How to fill the strategic gap?
Aspiring revenue targets for the coming years are nowadays easily set. But how to close the gap between the entrepreneurial vision and the actual organic sales progression? Key for success is a strategic planning, which is focused on few considerable cornerstones and a consequent, but market-oriented realization.
Visionary goals are necessary and important for a company’s development. To build a bridge between current status and desired target, the so-called GAP-Analysis is commonly used.
Basically, it lines out a comparison between organic sales progression and the strategic growth. Ideally the GAP-Analysis is broken down on business units or product lines. To close the revenue gap, different strategic scenarios are developed. Beside the sales revenue potential, the scenarios have to be assessed also with other factors like suitability and risks.
Companies are well advised not to focus with their strategy-scenarios on the competition, but on the current or future customer needs and their company-owned strengths. E.g. strategic approaches like the product-market-matrix according to Ansoff are used.
Strategic planning must include an appropriate and market-oriented business model. This applies as well for existing but also for new products/ services and markets. Especially future trends on the supply as well on the demand side have to be considered. Examples are the digital (trading-)platforms and smart services.
Consequent, market-oriented realization
Previous to realization it is crucial that the company’s management is committed to the goals and the chosen strategy. This is manifested upfront by clear and transparent communication to the employees and later in daily business by consequent focus of the available resources on the strategic committed measures and projects.
If nothing else, the strong belief of the management in the correctness of the chosen strategy-package and their trust in the competency of the employees during the market-oriented realization of the strategic measures plays a critical role for success.
At the start of the realization the own organization have to be consequently aligned to the new or changed customer and market needs. This includes first the employees’ understanding of the actual customer needs and later the orientation of products, services and processes to the satisfaction of these needs. It is the task of the department managers to quickly build up the missing understanding or implement the lacking know-how within the organization.
During the realization of the strategic measures a realistic planning of the activities based on actual available resources is important.
A learning and market-oriented company is aware during the realization of the strategic measures and projects that customer needs may to change over time and that the customers’ perception regarding the satisfaction of his needs may vary with the progressing level of detail during the product or service development. Thus, it is essential to check and test the customer acceptance multiple times during product developments or promotional campaigns.
Naturally setbacks also arise sometimes during these iterative acceptance tests. But the setbacks are to be seen more as a chance for need-based product optimization and will only support and guarantee a successful market launch. (“Fail early and often, to succeed sooner” Tom Kelley)
The consequent tracking of the strategic cornerstones is here important, but the situational agile adjustment of the measures to the actual predominant market condition is compulsory.
In the rapid changing market conditions, long-term strategies can nowadays not be prevailed anymore. Completely without strategic planning above-average growth cannot be accomplished. The modern compromise of a short-/ mid-term strategy with few cornerstones and a subsequent, agile package of measures appear to be reasonable.
I would be pleased, if I have aroused your interest now for strategic planning and if I have encouraged you in filling your strategic gap. Contact me, if you need support to plan scenarios or if you would like to conduct a workshop.