Winning Strategies Start With the End in Mind
This article appeared in Marketing Daily on September 2nd, 2010.
What does winning look like at your organization?
Defining success may sound simple, but few strategic plans come to grips with what winning looks like. Too often management teams fall back on broad-brushed vision statements. “To be the best…the biggest…the leading…” that lack the specificity employees need to implement the strategy or provide the benchmarks that leaders can use to measure progress.
Should growth strategies be visionary? Certainly. But they should also be concrete. That’s what Plan to Win is all about.
Plan to Win is a market-driven approach to strategic planning. It’s designed to create an actionable growth strategy and align the organization around implementing it. It relies on senior business leaders, including both business unit and functional heads, to work together to identify what really matters to driving growth.
They start by identifying, very specifically, what winning looks like. When McDonald’s built a Plan to Win several years ago, it successfully married the aspirational (“To be the world’s best quick service restaurant”) with more granular descriptions of the same store growth and customer growth required to deliver the vision. Importantly, they defined winning objectives based on customer outcomes. They assumed that increased EBIT and stock price gains result when a company wins with its customers.
Once the team knows what winning looks like, it must agree on the obstacles that are getting in the way of customers buying, buying more often, or buying at higher prices. Again, these have to be concrete barriers that really matter—and that are surmountable.
GE Healthcare’s strong relationships with purchasers and purchase influencers of diagnostic equipment didn’t necessarily provide an on-ramp for relationship building throughout the hospital (where the greatest opportunities exist), or with the CEOs who drive many larger-scale purchase decision. At McDonald’s, the lack of salads and other healthy foods had become a barrier to mom making a purchase even when her children were eating a Happy Meal. At Electrolux, a global appliance leader, low brand awareness was a barrier to sales in the U.S.
It’s actually pretty easy to list the barriers to growth. Prioritizing the surmountable barriers that make a big and immediate difference to winning or losing is a crucial and difficult part to an effective plan to win. Employees need their leaders to make the hard choices and prioritize the key challenges that they must tackle. The trick again lies in identifying key barriers for each of marketing’s four Ps—product, price, place, and promotion. Is there a product issue that must be addressed, like healthy foods at McDonald’s? Is there a communication issue like the one Electrolux was facing? Is there a cross-customer opportunity like GE’s to take advantage of?
Prioritizing involves understanding customer needs and assessing the importance of meeting these needs to drive growth and improve the bottom line. For McDonald’s, flattening beverage consumption among its customers was a clear barrier to growth. In the fast food world, beverages have always been an important profit center. But shifting consumer preferences for coffee drinks from Starbucks and fruit drinks like Jamba Juice’s, as well as the explosion of bottled waters had left McDonald’s with a big problem. It wasn’t seen as a natural outlet for any of the beverage types that were growing the fastest. At the time its Plan to Win was developed, the fast-food giant didn’t know that investment in equipment, training, and advertising to promote specialty coffee drinks was the solution to its beverage problem. But because leaders prioritized beverages, the product development and marketing teams were able to rapidly create the strategies, plans, and business case to address it.
And the results were there: According to published reports, the chain and its franchisees had to make significant investments to build McCafe stations, which would add $125,000 in additional beverage sales per restaurant. According to Morningstar, McDonald’s stores are running well ahead of that goal on average. And now, the chain is entering the blended, or smoothie, drink market to boost its beverage business even further.
The final step in the Plan to Win is to take the time to identify and address the organizational implications for execution. Who will lead the effort to address each growth plank? What roles will different employees play? Part and parcel of this stage is reaching agreement on the best metrics to track success, and a plan to integrate the growth planks into a unified and improved customer experience.
Electrolux achieved success with its Plan to Win in the U.S. kitchen appliance market through rigorous attention to relaunching the brand using actress Kelly Ripa as a spokeswoman. The plan started two years ahead of the actual launch, first by building the scorecard to measure success at the consumer, trade partner, and employee levels. Once the objectives and the metrics were clear, the teams went on to develop the products and the channel and communication strategies. Results were outstanding. NPD consumer appliance tracking indicate that Electrolux brand awareness rose from less than 5 percent to 60 percent among premium appliance buyers. More importantly, Electrolux share of its segment rose from 2 percent to more than 30 percent in only a year.
Planning to win works, as GE, McDonald’s, Electrolux, and any other number of businesses will tell you, because it departs from the modus operandi of most strategic initiatives. It defines winning in tangible terms, and identifies the most critical of the surmountable barriers to achieving it. With a clear and tangible vision accompanied by a critical list of priorities, winning is the logical
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