It is the 17th hole at the Bridgestone Invitational and Tiger Woods is one stroke behind the leader.
Both players hit their drives into the rough off the tee. Tiger lays it up into the fairway 180 yards from the flag. Padraig Harrington lays it up but catches the lip of the fairway bunker. Tiger responds by pulling an eight iron out of his bag and drives the ball high, landing it less than four feet from the flag.
Padraig decides he needs to reach the green to stay with Tiger. He overshoots the green and lands in the rough, leaving himself a tough pitch to the flag.
With one swing Tiger turned the table on Padraig and regained the advantage. Was this luck, skill or a strategic move?
I believe it was a strategic move by Tiger that forced Padraig to play his game. Tiger birdied the hole, Padraig finished with an eight, and a four-stoke swing. The tournament was over.
How often in business do opportunities like this present themselves and we miss them, because we are playing safe?
Tiger took the risk, went all in and forced his opponent to alter his strategy and thereby gained the advantage. Both players had the same goal, but Tiger was able to make an immediate strategic move in response to a change in the operating environment.
The next week at the Open Championship, Tiger was on the losing end. His opponent took a page from Tiger’s strategy book and elected to take a risky shot on the 18th hole and placed his ball within three feet of the hole. Now Tiger had to take an even riskier shot to tie his opponent.
Tiger ended up losing the hole and the tournament.
What we saw in HD is no different than what happens in the larger business world. One company copying another company’s strategy and eventually taking away another’s market share is not novel.
What do we learn from this example? In a competitive market, strategies need to be reviewed and changed based upon changes in the competitive environment. In a recent McKinsey Quarterly article titled “Strategic Planning: Three Tips for 2009,” the authors discuss the importance of monitoring the key indicators in a particular industry. After strategies are developed, both long and short term, they need to be monitored to assure they are implemented on a timely basis and in response to market shifts.
Especially during this year’s planning process, specific plans to monitor the performance of suppliers, customers and competitors need to be generated. As we have seen in the past year, things can change quickly and successful companies can suddenly go into financial distress. Planners need to look at the leading indicators of distress such as an increase in the level of accounts payable, a drop in debt ratings, late deliveries and a reduction in the level of quality. A change in any one of these indicators needs to be addressed with a change in strategic direction.
There are four key methods used to monitor a strategic plan. They are premise control, implementation control, strategic surveillance and special alert control.
Designed to check whether or not the assumptions made and scenarios developed during planning and implementation are still valid (growth in GNP over a period of time).
The key assumptions should be identified during the planning process.
Monitoring of these scenarios and assumptions should be assigned to the persons or departments who are qualified.
Designed to assess whether the overall strategy should be changed in light of unfolding events (i.e., September 11, 2001). There are two types of implementation controls, monitoring strategic thrusts and milestone reviews.
Strategic thrusts are early identification of critical success factors. These factors are isolated and monitored and thresholds (time, costs, research and development) are developed and tied into a “stop/go” assessment.
Milestone reviews..a full-scale reassessment of the strategy and can occur at a major resource allocation decision point or concurrent with the timing of a major step in the implementation or when a key uncertainty is resolved.
Designed to monitor a broad range of events inside and outside the company that are likely to threaten the course of the firm’s strategy.
A loose environmental scanning activity which would provide vigilance in all daily operations so as to uncover information that may prove relevant to the firm’s strategy (a change in the legal environment).
Special alert control
The need to thoroughly and often rapidly, reconsider the firm’s basic strategy based on a sudden, unexpected event, such as a loss of a major supplier.
Such an occurrence should trigger an immediate and intense reassessment of the company’s strategy and its current strategic situation.
Scenario planning is critical in the overall strategic thinking and planning process. The results of a survey conducted by McKinsey, indicated that 58 percent of the respondents will use scenario planning in the same or larger role as in the previous year. As a strategic planning consultant, I facilitate numerous planning sessions with for profit and nonprofit organizations and see the same challenge facing both. They develop a workable plan based on scenarios or premises, but drop the ball when it comes to properly monitoring the process. More than one executive has told me that they have a well developed strategic plan gathering dust on their bookshelf. It appears that all of the energy put into the planning retreat is exhausted when it is comes to implementation.
Firms that do their due diligence, and monitor their plans are more successful than those who don’t. In the McKinsey survey results, 85 percent stated that they will assess progress against the plan no less that each quarter or four times a year. Forty-three percent stated that they will assess progress against the plan on a monthly basis.
These statistics demonstrate that in our current economic state, it is imperative that regular monitoring of your progress on the strategic plan take place.
So, take down your strategic planning binder, dust it off and set up a monitoring meeting. You will find that things have changed since your last planning retreat and strategy revisions are needed to remain competitive.