Strategic Planning Archives | Page 2 of 18

Strategic Planning: Can you Imagine a Shop Selling an Affordable Dress Designed Specifically for a Person’s Body Type? It May Be Just Around the Corner.

When I was a teen (1970’s), the coolest place for car alarm systems was Ross Stereo located on the West-side of Los Angeles. Ross developed very custom systems tailored to the car and the owner’s specifications. My cousin, Bill, tried out one of them. Ross showed my cousin a Cadillac whose motor was running, windows down, and doors locked. Ross told my cousin to drive it away. My cousin accepted and got into the car, and shifted it into “drive.” Immediately, the engine shut off, the windows went up, the doors locked, and the alarm sounded leaving my cousin helplessly trapped in the car. A “custom crook catcher.”

This kind of product customization had only been available to those who can afford to pay for it. Things are changing, though. Gandhi, et al, article, How technology can drive the next wave of mass customization discusses how mass customization is really close for the individual. For example, can you imagine buying a shirt that is made to fit your body type?

Gandhi writes, “We believe the time for widespread, profitable mass customization may finally have come, the result of emerging or improved technologies that can help address economic barriers to responding to consumers’ exact needs in a more precise way.”

The operative words are “profitable” and “mass.” Sure, you can customize most anything, but in a profitable way for the masses? This was only a dream a short time ago.

Another example is one shown to me by Doctor Lester Silverman of Look Optometry in Manhattan Beach. Dr. Silverman showed me a set of frames that can be immediately customized for a prescription. The use of such frames could be for a vacationer who has lost or broken their glasses. The patient would need an emergency replacement pair but are leaving on the bus in a couple of hours. Now, these are not your designer frames, but just a temporary pair that Dr. Silverman would create using a machine in his office. As far as your designer glasses, he told me that there are so many different frames and patient requirements that this kind of in-house manufacturing is not here, yet, but the trend has started. But the day is probably not far away where most designer frames can be customized while you wait instead of sending the order to a lab, that will return them in a week.

The problem has always been cost,but Gandhi proclaims, “Mass customization has the potential to help companies increase revenue and gain competitive advantage, improve cash flow, and reduce waste through on-demand production.”

The technology is here in many situations for mass customization. 3-D scanning is an example.

In your strategic planning sessions, you should identify the trends as “opportunities.” When you develop your strategic plan, you should always look 10-20 years in the future. If you are a small– medium sized business, you are most likely not going to develop these technologies. (If you do, then your strategy should be designed for a rapid expansion.) However, your strategy should be tailored for growth.

Back in the early 1950’s Admiral Television manufacturer took a chance and sponsored Sid Cesar’s comedy show. Their strategy was to sponsor a show that would help promote this new form of entertainment in the home. The problem with their strategy is that they did not anticipate the massive demand for televisions. They were forced to stop sponsoring Sid Cesar’s show because they needed the resources to build new television manufacturing plants to meet the demand for televisions. Our first television was an Admiral (blonde wood finish).

Obviously there are two areas you must examine: Increased value to customer and control cost of customization. According to the article, the aspects that must be considered are marketing, sales, product/service development, operations, supply chain, and IT infrastructure.

In any event, in strategic planning and implementation you should always keep one eye on the horizon and the other on the step in front of you.

The Vertical Integration Strategy of a Christian Publishing Company is No Fantasy

A business acquaintance, Steve, recently purchased a small Christian publishing company from Jeff, another business acquaintance. Now both of these individual are pillars in the Christian “speculative” publishing world: Steve, a top agent in fiction, and Jeff, a man of many talents both inside and outside publishing companies. “Speculative fiction” includes such genres as fantasy, science fiction, etc. as opposed to general fiction written by likes of Hemingway. (Christian “speculative fiction” is a very small part of the publishing market with very loyal followers. Some of the novels have found their way into the entertainment industry like the Lord of the Rings.)

I have not spoken to Steve about his business strategy for purchasing this company, but this development can be a good example of how vertical integration works. Again, since I have not spoken to him, this article will be pure fiction as to strategic motivations.

Vertical integration is a style of growth executed by moving up or down the “supply chain” within a particular industry. A good example in the big corporate world is Apple’s iPhone. Originally, Apple created computers. These computers, among other things, could play music… other distributors’ music. The portable CD craze was winding down (and always breaking), and Napster just got crushed in July ’01 for its platform of providing free (illegal) music downloads onto computers.

When the Ipod was unveiled in October 2001-2003, vertical integration played an important role. Not only did Apple provide the device to play music, they moved up the chain to distribute the music that played on it through the ITunes store. Thus, eliminating any inter-company, inter-industry issues. They had achieved vertical integration. Today, almost every musician, small or large (including myself), distributes their music on iTunes. The iPhone was just an expansion into a complementary industry.

In regards to Christian publishing, the question is, how will Steve use this vertical integration to gather market share? Though, we can only speculate, I would start with a strategy session of consumer needs. The speculative Christian genre can be an advantage because large publishers may not want to divest resources from their money-makers (non-fiction books). A method that Steve could utilize is the Blue Ocean Strategy. This particular strategy focuses on creating a relatively non-competitive environment by challenging consumer demand assumptions. Is the speculative fiction publishers providing attributes that consumers do not want, and are there some attributes that the speculative fiction publishers ignoring?

Business Ethics Start at Home, But Strategic Planning is a Music Industry Necessity

About ten years ago I went into my fifteen year old’s room and laid on the bed to talk to him while he was online. He told me was he had learned of this “new” music service where you can acquire music for free. It was called Grokster. After watching him for a few minutes I concluded that this was wrong behavior. I explained to him that this activity bothered me for two reasons: 1) It was stealing. He was not purchasing but “acquiring” music for free. and 2) I had music clients who made their living from selling the music they wrote and performed. I told him that he had to cancel his account and not use it. In its place, I made him and his following brothers and sister a deal. If they promised not to download free tunes, I would pay for all of their music purchased through a service. Fortunately, they did not go hog-wild and buy thousands of songs. Instead, they usually purchased the latest acts, classic rock , and jazz. Since I shared the music account with them, I was able to learn a lot about the latest acts and play jazz. The practice still lives today with child (daughter) number four, but I really don’t care to listen to Justin Bieber. Still, honesty prevailed and they learned that conventional wisdom is not always wisdom at all.

However, according to Paul Resnikoff’s article, Technology didn’t kill the Music Industry. The fans did… , we were in the minority. Mr. Resnikoff’s article focused on educating the public as to the value of music and the unethical and illegal practice of stealing it.

Though I don’t disagree with Mr. Resnikoff about educating the public, I believe it is the wrong strategy to help the musician. People will always rationalize the theft of music, unless they get caught and pay penalties. That is an enforcement issue that is outside the scope of this article.

Instead of bailing water out a sinking boat with a tea spoon, the budding musician should learn how to strategically plan their career. The new musician cannot make music the old tried and true ways. Those days are over.

For example: Cirque du Solei changed the circus industry. Their strategy resembled the Blue Ocean Strategy. They focused on what attributes their circus customers wanted, (e.g., clowns, acrobats, and music) and discarded attributes that customers did not want (e.g., animals, big name lion tamers, and 3-rings). The result: a new type of entertainment that stole market share from plays, sporting events, and amusement parks.

The musician must reinvent the appetite for music. For example, who would have guessed 40 years ago that The WHO and other bands would sync license their music for substantial money on television shows and commercials? I don’t recall many doing that in the 1960s.

To be a “successful” artist or business person in capitalism, strategic planning must be done on both an individual level and industry level. Right now there is no strategy in the music industry to save the musician, and likewise, there are hardly no strategies on the individual level to save the music industry. Both are needed and must be interrelated.

Be an “Opportunist” and Put the “O” Back in SWOT

Did you ever catch a baseball at a professional baseball game. I had attended Dodger games since I was a kid, and never even got close. The odds of catching a ball changed depending on where you sat. However, no matter how great the odds were, I would bring my ball glove. Nothing came close, except when I became a father.

Then one day, I was walking down the steps behind home plate with a Carnation frozen shake (my favorite Dodger concession) in each hand. Before reaching my family, I heard the crowd cheer above me when a foul ball hit the upper level. The fans failed to catch it letting it escaped down to my level about twenty steps above me. As I turned, I watched a baseball bounce down the steps toward me. To heck with the malts, I dropped them splattering on the ground and fell to one knee to field the grounder like I was taught in Little League. My opportunity had come and I was ready.

Most small and medium-sized businesses probably don’t prepare a strategic plan. If you did, you would probably include a common tool: SWOT. The SWOT tool looks at your company’s “Strengths, Weaknesses, Opportunities, and Threats. Many companies usually list the SW, and T. But opportunities? That can be tough. The probably with this is that companies only look to their existing markets, and not leverage their product or expertise in other markets.

Take music for example: Songwriters and producers are banging their heads on the wall trying to get a share of a shrinking market. Yet, they don’t realize that they may have the tools to use music in a different way. Take Song Pong, for example. Song Pong is a music based social media game allowing users to communicate through music. The players can pose a challenge, share favorite songs, or deliver dedications. Song Pong utilizes personal music libraries and the 26 million song in the iTune store.

Now, I am not saying that you should not pursue your passion, but sometimes your passion can be an opportunity that you have not discovered. Michael Gorton, owner of the Song Pong app focused on the connectivity of music instead of producing its content.

So, how do you start? You start by looking at the needs of the public. Start with what you are producing and what is needed. Discard with is not needed and us the tools of what is left to inquire into several new markets.

Is Classical Music a Victim of a Red Ocean Strategy?

I like classical music, even some operas. I cried when I saw Paul Potts sing Nessum Dorma. That is why I was saddened when I read Why Classical Music is Imperiled–Sort of by Chris Farrell. Mr. Farrell cites several examples of operas, orchestras, and philharmonics who are either struggling or have failed financially. He claims:

“Classical music shares a problem afflicting all entertainment these days: fierce competition for eyes, seats, and dollars. The video-game industry has evolved in recent decades into a multibillion dollar industry far removed from its early Pac-Man days. On Sunday, Americans could choose to spend their evening at a concert, a book reading, a lecture, or watching the much-anticipated final episode of Breaking Bad (let alone Sunday Night Football.) By this light, the take-away is how healthy an historic art form is in the 21st century.”

Chris argues that classical music isn’t a dying industry, but caught up in the digital age where so many entertainment options are at our fingertips. He mentions a number of classical musicians who have ventured outside the genre.

To look at external factors for a business failure is not the cause of the failure itself. The failure is the lack of a strategic plan. Strategic plans are created with a vision that encompasses outside factors, like the changing digital industry. Instead, what business do in these situations is just change the inflight movie in a plane that is running out of gas. Sure, when businesses fail to strategize they create some “feel good” plan within their current strategy which ultimately postpones the inevitable.

The Blue Ocean Strategy by Kim and Mauborgne discuss a similar industry, the circus. The compare Cirque du Soleil and Ringling Brothers. Ringling Brothers took the traditional strategy, which was the traditional circus. Cirque, on the other hand, measured the value that they offered the public and eliminated some, while enhancing others. In creating their new strategy, and new show, Cirque emerged in an uncontested blue ocean, and left Ringing Brothers in a red ocean full of competing sharks who offered the same antiquated value to the customer. These sharks competed on price and values that the customer didn’t see relevant, like big names, animals, and three rings.

On the other hand, Cirque, designed a new show based on values that the audience appreciated, e.g., a new type of venue, themes, and music.

The ironic part is that Cirque not only took a major market share from the traditional circus, but absorb market share from other industries like; movies, plays, and yes classical live music performances. In other words, the pain that the operas and philharmonics are feeling is due in part to innovative companies like Cirque who have been successful crossed markets by realizing what the audience really wants. That is something that the classical industry must do if it is to survive.

Is it a Good Business Practice and Strategy to Hire a Ghost?

It worked for Disneyland in their haunted mansion, but will it work for you?

Living in Southern California had one big perk for a young lad, Disneyland. Growing up, I would go one or two times a year, and would ride the attractions over and over. One of my favorites was the Haunted Mansion. My cousin Bill and I watched it being built for years tying to imagine how the Disney Imagineering could conduct a ride in a fancy mansion. We weren’t disappointed once it opened. What I recall was at the end of the ride was a miniature female “ghost” hologram. After exiting the pod you were riding in, you would get one last thrill riding up the escalator by this woman who would say, “Come back! Come back!” It was just too cool, especially to two 12 year old boys.

Now, this holographic technology has made it to the mainstream as a hologram, virtual assistant that offers customers information in place of a real person. (Hologram Employees: Can Virtual Workers Replace Real Ones? by Anthonia Akitunde.)

These holograms come with a basic touch screen to help visitors ask questions. The article claims they will be everywhere in five years. (You have already seen them on live concert stages like Tupac (pardon the language).

If you are an industry leader with a heavy cost in sales personnel, you may be asking if this is right for you? The answer is that you are answering the wrong question.

It is very tempting to follow the herd without thinking. But you must remember the first step in business development: Develop and implement a strategy. Jumping into the latest and greatest is not a strategy, it is an orphaned tactic. It would be like setting sail on a brand new boat with no map or compass.

Strategic planning is a “must” for any business. To ignore this step increases your risk of failure, or at least solidifies years of frustration. You must stop, step back, and lay out your 10-20 year plan with strategic planning aspects. A great combination is to lay out the strategy in light of your current accounting situation, and then monitor it by combining your strategy with your accounting tactics. These will be the milestones that will monitor your progress.

Good business practices dictates planning. And planning is not a ghost that hovers in the back of you mind. It is a real, deliberate direction that may prevent failure.

Killing Me Softly With His Song: How the Social Media Strategy Is Killing Some Bands

Abraham Maslow stated in 1966, that if the only tool you have is a hammer, you would be tempted to treat everything as a nail.

Such is the case with social networking. If all you strive for are “followers” and “likes,” you are using the social networking the wrong way. You are using it as a hammer to pound non existing nails.

Such is the jest of the article Are you Guilty?–4 Ways Indie Musicians Are Killing Social Media by Joshua Smotherman. Smotherman exposes the practice of “Me, me, me Marketing.” No social conversation, no interaction, and most of all, no benefit to the reader.

Regardless if you are a band or a bar, you must engage your audience in something that can help them. It might be something educational like videos of band rehearsals, or the manufacturing of your product. Your reader (or viewer) walks away a more educated person.

Don’t make yourself the center of the hub because you are selling yourself. Instead, be the center of aiding the reader. “Seduce” readers into your world, don’t force them. If you offer something for them to use, they will find YOU useful. If you offer them only you, they will find you boastful.

Become the expert, not the exhibitionist. Advise others who seek your expertise, don’t pitch them for their attention. Your assistance will make you the expert, and you will build a loyal following.

The trick really is to weave what I have stated into your web page, blog, social network, videos, and appearance into your marketing strategy. Everything should be interrelated and substantially greater than if you did each one independently. Everything must tie into every “other” thing. You should not have a piece of the tactics sitting out in left field not integrated into the rest of the strategy. If you can’t integrate it, dump it.

Musicians and other business people must understand this going forward because at least one of your competitors will.

“Breaking Bad” Habits of Ignoring Your Strengths and Copying Others

Have you ever tried to compete on the “other guy’s field?” So many businesses and people try to copy other company’s strategies because the other guy is successful. Why not strategize using your own skills and resources?

Take Andrew Huang for example. Instead of covering the “Breaking Bad” Theme like so many have done before, he used a different approach. Watch him cover the theme using items commonly found in a meth lab.

Andrew broke the bad habit of many artists. Basically these artists film sessions covering a hit song with the intent to sound exactly like the original version using the same instruments. Their goal was to pick up an audience and a following. Yet, Andrew accomplished this by combining the music with the dynamics of the program. He was able to stand apart from the millions that ache for a “following.”

This thinking not only applies to artists, but to businesses. When your competitor launches a new idea, don’t try to replicate it. Instead, try to leapfrog it using other strengths that are inherent to you and your company. The typical “SWOT Analysis” is used in strategic planning, though as only a small part of it. The SWOT analysis is measuring the internal aspects of your business (strengths and weaknesses) against the external aspects of your business (opportunities and threats).

Setting a strategic plan means taking a novel approach to your business using all available information from your internal accounting to external market conditions. This entails being brutally honest. For example, if there are products, or personnel that do not align with your strategy, you must eliminate them. The concept that Jim Collins in states in his book, Built to Last is the get the right people on the bus before it leaves. Don’t drag people along that you hope will change. If they don’t mix with the new direction, then you are better off letting them find a job that they can agree with.

Try “Breaking Bad” habits and push your company to a horizon that offers more than immediate gratification. (BTW, I don’t recall a guitar being and essential tool in a meth lab.)

Seinfeld and the Art of Consistency

A couple of decades ago, I worked on a client who was one of the first TV Producers to land a very lucrative syndication deal. He was a very talented person who wrote, composed, and created. He was very consistent in his endeavors and it showed.

I enjoyed reading about “The Seinfeld Strategy” in Kevin Eikenberry’s Leadership Tip. He states that Jerry Seinfeld consistently earned tens of millions of dollars each year for over a decade by doing just one thing…being consistent. He wrote every day.

Whether you are an artist, a business person, or both, that is truly a well-kept secret. What is a better secret is that if you chisel away, instead of having to jackhammer your daily routine, you will persevere and enjoy the journey. Too many try to push too hard, too fast, and burn out.

From a business perspective, if you build a daily routine, you will build results. The routine can be as simple as writing an article like this one, or developing teaching videos that display your expertise.

Even a CPA can learn from this in the accounting profession. There is a lot of experiences that a CPA can share that others can benefit by because we are usually the hub of a business, professional, and even an artist’s life.

So, what is your routine, and are you leading others by doing it?

The Strategy of the “Argo” Writer and Why You Should Take Notice

Do you use “vertical” logic to solve a problem? This classic method for problem solving works out a solutions using a step-by-step method until a person arrives at a conclusion. Engineers I’ve known, have used this approach.

Or do you address problems “horizontally”? That is, having a thousand ideas but being unconcerned with how to implement the strategy of arriving at your destination.

Many will look at these two approaches and say the first is more left brain, the second more right brain. However, the better approach is to use both sides of your brain and think more entrepreneurial.

This appears to be the thinking of Joshuah Bearman, the “Argo” writer according to a Los Angeles Times article. According to the article, “Argo” prompted Bearman, …to think about storytelling in a different way–and to go entrepreneurial with his latest project, a tale of San Diego drug smuggler called ‘Coronado High’.” According to the article, Bearman negotiated a trifecta revenue package with publishing with GQ magazine( print), Atavist (a digital e-book publisher), and Sony Pictures (movie). These avenues displayed different “colors” of the project serving different audiences.

This strategy pushes Bearman into his own “Blue Ocean” by distinguishing his project from other journalists, novelists, and screenwriters. Though these multiple platforms operate separately, they will complement each other making this project greater than the sum of its parts. Why? Because one person hearing the audio version may want to see the movie, for example.

Some say that other writers will not be able to duplicate Bearman’s strategy because of his “Argo” clout, but I disagree. In business, there is always an industry leader that tests the water. If Bearman is successful, these(and other) publishers will be looking for other authors to replicate the success.

Multimedia is hear to stay, but the industry leader will be the person who can change with it. Multimedia platforms are not stagnant and demand a dynamic entrepreneur to change with them.