Archive for June, 2005
June 10, 2005
Sustainable Growth
Posted by Kevin | (0) Comments | Print This Article
This happened several years ago. I was working for the trucking industry.
I was new to associations — in fact, I was new to pretty much everything. I take a day and spend it visiting a member — the owner of a mid-sized trucking company. Not one of the largest companies, or well-known. But not one of the smallest, either. And a highly profitable company in an industry otherwise known for its low margins.
We talk about a lot of things: How he started the business with one used truck. How he created career paths to give truck drivers a goal to strive for and reach. His personal passions (cars and golf).
Then he mentions that his company’s goal for this year is to achieve 3% growth. In fact, his goal every year is 3 - 5% growth. I ask how he came up with that number. (I think, but don’t say, that it seems kind of small.)
He replies: "There are plenty of ways to grow quicker, faster. Always some way to bump up market share, or bring in some fast money. And I’ve seen lots of companies do it.
"But it seems like they always live to regret it. Fast money doesn’t necessarily mean more profit. It usually means less. A growth in market can stretch your resources to the limit until you wind up snapping back like a rubber band.
"And if you have a sudden growth spurt one year, all too often you find it’s not sustainable. The next year you grow a lot less — or decline.
"We aim for 3% growth — profitable growth — because I’m pretty sure we can hit it each year. And it’s vital to grow, at least a little, each year. Because it’s important for my employees to feel like they are part of a growing company."
It happened several years ago. I’ve always remembered it.
June 6, 2005
Strategery
Posted by Kevin | (2) Comments | Print This Article
Earlier I mentioned an article on the death of strategic planning from Jeff and Jamie at Association Renewal. Well, it’s not really about death. They write:
“For decades associations have engaged in what certainly must be tens of thousands of strategic planning sessions, and we doubt they have achieved many genuine breakthroughs. In the 20th century, it might have been sufficient for associations to pursue mission-driven constancy as their main strategic objective. In the 21st century, however, associations, like so many organizations, must confront their own demise and, in so doing, also must address the threefold challenge of sustaining relevance, catalyzing renewal, and increasing resilience. Unfortunately, strategic planning, an approach grounded in the command-and-control management model, fails to produce the requisite creativity and dynamism necessary for associations to succeed strategically in the years ahead.”
I couldn’t agree more. In his book Selling the Invisible, published a lifetime ago in 1994, Harry Beckwith laid out, in very simple terms, many of the problems with “planning” in general — eighteen “fallacies” described in twenty-eight very short pages. And these fallacies are still true — er, false — today. (While ostensibly aimed at “service professionals” like accountants, attorneys, etc., this is a great little book for association executives. I bought copies for all the staff in my division. In fact, it was the book’s title that first caught my eye in an airport bookstore because over the years I’ve frequently made the half-joking comment that associations are in the business of “selling air.”)
Chief among the fallacies of planning as described by Beckwith are the first two: “You Can Know What’s Ahead” and “You Can Know What You Want.” You can’t know either. And here’s what he said about “strategy”:
Business once encouraged the view of strategy’s superiority to tactics by throwing piles of money at it. Fifteen years ago, many with a Wharton MBA and a lust for money and status tried to get into strategic planning. They’re still great jobs if you can get them … But in successful companies, tactics drive strategy as much or more than strategy drives tactics. These companies do something and learn from it. It changes their thinking … Sometimes, the very first tactic you execute changes your plan.
Amen! If you want to get from A to Z, first you must do A. And once you do, guess what — B changes. You realize B isn’t what you thought B was. Or you realize you can skip ahead to D. Or you realize that A didn’t work out and you need to start from scratch. Or you realize you didn’t really want to get to Z in the first place.
Old-school association strategic plans lock organizations into mindsets that are outdated before the laserprinter is done spitting them out. They stifle innovation and create a “pass-the-buck” mentality among staff, who are rewarded for following the rules rather than introducing innovation — and who can easily blame the plan (and by extension, the association’s leaders/members) when ideas that sounded good eight months ago in a boardroom fail miserably in the field.
Jeff and Jamie, as association consultants, did a nice job of creating an “alternative consulting concept” in a world where strategic planning doesn’t work any more (if it ever did) but consultants still need to eat. For those lucky few, like me, who get to work for associations and CEOs who “get it,” there’s an easy path to follow:
1) Decide what you want “Z” to be. The vision. And a “vision” is not something wishy-washy like “We will offer first-class training, aggressive advocacy, and will be the partner of first choice among our industry/profession.” Bleah — I say it’s spinach and I say the hell with it. “Z” should be bold. It should be inspiring. It should be audacious. It should be something so bold, inspiring and audacious that you would never in a million years put it on your letterhead or in a press release.
2) What’s the first thing that should change/be done if “Z” is to ever be a reality. That’s “A.”
3) Do it. See how it flies. Now you know what “B” is.
4) Do it. Repeat.