Azzarello Group

The Process

1. Simplify:
A good Strategy should be able to be described with extremely simple communications. It doesn’t matter how robust your discussion of the strategy is, if you can’t answer a few basic questions about the customers, the market and why you win, your strategy is not good.

2. Disconnect it from the Budget Process
Most strategies are doomed from the start by being connected to the annual budget process.  The money always wins. Strategy is creative.  Financial Planning is operational. Strategy and financial planning require different skills, timelines, and different measures of success. You must separate the two streams of work.

3. Sponsorship
Strategy must be owned by the line of business executive and executive team. If the executives are not spending personal time and energy on strategy, it’s a real problem for the company.

The Data

4. Assumptions
Check of all your assumptions.   Don’t guess at unknowable data.  And don’t fail to learn knowable data.  When data is unknowable, don’t get caught up in straight line, point, or static assumptions. Test multiple scenarios so you don’t get surprised.

5. Competition
Many companies fail to predict the competitor’s response to your strategic move.  Know enough about your competitions business model to know how your strategy will impact it and be prepared for a range of predicable reactions.

6. Economic Value Proposition
Never forget that your value proposition does not end at the point of sale.  Your product has to fit into the economic lifecycle of your client.  You need to understand how your product impacts your customers cost and business model over the whole time they own it.

The Execution

7. Resources
Many companies fail to plan for the real resources required to execute a strategy.  They underestimate the time, and cost of driving a change.

8. Skills
Many companies expect that the same people can do the new work.  They underestimate the time and expense it will take to either train them, or the need to transform the organization to execute the new strategy.

Strategic Change

9. Experiment
Successful companies run a portfolio experiments to test new ideas and innovations.  The companies that do this well have a culture that tolerates failure.  But it’s important to fail quickly.  Don’t waste time and money trying to save or fix ideas that are not working.

10. Innovation
Companies who only plan incrementally to their current strategy don’t stay on top. A good strategic planning process allows companies to recognize and respond to fundamental changes in the market, and ensures they don’t get caught off guard when there are big shifts.