That's Not Part of the Strategy - Gulp!

Veering Off the Map

In my last article I spoke about the importance of strategic planning. While I occasionally read an article by someone claiming strategy is for the birds, I think you would be hard pressed to find very many successful companies who do not do some form of strategic planning. Strategy does many things, including the most important – driving culture.

However, what about when there is substantial change in the basics your plan was built around? In today’s fast-paced world, change is inevitable – an economic surge up or down, a political change of policy, a weather event of magnitude that affects a country or the world, or a competitive change in the marketplace. These things do happen and the well-prepared CEO has a team that can embrace that change with gusto and without fear.

Meeting the Market Where it's Going

Here is an example of a company that executed a good strategic plan and then initiated a revision to match marketplace needs. During the heyday of the banking industry’s expansion through mergers, CRE (corporate real estate) departments in the acquiring banks were tasked with integrating large numbers of buildings into their real estate portfolios – think branches, headquarters, operation centers, call centers, and OREO's (other real estate owned). Many different departments within the Bank had their hands in the real estate pie, sometimes creating conflicts and obstacles. CRE was tasked with meeting the requirements of these varying interests while adhering to the overall objectives of executive management. The CRE departments were staffed to handle normal building expansion and contraction, not supersized events that could total in the high hundreds of buildings with very aggressive government timeline requirements.

At first these CRE departments would seek out a variety of vendors to gather various information about the facilities – everything from telephone systems and IT infrastructure, security systems, operations layouts, floor plans, ADA compliance, etc. As many as six or seven vendors would be engaged to gather the information.

Company "X"

To leave names out of it, company “X” started off as a member of those chosen teams. Over time, their leadership saw the difficulty CRE had with coordinating all those teams. “X” examined what each of the other vendors did and what expertise was required. They realized with just a small amount of investment in training people and acquiring knowledge they could offer the same services.

“X” started to test those assumptions, acquiring knowledge and infrastructure, building and training teams to perform these additional services. All along the way, they tested their hypothesis against their current strategic plan to insure they were not diluting or distracting from the company’s overarching goals.

“X” then went back to CRE and proposed doing more, thus reducing CRE’s responsibilities. CRE saw this as a valuable improvement in the cycle. Over a period of 18 months, one-by-one they gave “X” the opportunity to take an additional piece. In the end, “X” became the primary company they called to run the due diligence phase. This fed into relationships with other CRE departments in other banks.

Anywhere along the way “X” could have found a conflict with their core strategy and pulled the plug. Still, because they continually worked it against that plan, they were able to integrate the new opportunity without disruption. This is a great example of strategic planning and revision – becoming more and thus becoming more valuable.

Contact me if you’d like to hear more about the keys to embracing change as an opportunity, not something to fear.

About the Author: I draw from a background in corporate and private business to help fellow executives fulfill their potential as people and as leaders. I can be reached Tom.Grogan@VistageChair.com.