Outsell Growth Framework — Step 2
Strategic Business Planning
Last week, we shared the background on the Outsell Growth Framework and began sharing how it works, step by step. As we wrote, the essential first step is placing the business in a value chain. This week, we cover step two in the Outsell Growth Framework: strategic business planning.
This is about honesty, eliminating sacred cows, and truth-telling in the C-suite and boardroom. It’s about healthy dialogue and debate, and, ultimately, about decision-making. How do we get it done?
The process is typically led by the chief strategy officer (CSO) — or the CEO in the case of smaller companies — in concert with the budget cycles driven by Finance (the CFO), with CEO guidance and executive team participation, involvement, and support.
A good strategic plan has two components — strategy development/refresh and strategy implementation planning — and must address the following.
Strategy Development/Refresh
· Business Purpose: What is the business’s purpose and mission?
o This includes a review of culture, values, and reason for being.
· Business Status: How is the business doing?
o This includes a review of key performance indicators (KPIs) and success criteria; financial benchmarks such as revenue, expenses, margin, and revenue per employee; market share analysis; win/loss analysis; and customer and brand perception. This is where competitive review takes hold. This step focuses internally on the state of play and results.
o This is also where the company reviews talent for strengths and weaknesses against current goals or technology prowess vis-à-vis the external world. It’s an honest, hard look at the business and how it’s performing.
· Business Trends: What new trends, technologies, or events are emerging?
o This question focuses more externally on key market and competitive trends and developments, evolving technology movements, and an analysis of social, geopolitical, and regulatory movements and their potential impacts on the organization. This is about seeing what’s around the corner, preparing for what might come from left field, and/or by connecting dots that point toward logical trajectories.
· Business Differentiators: What are the company’s unique core competencies, true differentiators, and weaknesses?
o This focuses on truly differentiated barriers to entry, such as proprietary data or algorithms, IP and patents, taxonomies or knowledge graphs, or customer dependencies that are very difficult to switch out, such as platforms or ecosystems. An ability to attract talent, brand halo, and other “soft attributes” are important to consider as well.
o This includes honest debate about whether perceived differentiators are truly competitive advantages.
· Business Direction: What does the company want to be? What must it offer? To what markets? To what buyer personas?
o This is where the business review, emerging trends, and unique capabilities come together with an analysis of the Value Chain in Step 1. The company decides where on the value chain it seeks to remain and where it will head. This must be done at a sufficient level of detail, so the next two bullets can be addressed with enough specificity to feed a one-to-two-year rolling roadmap.
o This is also where the firm analyzes critical issues like market need, use cases, market opportunities, and size to provide answers clear enough to meet management thresholds about what to pursue.
Strategy Implementation Planning
· Business Changes: What changes in people, products, or processes must the business make?
o The answers to this question become the bones of the plan for what talent is required; what products the organization must kill, modify, or build; and what processes and organizational structures must shift to be ready to execute the plan. This is also where the firm contemplates make-or-buy decisions in terms of M&A, divestiture, partnerships, and other actions required to enable the plan. It’s also important to understand brand awareness, perception, permission, and consideration, so the external market is poised to adopt whatever changes the company makes.
· Business Investments: How and when will changes be made, and what investments are required to do so?
o This is where the rubber meets the road, with the “whats, by-whens, and by-whoms” broken down into key milestones to ensure that owners and budgets dovetail appropriately. This is where the financial assumptions must meet goals, contemplating external or internal funding and making appropriate resource allocations.
o This is also where executive teams often “horse trade” for the greater good, making determinations about where resources go based on what’s most important to accomplish and in what order to finalize the plan and budgets for the coming year.
o This is also where M&A is planned for. Market opportunity and business timing may create the need for a mix of organic and inorganic business growth. Inorganic growth includes business investment in mergers, acquisitions, and joint ventures. M&A is executed through a different process, but the needs, trawls, and potential assets are reviewed as part of the planning process.
· Business Communication: How will the strategic plan be communicated internally, and how will performance be measured?
o This is where the company articulates the components of the strategic plan and outlines the roles and participants throughout the company who will implement, including reporting.
o The implementation plan includes a process/cadence to report on, agreed-upon measurement metrics, with timetables for reporting (daily, weekly, monthly, quarterly, and annually), relevant audiences who will consume such reporting (individuals, departments/teams, managers, executive team, CEO, and board of directors), and a feedback loop for follow-on actions.
At Outsell, we believe that a solid business plan is a living document with a rolling two-year horizon whose elements are reviewed and revisited quarterly and monthly to make it an operating plan in the short term. It’s also a place to visit/revisit longer-term goals to make trade-offs without waiting for a full rewrite as market, competitive, technological, or geopolitical developments occur. In an agile world, we are proponents of agile planning and believe the best plan is one that is proactively adaptable. Outsell also believes an effective business plan boils down strategic goals into no more than a handful of items and includes a communications schema to enunciate those goals and other plan elements internally.
A solid plan has the following sections and will ideally be articulated in one visual with the total plan no more than 10 to 15 pages or PowerPoint slides:
1. Purpose and Values
2. Strategy Goals, Including Organic and Inorganic Plan Considerations
3. Target Markets
4. Products, Solutions, and Potential Buy Versus Build Approaches
5. Data and Technology
6. Marketing and Sales
7. Talent, Culture, and Organization Design, Including Merger and JV Options
8. Key Tactical Objectives/Milestones
9. Budget & Investments Alongside Business, Financial, and Success Measures and Reporting Cadence
10. Communications Plan (Internal)
Let us take you through a strategy visit to discuss your organization’s future. We also do full-blown strategic assessment focused on all these areas. Or, if you prefer to DIY, you can use this process and let us advise into your planning cycle. No matter how we serve our clients operating in the data, information, and analytics economy, we ensure that they plot a course to growth.