Perhaps it was because Romania was so over-heated and so overconfident for those few brief years before the crisis hit, that caused the sudden fall to be so traumatic. Hard to say for certain, but as we make our way forward in 2011, I think it is time that we re-look at our approach to business planning and to stop thinking so much about the past and start thinking about what success could look like in the future if we set out now to make it so.
Whether it is top-down, bottom-up, or someplace in between, it is typical to start the business planning process by establishing objectives based on the previous year’s results. Most senior managers see these historical performance numbers as a baseline to target future growth, or worse, to focus on making further operational cutbacks and other cost savings. The resulting business goals and objectives may vary, but the underlying fact is that most Romanian businesses are looking at the future based on what has happened in the past. Consequently, where you go becomes self-limiting from the start.
What businesses are finally waking up to in Romania is that going into the third year of a crisis, all of the cost savings and cutbacks have already been done. Now comes the daunting reality that any sustainable growth in profits, and, correspondingly, in increased shareholder value, can only be achieved by creating top line customer driven sales growth. That is what destination planning will help you get done.
Destination planning is a process of looking into the future and then integrating some basic forecasting and planning elements that will produce a clear and concise model of where you want to be, and what it takes to get there – a success dashboard.
Unless you are looking at customer value and integrating it into your key activities to drive your business objectives, you are going to find it much more difficult to achieve your goal. With a one-look dashboard, you can establish the relationship between customer value and the key strategies and business objectives that will lead to your ultimate goal – all on a single page. In the success dashboard, these interrelated elements – the goal, customer centric objectives, marketing activation strategies and tactics based on acustomer value platform that is supported by key customer insights – may seem obvious, and you may feel like you already know and are focused on all these drivers of business success.
Chairman at The Garrison Group
Paul is a visiting Professor of Marketing at Moscow School of Management SKOLKOVO and Adjunct Professor of Marketing, Maastricht School of Management (MSM) Romania. He is also the author of "Exponential Marketing".
But are you really? And are they integrated into a single ‘success dashboard’ that everyone in the organization can see and understand? The important thing is how effectively you can integrate all of them to define success. Each element must necessarily be inter-related with the others, which gets us to the fundamental point – unless you are looking at customer value and integrating it into your key activities to drive your business objectives, you are going to find it much more difficult to achieve your goal.
What the CEO and the CFO will like about this destination planning model, beyond the fact it is thinking about top-line growth and success as a going in premise rather than bottom line focused cost cutting, is that it gets the marketing guys to be accountable for clear and measurable business objectives – something that they think the marketing guys should have been focusing on all along. Good point. Coming from another perspective, the marketing department will see this as an effective process to get the rest of the organization to focus on driving customer value – something that they think everyone should have been focusing on all along. Also a good point. The reality is that both perspectives are correct and serve to emphasize why customer value (as the key driver of business growth) needs to be understood and integrated into core business objectives and goals.
Reinvent the way you go to market while building on what you already are.
The Overall Business Goal
The steps in developing the destination model are important. The first thing that needs to be done is to plant the flag on the single business goal that will best drive shareholder value. A relatively aggressive number in this instance is critical because it will force the organization to the conclusion that they will never get there with ‘business as usual’. You can argue that to focus on just one number, or one goal, is an over- simplification of a complex business, but I would counter that it is through the goal’s focus and clarity that it becomes effective at rallying the organization – much like a flag that must be seen by all of the troops on the battlefield. Something clear and to the point is best such as, double the business by 2014, or achieves 50 million in profit by 2012!
So, how far should you go? The metaphor is that you need to stretch the rubber band without breaking it. When I say transform your business, I am talking about leveraging your core competence as a business to establish an enhanced value platform that will drive renewed growth. Reinvent the way you go to market while building on what you already are. Find a way to do what you already do better than anyone else has ever done before to create a stronger customer value platform that will speed you toward your goal. Any significant growth in your business will necessarily have to be built upon a stronger customer value platform.
Customer Value Platform
What do your customers need to think and feel about your products, brands and perhaps the company itself in order for them to make the purchase and re-purchase decisions required for you to achieve specific customer centric objectives. Any significant growth in your business will necessarily have to be built upon this stronger value platform, that will speed you toward your goal. Dig into the evolving needs of your own customers. What value would you need to provide in order to acquire new customers?
Customer Centric Business Objectives
To complete your success dashboard and thereby define your destination, your customer value platform can be extended to anticipated customer objectives. These objectives are the 3-5 measurements that must be achieved to reach the goal. And if you have chosen the most important objectives that most impact the overall sales and profit performance of the business, than naturally achieving these objectives would result in reaching an overall profit goal. This linkage will go a long way to getting you to where you really want to be – a customer value driven business.
Marketing Activation Strategies and Tactics
These are the primary activities you will do to communicate and deliver on the customer value platform you have established in order to achieve the desired customer centric objectives. It is probably impossible to have everything you do inside and outside the selling environment focused on the right customers, delivering on exactly the right services and product benefits, and creating the appropriate communications that deliver the right message to the right customers at the right time and place. Give destination planning and success dashboard a try!