Yesterday, I made the point that “big” isn’t analogous to strategy or positioning (see “Big” Isn’t Strategy Or Positioning). I got a question today from an exec in response that article – where does “big” and “mergers” fit in your planning process? Great question with a complicated answer.
First, the planning part. The current health and human landscape is framed by volatility of political and economic interests, along with disruptive innovation and competitors. This brings with it the need for an enhanced approach for planning. The plan I recommend is framed by a long-term vision, has objectives for two to three years, and a “high-level action plan” for the next 12 months – all developed in an intensive but short period. From there, the executive team needs to develop both the detailed action plan and the budget that goes with their area of responsibility (marketing, a new service, IT, etc.), which moves the strategy to an operational level.
Finally, a good planning process includes the development of a set of key performance measures that are tracked over time – to monitor the implementation activities and the success (or lack of success) of the initiatives in the plan. This allows the executive team to “recalibrate” the plan. A map of our recommended enhanced planning process is outlined in the chart below.
What you may notice is that addressing the issue of “big” through “collaborations” (a term with a wide number of meanings from joint ventures and partnerships, to mergers, consolidations, and acquisitions) is at the end of the strategy decision making process (see Innovate. Coordinate. Collaborate). To decide what type of collaboration your organization needs to meet its strategic objectives, you first need to decide what you need to do optimize the performance of current services and what new service models you need to adopt. After making those decisions, your executive team will know what you need to implement your strategy – size for economies of scale, new capital for investment in new services, new competencies for positioning, or some other strategic essential. Those needs will answer the questions of whether your organization needs a collaboration and what type of collaboration.
One of the problems I see now are too many collaborations of all types without any clear strategic objectives. (I like the observation of my colleague Joseph P. Naughton-Travers when he wrote, “Strategic management is oftentimes revolutionary, and it appears the executives of many organizations are caught in the rut of collaborating with everyone and competing with no one” in this piece, Friends Or Foes? – The Ten Commandments of Collaboration and Competition).
As you think about your plans for “getting big,” plan carefully and choose wisely. Every collaboration has a cost – in time, finances, and opportunity. First, do you need to “be big” and why (see The Alternative To Big – The Niche? and Who’s In Your Niche?)? Second, what is the best path to addressing that strategic issue? I am reminded of the keen insights of management guru Peter Drucker, “There is nothing so useless as doing efficiently that which should not be done at all.”
For another free resource, see: The Evolution Of The Strategic Plan