You Can't Save Your Way to Success

It is the beginning of a new year, and many are making their New Year’s resolutions. Given these turbulent times, many companies are trying to “save their way to success.” While cost reductions and reductions in staff may be necessary, too many companies jump into these efforts with little or no long-term thinking. The result: no effect on the bottom line (reducing customer service ultimately reduces sales) or, at best, short-term, shallow results. The first element of a cost reduction process must be a Disneyesque Dream or visioning process.

Questions that must be answered:
1. How do the guiding members of the organization envision the future?
2. How will success be measured?
3. What kind of organizational culture is necessary to achieve success?
4. What are the values and principles that guide the company?

Keys to Successful Dream/Visioning:
· Invite all direct reports to participate. CEOs need the collective energies of the entire team.
· Start with the story of where you would like the company to be in ten years, and work backwards. If you feel you can readily achieve that vision, you have not allowed yourself to dream.
· Do a thorough investigation of the driving forces affecting your business. These include suppliers, competitors, customers, distribution channels, and technology. Make sure to look outside your own environment; do not assume you know all the external forces that are affecting your business.
· Create a plan that is customer focused. The best reason to be in business is to provide "blow their socks off" products and services to your customers.
· Once you have established your plan, share it with all employees. Too many strategic plans are kept under lock and key simply because the CEO does not want the competition to know the company strategy. Unfortunately, the employees don’t know the plan either. How can an organization accomplish great feats if the “players” don’t understand the goal?
· Include specific, measurable objectives as part of your plan. Here’s an argument that doesn’t compute: "We cannot commit to measurements that are so far out in the future." How will you know that you have achieved your vision if you cannot measure it?
· The best way to establish strategic alliances with your key suppliers is to involve them in the planning process. Don’t forget to ask your key customers if they agree with your strategies; find a good facilitate who will assist in eliciting honest feedback and protect them from defensive “corporate” behaviors.
· Test how well the plan is being executed by doing the following:
1. Hold a meeting with your team two months after the completion of the strategic plan, and ask all members to bring their calendars.
2. If you determine they have been spending over 60% of their time on strategic customer-focused issues, your chances for accomplishing your vision are pretty good. If you want to do even better, discuss how everyone can begin spending 80% to 90% on these issues.

In these troubled times, we need to envision how we can add even more value to our customers rather than cutting costs and services.
Focus on long-term service, not short-term savings.