback, that would be fabulous. So I think that’s it, there’s John’s final slide if you have got feedback, best do leave it it really helps us to curate our content. And good evening we.
Do feel free to come connect with me on LinkedIn or contact me on email. Thanks very much everybody.