Building Your Vision of Success: Focusing on the 5 C's

Nov 28, 2022 Building Your Vision of Success: Focusing on the 5 C's blog from ProCFO Partners

The CEO of the Ford Motor Company, Jim Farley, declared that Ford’s future is not based on selling cars but on selling a continuous stream of services, from hands-free driving technology to updated touchscreen infotainment apps. Ford success not based on selling cars – One can only wonder Henry’s view on that strategy.

ILLUMINATE THE WAY – MAKE THE PATH ACCESSIBLE

Leadership sees with increasing frequency the changing dynamics of their markets. Effective leadership is mobilizing to, as the philosopher Soren Kierkegaard stated, create the environment that lets management’s mindset “Swing into the World of Possibilities.” With that enlightened mindset, how best can leadership energize its management team to “Create a Vision of Success,” defining what success is, in what period, and then working backwards to achieve it. What you need is an articulated and concise roadmap for the organization to achieve its vision.

Much management time and resources have been wasted by well-intentioned, but misdirected attempts at planning. The effective sequence is 1. Goal, 2. Strategy, 3. Plan. A strategy without an implementation plan is nothing more than a wish list. The strategy and plan need to be dynamic and flexible.

Peter Mahoney, the founder of Plannah, an AI-driven platform to automate marketing leadership, simplifies the strategic sequence. He uses an example – Goal is to climb to the top of a mountain. Strategy options are do you climb the steep North Face, harder but shorter, or take the longer climb on the Southern Face? The strategy needs to be translated into an operating plan. Depending on which strategy is selected, then you need a plan to pack different tools and supplies for the trip. Strategy impacts the type of plan.

But the strategy alone does not drive the plan. The strategy must be responsive to the reality of limited internal resources and the capabilities of competitors.

The goals need to be defined by these questions: How measurable are they, what are targeted measurements and what are the milestones, or interim measurable goals attached to a timeline?

Goals-Strategy-Plan is step one. Company leadership has to drive execution of the plan, by providing guidelines and creating an environment that maximizes the contribution from all employees.

SITUATIONAL ANALYSIS

Where does management begin the “Vision of Success” process? Start with discussing the 5C’s of your organization:

  1. Customers–Start with the Master Customer List; don’t end there. Identify who are your best customers and determine how to increase their number. Examine some noncustomers and analyze how to convert them into customers. Do you understand why people do not buy your products? How can you change their minds? Talk to former large customers to determine who they buy from and why since they left your company. Never forget that success comes from solving a customer’s problem, not just building a new product, service, or feature.
  2. Company–What are your overall operational capacities? What customer problems do you profitability solve?
  3. Competitors – What is your market position relative to theirs? Ask yourself not only what are they doing, but what are they likely to do next? Do not assume that an industry’s structure cannot be realigned by its participants. It is often more cost effective to go around competitors instead of attacking them head-on; how can you do that?
  4. Collaborators –Who are they and how well do they support your firm? What additional ways can they support you?
  5. Context – What are the dynamics of the environments in which you are operating?

The result of that analysis will become the field on which you compete. It will identify which customers you serve and the products you will offer them. It will define the compelling reasons why customers will do business with you. And perhaps most importantly, it will direct you to see what is coming next, and in effect, provide the ability to see around the corners.

Ownership needs to facilitate an open dialogue for management to discuss not just the marketplace as it is, but also seeing it as it is not, igniting imagination and innovation into a mindset of what can be done. Do not forget the past, but do not let it impede management’s imagination of what can be. Your management team needs to create its own future instead of wasting time and resources mired in Shouldsville. Do not allow your organization to drift down the river of traditional expectations; instead, chart a new course and portage whenever necessary.

Marketing executive Bonin Bough said it best: “New ideas are born from optimism, a curious mind, and a creative spirit.”

However, prioritizing those new ideas is critical for management in order to best use resources, execute on the plan and bring the best ideas to market.

To get there, it is not enough to assess the current situation. Using just financial statements to manage a business is like driving a car looking out the rear-view mirror. You need to see around the corners to prepare your organization for what is coming next. You get these insights by creating Portals of Discovery. Given the increasing rate of change in many markets, just extending historically effective strategies is often no longer a viable alternative.

PORTALS OF DISCOVERY

What are your “Portals of Discovery?” James Joyce said our mistakes are our best portals of discovery. While that may be true, I use the phrase to help a company develop 3 to 5 Portals, that provide insights into how current developments are good forecasters of oncoming change: changes in products, distribution channels, supply chains, competition, workforce engagement, etc.

Measuring sales, profits, customer satisfaction are measures of a company’s current condition. They do not by themselves predict/indicate future opportunities.

How do you identify and listen to the customers of tomorrow? Three years after NetFlix offered streaming movies, the movie rental giant Blockbuster stores filed bankruptcy. Blockbuster’s reliance on outdated technology created the opportunity for competitors. Toys R Us, which at its peak was selling toys in 40 countries, was the largest toy store retailer in the world. Toys R Us signed a 10-year deal with Amazon to sell toys online, which taught Amazon the toy business and then Amazon started selling direct to consumers and put Toys R Us out of business. It is not just technology, but how technology impacts strategy. Management needs to align innovation with value delivered, price and cost comparisons.

How does your company source innovation? What process can you establish to expand the minds of your employees and management team on what is possible? Ask yourself how can you avoid being the next Blockbuster or Toys R Us?

WHAT PROBLEMS TO SOLVE?

What problems does the company need to solve? Not symptoms, but the actual problem that needs to be fixed.

Before deciding that, decide these three issues:

  1. What products and services should you stop doing?
  2. What products and services are your company not good at providing in acost-effective manner?
  3. Would the company profit from redeploying the capital supporting these suboptimal activities into other higher margin ones?

For some companies, redefining the problem leads to a better outcome than consuming resources in an attempt to solve perceived problems. Success is not always creating something new, often it is reconfiguring what is. Define the problem first, then determine the data needed for an effective solution. Information derives its importance from the possibilities of action that it creates.

HOW BEST TO FACILITATE CHANGE IN YOUR ORGANIZATION?

Management needs to be the Agents of Change in their organization. Management needs to be proactive, not reactive. Consider these 9 steps:

  1. Through employee engagement, surface dissatisfaction with the status quo; get the pulse on the perceived company problems
  2. Provide a vision of the future state for the company
  3. Develop a process to move from the status quo to the future state
  4. Reduce the costs of change

  1. Give employees a sense of control over their work environments, do not let them feel isolated or powerless. Assign some employees to work on cross functional projects so they can understand their job in the content of the entire company’s strategy.
  2. Identify possible groups offering resistance to change and be prepared to respond to resistance with facts and reason.
  3. Make larger goals easier to achieve by dividing them into a series of smaller attainable goals that support each other.
  4. Assess the attitude and aptitude of staff and realize that good performers today may not have the skill set needed to implement the plan that is creating your company’s tomorrow.
  5. Celebrate Wins and Lessons Learned

INVESTMENTS TO MAKE

While ownership together with management is creating its “Vision of Success,” it is important to focus on which investments are required for sustainable profitability.

  1. Allow for Deferred Returns – for organizations that have a sufficient capital base, do not focus on the short-term gain to the detriment of longer-term improvements. Focus on the longer-term benefits. For example, investing in technology that may take awhile to show improvements in productivity and the customers’ experience.
  2. Staff and Leadership Development – many markets have very short-term periods of status quo. Allocate resources for ongoing training of not only for the leadership team, but all employees that demonstrate growth potential.
  3. Communications Channels – while persuading, never stop listening. The more feedback you receive the better your decision making. Establish communication channels to get honest feedback from your employees and customers. Construct a culture of Constructive Dissent, where employees are comfortable expressing thoughts about problems in how the company is operating.
  4. Diversity – profitability is not always coming from maximizing output, but also from minimizing the impact of failures. Strive for diversity in your products, markets, staff, supply chains and distribution channels to minimize your risks. Never become too dependent on any one customer, supplier, or network.
  5. Attention to Detail – do not let the focus on bigger issues distract you from the details. The successful implementation of all plans, not matter how small or grand, are based upon someone watching the small details, making sure the plan as outlined is actuality being successfully implemented.

Ownership’s responsibility to its organization is to illuminate the darkness of uncertain times. This illumination is best facilitated by an open discussion with management and employees on how best to create and successfully execute on your Vision of Success.

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