What executives struggling with execution should learn from the Presidential election!

AN INSIGHTFUL PARALLEL TO A PAST PRESIDENTIAL ELECTION. A GEM OF A BLOG-ARTICLE AND A MUST READ FOR ALL BUSINESS EXECUTIVES!

Written by Elliot Schreiber, Ph.D., one of the world's most knowledgeable and insightful business and market strategists.

The related BLOG will provide you with a thought provoking topic and is meant to stimulate fresh thinking about your business' strategy. This information might make a few recipients, out of thousands reading this blog, just a little uncomfortable. Actually, that is exactly its intent! This BLOG is meant to convey some fresh thinking that can without question, help to make your business more successful.

PLEASE READ THE ENTIRE BLOG-ARTICLE ON THIS TOPIC BY CLICKING ON:
"What Executives Struggling With Execution Should Learn From The Presidential Election."
or cut and past the following into your URL address window: http://schreiberbartgroup.com/article-details.php?id=108#.UJ186GnBI34

TIP: When you read this BLOG, think about both your entire business (as a CXO or Owner), as well as your own department (if you have departmental responsibile).  Feel free to let me know your thoughts after reading this article!

Best wishes,

Dennis  

Dennis Paris
Tangerine Strategies, LLC
dennisparis@tangerinestrategies.com

What does Failure and a Business Growth Strategy have in common?

... POOR EXECUTION.

Through out my 30 years in business, either on the consulting or on the client side, or in small or even large businesses, how STRATEGY EXECUTION is handled has been one of the top causes of failure. Notice that I did not say "strategy failure".

Ironically, or maybe I should say understandably, the blame is almost always placed on the strategy, where in most cases, the strategy is sound. So we have 3 issues here, a.) what can go wrong with execution, b.) why is the strategy usually the blame and c.) how to assure good strategy execution?

What can, and almost always goes wrong with execution is that while all of the focus is on building perceived value (PV) in the customer market, generating simultaneous PV among the company's employees and its investors (bank, private and/or shareholders) is completely neglected. The results include;

• Internal tension between support groups, particularly between Sales and Operations.
• Disconnects on what the strategy is between executive management, middle management and staff.
• Confusion in the market over the company's evolving position, including a disconnect between its promises and, level of responsiveness by support resources.
• A decline in profitability.
• Misalignment between how investors or the board, view the company's direction and that of senior management.

These are only a few examples of the myriad of issues that can arise when execution does not have a plan of its own and, IT IS NOT IMPLEMENTED ACROSS ALL 3 TARGET AUDIENCES! I use the term "target audience" because of the importance of understanding that once we develop, through a meticulous plan of execution, perceived value among all 3 groups, everyone is on the same page. What results are enthusiastic and unsolicited levels of internal problem solving, planing and management of operational efficiencies, customer support and sales-enabling financial oversight. And the effort of all support functions become synergistic. This occurs when (a) everyone clearly understands the strategy and (b) they have translated their own perceptions of the strategy's value to their personal wealth, the wealth of their company and/or their investment in the company.

Once, through proper execution, PV is intentionally developed among the company's investors, management teams, employees and customer markets, something almost magical occurs; efficiencies increase, costs decline, profit goes up, quality goes up, responsiveness increases and the value of your product or service rises. This translates to the movement of your product or services' value, closer to the "price ceiling" in the market place. Simply put, the market will pay more for your product.

This unified synergy is seldom experienced by companies who's strategies have been blamed as the reason for failure. And why not blame strategy? Because the profound effect of (integrated) PV across customers, staff and investors is simply not understood, and rarely experienced! It is easier to blame the strategy when in fact, without effective (connected) execution, a good strategy never had a chance.

So, to assure good strategy execution, a company must factor into the post strategy development timeline, an execution plan that includes not only staff or department readiness, but how to generate a realistic level of perceived value, and what behavior this PV is expected to generate! Not much different than sales and market tactics that target specific customer and market-wide behaviors, a similar plan and tactics executions are required to knit together, a strategy execution engine that will optimize success.

Have you experienced a winning execution plan that led to strategy success? Please share your story or thoughts!

I also want to give credit for the conceptual application of (PV) Perceived Value to Dr. Elliot Schreiber, past Professor of Marketing and Strategy at the LeBow College of Business at Drexel University, Philadelphia, PA. Dr. Schreiber was also the past Chair of the Schreiber-Bart Group, a strategy execution consulting company.

Is Budgeting Destructive? - Real Life Example

Flashback:  You can sense the tension in the board room as 3 of my Product Marketing LOB (line of business) management peers enter the darkened board room, only lit by the presentation screen, filled with Executive VPs and the CEO. All 4 LOB managers must accomplish 3 things, 1) present YTD budget results, successes, failures, causes, lessons learned, impact on business and financials and 2) present the best way for the remainder of the year's budget to be applied so as to optimize business objectives and, 3) propose the next year's budget requirements for their respective LOB's with enough external market trend data, internal sales projections and financial sensibility to just hope, that they appear to know what they are talking about. One by one, we each present, 60 - 90 minutes in length during which time we receive, absorb, deflect or down right choke on questions dished by the corporate governing body. Questioning is aggressive in a "take no prisoners" style. The body heat in the room noticeably rises with each presentation. We all know what's on the line. Some of us will be winners and receive what we asked for. Others will be loosers and not receive even what was approved in the current year and someone could be (and one was) terminated for presenting flawed data. That's a 25% mortality rate, which is pretty high.


The fact is, that we (each of 4 LOB managers) logged in on average 50+% of our time for 2 - 3 months of preparation for this annual blood bath, and about 10% - 15% of each week (or approximately 240 hours) during the remainder of the year was dedicated to budget analysis and reporting. In fact, all of our year-long actions and programs were enabled solely by the budgeting and approval process. Performance against budget remained central to our individual reviews. Bonuses were measured against revenue and budget management. The thick of politics constantly revolved around the budget. It was a never ending cycle...

An Executive MBA graduate school professor asked a room full of experienced EMBAs, is budgeting bad for business?  The overwhelming answer...The typical budgeting process has been, and still is one of the most destructive processes within a corporation. Good opportunities are missed, destructive politics and the character of good people become questionable. It's bad but, it's a necessary evil.

Question: Is it a necessary evil? How can we make it less destructive?

Are Budgets Bad for Business?

Here's an oldie but a goodie... an opposite view of "Budgeting is good for business";

1. They control the wrong things and miss the right ones.

2. They erect walls.

3. They assume that everything is translatable to dollars, but just because a budget was not over spent, doesn't mean that it was well spent.

4. They create distorted behavior, managers do incredibly stupid things to make budget.

5. They do not measure value creation.

(source: “Why Budgets Are Bad for Business,” Fortune, June 4, 1990)

Manufacturing Risk! What, no business plan?

Even a contract manufacturers that operates solely by a near term customer perspective versus a longer term market based strategy, assumes considerable risk to growth, and even its survivability. Unlike in the past, current market instability requires more than to rely on a sales rep bagging the next project, in effect, to save the day...or the next couple of months.

What amazes me is how often, even a mid-sized manufacturer, admits to not having a business plan. And of the business plans that do exist, many do not reflect a prediction of the future, but more of a near sighted view for the obvious, essentially a sales-plan. A forward looking business plan is crucial to laying the foundation for perspectives and actions that lead to sustainability, and future growth.

An important element of the plan comes from listening to the market for shifting needs and new or potential trends that have near or long term consequences. Changing competitive influences and industry wide trends provides the additional fuel for a projection of 2 or 3 possible strategies that a manufacturer will be poised to adopt, depending on future market conditions.

Please share your thoughts with Dennis at dennisparis@tangerinestrategies.com

Manufacturing and the importance of innovation...

An article in the Autumn 2011 edition of Strategy and Business pointed out not only how important innovation is to the manufacturer itself, but to the U.S. economy. It stated that; In 2008, 67 percent of all private sector RnD was by manufacturing companies, according to the National Science Foundation. Innovation propels improvements in worker output, capital flow, usage of materials and energy among other components of productivity. Increased productivity leads to faster economic growth and higher standards of living. And from 2006 to 2008, 22 percent of U.S. manufacturing companies reported a new or significantly improved product, service or process, compared with only 8 percent of non-manufacturing companies. Trends of this nature are still relevant today.

From my vantage point as a market strategist and a new product development (NPD) process advisor, for a manufacturer that generates all of its revenue through custom contracts, very little investment is required to explore opportunities that leverage its future with either an improved production process or new commercialized product. A flexible NPD process offers a manufacturer the benefits of a "creeping commitment" and strong guidance to accumulate enough data to support the decision to take the leap!

Please share your thoughts with Dennis at dennisparis@tangerinestrategies.com

600,000 Unfilled Manufacturing Jobs!

During the "great recession" I was commissioned by the Manufacturing Alliance of Philadelpiha to develop a long term strategy for growth. During my research, in addition to City Council members and the Department of Commerce, I interviewed CEOs and Owners of small, medium and large manufacturers throughout the Philadelphia metropolitan area. One discovery back then, at the height of the recession, was a consistent theme of open job positions that could not be filled due the unavailability of applicants with fundamental skills, like eye and hand coordination, shop math etc...

Another was a complaint about the decline in employee work ethic that directly impacts productivity and firings that contributed to the challenge of filling positions. Now, add one last challenge associated with interviewing large numbers of applicants for each position and the vetting of potential candidates with frequent drug test failures, and having to begin the process over again.

Compare these past findings to the frightening levels of unemployment that we are "very" slowly recovering from, and there seems to be a serious disconnect. While most would say that fiscal and monetary policies have not done enough to stimulate consumption, productivity, nor to add jobs fast enough, I question if there is a disconnect between high unemployment, and the large number of open positions in manufacturing?

Fast forward to current day, where I recently sat in an Innovation and Manufacturing symposium at the LeBow College of Business at Drexel University. I listened to nationally recognized Economists who advise the President, make a case for an obvious correlation between innovation and growth in production capacities. A case was also made for the widening skills gap between manufacturing and the current labor force, and unemployment.

At the end of the presentations I asked the following question: "When you speak of steep employment declines in manufacturing and a widening skills gap, how are the hundreds of thousands (roughly *600,000 nationally) of current open job positions in this sector factored into your analysis, considering many positions require only foundational skills, like hand-eye coordination, shop math, measuring skills and speaking English? Imagine the immediate uptick in employment, in manufacturing productivity, in GDP, if these OPEN jobs were filled!" I also mentioned the work ethic finding.

The answer went something like this: Good Point! There does appear to be another layer of data here worth considering and, the work ethic issue does represent a shift in social patterns around which some studies have been done.

The point here is that we are focused almost exclusively on how to create more jobs... Completely understandable given the unemployment rate at that time. BUT, six hundred thousand unfilled positions (600,000) is a lot of jobs waiting to be filled, wouldn't you say? And the more time that passed, the wider the skills gap becomes. The same can be said about widening competency gaps today!

Do we rely on the Government to lead the way? Probably not. Manufacturing associations and alliances should increase collaborations with the Government for funding of proven models that foster strong partnerships between the education system and national manufacturing sectors. Manufacturer's should also take responsibility for employee training while taking advantage of state training funding. And finally, we have to reinstill a sense of place for manufacturing among our younger students, so that they envision a career in this sector.

I am not suggesting that these ideas are revolutionary, as there are disparate programs in place to help workers re-skill or to develop foundational skills. But I am suggesting that this effort be driven on a national level to ensure a multiplier effect on the strengthening of US Manufacturing. One such program here in Philadelphia is the Job Ready Program that is run by the Manufacturing Alliance of Philadelphia.