Knowledge Center


Article -> Caught in the Act of Success

Date Added: July 2007

Keeping customers loyal is an Act. To build real partnerships with customers, active always outperforms passive. Leaders who Act create a strategy for gaining and retaining top customers – not to mention edging out competitors.
Even competition itself has become a hybrid. In the past, organizations could differentiate themselves from price-driven rivals through high quality. Niche consumers were willing to pay a premium. Now, more than half of Americans shop weekly at mass merchants that provide both ends of the spectrum.1
Moreover, as low-price driven organizations – traditionally known for lesser quality – gain market share, they amass the resources to improve upon quality, service and convenience. Customers, confused by the minimalization of potential tradeoffs, see the perfect combination of low prices and higher quality. For competing businesses, the loss of market share often triggers tactical responses to shrink margins that are inconsistent with organizational objectives. The tactics, then, are merely trial and error.
Only 11 percent of leaders believe strategic planning is worth the effort; yet, its need is more apparent than ever. To reevaluate the components of success – costs, differentiation and pricing – the first step is to create organization-wide alignment.2 In other words, first determine what you need to do and then how you should do it.
Align intervisions. Work together as “intervisions,” not apart as divisions (literally divided visions). All of an organization’s people should help create, implement and execute the main objective.
Determine present situation. Assess your organization’s strengths, weaknesses, opportunities and threats. Realistic evaluations will help identify and overcome gaps. For an unbiased view, partnering with an independent third party is recommended.
Create an objective. Drive both the strategy and strategic planning process by first designing a main objective. Without it, the organization’s people will not know why they go to work everyday – and the doubt will be passed on to customers. There are five characteristics of a main objective.
Develop goals. Set goals for the organization, its intervisions, and its people. All of the goals should fulfill the main objective – the reason why the organization exists.   
Construct strategies. Put in place strategies to reach goals, and assign an owner to each process within an intervision. An external facilitator is a useful resource in the process to keep the participants focused, engaged and moving forward.
Generate SMART tactics. Spell out the detailed tasks that will accomplish the strategies. Measure achievements of people, intervisions and the organization itself by implementing a personalized measurement tool.
Conduct continuous reviews. Perform ongoing sessions to appraise and revise the organization’s strategy for effective planning. Quarterly reviews are recommended, and flexibility is a necessity.
It took years of relentless planning and execution for Wal-Mart to construct the partnerships necessary to cut distribution costs, strengthen vendor relationships, improve purchasing power and raise productivity levels. Its patrons, once viewing quality as an obstacle, began to rate it as “good enough.” As a result, Wal-Mart nearly doubled its market share from 1999 to 2001.3
Sentimentality aside, leaders are searching for ways to restore the value-added service of yesteryears. The pushback – coming from unexpected value-driven rivals – forces leaders to take a stronger stance on their organization’s differentiation and execution. With a solid strategic plan in place, the competition is heating up.

1 Frank, Robert J.; George, Jeffrey P. & Narasimhan, Laxman. “When your competitor 
  delivers more for less.” The McKinsey Quarterly. June 2004.
2 Yeghiaian, David (2007). Pieces for Profit. Neenah: Winners Success Network Publishing.
3 Frank, Robert J.; George, Jeffrey P. & Narasimhan, Laxman. “When your competitor 
  delivers more for less.” The McKinsey Quarterly. June 2004.
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