Surviving Business Coronageddon – Part 8. Blending Strategy and Culture More Important Than Ever

Larry Goddard
Strategy, Growth, Family Business & Turnaround Advisor & Executive Coach

The two of us have an ongoing debate: What is more important to business success – Culture or Strategy? One of us is an ardent proponent of Strategy first, and the other puts Culture out front. We each agree that both are necessary for success, and that neither is worth much without the other. Because strategy without execution is meaningless.

Strategic planning has always been important for businesses. Now – in an uncertain and potentially life-threatening COVID environment – it is more important than ever.

A good plan allows the business to have a much greater impact on its direction and success – rather than allowing momentum and external forces to control its destiny.

But, a strategy without a great culture is unlikely to be successful. A healthy culture creates the means for success in a way that no plan alone can. Passion, resilience, inclusion, empowerment, and commitment lead to higher levels of creativity, service, accountability, productivity, and responsiveness.

In developing and executing a plan, there are currently a lot more unknowns and significantly less predictability than in the immediate past. In addition, for many companies, many traditional sources of revenue are no longer generating the sales needed to sustain the businesses or to grow. Management teams need to dig deeper and wider to find ways to produce revenues, maintain a safe environment for staff and customers and manage liquidity to ensure business survival. This requires deliberate and focused attention to strategic planning, and ensuring you have the organization that can deliver the plan.

Many hear the words “strategic planning” and respond, “It’s all fine to talk about vision, mission and what to do for the next five years but I can’t even think about what to do five days from now.”  Every worthwhile strategic plan contains four key elements: 1) Vision (where the business is heading), 2) Goals and Targets (how we will measure if we are successful), 3) Action Plans (the steps that need to be taken to achieve the Vision and Goals, and 4) Funding Sources (where the money will come from to make this happen).

In a COVID world, strategic planning must be more focused on short-term actions to grow revenues, reduce costs and improve cash flow – but the plan must still be developed in the context of what the medium and long-term outlook might look like.

We believe the best way to do this is to create a cross-functional team of managers and staff to work together, in a collaborative and brainstorming manner, to come up with ideas.

The brainstorming team should create three lists that will improve the bottom line or enhance cash flow (note 1):

1.     List One - Opportunities – These are potential bottom-line gains that can be achieved from “lower-hanging fruit”. They are easier and/or quicker to implement, and within the business’ current capabilities.

Examples include growing wallet share with existing customers, expanding geographic coverage to a nearby area, product extensions, sales force training, productivity enhancements, and renegotiating any and all costs.

2.     List Two - Possibilities – These are potential bottom-line gains from “out-of-the-box” or stretch situations. They might be beyond the business’ current capabilities, but they have significant potential.

Examples include selling via a new channel of distribution, new product development, and acquisitions.

3.     List Three – Necessities - These are actions necessary to protect, preserve or strengthen the organization.

Examples include upgrading safety procedures, strengthening communications, leadership training, and improving financial and operating reporting systems.

Once the three lists are created the brainstorming team should, for each item listed:

1.     List pros and cons, including execution risk as well as disruption to the business.

2.     Estimate the bottom-line benefit.

3.     Project the necessary resources, costs and time to implement.

4.     Use the above items to prioritize the lists with the most valuable ideas at the top of the list.

Foster a culture with a bias for action. Once you have decided which items to proceed with, align your teams and recognize that fewer items done well can be more valuable than several attacked in a mediocre fashion. These prioritized lists should not be static. Updated information might change the order of priority or cause an item to be removed from the list because the team has realized it is not as valuable as previously thought. However, once the business selects which items to deliver there should be as little second guessing and as few stop-starts as possible.

In a cash-flow challenged COVID environment, emphasis should be placed on the fastest payoff with the least execution risk. These are probably going to arise from Opportunities. Possibilities may be a lower priority – unless there are not enough attractive Opportunities, or the Possibility is so attractive or important that it makes sense to invest in it now.

For most CEO’s and their teams, running a business today requires you to use your skills and experience (i.e. the past) while you adapt to a here and now that looks, and is, totally different from what has been before. At a minimum, even if your business is thriving, the mindset of your staff, your customers and suppliers has changed. On the other hand, a huge amount of reinvention may be necessary. You can succeed by methodically gaining ground (Opportunities) or being disruptive (Possibilities) or a combination.

Success – in this COVID environment - is much more likely to occur with a Strategic Plan focused on short-term actions to grow revenues, reduce costs, and improve cash flows - together with a great culture.

 Best to you all.

Laurence Franklin and Larry Goddard

Note 1: We have an online survey that we use to help businesses rapidly identify a preliminary list of Opportunities, Possibilities and Necessities. Feel free reach out to us at lgoddard@parkland.com or lf4507@gmail.com if you want to take the survey for your company. It will only take 5-10 minutes - but could reveal actionable insights regarding the potential for significant improvement in profitability and cash flow.

Larry Goddard, a strategy, growth and turnaround coach and consultant, is the CEO of The Parkland Group, Inc. and SOAR Growth Strategies (www.SOARgrowth.com)

Laurence Franklin, business advisor and board member, is the former CEO and business leader of Tumi, Coach, Elizabeth Arden, and Frette. www.linkedin.com/in/laurence-franklin-18a88427/

©Copyright, 2020, Larry Goddard and Laurence Franklin. All rights reserved.

While the authors believe the information contained herein is accurate, readers are advised that this information does not cover all circumstances, and readers should consider their own unique circumstances and consult their own financial and legal advisers before taking any action related to these topics.

LinkedIn Article:

https://www.linkedin.com/pulse/surviving-business-coronageddon-part-8-blending-strategy-goddard/