Quote of the week

“Rare is the company that truly understands what its competitors and their decision makers care about most, how they perceive their assets and capabilities, and what all this means for their strategies.”

--Hugh Courtney, John T. Horn and Jayenti Kar, Getting into your competitor’s head, The McKinsey Quarterly, February 2009

Continuous improvement – How does it work as a strategy?

by Michael W. Van Belle, Senior Vice President and Chief Financial Officer of The High Companies 

Continuous improvement (CI) is not a strategy within itself, but a means to improve results regardless of strategy. The improvement can be in products, services, or processes and various methods in CI exist depending on the results needed. The magnitude of improvement gained also varies greatly…for example, Policy Deployment focuses on ‘breakthrough’ improvements over a single or multiple years while the MDI (Managing for Daily Improvement) process will focus on ‘incremental’ improvements on fundamental processes on a daily basis.

At High Industries, we focus our CI activities on business strategies using Policy Deployment. Policy Deployment lets us align our capital and human resources with the larger scale projects and activities needed to achieve our goals. We use MDI to help functions and CI measure their results on a near real-time basis, understand opportunities for improvement, and determine the impact of improvement activities.

Strategy implementation – From the shelf to the shop floor

by Michael W. Van Belle, Senior Vice President and Chief Financial Officer of The High Companies


At The High Companies, our strategic implementation involves many activities as described above; however, there are three processes that have significant impact:

1. Capital Budgeting Process

2. Cascading Objectives / Performance Planning Process

3. Policy Deployment

The capital budgeting and performance planning processes both specify how the company will utilize its two most valuable resources to accomplish its goals. They also help the management teams understand how much can be accomplished in a specific time period.

Policy Deployment (PD) gets into the tactics and operational plans of the strategy implementation. (PD) Initiatives are developed that will yield the financial and market results in a 3-5 year time period and support the strategy. These initiatives are assigned goals on an annual and monthly basis. Regular assessment of results against goals is a means that helps us understand the success of our strategy implementation. The budgeting process and performance planning process aligns the resources with the specific activities developed in Policy Deployment.

The implementation and execution of strategy is just as difficult and just as important as making the strategy. More information on strategy implementation and execution is available:

Business Strategy: Execution Is the Key by Lawrence B. Hrebiniak at the Wharton School of Publishing

What Is Strategy Acceleration and How Can It Help My Organization? by Gayla Hodges at Fast Company

Planning an Effective Policy Deployment Process by Jill Jusko at Industry Week

How do you start strategic planning?

by Michael W. Van Belle, Senior Vice President and CFO of The High Companies

Our strategic planning process started with visioning sessions and scenario planning. This was an involved process that over several months helped the management teams in each of our operating companies develop a vision for their future. The mission, which describes the vision of the future, was then developed to ‘set a path’ for the company. We spent significant time in these activities as we have started to develop strategy further into the future.
The remainer of the activities followed the typical strategic planning process. Environmental scans of the company and their industry were completed to develop a SWOT (strength-weaknesses-opportunities-threats) analysis. The strategy formulation phase focused on improving our competitive advantages based one the internal and external influences determined by the SWOT analysis. Implementation and control of the results is an involved process that includes critical discussion at the board level, forecasting, the capital budgeting process, communication with all co-workers, Policy Deployment, cascading objectives in our human resource and performance planning processes, as well as many other activities.
Addition information on the strategic planning process is available at QuickMBA.com and the Free Management Library.

Talent as a top strategic issue

by Mary Beth Matteo, Founding Director of the S. Dale High Center for Family Business

The “War for Talent” will be a top strategic issue during the next decade. According to an article by Charles Fishman, “in fifteen years, there will be fewer Americans in the 35-45 year-old-range than there are now. At the same time, the United States economy is likely to grow at a rate of 3-4% per year. Over that period, the demand for bright, talented 35-45 year-olds will increase by say 25% and the supply will be down by 15%. That sets the stage for a talent war.”

Even in difficult economic times, it’s important to think about talent in a strategic manner, instead of as a short term tactic. Several tips include:

• Focus on recruiting/nurturing talent across the entire organization instead of just top performers

• Develop value-propositions for each different category of worker, e.g., Y-generation, older workers, information workers, middle-aged women, and cultural groups where appropriate

• Revitalize the HR function (some of the historical failures of HR have had to do with not having talented enough people in the function, and also not having the CEO’s attention)

Sum & Substance: If you've got talented folks in your company, they are as asset worth preserving. Hold onto them. At the same, make all employees the best they can be by managing their performance. A talented workforce can contribute to your strategic advantage.

Book Pic: The Entrepreneurial Mindset

In this kind of economy, when many businesses are struggling, who has the luxury to think beyond survival tactics? In their book The Entrepreneurial Mindset (Harvard Business School Press) Rita Hunter McGrath and Ian MacMillan assert that uncertain times are the best times to revise and develop long-term strategy.

One of the book's reviewers, Peter Hupalo claims, “Successful … entrepreneurs experiment intelligently. They don’t view every business move as a do-or-die endeavor for their company. Habitual entrepreneurs focus ruthlessly upon priorities and ruthlessly weed out unprofitable endeavors. They balance current, profitable, business operations with an eye to future opportunities.”

Click here for more from Hupalo on The Entrepreneurial Mindset.