Achieving Business Excellence with John Spence

A Storm Is Brewing

Mountainous road with clouds aheadIn December 2007 when the great recession started, I was working with several companies across a myriad of industries, and I spent a lot of time strategizing with CEOs about how to successfully survive that global financial crisis. Although each company was unique in the specific strategy we developed, as I look back, I can see a pattern of five key things that I counseled all of the organizations to focus on.

1. Be so good they can’t ignore you

A) Deliver the best product/service you have in the history of your company. You still need to do some level of advertising, but the most potent opportunity to retain and grow your customer base will be through referrals, so you must be so incredibly good at every level that people enthusiastically recommend you to new potential customers.

B) Get closer to your best customers than you ever have before. Identify your top customers and invest heavily in strengthening your relationships, understanding them at a deeper level, and turning them into wildly loyal evangelists for your business.

C) Retain and grow your best employees. It is impossible to do the two things above without an amazing team. Identify your top performers, invest in them heavily, get closer to them than you’ve ever been before and turn them into wildly loyal evangelists for your customers!

2. Have a very focused strategy

Ensure that you have a clear, compelling, and well-communicated strategy for how to successfully navigate a challenging marketplace. Your current strategic plan might need to be adjusted, even significantly altered, if there would likely be a significant negative impact on your industry. You will also have to shorten your planning timeframe to be nimble and adjust quickly as a wave of changes impacts your organization. Once you have that plan, overcommunicate it consistently so that everyone is fully aligned and understands their role in keeping the business moving forward.

3. Execution is everything

During a rough patch, you must have high levels of accountability and disciplined execution. I just mentioned that you need to have a focused strategy, but that strategy is useless if you don’t execute it effectively. You have to make your numbers, meet your deadlines, increase quality, decrease waste, increase efficiency, increase customer satisfaction, increase employee engagement, and become more innovative all at the same time. The only way to achieve this monumental challenge is to create a culture of accountability that has a fanatical focus on execution.

4. Be honest and transparent

When employees see an organization struggling, they fear the worst, and nobody does excellent work when they’re feeling scared. Share as much information as you can with your team, be open and honest, share the good, the bad and the ugly. The only people that will allow your company to survive, even grow, during a severe recession are your employees, so give them enough information to understand what’s going on and help you keep the business on solid footing.

5. Create a contingency plan

Before it gets too stressful, create a thoughtful plan of action for what to do if things start to get bad. A strategy is simply the allocation of scarce resources, and during a recession, you’re going to have to allocate your dwindling resources even more strategically. Before your judgment is clouded by fear and worry, decide what you will cut and in what stages. Then create a series of red flags that determine when you begin to implement the different elements in your contingency plan.

As I am writing this note, there is a hurricane headed for Florida, where I live. A few weeks ago, it was a tropical depression off the East Coast of Venezuela, and I did not know it even existed. About a week ago it became a tropical storm headed towards Puerto Rico, and we were worried about them, but not about us. Today it is on track to hit Florida as a category four hurricane with winds in excess of 130 mph, and I spent the afternoon filling up my truck with gas, buying supplies and making sure the generator at my house works. I don’t know if it will hit us, but I know that if it does I am fully prepared.

Right now I think it’s the same with the economy. There is a storm brewing, possibly a severe hurricane and it is only a matter of when and where it hits. I am currently working with CEOs around the world, and every one of them is nervous, they feel the winds growing. I have counseled all of them, like I am counseling you, to start getting prepared for the storm now before it is too late.

Be safe, it’s going to get nasty out there – John

** Please let me know if there is any way that I can help you and your team.

My Best Advice On Strategic Planning

For almost three decades, I have served as a business coach to executives around the world in companies of every type and size. It’s one of the favorite parts of my job because our work together can have such an immediate and dramatically positive impact on their organization. However, I have a somewhat different approach to coaching and see it as a process of learning together with my clients and rather than telling them what to do—as many coaches/consultants do—I serve as what I call a “Learning Partner,” where we work through issues together. As part of that process, when they are facing a challenge they want my help with, I start by writing a memo with all of my thoughts on that specific area to then use that memo as a foundation for our discussions. Over the next several weeks, I’m going to post actual memos that I have sent to my coaching clients in hopes that you might find the ideas I shared with them helpful to you and your business.

Below is a note I put together for a client I have been working with for many, many years. It’s a $50 million-plus company that is extremely well run and has recently acquired two new businesses. The challenge was to develop an overall strategy that would encompass the core business and these new additions, and I wanted to assist their senior managers in being successful in creating that strategy.


Bill and Brian, we have discussed that you are getting ready to go into another round of strategic planning, which will include two new businesses you’re taking control of, so I thought I’d send along some ideas to help you have the most successful planning retreats you possibly can. As you know, I have been a guest lecturer at the Wharton School of Business for the last 12 years, delivering a class on strategy and strategic thinking at the Securities Industry Institute, and also led well over 100 strategic planning retreats, so this is a subject I’ve given a great deal of thought and study to. Having said that, here are some of my key ideas around strategy, strategic thinking, and strategic planning.

I can boil my entire Wharton class down to one key sentence:

Successful Strategy = Valued Differentiation x Effective Execution

This equation is deceptively simple and extremely powerful. Let me take a moment to explain it more fully.

In order to build a winning strategy, you must bring something to the marketplace that is…

  1. Unique and compelling
  2. That your target customer sees great value in and is willing to pay any reasonable price that you ask
  3. Is difficult or impossible for your competition to copy
  4. You can consistently deliver it superbly

Another key idea around being a great strategic thinker/strategic planner is understanding that unless the ideas and information you put into the strategic planning process are of value, then you can do the “process” extremely well and still come out with a flawed plan.

People often get wrapped up in the SWOT analysis, value chain analysis, branding and positioning strategies, customer analytics and all sorts of very important processes. However, if you don’t put good strategic thinking in at the beginning of the process, you can go through all these wonderful tools and still develop a plan that will run your company into the ground. So it’s critical that the people involved in strategic planning within your organization are investing the necessary time to build a solid foundation of business acumen, great ideas, innovations, new and creative ways of looking at things so that they bring superb information into the process. There’s an old computer term that summarizes this perfectly: GI = GO (garbage in = garbage out).

Several years ago, I was asked to deliver a workshop on leadership and strategy at Cornell, and in an effort to up my game and try to bring some new information to the table, I really went back and did a deep dive around the topic of strategic thinking. During this effort, I had an epiphany of sorts when I realized that one of the most important things a great strategic thinker/leader does is figuring out when to say “no.”

All strategy is the allocation of limited resources into the areas that create the most leverage for the organization.

What strategies will we not pursue, what products will we not develop, where are areas we will stop investing, what parts of the business are no longer working? These are really tough questions, and many business leaders are afraid to ask them. But great strategic thinkers/leaders understand that they are the ones that must have the courage to figure out what the company will no longer do, directions it will not go in, areas will not compete.

One of the biggest challenges with this is getting over the realization that sometimes you’ve got significant sunk costs into a product or project and see that it is no longer viable, but can’t bring yourself to walk away from the money you have already spent. This leads to many companies to throwing good money at bad initiatives, only digging a bigger hole when the answer was clearly to say “no” and have the courage to walk away.

Now let’s take a look at some of the tactical elements of effective strategic planning.
  1. Be exceedingly well prepared and do your homework – I have been in far too many strategic planning retreats where people are just “guessing” at critical information that will have a major impact on the success of the plan. Make sure that the data you use to build your strategic plan is recent, real and reliable.
  2. Have a very clear goal – Know exactly what outcome you want before you go into the strategic planning retreat. These things can get ugly fast, they can get off track quickly, so build a very explicit set of expectations about what outcomes you want and then follow that agenda with discipline.
  3. Don’t waste time – If you bring a bunch of talented people together and spend the day putting sticky notes all over the wall, what are you achieving? It is my strong recommendation that you do the SWOT analysis and a lot of other analysis BEFORE the planning retreat. I typically send out an electronic SWOT analysis survey a few weeks before any planning retreat, and then compile all the information into an “Executive Report.” Instead of spending several hours doing a big group SWOT analysis, I simply hand out the report, break people into small teams and ask each team to list what they feel are the five most important internal strengths, internal weaknesses, external opportunities and external threats from what they read in their reports. This allows us to gain consensus very quickly and get moving on to the more important part of the retreat, which is setting strategy.
  4. Follow your strategic objectives – To me, if you’re going to gather a group of your high-level people for a day or two to create an updated or new strategic plan, the main outcome of that meeting should be a handful of very focused and clear strategic objectives with some recommended metrics/measurements under each that would determine if you had successfully met the objective. I then take that list of key strategic objectives and recommended metrics and give it to the people that will be held accountable for actually implementing it and ask them to create detailed and specific tactical plans that they feel will allow them to reach the objectives and meet the metrics required. This way the people who are closest to the real work are the ones creating the tactical plan of how they will reach the goals that have been sent to them, rather than having some unreasonable plan handed down from on high.
  5. Make sure to execute – It is also my very strong belief that you should spend at least an equal amount of time working on a “strategic execution plan” as you do on creating the actual strategic plan. I cannot count the number of times I have been at a strategic planning retreat where we spend two or three days coming up with some bold, innovative, highly creative strategy that never gets put into action. Every year I get 100 and 120 senior executives in my class at Wharton and I ask “What percentage of companies that have a good plan, that know how to win in the marketplace, that have a truly great strategy … effectively execute that strategy?” The answer for the last 17 years has been: 10% to 15%. Think of the amazing amount of money left on the table, of all the wasted time and energy to put together a really good plan and only execute 10% of it. If you’re going to be great strategist you absolutely have to become superb at strategic execution.
  6. Consolidate your strategy – People ask me, “How do you make the strategy into a living document?” Here’s what I’ve done in all the companies that I have run. I try as hard as I can to get the entire strategy down to 10 pages or less (Many companies I work with now try to get it down to a single page). I then put that it into a handbook (we called it the Red Book at the Rockefeller foundation I ran because we bound it with a red cover) and I would tell everyone to bring the Red Book to any meeting where we were going to make strategic decisions. I would also tell them that if they came up against a decision and they weren’t quite sure what to do, open the Red Book and take a look in there, and if it matched the strategy it was probably a great idea; if it did not, it was probably a good idea to get some feedback and input before they went forward.
  7. Make your team accountable – Another big factor in being able to effectively execute strategy is to create a strong culture of accountability for people consistently deliver the required business results. It’s also important to note that there is no such thing as “group accountability,” there is only individual accountability which then contributes to a high level of accountability across the entire organization.

This is not everything I know about strategic thinking and strategic planning, but I believe if you keep these key things in mind you will alleviate a lot of pain, stress, and wasted time and effort. I hope you found these ideas helpful; as always, if you have any questions at all, please do not hesitate to send me a note. I’m here to assist you in any way I’m able. Good luck – John

6 Keys to Effective Strategic Planning

mini-peepsI am currently preparing to facilitate three strategic planning meetings, for an association, a technology company and a Fortune 100 client. Here are a few things that I see as foundational for creating an effective strategic plan.

  1. The key to a successful strategic plan is: FOCUS. Every company, regardless of size, has limited resources and strategy is all about effectively deploying an organization’s resources where they will have the most positive impact in the marketplace.
  2. To mirror my first point, one of the most important things a great strategic thinker does is figure out what to say “NO” to. What markets will we not compete in? What products or services should we not try to sell? What current projects should we abandon?
  3. If you have 10 strategic objectives, you do not have a strategy. All of the successful companies I’ve worked with were able to focus in on 3 to 5 major strategic initiatives. Anything more than that causes a lack of focus and ultimately a lack of success.
  4. When examining business issues, are you trying to solve a puzzle or a mystery? With enough data and information, you can find the right answer to a puzzle, but no matter how hard you try it is impossible to find the exact right solution for mystery. Because of this, as much as I hate to admit it, a large part of strategy is simply an educated guess about what might happen in the future.
  5. Alignment is critical. If the senior team is not 100% committed to strategic direction of the organization, the plan will fail.
  6. It’s an age-old business cliché, because it is correct: What gets measured gets done. A major reason that many strategies are not effectively executed is because there is no way to determine exactly what the expectations are. Ambiguity Breeds Mediocrity.

Those are just a few of the key ideas I try to help my clients keep in mind as we move through a strategic planning retreat. I will also add one more critical point; to make sure you follow through and implement your plan, you should spend just as much time on strategic execution planning as you do on planning the strategy. This is a very important idea that few companies truly embrace.

What are your thoughts?

Five Things To Focus On In 2019

2018 marked my 24th year traveling around the world to help people and businesses achieve more success. I went to some amazing places, spent time with old friends and made lots of new friends. It was also a great year for learning, as I worked on all kinds of projects from executive coaching, facilitating strategic planning retreats and doing some consulting to running lots of workshops and delivering dozens of keynotes. In this video I’m going to share with you the five major things I learned in 2018 that I think will be important for you to focus on in the coming year.

I hope you found this helpful, and if you do, please share it with your network. Thanks – John

 

I Have Changed My Mind About Strategy

I have been studying and teaching strategy for nearly 20 years and I thought I had a pretty good handle on it, but in the last year, I have changed my thinking around one of my most important ideas on strategy.

I hope you find this video helpful, I look forward to your comments and please share this with your network if you think they would find it valuable.

Thank you very much – John

14 Ideas For Leading In Difficult Times

In the video below I share a list of 14 key ideas for successfully leading an organization through difficult times. These ideas apply to companies in a high-growth mode, or in a market that is being disrupted by technology, new competitors, changing consumer preferences, financial challenges, and other major events. The runtime on the video is a little over 14 minutes, but it has some great ideas that I know you will find valuable.

 

What Is Visioning?

visioning vision board action planWhen I work with large corporations and CEOs, I often challenge them to think about the trajectory of their company. Where do they want their organization to be in the future? Based on how things are going, where is it headed now? These are vital questions.

Here is an overview of a powerful business idea I use to help organizations create a detailed and compelling vision of the future they want to achieve for their company.

Check out the video or read through the content below.

 

What Is Visioning?

I want to share a tool with you that I sometimes use when I’m working with CEOs and helping them create a foundation for their strategic plan, and it’s called “Visioning.”

I will challenge leaders to create what I would call a “painted picture” – a vivid, compelling, highly detailed picture of where the company will be in the coming years. Let’s just use 2025 for this one.

And there are two ways I ask them to approach it:

Approach #1

One way could be to write a story as if you’re a reporter from Inc., Fortune, Forbes, something like that, and you were there to write a story about your company in 2025, about all the things that it accomplished. Maybe you just made the Inc. 500, or Inc. 100, or Fortune 400, or whatever it might be, but they’re really impressed with your company and they want to come and write an article about all the cool things your company is doing.

And I want it in detail, just like it would be in the magazine.

And I challenge them: Read a couple of business magazines with overviews of companies, and that’s what I want you to write.

Approach #2

The other way, which happens to be my favorite way, is I ask them to write a story about what it would be like to be an employee in this company in 2025:

  • What would it be like?
  • What would the culture be like?
  • Who would I be working with?
  • Would it be a casual atmosphere where people brought their dog to work?
  • Would it be a more formal culture?
  • What kind of locations would we have?
  • How much total revenue?
  • Would there be an employee profit-sharing plan?

But I want them to sit down and really give some serious thought to where do you see your company 5 to 10 years from today, and I want it to be as if I was there.

What’s the Point?

Now, what does this do?

This creates a really broad story about what the owner, the CEO, the president, whoever it might be running the company, of what they really see the future look like for their organization.

Step 2, then, is to give that out to your senior management team and get some feedback. And oftentimes, there will be some difficult conversations.

And then once you get alignment on the senior management team that, yes, this is where we want the business to go, this is what we see in the future, then you can back up and do your vision statement.

But What Is a Vision Statement?

A vision statement should be short, concise, to the point, focused, typically with some numbers in it, total revenues, position in the market, locations, number of employees, whatever numbers are important to you.

From that vision statement comes your strategy, because your strategy is built to get you to the vision you have of the future of the company.

You start it out with where we want to be in 2025, and you back up, year by year, all that way down to the current year, and say, ”All right, if this is where we want to be in seven years, where do we have to be next year, and the year after that, and the year after that?”

Then it’s pretty simple to create some major strategic objectives, 3 or 4, but no more than 5, for where we want to be this year, and then break that down into organizational action steps – tactics that go all the way down to the front line, and then it cascades all the way back up to the vision.

But for me, creating a Visioning exercise is a really good way to get people dedicated to where they want to take the company in the future.

Apply “Visioning” in Other Places

And by the way, this works exactly the same for your life.

Sit down, and some people actually create a picture. They cut stuff out from magazines or take photos and say, ”This is what I want my life to look like in 2025. Here are some images that motivate me and get me excited.”

And then back up to today and say, ”What would I have to do today – what decisions would I have to make in my life today so that 7 years from now, I’m actually living that vivid vision of the future I want to create?”

 

I hope you found this helpful.

 

Who is Your Competition?

Last year I did a speaking tour of Australia and one of my session was a business excellence program for an organization called The Growth Faculty. A young lady named Kasey Patterson attend that workshop and recently sent me this question. I thought you might find a few ideas for your business in my response.

Hi John & Sheila

I attended the growth summit last year and saw John present. What an informative session. Thank you.

The reason for my email is that I have just watched your keys to success for 2018 video and have a questions in regards to competition and thinking outside your industry. We are a Financial Planning business and I have been thinking hard about competition outside our industry – ie banks, accountants, but that is where my mind stops. Who else would you consider our competition?

Kind Regards

Kasey

 

Kasey, it’s funny, I was just watching that video myself because someone else asked me a question about it. So as a financial planner/advisor you likely get paid a percentage of the amount of money you manage for someone, or at least that’s how it works here in the United States. But no matter what, here are a few things I might consider competition/replacements if I were a financial planner.

Anything expensive that someone buys would compete for them saving for their retirement. So vacation homes, private airplanes, boats, motorcycles, around the world vacations, buying a new home, sending their kids to an expensive school/university – at some level, all of these could be considered replacements for saving my money and allowing you as my financial planner to manage it.

Another competitor would be startup companies that are seeking angel funds. Instead of giving money to my financial planner, I invest it in a company in hopes that I will have a much larger return.

Here’s a big one, bitcoin!!!

You could probably throw gold in on that list too, as another type of currency.

You compete against collectibles: artwork, cars, rare coins, antiques, and other such items.

You compete against people who decide to do it for themselves and think they don’t need a financial planner. Or, they use someone in their family to help them invest.

You compete against ignorance and apathy; people who don’t know that they need a financial planner or who don’t care.

You compete against nonprofits and other charities that will seek major donations from your potential customers, again, reducing the amount of money they have to invest with you.

You compete with ill health. If someone gets sick and has to spend a lot of money on care.

You compete with death. If someone in their family dies and does not have adequate life insurance then your potential customer might spend a large chunk of their money taking care of the funeral costs and other financial obligations of the deceased person.

You compete with disasters. If there is a major fire/flood/earthquake that wipes out one of your customer’s businesses or homes and they do not have adequate insurance they will not have enough money to invest with you.

Okay, I’m starting to run out of ideas here, but those are a few off the top of my head. Give this some more thought and let me know if you come up with any more.

I hope you found this helpful – John

I followed up with this last idea…

Kasey, I forgot the most important competitor of all… You. You are constantly competing against other financial planners, but the number one financial planner that can do the most harm to you is you. If you lack discipline, if you are not working incredibly hard every day to keep your current clients exceedingly happy, if you’re not constantly studying and trying to get better, if you are not out networking and asking for referrals, if you are not trying to be among the best in your industry… you are your own worst competition.

So, who do you compete against in your business?

Here is a link to the video Kasey mentioned if you’d like to watch it: Click Here

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What is Your Philosophy of Business?

Here is a powerful idea that is fundamental to creating a culture of accountability…

 

 

**** The Australia events have passed ***

 

 

Several people have asked to see the pyramid I mentioned in the video — here are two of the slides I developed for this program – hope these help!