On Getting Your Prices Right

Your business offers a product or service. Regardless of how well your offer sells, you wonder whether or not you are leaving money on the table. In other words, are you charging the best price possible?

This question is often left to opinions, chance, or comparisons with competitors. These choices unfortunately indicate the lack of a defined philosophy.

Alex Hormozi’s book, $100m Offers, provides a simple way to think about the challenge of setting prices. If you have a sense that your company should reconsider its thinking, keep reading.

Your Business Should Charge As Much As Possible

Here in Jamaica, we equate high prices with robbery. Those who list exorbitant prices are disparaged as thieves. Unfair. Rapacious. Wicked.

However, part of being a successful leader means transcending such sentiments. A company is not a charity. It must do what it can to become sustainable so that customers, employees, shareholders, suppliers and even tax authorities can benefit in the long term.

As such, Hormozi argues that companies should charge whatever they can, subject to their customers’ willingness to say “Yes”. Unfortunately, only a few organisations perform this balancing act effectively.

In this context, being “fair” is beside the point. It’s definitely a juicy argument for verandah conversation, but not a strategic consideration. What matters more is customer behaviour, not popular sentiment.

For example, many think that the new Krispy Kreme donut craze is ridiculous. However, should the naysayers’ sentiments be considered in the pricing of the product? Or should the company pay more attention to those who drive by, wishing the line were shorter?

Hormozi argues that every enduring organization charges a big multiple of its unit costs. A company spends pennies to make a donut. But it’s not unusual. Internet service. Concert tickets. Hotel rooms. Restaurants. They all offer highly marked-up products or services.

Your company should be no different, he explains.

After setting guilty thoughts aside, he recommends you focus on “value” – the only thing an actual customer cares about.

Value is Primary

The author quickly establishes a fact we all know: customers exchange their hard earned money for value. But it’s not a fixed quantity of anything. Instead, they focus on *perceived* value.

For example, the volume of metal, rubber, glass and other materials in a Kia is about the same as a Porsche. Yet, the desirability of each could not be more different.

But that’s an everyday observation. More importantly, how does your company increase the value it offers customers? Hormozi’s book shines when it introduces a new formula.

Customer’s Perceived Value = Their Dream Outcome x Likelihood of Achievement / Waiting Time x Effort*Sacrifice

Above the line are the items most companies focus on, including your competitors. At first, they prioritize the dreams and aspirations your customers are trying to fulfil. It could be a pleasure they seek, or a pain to be avoided.

Unfortunately, you may be in a sector in which all the players are promising big things. So no-one is responding to hyperbole.

The other item above the line measures the confidence of your customers in accomplishing their outcome with your offer. In other words, a teacher who is famous for gaining government scholarships for PEP will provide more perceived value than a first-timer to the classroom.

These two items in the equation are taught in Marketing 101. However, the biggest differentiators in your niche are probably lying quietly below the line. They sit outside the control of marketers.

Focus Below the Line

As you see from the equation, maximising value means lowering the items underneath the line. The first, the time delay, is the gap between the moment when the customer pays and the moment when the first benefit is experienced. When you lower this interval, value increases.

To illustrate, back in 2001, cell service via Cable and Wireless took weeks to provide. Then came Digicel with its immediate availability, and it quickly became the market leader.

If your offer must take a while to deliver the final outcome, Hormozi recommends that you set up quick wins along the way. This helps customers see and feel progress.

The other item to be decreased below the line is the effort and sacrifice the customer needs to invest. In the book, the author lists liposuction as a means to lose weight, compared with the typical remedy of diet and exercise.

The personal changes required by the latter are considerable. Why? It’s hard to transform one’s habit patterns, attitudes, scheduling, grocery shopping and more. By comparison, for those who can afford it, liposuction only requires a week or two of soreness.

Increasing value for your customers means focusing on each item separately. Do this in your next strategic planning retreat and your prices could be transformed.

Making Hard Choices — Intel

Your company has once again begun to look to the future. It’s shaken off the post-COVID blues and must now position itself in its industry with a fresh strategy. But all of your executives are not convinced that hard choices must be made. How can you persuade them?

A friend of mine was recently confronted with a golden opportunity. Her boss, the retiring owner of the company, offered to sell her a majority share.

But she wondered: “What am I really buying here?”

While it’s easy to think in terms of immediate dollars and cents, or the present value of future cash flows, this thinking is limited. While finance MBAs know how to do these calculations with their eyes closed, that was not the real point.

Instead, we decided that she was being offered a future outcome, the result of a possible company strategy.

In other words, she had to decide whether the organisation could craft a plan that was worth the offering price.

As you may imagine, this was a very difficult decision to make, especially as the company had no long-term strategic plan in place. She would have to create one as soon as possible and use it to determine the future value.

Given the number of assumptions and estimates to be embraced, this made the task a challenge. To illustrate, let’s look at the case study of Intel Corporation, the maker of electronic components for computers.

The company passed through three distinct phases in its lifetime. Let’s examine it from the perspective of a potential buyer in each phase.

Phase 1: Success and Ignorance

In 1974, Intel was dominant in its industry. With an 82.9% market share, DRAM (memory) chips made up around 90% of the company’s revenue.

At that point, it seemed that the firm could do no wrong. It had powerful leadership and a legendary founder, Gordon Moore.

Anyone who wanted to purchase a majority share would have concluded that the future was bright.

However, a deeper analysis a few years later would have revealed trouble. The competition (mostly Japanese manufacturers) was gaining ground for the first time. But historically, their products were an industry joke.

Phase 2: Disruption and a Decision

Jumping ahead to 1984, and Japanese companies were riding a tsunami of steadily accumulating advantages. In no particular order, they benefited from:

  • lower costs of capital than Intel could attract
  • the long-term investment horizons of Japanese stock traders
  • steady investments in spite of an economic downturn
  • far greater efficiency based on continuous process improvement

The result?

Intel’s market share plummeted to 1.3%.

At this point, someone thinking about buying shares would have asked CEO Andy Grove, “What is the short- and long-term strategic plan now?”

The fact is, Intel had no strategy to deal with the disaster unfolding. But a fateful meeting between the two leaders in 1985 changed everything.

Grove asked Moore: “If we got kicked out of this company and the board brought in a new CEO, what do you think he would do?”

Moore immediately replied, “He would get us out of memories (chips)”.

Andy, with a surprised look, responded, “Why shouldn’t you and I walk out the door, come back and do it ourselves?”

This conversation marked a turning point. The firm made a complete pivot to a different product altogether…microprocessors. Although they had a tiny operation in this niche, this was going to be a big bet. Almost at once, one billion dollars (US$) were shifted from further investments in memory chips to this new offering. In fact, they decided to phase out production of the old line.

Phase 3: The Strategy Pays Off

Today, in hindsight, the two are lauded for their brilliant decision.

Microprocessors became the number one business at Intel, driving annual revenues from $1.9b to $63.05b. The company’s market cap went from around $3b to $151.1b.

While this high-wire approach to strategic planning cannot be recommended, let’s tie that back to the decision my friend had to make.

In essence, she wanted to know: “Is the company in Phase 1, 2 or 3?” As you may imagine, the price she would have to pay would vary tremendously depending on the answer, and the strategic plan called for in each case.

But let’s forget about her. Take a look around your own organisation. If your leadership team has no consensus view on which phase it’s in, consider it to be in danger. While it may become a lucky winner like Intel, don’t count on it.

Instead of waiting for disaster to strike, create a forum to have the difficult conversations required. You’ll protect your stakeholders from potentially ruinous outcomes with a strategy that fits.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. To search his prior columns on productivity, strategy, engagement and business processes, send email to columns@fwconsulting.com.

The Hidden Secrets of Flexible Strategy

As a leader, you need to provide your organisation with a clear path for the future. But you also hate changing direction in mid-stream. Some say you shouldn’t bother to make any long-term plans in the first place, but is that the best solution?

It pains you to think of spending a lot of time and money to create extended plans which require updates when there is a disruption. Why? You know staff can feel disempowered when a rethink is needed.

However, you also realise that having a predetermined, “True North” steadies the ship. It keeps your team focused on the horizon, rather than on the next wave. Confident in the future, they aren’t distracted by their immediate fears. Or social media. Or their email inbox.

But if you stick to the old ways of doing strategic planning, you are likely to fail. Most still try to use a vague vision statement, what Dr. Richard Rumelt calls the “Statement Doctrine.” It’s easy to do, but few remember it.

Some organisations give up without even trying. They simply rename their 5-year list of tactics a “strategic plan” and keep going.

Fortunately, there are modern techniques which can be combined with group dynamics to provide you with the flexible plan you need. Here are a few of these elements.

  1. Rapid Backcasting

Unlike forecasting, backcasting is known as a method of strategic planning in which a detailed future vision is defined first.

From this visionary description involving multiple Key Performance Indicators (KPIs), you step back in time to the present.

However, its originators in the academic social sciences have been accused of turning the approach into an exercise requiring months of effort. At high expense.

The end-result is a long report, usually unreadable by the average manager.

Fortunately, there’s an alternative in the form of rapid backcasting. In this adaptation, the output is a single matrix. This picture captures the timing of major decisions in your timeline, as shown in the vastly simplified diagram below.

For example, a company with a 27-year plan can record milestones such as the acquisition of another firm (Project 2 above).

But this is just the start. Overseas expansions, outsourcing, new technology implementation, product innovation, re-engineering, rapid process automation…these are all big decisions to be included in your timeline.

One immediate benefit is that the plan is rigorous and credible. By including major activities and their impact, you ensure the logic is sound. But the other plus is that when circumstances shift, it can be modified quickly.

When COVID arrived, for example, companies changed their backcasted diagrams. It only took a meeting or two. Why?

The fact is that their “True North” didn’t change by much. Only the tactics to get there. By contrast, if they had to deal with a 100-page report, they may have given up.

  1. Powerful Group Dynamics

In the old, rigid approach mentioned above, organisations come to believe that their executives don’t have time for long-term thinking. In these circumstances, they may turn to outside consultants.

At great expense, these outsiders attempt to do the hard thinking required on behalf of the leadership team. Along the way, they present voluminous PowerPoint slides and reports. Usually, their thinking is logical, but it’s not enough. Why?

This approach fails to rely on the real experts – those managers who struggle with the challenges each day. Their inside knowledge is nuanced, and often under-estimated by outsiders.

A very different technique would be to teach them rapid backcasting, then set them loose to do it on their own. They can learn how to think from the future back to the present, and develop a complete matrix of results in hours.

Even though they may not have the big IQ’s of the consultants, collectively, they produce something better. After trading different points of view and conducting some hard negotiations, they have made the most difficult decisions. And now they have a credible plan.

I can say from experience I have witnessed teams making the most challenging choices imaginable under these circumstances. It’s inspiring. In an honest and truthful setting, executives actually step away from their personal interests to seek the best for their companies.

They just need to be given the chance to surprise the company with their courage and intellectual prowess.

As such, when the inevitable disruptions occur, the team can call a fresh huddle, confident in their ability to make the necessary changes. After all, they can unmake any original decisions, as they know how to use the tools.

The naysayers argue that such feats are impossible. “Don’t even try” they advise. But they are wrong. Modern approaches like backcasting can now be taught quickly, and doing so makes all the difference.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. To search his prior columns on productivity, strategy, engagement and business processes, send email to columns@fwconsulting.com.

Balancing Social and Intellectual Challenges

Your company is dealing with a significant challenge. Due to the complexity of the issue, it’s hard to determine the right path forward. This is an intellectual puzzle that needs the attention of analytic minds.

But is finding the optimal answer your only concern? After all, the management team has had implementation problems in the past. As such, you sense that the “soft side” warrants some consideration to succeed by the end.

You ask: “How do we balance intellectual and social perspectives so that we effectively tackle the complete problem?”

Now, you must design an event that accomplishes all your goals, not just some. Here are some suggested ways to shape your interventions, using the example of your company’s corporate strategic plan.

  1. Determine acceptable outcomes.

Before the exercise starts, you need to create a clear picture of the final result. Rather than fixate on a single point, craft an array of acceptable outcomes. Here are some questions you can begin with.

How important is it to get to the exact right answer? How close do you have to come? What other soft-skills and communications targets need to be accomplished?

Will the team solving the problem also be in charge of implementing it?

To respond to these questions, consider the following: the purpose of a strategic planning exercise is not to craft the perfect document. The output is not at all like a book which could be written by an anonymous author.

Therefore, a consultant can’t be hired to do the thinking for your executive team. For similar reasons, your CEO shouldn’t do this task on his or her own either.

Consider the idea that it’s possible to capture the ideal language on paper, but do so in a way that ultimately fails.

So don’t fixate on the written words. Instead, concentrate on the decisions to be made. Think of ways to maximize the following:

  • The participation of affected stakeholders.
  • The inclusion of internal experts with unique insights.
  • The engagement of executives who must implement the decision.

But understanding the end-result in this broad way is just the start.

  1. A Social Activity

When you offer a maths problem to a student, even if the theory required is advanced, the general idea is that only a single solution exists.

But in our example, the process followed to derive the answers has everything to do with the chances of effective implementation. If you include the right people appropriately, you increase the odds that the final strategic plan will be embraced.

To illustrate, imagine locking a group of colleagues in a room. The only way they can escape is to solve a difficult puzzle.

Studies have shown that the bonding which may occur in such situations is transformative, even for a bunch of strangers.

This is especially true if the task is challenging and the activity is meant to accomplish an explicit, higher purpose.

Why is this important? It all means that to hit all your stated outcomes, you must address the “soft side” of the team’s activities. In your design, this aspect needs to be fostered, not left to chance.

Given this fact, scrutinize every step along the way with a social lens. Plan each activity to help the team make progress towards effective problem-solving and future implementation.

Fail to do so, and even the initial invitations sent out to ask team members to save the date can be unsuccesful. How? All of a sudden, calendars will become unavailable without explanation.

  1. Unique, Interlocking Information 

Get the executive team working well together and you will find that its collective IQ is greater than that of any individual. As members bring different areas of expertise to bear, you’ll see where unique discussions emerge.

Once again, these are impossible for even McKinsey consultants to have. Only people with an in-depth understanding who trust each other’s knowledge can engage deeply. The collective decades of experience inform the analysis.

As a result of all these factors, the likelihood of successful implementation is much higher.

Furthermore, it’s sometimes unhelpful to compare an executive team in one company with another. But if the event is facilitated skillfully, the group will make practical commitments which match their ability to deliver results.

For example, a board member who serves multiple companies may refer to a bunch of leaders from another company as an exceptional case. Although the comparison may encourage creativity, every organization has to follow its own limitations.

Realistic planning means considering constraints before making new commitments.

As this occurs, resist the urge to draw comparisons. Instead, seek solutions which help you achieve social and intellectual outcomes at the same time that fit your unique circumstances.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. To search his prior columns on productivity, strategy, engagement and business processes, send email to columns@fwconsulting.com.

How Long is the Ideal Strategic Planning Retreat?

How long is the ideal strategic planning retreat?

“Francis”, clients sometimes ask, “Why do you recommend a two-day strategy retreat?” Usually, they want to get the most from their workshop, but also don’t wish to waste a moment. After all, top executive time is quite expensive.

Assuming that your company has agreed to such a workshop, what’s the difference between one, two, or more days?

Decision-Making vs. Decision-Announcing

Sometimes, companies just want to announce decisions which have already been made…”Town Hall” style. In these settings, you intend to inform an audience at scale about something important. But you’re happy to answer a few questions and gain some initial support. Expectations are low. Participants don’t expect an open-ended dialogue on all aspects of the business.

We recommend that these short announcement-style meetings be held separately from “decision retreats”.

By contrast, the latter are designed to foster the most powerful, breakthrough conversations possible. The stakes are deliberately boosted so that extensive, game-changing resolutions can be made.

Jim Collins and Jerry Porras, authors of Built to Last, call them BHAGs – Big, Hairy Audacious Goals.

To facilitate these discussions, attendance needs to be limited to 18 people. In this way, your team can have all the necessary talks to come to consensus. Before leaving, you should ask for a clear show of support.

This is especially true for a strategic plan, hence the need for participants representing a wide range of disciplines. But there’s more.

Discomfort Thinking About the Future

In daily corporate life, only the CEO has the benefit of spending much of her time contemplating the future. After all, it’s her job. By contrast, other senior managers are more concerned about fixing everyday problems and meeting short-term targets.

Consequently, when she sits with her team at the retreat, she has a considerable head-start. Her thinking is far advanced. As such, in my role as a facilitator, I sometimes ask her to hold back, especially if she’s an extrovert. She has the knowledge and smarts to dominate the conversation from the first few minutes, but shouldn’t. Why?

Due to the nature of this unique gathering, it takes more time for her direct reports to shift gears from short-term to long. Also, they are more likely to be introverted, which means they need a chance to think quietly. Sometimes, they may be silent for the entire first day.

Unfortunately, in a single-day retreat, the event is over before they have even left the blocks. They literally drive home thinking about all the statements they wish they had made and questions they intended to ask.

The solution is to have a second day which can maximise the team’s overall commitment. Their emotional and social involvement in the process is the key to effective implementation.

Additionally, their most valuable insights are often not revealed until the second day. This impacts the quality of the strategic plan, which begs the inclusion of their ideas.

Only a multi-day retreat gives them at least one night to think. Here’s the best way to bring different thoughts together.

Start from a Blank Canvas – Together

Successful retreats with maximum buy-in all start the same way: they pull each attendees up to speed by crafting a common base of knowledge. This ensures that no-one has an “insider advantage.” Instead, subsequent ideas are based on a shared but informed “blank canvas”.

This is a far cry from meetings where the leader announces the end-result from the start. By so doing, he unwittingly reduces participants to foot-soldiers. Following his cue, they withhold their participation, wasting time and effort.

This doesn’t work, as they all need to play a part in crafting each decision, giving their all and their full attention. It’s the only way to tap into their functional knowledge and experience required by a sound strategic plan.

When these fundamentals are in place, there is no need for more than two days. Instead, you can plan for intense discussions from start to finish, which maintain momentum once it’s established.

Before the 2008 recession, clients used to expect three-day retreats as the norm, with relaxing and fun activities sprinkled throughout. That changed when budgets tightened.

But it was actually a benefit. Now, retreats are focused affairs intended to move the needle in the right direction in the shortest time possible. They require more than ever from all concerned, but the results are equally robust.

Finally, our study underway of 50 retreats producing 15-30-year strategic plans shows that two days are ideal. Given all the conflicting needs, it weaves the path and gives the company the greatest opportunity to have an effect in a single, concentrated effort.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. To search his prior columns on productivity, strategy, engagement and business processes, send email to columns@fwconsulting.com.

What’s Your Business Legacy?

You don’t normally think for long about the lasting impact your actions have on unknown business colleagues. This is particularly true if they haven’t even been born. But is there a reason to consider far-future generations of leadership in your company?

Antonio Guterres, who heads up the U.N., recently wrote a letter to his unborn great-great-granddaughter…for delivery in 2100. He titled it a “Climate-Change Apology” and began with the following question: “Will you open this letter in a spirit of happiness and gratitude—or with disappointment and anger at my generation?”

He further admits that humanity is “losing the fight of our lives: the battle against climate upheaval that threatens our planet.” But why is he unsure about her reaction? Simple: today, he sees two paths ahead and doesn’t know which one we will take.

The first leads to a trail of destruction. The other trends to planetary salvation. Given the information, tools and technology at our disposal in 2023, both are possible.

At the end, he imagines her wondering quietly: “What did you do to save our planet when you had the chance?”

His commitment is familiar to all creators of interwoven short/long-term strategic plans. As facilitators, we help clients convert game-changing commitments into immediate actions. Here are three steps I employ.

  1. Use Today’s Gripes

In a typical retreat, I ask, “What are some of the complaints you have about your organisation that should have been resolved some time ago?”

This question opens a floodgate of woes. Sometimes, they stretch all the way back to the inception of the company. In fact, older heads admit that the matters being raised were mentioned in previous meetings just like this one, but never addressed.

Then we ask: “What decisions did prior executives fail to make 10 years ago that would have prevented or resolved these issues? 20 years ago? More?”

This also unleashes a torrent of suggestions. In fact, it pays to pause before proceeding.

  1. Visit the Future

We then have the team envision a strategic planning retreat like this one, but 15-years down the line. “What are some of the complaints future leaders may have regarding tough decisions you failed to make today?”

Unfortunately, this query is frequently met with horrified silence.

After a few moments of reflection, the answers come out, slowly but surely. But this is a new question for most. Managers spend their days tackling immediate issues, and don’t often take a break to consider the distant future in a structured manner.

On occasion, they may speculate over lunch or drinks, and bemoan their organisation’s collective lack of foresight. But the next day, they are back in busy-mode. “We don’t have time to do interwoven short/long-term planning!”

  1. Point Out a Young Person

Finally, if there is a colleague in their twenties in attendance, I point them out by name. “Bob is likely to be in that future retreat.”

I add, “His colleagues will ask: ‘What happened at that planning meeting in 2023? Couldn’t they see what was happening?’”

Just like Guterres, Bob could have two contrasting stories to tell.

One could be a tale of courage. “Amazing experience! The executive team put itself at risk, set aside its fears, and made some difficult decisions. Today, we benefit from their wisdom.” Everyone applauds.

The alternate story could be one of cowardice and selfishness. “They realised there was a problem looming, but they decided to focus only on the short-term issues that affected them.”

Why such a contrast?

Some strategic planning teams fail to address the most salient challenges openly. Instead, they point fingers at the “Big Man”, board, government, customers, etc.

Other teams just don’t care. Attendees are coasting into the second-halves of their careers, and just want to make it into retirement with a pension. They place self before service. So their “strategic” plans don’t look past three to five years of tactics: the outer limit of their comfort zones.

You may think these are bad people, but nothing could be further from the truth. Instead, they are simply caught in a trap whose mechanics they cannot clearly see. Consequently, they do their best, but it’s not good enough.

In the end, regardless of their motivation, the result is the same. Disaster.

Jamaican companies, like many worldwide, are currently rife with short-termism. Blame COVID. Or inflation. Or the war, etc. As such, our leaders are becoming cynical.

Don’t yield. Challenge them to leave future managers of your organisation with more than a basket to carry water. Instead, ask them to create a legacy of kindness, not in the form of cash, but in the strategic decisions only they can make.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. To search his prior columns on productivity, strategy, engagement and business processes, send email to columns@fwconsulting.com.

Time to Ditch the “Pillars” in Your Strategic Planning

You finally have time to look back at outputs from prior strategic planning retreats. A quick glance reveals an approach they used which includes “pillars”. If so, be aware: there are some drawbacks to this technique that could lead to a weak plan.

But you must make a decision about what to use going forward. You need to craft an approach, but why should you be wary? To understand why, let’s go back to the process typically followed.

It usually begins with a review of the company’s vision and mission statements. Then, a SWOT and PESTEL analysis of the environment are also done. Next, the team brainstorms projects which are necessary for the organization to achieve the vision. Finally, these projects are grouped into three to five pillars based on common themes.

The final product is often diagrammed as a building with the vision and mission statements in the roof, supported by the pillars. However, its simplicity belies the fact that there are some good reasons to use a different approach.

  1. Pillars are merely semi-random lists

A review of the contents of each pillar shows that the link between its items is tenuous. They are simply a list of activities which are nice to do, grouped together using some common attribute. Why is this a problem?

As Peter Compo says in his groundbreaking new book, “The Emergent Approach to Strategy”, anything that resembles a to-do list is not a strategic plan.

Instead, he reasons that, at the heart of an overall framework, should be a triad: an aspiration, a bottleneck and a strategy. What is the role of each element?

  • The aspiration defines the overall goal or outcome desired.
  • The bottleneck represents the primary obstacle which stands in the way of achieving your accomplishment.
  • The strategy defines the way in which the bottleneck will be “beaten” or loosened so that the aspiration is easy to achieve.

Together, these three elements form a hypothesis. It represents the most important changes the organization needs to make. Plus, it evolves as further information and experiences are gathered.

Unfortunately, the pillars approach masks this important nuance. Instead, it assumes that all you need to do is mobilize staff to execute disconnected projects. If this were so, executing strategic plans would be easy.

Instead, in the real world, planning teams need to adjust their hypotheses on the fly as technology advances, government regulations change, competitors take action, and customer tastes change. Together, these shifts force changes in the original hypothesis, a fact of life the pillars approach ignores.

  1. Pillars hide relationships

Pillars also over-simplify reality. A mere list of activities hides the fact that projects are always interconnected. But more importantly, they only produce outcomes after the correct chain of causal relationships is followed.

For example, if you are a retailer, you may believe that an Easter Sale will bring in added revenue. However, to achieve the final result, a number of other actions need to take place.

You must become effective at reaching your audience with a promotion. Also, the sale should be launched on the right day of the month to hit paydays. Finally, the season has to be ideal for shopping, as some folks restrain their “retail therapy” during Lent.

The point is that the strategy relies on a number of variables which need to work together, but are imperfectly understood. As such, success is far from assured. The pillar approach obscures this reality and over-simplifies the challenge.

The truth is that strategy is an art in which your actions (causes) are separated from the results (the effects) in time and space. Sometimes the gap can be decades long, or thousands of miles apart.

Fortunately, there are better tools to use, like strategy maps, invented by Drs. Kaplan and Norton. These diagrams preserve the connection between key activities. Furthermore, they are easy to understand and explain to other employees.

3. Pillars emphasize short-term thinking

None of the pillar-approach strategic plans I have seen take into account long-term strategies and results. Instead, they tend to be so simple that they only work for plans which are five years or less in duration.

As such, the lists of projects in each pillar don’t tell a long-term narrative or story which builds a timeline.

Without it, complex undertakings lasting several decades aren’t possible. Think of the planning it takes to build a cathedral over a span of more than 200 years, for example.

Consequently, the list of projects found in a pillar only works for short-term tactical assignments in which the sequence doesn’t matter. This is a major drawback. The technique can’t be used to produce an inspiring, monumental accomplishment.

To craft an alternate approach, read my Gleaner article from March 19th 2023, as an example.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. To search his prior columns on productivity, strategy, engagement and business processes, send email to columns@fwconsulting.com.

Stop Treating R&D as a Luxury

You agree with the general concept of having new products and services to offer your customers. After all, a company that relies on stale stuff is likely to fail. But how do you put together an effective R&D plan when budgets are limited?

It sounds like something only the biggest companies overseas do. Most think that “Research and Development” are two luxury items to be indulged in when times are good. And Jamaica’s economy has not shown sustained GDP growth in years.

But what if R&D is just a fancy name for innovations you cannot afford to delay? Sadly, some only realise this in retrospect. Today, they are out of business because they failed to abandon old, obsolete thinking. How can your firm ensure that it doesn’t destroy value because it’s too slow to learn?

  1. Be Hyper-Curious About the End

Most of us remember when videotape rental companies did a booming business. To most, this appeared to be a great niche, with guaranteed traffic every weekend.

I happened to live in the US when Netflix arrived, offering the chance to rent a DVD by mail. Initially, it was inconvenient to send items through the post. Compared to renting a video from Blockbuster, it took longer and stuff could get lost.

Apparently Netflix agreed and tried to sell itself to Blockbuster…who literally laughed as they left in embarrassment.

A few years later, after they closed 9,000 stores, the smiles were replaced by tears.

In retrospect, it was all very obvious to see what was happening. Today, we shake our heads at their arrogance in disbelief. But are you committing the same mistake in your organisation?

If you accept the fact that it’s just a matter of time before your industry is disrupted, congratulations. You are ahead of the game. Consider that, in your company, a short-term plan, by itself, may not go far enough to show that the clock is ticking.

If you are really curious, you should have a plan for exiting each major line of business. Create a deadline date: the moment when you intend to earn your last dollar from the pertinent product or service.

Alongside this doomsday prediction should be a plan to launch a new category of product or service. Where should these timelines come from? Your long-term R&D plan, of course.

For example, immediately after making a record year of profits in 2000, Fuji Film’s research showed it had a 10-15-year end-game. Kodak also had fantastic sales, but was never curious enough about the future to take the right actions. Consequently, Fuji thrives in a whole different industry. Kodak is just a single tiny business, having destroyed an estimated US$9 billion of value.

  1. Allow Competing Alternatives in Your Planning

How should your company determine these choices?

In your next strategic planning session, ensure that you permit attendees to propose various visions of the future. (If team-members share the same age, gender and background, consider that to be an impediment.)

You want different points of view to emerge for your “Vision 2040”, for example. First, make sure you are all starting with the same facts. Then, invite advocates to describe their preferred future. Even if it makes others uncomfortable. Get them to share details as they paint a vivid picture and draw fellow participants in to expand it.

Do not squelch your colleagues.

When you have a number of candidate futures, stand back collectively and assess them, because it’s time to choose which one(s) to pursue.

In this moment of truth, you should be scared witless. Why? You could easily and unwittingly fall into the path of more videotapes. Or film.

In other words, you could doom your company. Or save it. Agonize if you will, but understand that your decision cannot easily be reversed. It’s just not the kind of choice that can be revisited whenever the breeze changes direction.

  1. Decide and kill off alternatives

Instead, treat this moment of selection as a final verdict which will assign time, money, manpower and other corporate resources. You are making a bet which has an unsure outcome, but understand that the team must be willing to stand by its selection.

However, this means that if major assumptions change, then it’s your duty to revisit the plan. But this should be rare.

Blackberry needed to do this when the iPhone turned out to be a serious threat, for example. Only a dose of humility would have saved it from obsolescence.

Unfortunately, this advice isn’t easy to take. Most shy away from the kind of hard conversations required until it’s too late.

Don’t disappoint your shareholders, employees, suppliers, pensioners, and other stakeholders by being slow or cowardly. Instead, make the difference by investing in your organisation’s future.

Francis Wade is the author of Perfect Time-Based Productivity, a keynote speaker and a management consultant. To search his prior columns on productivity, strategy, engagement and business processes, send email to columns@fwconsulting.com.

Planning for Profits vs. People vs. Purpose

How to Be Selfish in Your Strategic Planning without Gouging the Planet

Like most other business-people, you have almost given up on the task of combining short-term and long-term strategic planning.


It’s not that you don’t believe in it at some level. You acknowledge there is value in thinking expansively and inspiring others with BHAGs (Big Hairy Audacious Goals).


At the same time, things are changing too fast nowadays. You can barely find time to focus on solving short-term problems, let alone anything pie-in-the-sky.


But what if the popular conventional wisdom, that long-term strategic planning is dead, is wrong?


What if there were huge gains to be made in the following areas from an interwoven short/long-term approach?


Area 1 – gaining competitive advantage by planning for horizons just a bit longer than others. (Amazon)
Area 2 – inspiring staff with commitments that create an irresistible future. (Unilever)
Area 3 – becoming a sustainable organization that takes care of its own, organic ESG concerns first. (CVS)


These areas could be the keys to unblocking multiple goals at once, while bypassing the worst tendency of companies to fall into short-termism.


In this webinar, you’ll be exposed to a practical method of doing interwoven short/long-term strategic planning. You’ll find out how to invest two or three days (rather than weeks) in a way that returns game-changing results. But maybe most importantly, you’ll be well-informed.


Register today.
Time: Thursday March 30 2023, 12:30pm Eastern
Join Francis Wade, two-decade veteran of 50+ interwoven short/long-term strategic planning retreats in this one-hour introduction.
NB – Space is limited

Planning for Profits vs. People vs. Purpose

You need to add a widget, row, or prebuilt layout before you’ll see anything here. 🙂

Like most other business-people, you have almost given up on the task of combining short-term and long-term strategic planning.


It’s not that you don’t believe in it at some level. You acknowledge there is value in thinking expansively and inspiring others with BHAGs (Big Hairy Audacious Goals).


At the same time, things are changing too fast nowadays. You can barely find time to focus on solving short-term problems, let alone anything pie-in-the-sky.


But what if the popular conventional wisdom, that long-term strategic planning is dead, is wrong?


What if there were huge gains to be made in the following areas from an interwoven short/long-term approach?


Area 1 – gaining competitive advantage by planning for horizons just a bit longer than others. (Amazon)
Area 2 – inspiring staff with commitments that create an irresistible future. (Unilever)
Area 3 – becoming a sustainable organization that takes care of its own, organic ESG concerns first. (CVS)


These areas could be the keys to unblocking multiple goals at once, while bypassing the worst tendency of companies to fall into short-termism.


In this webinar, you’ll be exposed to a practical method of doing interwoven short/long-term strategic planning. You’ll find out how to invest two or three days (rather than weeks) in a way that returns game-changing results. But maybe most importantly, you’ll be well-informed.


Register today.
Time: Thursday March 30, 2023, 12:30pm Eastern
Join Francis Wade, two-decade veteran of 50+ interwoven short/long-term strategic planning retreats in this one-hour introduction.
NB – Space is limited