Winning Without Competition: How to Break Out of a Commodity ...
Winning Without Competition: How to Break Out of a Commodity ...
Winning Without Competition: How to Break Out of a Commodity ...
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Winning Without Competition: How to
Break Out of a Commodity Market
An Educational Leadership Series for Precast
Concrete Company Strategic Leaders
Pamphlet 5
Strategic Alignment: Creating
Differentiation in Fact versus in Theory
Created for the Precast Concrete Institute by Plantes
Company, a strategic marketing consultancy. © 2001
Plantes Company, Madison, Wisconsin.
Pamphlet #5 Page 183
Strategic Alignment: Creating Differentiation in Fact
versus in Theory
Key Messages
• Strategy without execution is a plan that sits on a shelf, at least until next year.
Communication of the competitive strategy and alignment of departmental
and team actions to the strategy is required to create the desired
differentiation.
• Annual plans are the current year execution of strategies; they are the
itineraries for attaining the organization’s strategic goals and vision.
• The marketing-sales plan, operational plan, leadership plan, and financial
plan must be aligned with one another.
• Process improvement that is not linked to creating a meaningful point of
distinction from the competition is a feel-good exercise that will help the
bottom line in the short term, but is unlikely to create a meaningful shift in
your market position.
• The Balanced Score Card is a useful tool for measuring whether strategy is
being executed and whether the strategy is having its anticipated effect on key
performance measures. Linking individual and process objectives to balanced
score card measures is a critical part of alignment.
• The leadership team plan is also a critical part of alignment. It will insure that
the organization creates future leaders and that today’s leaders are doing the
work only they can do: setting direction and creating change to align the
organization to create its desired future.
• Systematic review of market changes will help the organization evolve its
competitive strategy so as to maintain differentiation. A marketing
department plays a critical role in this process.
• There are two types of marketing – strategic and tactical. Tactical marketing
decisions, e.g., pricing and advertising are – for the most part – the domain of
the marketing professional, working in collaboration with the Sales
Department. Strategic marketing decisions, e.g., competitive and growth
strategy decisions, must rest with the entire leadership team. The Marketing
Department creates the strategic analysis used by the leadership team to both
identify strategic issues and opportunities and define new strategies.
• Ignoring needed marketing activities is like driving without being able to see
beyond two feet. Organizations without strong marketing skills are generally
unfocused and reactive.
• Sales and Marketing serve different roles in a company. There is great danger
in combining the two roles in the same person as sales requirements always
win out over marketing. Sales is the most expensive resource in the company.
You must therefore minimize how much time is spent on non-selling
activities. Don’t ask sales people to do Marketing’s work.
Pamphlet #5 Page 184
Introduction
One of the greatest failures of strategic planning is the lack of execution on the
other side of planning. Great ideas and newfound desire for strong leadership
emerge from strategy retreats, only to be left to notebooks and memories a few
months later. Sound familiar? A trip plan without an accompanying itinerary is
often to blame. If we plan to travel to Phoenix, but follow whatever roads
promise fun (the organizational equivalent of sales and margin), the probability
we will get to Phoenix is very remote.
Act Three of the change process is about alignment: changing the work of the
organization and changing how people work with one another in order to “fit” the
organization and its activities to the new competitive strategy. This work is the
change process. Acts One and Two have, for all intents and purposes, been
preparation for change, the creation of the "plan" so to speak. Absent action,
there is no change.
Change becomes part of daily work when leadership links annual planning and
other key decisions about the organization to the new strategies. For example, a
company will not start selling to owners in the absence of sales force training and
changes in sales incentives. Marketing to owners will also be needed for the sales
force to succeed in their initial efforts. Part of the change for companies in
commodity markets will be to introduce marketing skills and philosophies into
the company. And, often times, changes in the culture of the organization are
needed to better support the new strategies. For example, if an organization
wants to become more customer-driven, the people in the organization need to
first learn to listen to one another internally. Relationships outside the company
usually mirror relationships inside. If people fail to listen internally there is
typically a failure to listen externally.
Change occurs in two directions: the work people do and how they do this work.
Pamphlet Five addresses changing the work of the organization. Pamphlets Six
and Seven address how work is done. Pamphlet Six discusses strategic
leadership. Changes in the work people do and how they do their work come
together in the presence of strong leadership. A strategic leader always uses
today’s work to model desired behavior, to foster change and renewal, to
maintain spirit and momentum, to help others know and fully use their gifts, and
to reinforce an inspiring and meaningful vision. When leaders do this work, the
vision becomes reality as the competitive strategy gets executed.
Pamphlet Seven addresses culture change, i.e., changing how people work
together.
Align Everything
The key principle to remember in executing change is that anything that is not
consistent with the strategy will deter the success of your strategy. Everything.
Pamphlet #5 Page 185
This includes your organizational structure, your measures, the processes you reengineer,
measures and incentives, the types of people hired, job goals, how you
lead. Everything.
In fact, every organization with a new competitive strategy will face a moment of
truth in which it needs to decide whether it was really serious about the
competitive strategy or not. These moments of truth arise from a fundamental
principle of markets: to gain leadership in one market segment requires you to
not secure leadership in a segment with conflicting requirements for the
organization. In the case of a health care products company, the president
needed to sell a recently acquired company, recognizing that the acquisition was
no longer consistent with the future strategy of the organization. In another
example, a commercial sewing company walked away from a $1M medical sewing
customer in order to have the resources to devote to its strategic market, fabric
accessories for the power sports vehicle market.
Whatever the moment of truth, they are tests of whether the organization has the
resolve to execute strategy. You can be sure individuals in your organization will
be looking at these tests to understand the real message about what’s important
or not important. Therefore, when you face and resolve your moment of truth,
communicate it broadly throughout the organization as to why you arrived at the
decision and took the steps the strategy suggested.
Alignment answers the following questions:
• How do we create the differentiation in fact?
~ What are the key processes that build the core competency and create the
organization’s differentiation?
~ What processes must I get "right" to meet minimum customer
requirements to be considered?
~ What process goals should we establish to achieve our key strategic goals?
• How should we organize to manage and run the company on a daily basis to
insure key processes achieve what we need them to achieve?
• Do we need a marketing department?
• How will we achieve our sales and margin goals?
• What must we change in our key processes and other operational activity to
support the sales-marketing plan and achieve process goals?
• What partners do we need?
• How will we measure success?
• What must the leadership team accomplish working as a team to enhance the
capacity of the organization to succeed?
• Is our competitive strategy still aligned with the evolving market place and
competitor dynamics?
The first steps in the alignment plan will be obvious to you. But, clearly,
alignment cannot be planned entirely in advance. Change becomes a process of
being alert to where the organization is not in alignment with the strategy and
Pamphlet #5 Page 186
then responding. The response brings things into alignment. At times, the
response can include changing the strategy if the market place has changed and
assumptions that supported the original business model no longer hold true.
What you are essentially doing in Act Three is redesigning the organizational
system from scratch, given its design (i.e., its purpose, vision, guiding principles,
competitive strategies and strategic goals). (See Pamphlet Four for a description
of these design parameters.) A systems view is critical in this work, as the
success of the organization in achieving its aim will depend not just on the
effectiveness of the strategy, but on how well your organization works as a
system, as this will determine the success of execution. (See Pamphlet Two.)
How Do We Create the Differentiation in Fact?
The outcomes of any system are a perfect reflection of what the system was
designed to accomplish. Beyond this, the first step to change is to acknowledge
that you are accountable for any of the results you don’t like. The key to
successful differentiation is not just the identification of ways to differentiate the
firm that are meaningful to customers and that cannot be easily duplicated but to
create this difference. The creation of differentiation (or the maintenance of
differentiation) is accomplished by designing and operating key processes that
are at the heart of differentiation. This is true whether the differentiation is in a
product or service or the business model. And, if you lack the distinction you
desire, you look first and foremost at how your processes are working.
There are a number of steps to creating "process-based" differentiation:
• Identify the key processes that create the differentiation, what I’ll refer to as
strategic processes
• Redesign or improve key processes to eliminate problems, create competitive
advantage and secure differentiation
• Create a culture of continuous improvement in processes
• Deploy limited resources to redesign and improve processes that are at the
heart of competitive victories and that promise financial payback
• Create measures that will help you better understand how the organization is
doing and better align individual and group activities to desired outcomes
• Keep the leadership team focused on the unique role of leadership so that the
operational agenda does not crowd out critical organizational change work
Success in these steps depends on strong systems thinking skills throughout the
leadership team and management ranks. (See Sidebar A: Systems Thinking)
Why do we take a process focus? We do this for a number of reasons.
• First, the organization is only as good as its underlying processes. They are at
the heart of core competencies, customer value and competitive advantage.
Pamphlet #5 Page 187
• Second, you can’t fix a problem by fixing the individual parts. You must look
at the whole. This is because it’s the interaction of parts, not the parts
themselves that define behavior and dictate outcomes in any system. If Sales
keeps on selling more than the capacity of Operations, success will not be
forthcoming. In fact, the recurring backlogs in an organization where Sales
oversells will, in fact, set in motion reduced customer satisfaction that will
eventually reduce the success of the selling organization.
• Third, a process focus creates an empowered organization. It focuses
managers and leaders on the work only managers and leaders can do, i.e.,
improving the interactions between the different processes and making sure
processes are designed well. It is up to others, the "workers," to actually do
the operational work of the processes. When leadership focuses on their
unique roles as leaders and managers, the rest of the company’s productivity,
morale and creativity increase. This is especially important because a key
strategic leadership practice is enabling others to do their best. Doing
people’s work versus removing barriers that undermine their ability to do
their work creates credibility as a leader.
• Finally, a process focus lets you eliminate problems versus treat their
symptoms. There is entirely too much time spent in organizations today
treating the symptoms of problems as opposed to eliminating them through
process improvement and process redesign.
About Processes
With systems thinking, we begin to look at the organization as a series of
processes that interact, dramatically affecting the results of the organization. A
process is a series of cross-functional actions that produces a result of value to
someone else in the organization, the customer or the ultimate end-user.
Processes are often thought of as fairly linear (e.g., the creation of forms,
erection, measurement of financial outcomes). In fact, there are many critical
processes that are without clear inputs, flows or outputs. For example,
leadership is a process as is building strategic alliances with a key customer or
supplier.
There are two types of processes: operational processes and management or
administrative processes. Operational processes deal with what works gets done
to produce the organization’s output and what jobs and actions are required to
support the effort of getting the work done. The external customers provide
measures of the effectiveness of operational processes. Examples of operational
processes would include: marketing to owners; getting the order; finalizing the
design; developing a labor force; developing subs; making the structure. Note
that this is a very different view of the organization than the traditional silos of
sales and marketing, administration, purchasing, project management and onsite
construction. From a strategic leadership perspective, processes almost
always cut across different functions.
Pamphlet #5 Page 188
Management and administrative processes affect how the work gets done.
Typically, each management or administrative process serves multiple
operational processes. The measurement of process success is whether it
provides internal customers with what they need to best conduct the operational
processes, i.e., to meet customer needs and create differentiation for the
company’s offerings. Examples of management processes would include:
evaluation of performance; measurement of financial outcomes; insuring
compliance with OSHA regulations.
There are many "lens" for looking at processes. A narrow but deep view lets us
see micro processes, e.g., pouring the concrete and mixing the concrete. Macro
processes reflect a broad lens, e.g., manufacturing structural components. Macro
processes are also called, "organizational subsystems," as they contain multiple
processes.
The key steps for aligning processes to execute the competitive strategy include
the following:
• Make sure that your competitive strategy is clear and well understood within
the organization.
• Diagram the flow of work by identifying the subprocesses and then build up
into the macro processes, both linear work flow and non-work flow processes.
• Determine the most important macro processes to focus on, i.e., those that are
critical issues affecting your competitiveness or are a source of existing or
potential differentiation.
• Decide whether process improvement or redesign will be used to enhance
process outcomes and prioritize projects of each type. The improvement and
redesign projects with the highest priority become key objectives in the
operational plan for the organization, which will be discussed below. In this
way, strategy is driving operational change initiatives.
Entire books are written about how to do process improvement and process
redesign. Therefore, it is not the intent of this pamphlet to teach process
improvement. Rather, we will focus on how to approach process improvement in
a way that creates alignment of the organization to its competitive strategy.
Identifying Strategic Processes
Critical processes refer to the 3-5 key macro level processes that, when
successfully designed and managed, do the most to differentiate your company’s
offerings and secure a market leadership position. Critical processes let you
execute the firm’s competitive strategy effectively and efficiently. They are at the
heart of competitive advantage.
The key attributes of critical processes include:
• They are few in number.
Pamphlet #5 Page 189
• They are linked horizontally and vertically.
• They can be diagrammed in terms of their interaction with other parts of the
organization.
• They can be measured—although not always easily measured.
• They can be improved.
• They have a major impact on differentiation of the firm, customer value,
return on assets and organizational goals.
The first step in process improvement is to identify the macro processes of the
organization (Chart One: Macro Process View of a Precast Company gives an
example). One approach to selecting critical processes from this list is to
categorize each macro process into one of the following categories of importance:
• Identity: It serves a major role in creating the desired differentiation of your
company.
• Priority: It meets a customer requirement and strongly influences how well
identity processes are carried out and how the firm stands versus the
competition.
• Background: It supports other processes; many management processes fall
here.
• Mandated: It is required by, for example, government officials.
• Folklore: These are processes that have been in place in the past, but are not
necessarily needed today.
Chart Two: Example of the Process Salience of Different PC-PS Companies shows
an example of process categorization for two precast firms, each with very
different competitive strategies. (For more information on this topic, see Keen,
whose work guided the thoughts in this section.)
Identity and priority processes, or those that could be identity and priority
processes, become the strategic processes for the organization. Organizations
should focus improvement and redesign efforts on background processes only if
they are becoming, or could become, a priority process. Mandated processes take
on strategic important if changing them has a major positive impact on the
profitability of the firm. In general, background processes do not pass this test.
Any folklore process should be removed.
After categorizing processes, the organization must select which critical processes
it wants to improve or redesign so as to achieve greater success. The key to doing
this is to determine which critical processes of the organization already perform
above average versus which perform at or below average. Because of limited
resources, the organization may choose to monitor performance of critical
processes with above average performance in order to maintain a lead. Any
critical processes that are at or below the performance of other competitors, i.e.,
that are not best in class, must be improved or redesigned.
Pamphlet #5 Page 190
What should you do about a process performing below the competition that is not
a critical process? You should only improve or redesign the process if:
• It will eventually become a customer requirement.
• It could enhance your value to the customer and differentiation in customers’
eyes.
• There is a financial payback to improving the process.
Selecting processes to improve or redesign is at the heart of successful strategic
leadership. All too often, process improvement resources are focused on
processes that are not identity processes. As a result, organizations "get better,"
but they don’t necessarily create differentiation, which is the key to breaking out
of a commodity box. (See Pamphlet One).
Redesign or Improvement?
The next critical decision by the leadership and departmental team is to identify
whether process improvement or process redesign is needed. Often times both
are used, as evidenced in Chart Three: Organizations Combine Process
Redesigning and Improvement Efforts. Process improvement can be as simple as
insuring that everyone uses the same process, i.e., that standardization around
the process is created. Or, it can focus on incremental redesign of the process,
e.g., insertion of an additional step (e.g., a phone call) to make sure plans are
approved by the architect before the weekly manufacturing schedule is set.
Process improvement is used when the current process works well, but you would
like it to be better.
Process redesign is used when:
• A straightforward and identifiable process does not really exist.
• The current process is entirely way too complex to be managed well.
• Creating differentiation demands that the process produce significantly
different outcomes.
Both company factors and process factors enter into the decision on whether to
improve or redesign. Company factors include:
• Organizational leadership style
• Business conditions
• Type of change required
• Commitment level to change
• Organizational skills with regard to change and process improvement
• What has worked effectively in the past
• Willingness to engage in true strategic planning (vs. annual business
planning)
Pamphlet #5 Page 191
Process Factors include:
• Extent of problem
• Whether the problem is in the process or its containing system
• Time frame before results are needed
Process Improvement
The focus of process improvement is to improve process outcomes incrementally.
The key steps in process improvement are (Joiner):
• Step One: Define the project, i.e., what problem are you trying to solve with
what process.
• Step Two: Understand in detail the process status quo—how it works, its
effectiveness and what causes variations in its effectiveness. (See Sidebar B:
Variation)
• Step Three: Understand why the results of the process are what they are.
• Step Four: Develop and try solutions that address deep causes of the
problem.
• Step Five: Evaluate the solutions, select one and create and evaluate plans to
implement the solution.
• Step Six: Maintain the gains by standardizing work methods of products.
• Step Seven: Anticipate future improvement in order to preserve lessons from
this effort.
(See Appendix One for a more detailed description of these steps.)
It is critical, while engaged in process redesign, to understand not just what’s
going on with the process but how the process interacts with the rest of the
organization. Suppose your organization is trying to speed up the completion of
shop floor drawings. Many teams would jump immediately at the idea of getting
architect approvals earlier. But, there are many ways to increase speed besides
increasing the speed of the architect’s approval. And, there are many aspects of
shop floor drawings an organization needs to be concerned about beyond speed,
e.g., the cost to complete the drawings, the efficiency of the design for
manufacturability and the accuracy of the design.
Everyone must understand the competitive strategy so that in designing changes
to increase speed, you do not impair other process dimensions that are also
critical to your competitive position, i.e., those that drive your differentiation or
are required for consideration in the marketplace. This is why systems thinking
Pamphlet #5 Page 192
is so important. It prevents improving part of the organization at the expense of
other parts of the organization.
Team Exercise: Process Improvement
Appendix Two provides an exercise you can follow to develop a feel for process
improvement. After competing the exercise, answer the following questions:
• Do we have a process orientation in our company? If not, should we?
• Which of our processes need to be improved? If we could really improve
these, would it make us more competitive or profitable? Would it create
differentiation from our competition?
• Are we willing to commit resources to process improvement?
• Do we need any outside help to be more effective in process improvement?
Process Redesign
Organizations succeed by doing the right things right, not just doing things right.
Redesign is about doing the right things; process improvement is about doing
things right. Process redesign is very sophisticated work. It’s not done overnight
with a simple six-step process. It requires careful understanding of the current
process and deep insights into the reasons today’s outcomes are what they are.
Nevertheless, process redesign has tremendous opportunities for payback.
Process redesign dissolves the problem, i.e., the problem no longer appears. It
differs from fixing the process, which handles a problem better. Fixing modifies
the existing system. It removes what’s wrong by adding, deleting or modifying a
step in the existing system. Redesigning, on the other hand, starts with a blank
sheet of paper.
Process redesign is based on the following concepts:
• Each system is well designed to act as it behaves. In other words, you get
exactly what your process or system was designed to create.
• Each person in the system is acting rationally within the context of the
system.
• Often times the limitations of the system are defined by what’s going on
around the system, i.e., in the containing system. The most important
limitations may not be in the system itself.
• To change a system’s outcomes, behavior and operation, you need to change:
~ Its structure (i.e., what are the parts and how are they organized)
~ Its motivations (i.e., incentives, rewards and beliefs, why participants do
as they do and who benefits from current behaviors and why)
~ Its key processes (i.e., how the work gets done)
Pamphlet #5 Page 193
~ Its function (i.e., what work gets done, in other words, what is a system’s
intended output)
Or, you must influence the containing system (e.g., other suppliers or general
contractors) to work more in the favor of the system.
Process redesign work is focused on identifying all the characteristics of the
system that create the undesired and desired characteristics of the current system
or process. You won’t be able to do this work without a deep understanding of
the motivations and beliefs that drive how people work and relate to one another
in your organization. You need to get at different dimensions of motivation, how
they operate within the system and why they produce the system outcomes that
occur. This work also what lets you understand the nature of culture change
that’s needed. (See Pamphlet Seven.)
Team Exercise: Process Redesign
To get a feel for process redesign, discuss the following questions about shop
floor drawing approval:
• Where is speed of approval not an issue?
~ In what kinds of projects?
~ With regard to what kinds of suppliers/subs?
~ In what kinds of roles?
• Who holds the power to affect speed of approval and why do they delay?
~ Who really drives when things get done and why is this person in the
driver’s seat?
~ Who can delay approval and why is it in their interest to do so?
• What scope of services would lead us to be in charge of approvals?
• What is it about our overall system that would make delays on approval
irrelevant to meeting customer erection dates?
• How could we hand the design off to those in charge of approvals? How could
we eliminate the need for approvals?
• Who benefits from the current system? Who would be concerned if it
changed significantly?
You should engage in process redesign when:
• No process is in place
• Significant market changes are occurring
• The process spreads across multiple locations/business units
• There is high urgency to fix/improve this part of your business for cost or
customer satisfaction reasons or to create competitive differentiation
• There are several problems and/or several root causes of the problem
Chart Four: Which Improvement Approach to Use? provides a useful tool for
deciding between process improvement and redesign.
Pamphlet #5 Page 194
The logic for process redesign work is similar to that for the 7-Step improvement
process, but the steps embrace multiple problems and causes. The steps are:
• Plan
~ Identify desired outcomes and measures of process
~ Create the "as is" process map. Take baseline measurements and identify
process "disconnects," i.e., missing, illogical or redundant steps or flawed
logic
~ Theorize and test ways to stratify where problems appear
~ Theorize and test causes of problems
• Do
~ Pretend you are starting from scratch. How would you (ideally) organize
this process to eliminate problems?
~ Seek broad-based feedback on one or more "should" designs and select
and modify "should" process map accordingly. Use evaluation criteria to
choose among options
• Check
~ Does new process offer improvement over basement measurement?
• Act
~ "Institutionalize" the new process
- Educate
- Standardize
- Establish improvement goals and manage
As you envision a redesign, it is important to keep the following principles in
mind:
• Eliminate waste
• Simplify
• Create alternate paths when a uniform approach will not work
• Increase speed (establish concurrent activities wherever possible vs. linear,
sequenced activities).
• Use technology when it adds value
Team Exercise: Process Redesign, continued
Appendix Three provides a process redesign exercise. After completing the
process redesign exercise, discuss the following questions as a team:
• Are there processes that should be completely redefined from the start if we
want to genuinely execute our competitive strategy?
• What would be the benefit of doing this?
• How can we get started?
Leadership’s Role in Process Improvement and Redesign
Pamphlet #5 Page 195
The leadership team has a very strong and defined role in certain elements of
process alignment and a very weak role in others (See Chart Five: Senior
Management’s Role in Process Edge). They take the lead in defining the critical
processes in the context of competitive strategy and creating the idealized overall
design of the organization (i.e., the organizational chart). It’s also their role to
make sure that the goals for different processes and the measures of success of
those processes are aligned with the competitive strategy and the organization’s
strategic goals. They also play a leading role in terms of major redesign efforts,
while serving in a coaching role in continuous process improvement activities.
While process improvement is the work of lower level management and the
workers themselves, the leadership team must also make sure improvement
priorities are defined and resources are allocated to achieve desired
improvements.
Some leadership teams encourage their companies to adopt what’s called a
continuous improvement philosophy. When a continuous improvement process
is in place, every process in the organization is measured and improvements are
made on a regular basis. The fundamental concept behind continuous
improvement is that process improvement is for the benefit of the customer. The
focus is on customers, where customers include both internal individuals as well
as external customers.
A process improvement focus insures that different parts of the organizations
clearly understand who their internal and external customers are, their needs and
expectations and the purpose and the desired output from their part of the
organization. With a process improvement focus, individuals who are part of the
process get feedback from customers and change in response to the customer’s
needs and expectations. Jay Howell, a colleague, argues that the key philosophies
of a process improvement focus include:
• Performance is measured. Continuous improvement means that there is a
long-term commitment to regularly measure and improve processes to
produce outputs of high value.
• Everyone is involved in improvement. Continuous improvement becomes the
work of everyone in the organization as opposed to a defined or imposed
management solution. This builds teamwork and creates an environment of
trust and open communications. As a result, process improvement ideas are
surfaced by everyone in the organization.
• Leaders and others develop systems thinking skills. Organizations with
continuous improvement philosophies help people in the organization think
in new ways. The work of the organization is viewed not as a collection of
fragmented production units, but rather as a whole focused on providing
output that’s highly valued and differentiated in the eyes of the customer. A
systems view replaces a focus on blaming individuals for problems with a
Pamphlet #5 Page 196
desire to -- continually discovering new ways to improve the organization for
the benefit of customers.
It’s important to note that the process goals should always supercede functional
goals because the process goals, especially processes that cut across functions,
drive what the different functions or departments spend their time on. Rummler
& Brache comment, "If we had to pick one of the three levels as the greatest area
of opportunity for most organizations, it would be the process level. We are
learning that it’s not enough to manage results. The way in which those results
are achieved, i.e., the process, is also important. If we are achieving the results,
we need to know why. If we are not achieving the results, we need to know why.
In both cases to a great degree the answer lies in the processes."
How should we organize to manage and run the company on a daily
basis to insure key processes achieve what we need them to achieve?
Organizational structure (the “white chart” that shows who reports to whom) is
one of the strongest leverage points for aligning the organization to fit its
strategies. It is critical to creating culture change and for getting people to focus
on the right kind of work, performing to the right set of measures. After your
strategy is designed and you understand the critical processes of your
organization and its strategic goals, start with a blank sheet of paper and design
the ideal organizational structure. Do not think at this stage about what people
will fit where. All that can come later. It is always better to make decisions
knowing what is ideal. (See Nadler)
Many companies with a continuous quality improvement philosophy organize
their company by process teams, instead of functions. This shift can be
instrumental in creating more effective processes, as the new structure changes
relationships and therefore culture. Nevertheless, changing organizational
structure alone is not sufficient for creating strong processes. People also have to
be willing to work collaboratively to make the processes work well. Chart Six:
Collaboration vs. Cooperation shows the difference between organizations in
which the functions only cooperate with each other versus those in which
collaboration is present. What we see here is that collaboration eliminates, or
significantly reduces problems, whereas cooperation causes problems to be
shifted to another part of the organization, which then must absorb the cost
associated with the problem. Absent collaborative cultures, organizational
change often times does little to improve operational effectiveness. (See Sidebar
C: Structure Affects, but Does Not alone Determine, Behavior.)
Do You Need a Marketing Department?
You would never consider asking the director of accounting in your firm to also
run the plant. Yet, many precast companies either delegate marketing
responsibility to the sales director or leave the market role unfilled. This is one of
Pamphlet #5 Page 197
the biggest errors in your industry. Without marketing, your organization will
remain operations driven and compete as a commodity supplier.
Still not convinced? Let’s try it another way. In the absence of a marketing
professional, the CEO and members of the leadership team “own” the marketing
role. How effective are you at this job?
Team Exercise: How Well is Marketing Being Done in your Organization?
Complete the Job Description Questionnaire in Appendix Four independently
and then summarize the individual answers to create a team response. On any
line item where a number of respondents entered “No” under “Done Well” or
“Done Regularly,” ask:
• What are the implications of this gap?
• How might we be a stronger company if we filled this gap?
• What are the implications of asking sales or some other function to take on
this role?
• What is not getting done or not getting done as well?
Then, looking collectively at the gaps, ask:
• Would the investment in good marketing professionals be worth the return we
would get from filling these gaps?
What is Marketing?
There are a number of definitions of marketing:
• The activities of identifying, designing, promoting and delivering goods
and services to customers – in exchange for money.
• The discipline required to make decisions that maximize customer and
company value, i.e.:
• Product line and business scope
• Growth strategy
• Distribution strategy
• Value proposition to customer that differentiates the company from
its current and future competitors
• Pricing
• “Promotional” expenditures to ensure fiscal year sales and profit
objectives are met
• Defining market segments; understanding their needs; identifying what is
required to meet the needs of “target” market segments (i.e., those of
greatest priority to the firm); and communicating with members of the
target segments. (Hiebing and Cooper)
• Identifying the changes needed today to ensure success in tomorrow’s
markets while attracting customers to today’s offering.
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Two types of marketing activities create strong financial and market place results.
Tactical marketing focuses the organization on the target markets in which the
company’s current goods and services can be sold most successfully. The
purposes of tactical marketing activities are to:
• Raise awareness of the company’s offering – a key driver of whether a
company gets considered by potential customers. This then affects the
company’s market share.
• Enhance the image of the company in the target market customers’ eyes
• Work with associates inside the company to insure current product lines (as
opposed to individual orders) are as profitable as they can be. Product line
extensions and cost reduction activities are examples of this work. The
Marketing Department’s role in these activities is to insure products meet the
needs of target markets.
• Increase the sale force efficiency and effectiveness by leading them to the right
target markets, profiling “desired customer” attributes, creating customer
awareness and providing effective selling tools.
Strategic marketing focuses on how markets, competitors and customers are
changing and what the company needs to do differently to secure and maintain a
leadership position. When David Packard argued, “Marketing is too important to
leave to the marketing department,” he was talking about strategic marketing.
The leadership team as a whole must “own” the company’s strategic decisions
regarding where and how to compete and grow, and how to align operations to
win in targeted markets – much as they own the financial performance of the
company. The marketing department owns the “process” for identifying changes
needed in the company and its strategies to enable it to remain competitive (i.e.,
new products, services and channels). The marketing department is also
responsible for creating a strong marketing understanding process. (In this
sense, Marketing is like the finance department. They both oversee a process of
collecting and interpreting data and insuring it is used in company decisions.
Finance focuses on financial and operational information and marketing focuses
on market information.) But the actual strategic decisions remain the leadership
team’s responsibility.
Chart Seven: Tactical vs. Strategic Marketing lists the significant tactical and
strategic marketing activities/decisions. One way to think about these differences
is to think of tactical marketing as “inside to the outside,” i.e., where to focus the
company today within the broader market, and strategic marketing as “outside to
the inside,” i.e., what do market changes imply for how the company must
change? The role of the marketing department in the context of the overall
company is summarized in Chart Eight: The Marketing Department’s Role.
Sales and Marketing Are as Different as Precast and Wood
Technologies
Asking the Sales Department to take on the marketing role will not close the
marketing gap. Sales serves a very different role in the company than Marketing.
Pamphlet #5 Page 199
Their role is to represent the company to the customer and secure orders. Sales
effectiveness is driven by:
• Focusing on the right potential customer
• Understanding the customer’s needs
• Showing how the company’s offerings can best address the customer’s needs
• Supporting the customer through issues and questions that arise in the buying
process prior to sign off to the project manager
• Developing a trusting and open relationship with ongoing buyers
Marketing and Sales are involved in the selling process at different stages.
Marketing’s influence ends before the order is won. The objectives of Marketing
are to:
• Make sure the company produces products and services that customers want.
• Create awareness of the company and the benefits of its
technologies/offerings.
• Help the company get considered – i.e., encourage a customer to seek
information from the sales rep or company.
• Create a favorable company image in the customer’s mind.
The difference between sales and marketing is like the difference between
planting a field and harvesting the crop. Marketing professionals plant the field.
They create awareness about the company among potential customers and then
direct sales representatives to the markets and channels where they can be most
successful. (This is tactical marketing.) Marketing also plays a key role in
making the company more attractive to potential matches in the future. (This is
strategic marketing.) Sales makes the matches, i.e., they harvest the rich crop
that marketing (and operations) have helped create. Chart Nine describes the
different perspectives of sales and marketing as a result of their different roles.
Different roles demand different skills. As a result, different types of people are
generally attracted to sales and marketing roles. Sales people have high empathy
and a keen need to win frequently and regularly. Outgoing in personality, they
are comfortable developing relationships. They “put themselves up for rejection”
daily, as long as the prospect for a victory exists. Like hunters in a difficult
jungle, effective salespeople are independent, self-motivated and untiring.
Marketing people work as much on the “intellectual” side as on the “relationship”
side of issues. They love a tough intellectual challenge and, while oftentimes
people-oriented, they often see the problem as more engaging than the people.
They would either be the organizers of a safari or the environmentalists making
sure the jungle ecology is healthy. Relative to Sales, they enjoy working on things
with a longer time frame. A good marketing person is excellent working “across”
the organization, i.e., with different functions of the company.
There is some overlap in skills. Marketing people must be good at selling ideas.
And, a great consultative salesperson bringing customized project solutions to
one customer is not unlike marketing people who do this type of work for target
Pamphlet #5 Page 200
markets as a whole versus for an individual customer. Making good decisions for
an entire target market demands the marketing person have outstanding
analytical and interviewing skills and be able to make insightful business
decisions involving difficult trade-offs. Many CEO’s argue that Marketing is the
best training ground for general management. Chart Ten outlines a comparison
of duties and qualifications for sales and marketing professionals.
Sales Can’t Do Marketing Well
Three problems arise when a company uses the sales role to do the marketing
role:
• It is very expensive.
• Sales will not get the work done on time – or done at all.
• When Sales takes on marketing activities, they are a biased source of
information.
It is very expensive.
From an opportunity cost perspective, selling resources are the most expensive in
your organization. For every hour the sales organization is diverted from direct
selling activities (i.e., getting the company considered, overseeing the internal
process for developing a proposal that is high value for the customer and the
company, winning the order and developing the relationship), the company is
losing gross margin potential.
Sales will not get the work done on time – or done at all.
The urgent always drives out the important, in sales and elsewhere. When Sales
wears both the marketing and sales hats, marketing is what suffers. Therefore,
you must consider what activities are not getting done when individual sales
professionals and their managers are responsible for both sales and marketing
roles.
Team Exercise: Wearing Two Hats
Individually complete the exercise in Appendix Five. As a group, discuss the
items that fall into the “follow up later this week” boxes. The activities identified
under “follow up later this week” or “follow up later this month” are typically
marketing activities.
When Sales takes on marketing activities, they are a biased source of information.
To understand the bias Sales brings to the marketing role, one must think about
how a good sales person carries out his or her role in the organization – getting
the company considered and securing orders. A good sales person will spend
time with customers who have a high potential to purchase within the next 12-18
months. As a result, the sales person may not be listening in places where
important information about your company’s position within the market and
about market changes can be gained, i.e.,
• Lost customers
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• Non-customers who are buying complementary products of other
technologies, but not your technology, i.e., they may be potential customers in
the future
• Manufacturers and providers of complementary products and services
• Competitive technology suppliers
• Your company’s suppliers who often have key insights into the building
marketplace
In addition to talking to a biased sample, Sales is always listening for information
that will help secure an order. Sales people are focused on a much narrower set
of issues than that which a marketing person would explore and learn about in
the marketplace. Furthermore, the customer – knowing the role of the sales force
– is oftentimes leery of offering information that might reduce his opportunity to
push for price concessions. The customer may also be reluctant to share
information he deems is not pertinent to someone in the sales function. For
example, many organizations use their sales force to gain information about whey
the company loses orders. Customers will always tell sales people that the
company lost the order due to price, because they want to get the very best price
possible in the future. They will rarely criticize sales performance to sales
representatives, for example. Market research professionals, on the other hand,
are able to gain a much better perspective on why the company loses customers,
which is a key part of a strategic assessment.
As a result of these sources of bias, sales people offer an important, but
nonetheless biased, view of the marketplace. It is often said in marketing circles
that if you ask the sales department to define the specifications for a new product,
the product will be out of date before it is introduced to the marketplace.
In light of these problems – it’s expensive, Sales does not get the job done, and
biased information results – separate marketing resources are of great value in
any organization. Strong tactical marketing creates:
• More effective forecasting
• More time the sales team can spend on selling
• More focus throughout the company
• More effective selling because the sales force is better focused, has stronger
selling tools and aids, and there is prior awareness of the company
• Better measures of how the organization is performing in its markets
• More successful product introductions
• Better feedback on the quality and cost position of the company so as to create
quality and cost improvements
• Activities to minimize sales losses should the market decline
• More realized opportunities identified and pursued
• Higher profits through stronger pricing approaches
Strong strategic marketing creates:
• A stronger, more effective market understanding process
• More focus throughout the company
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• Conscious decisions of where and how to compete, which are key to
differentiation and breaking out of a commodity market (see Pamphlet One)
• Early warning of emerging risks and key opportunities
• Stronger products and secure offerings
• More focused and effective resource allocation
• Higher pricing through better differentiation
• Greater partnership opportunities
• Stronger awareness and understanding of current and potential competitors
While Sales and Marketing must work together effectively, it is important that
Marketing not serve in the role of sales assistants. In particular, it is very
important not to use Marketing to:
• Evaluate specific sales representatives’ performance
• Generate leads by calling on individual accounts
• Create individual sales representative forecasts
• Be the sales person for accounts with longer-term potential
• Maintain all information in a customer database
• Write proposals for a specific job
• Serve as the engineer for new product development activities
• Train Sales on selling skills (Marketing does train Sales on what to
communicate in discussing why the company or its products are better than
that of the competition)
• Set prices in front of the customer (Marketing does set pricing policies and
works with Sales in cases where policies are not effective)
• Review contracts for accuracy or legality
Finally, it’s important that Sales support Marketing in fulfilling the marketing
role. Sales professionals help Marketing by:
• Making customer contacts on behalf of Marketing
• Providing feedback on product ideas and communications materials
• Providing Marketing with an in-field understanding of how the products are
working
• Helping the Marketing people understand the sales process
• Providing a record of won and lost orders and insights into market size and
why orders are won and lost
• Providing information on the competitor
• Identifying who the key opinion leaders are
• Defining tradeshow requirements
If you are considering adding a marketing person to your staff, Appendix Six
contains a job description that can help you get started.
How Will We Achieve our Sales and Margin Goals?
The Marketing Plan (This section draws heavily from Hiebing and Cooper)
Pamphlet #5 Page 203
The Marketing Plan is to competitive strategy what the weekly itinerary is to a
two-month trip or what production and capacity planning is to operations. The
marketing-sales plan answers the following questions:
• Where do we want to end up at the end of the year typically expressed in sales
and margin terms?
• What products and services will be the focus of proactive marketing and
selling?
• What are the priority target markets, i.e., groups of customers with similar
needs defined in a way sales can identify whether customer fits or not?
• What outcomes are needed in each target market to achieve our sales and
margin goals?
• What marketing and sales strategies will we use to create these outcomes?
The tactical marketing plan translates the competitive strategy decisions and
company-wide strategic goals into annual two-year action plans that drive the
work of the organization going forward. The tactical marketing-sales plan
insures you have a plan to achieve your sales objectives and that the activities of
the marketing organization are aligned with the competitive strategy of the
organization. The tactical marketing-sales plan also insures that operations
(manufacturing design and erection) understand what marketing and sales need
from operations (and vice versa) to fulfill their role in helping the organization
execute strategy and achieve strategic goals. The role of management is to insure
that the marketing-sales plan and the operations plan are in alignment so that
everyone’s efforts will support one another.
Hiebing and Cooper present the tactical marketing plan as a ten-step process
which starts with a business review and ends with evaluating whether or not the
results of the business are consistent with what was planned. Chart 11: Ten Steps
to Disciplined Marketing Planning presents the ten steps to disciplined
marketing planning. Development of the marketing-sales plan starts with a
business review. This is basically an update of the strategic assessment of the
organization (See Pamphlet Four). The review is used to identify problems and
opportunities facing the organization, which the annual marketing-sales and
operational plans will address. This review helps you assess whether or not your
strategic plan is in fact working effectively and then modify the competitive
strategy, if necessary.
Problems and opportunities should be ranked according to impact,
probability of success if addressed, potential return and criticalness to
competitive strategy execution. It is often times helpful to differentiate problems
and opportunities in terms of those that affect where your firm competes, e.g.,
target market products and services and geographies versus those that affect how
your firm is different than the competition, e.g., pricing pressures, quality issues,
speed issues, etc.
The sales objectives stem directly from the strategic goals of the organization,
one of which is typically defined around revenue, gross margin and operating
Pamphlet #5 Page 204
profitability. From these sales objectives, Step Four of the marketing plan
identifies the specific target markets and target customers the
organization will focus on over the next two years and what outcomes or market
and objectives we want within these target markets. This step creates the critical
link between the actions of customers and the desired sales results for the
organization (See Chart Twelve: Interlocking Sales Objectives).
In selecting target markets, it’s important to remember that all marketing plans
boil down to one question: “Whom are we trying to precondition to make selling
as ‘effortless’ as possible?" There are many potential target markets for any
organization. The role of the marketing plan is to prioritize who is the ideal
target market for each product or technology offering and then for the company
as a whole. Factors you might to consider in deciding on target markets include:
• Who are the heavy users?
• What are the strategic market segments?
• Which have the best growth prospects?
• Where is the highest profitability and loyalty?
• Which are most attractive?
• Where is awareness high, or where could it be high?
• Which are most favorably inclined to work with us?
The key decision in Step Four is to identify the target customer groups that will
be the primary focus of the marketing-sales plans. Choose large, profitable,
growing and well-defined targets. The secondary targets include: influencers;
low volume but easy-to-access customer groups that are too small to be primary,
but nevertheless can contribute to the financial outcomes of the firm; and other
attractive targets that didn’t make the priority list for primary targets.
The marketing objectives identify what needs to be accomplished, that is,
ends that need to be achieved within each target market to achieve the sales
objectives and the strategic goals of the organization. Defining marketing
objectives are where most marketing plans fall apart. The marketing objectives
must be:
• Specific
• Measurable
• Have a defined time for completion
• Achievable
• Focus on achieving a specific target market behavior such as awareness,
consideration or selection
• Typically require multiple actions to be achieved
• Relevant – they collectively insure you achieve your sales objectives
Examples of marketing objectives would be:
• Secure two parking deck jobs with leading design-build teams
• Increase wall panel sales 25% to general contractors
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• Achieve a 90% repeat purchasing with top tier contractors this year
• Drop the block business
• Be positioned to offer steel and precast frames to the top-tier contractors by
Quarter 3
• Secure $2M in orders in Quarter 4
Step Five is the marketing plan strategy development stage. In this case, we are
referring to the plan strategies which will enable the organization to execute its
competitive and growth strategies. There are two types of plan strategies: the
communications positioning strategy and marketing strategies.
The communications positioning strategy summarizes what you will
communicate about your product and business relative to competitive offering. It
is the “umbrella” or basis of all of your communications. It defines, confirms and
reaffirms the most important reason for the product’s existence and why it should
be purchased. It must be consistent with the strategic positioning of the
organization. Communications positioning differs from strategic positioning in
that the former speaks to a very strong emotional appeal of working with the
company, while the strategic positioning speaks more to "objective and rationale"
basis of superior value.
There are a number of different approaches to communications positioning, each
centered on one theme. Consider a precast bridge company that wants to
compete on speed:
• Focus on a product difference. Steel bridges takes five times longer than
precast bridges. Can you afford the difference?
• Focus on the key attribute or benefit. You get to drive faster and get home to
your kids earlier.
• Focus on problems with the category to show that you’re different, e.g., if
building material subs only create headaches for you, you’re talking to the
wrong sub.
• Focus on the competitor. Steel can save you money, but only on the bid. We
save you time. That’s real money.
• Associate with something that the target market already likes. Taxpayers
love parks, city services and grade schools. With precast bridge expanders,
you too can be loved by taxpayers.
• Focus on a problem that your product or service solves. There’s $2M of new
funds available from the Feds for bridges. Too bad you lack the staff to go
after this goldmine. With the precast industry’s help, you too can get bridges
designed and erected fast.
Which communications positioning do you choose? Select the one that:
• Is most meaningful
• Is feasible.
• Creates the greatest differentiation versus the competition
• Is completely consistent with the strategic positioning
Pamphlet #5 Page 206
• Creates an umbrella that will be enduring over time
You may also want to actually test your communications positioning with several
groups of customers from each target market group. Since there is considerable
overlap in different communication tools, it is critical that the chosen
communications positioning be consistent across all target markets.
Marketing strategies explain how you will achieve a specific marketing
objective. They are descriptive, and neither quantifiable nor measurable. Areas
to consider include:
• Build market or steel share strategies
• Location-specific strategies
• Seasonality strategies
• Competitive strategies
• Product strategies
• Pricing strategies
• Selling strategies, e.g., bridge strategies, price justification and target
customer profile
• Promotion strategies
• Advertising strategies
• Merchandising strategies
• Publicity strategies
Communications programs help you achieve your marketing objectives. The
communication goals are therefore sub-objectives of marketing objectives.
Goals are developed by first asking, "What does the marketing plan hope to
accomplish in terms of sales, awareness, image, education, leads and new
accounts, etc.?" From this, you then establish what you have to accomplish in
terms of your communication pieces. Communication objectives can be broad,
(i.e., create a positive company image) as well as very specific (i.e., generate 50
Class A sales leads during fiscal year ’01).
Always keep in mind that marketing communications is an arm of marketing and
its primary purpose is to help you achieve your marketing objectives. Don’t begin
by saying, "I need a brochure." Rather begin by analyzing your marketing
objectives and strategies and asking, "What objectives can communications
potentially help you achieve?" (See Chart Thirteen: The
Marketing/Communications Link) for an example of how communications can
help achieve marketing objectives and strategies.)
Note that in looking at the target markets, communication tools will focus on
both broad audiences as well as narrow audiences. Advertising is often times
focused on members of a target market as well as others, whereas a direct mail
program would be directed to a very specific group of people within a target
market. Also keep in mind that your employees and members of your community
are important target audiences as well. Pizza Hut and British Air campaigns are
Pamphlet #5 Page 207
great examples of using their advertising to communicate points of
differentiation that their employees can learn about and be proud of.
Once you understand how communications can be used, you then create
communications objectives which are really sub-objectives of your marketing
objectives. (See Chart Fourteen: Communications Objectives). There are a
number of potential communication tools you can use to achieve your
communication objectives. They include: general advertising; direct mail; sales
brochures and sales aids, product displays, Website, publicity news releases,
promotions, summaries, newsletters, executive correspondence, etc. Each tool
serves a specific role in terms of helping you achieve your communications
objectives. (See Chart Fifteen: Communications Tools).
The keys to successful communications include:
• Ensure your communications program contributes to the attainment of your
marketing goals and is always consistent with your strategic positioning.
• Create a written plan, with specified objectives, strategies, tactics, timetable,
budget, measures.
• Develop an integrated campaign in which communications elements reinforce
one another -- not independent ads and sales sheets that work alone.
• Maintain consistency in your message and its creative execution across the
marketplace and over time.
• Promise only what you can deliver; and substantiate your claims.
• Convey your company’s points of distinction and value in terms that are
meaningful to each customer segment.
• Evaluate alternative creative executions relative to the communications
strategy; don’t focus on graphic design or clever creative work at the expense
of strategy. Test concepts with target customers.
• Communicate your strategic positioning, communications positioning and
program plans to employees.
Also recognize that communication tools aren’t the only tactical tools. Other
marketing tools include: promotions, new products and service introductions,
new target market groups, joint ventures, pricing strategies, etc.
Sales Plan
The sales plan takes the overall marketing plan and prioritizes specific customers
into A, B and C accounts. A are the most important accounts and will receive the
most time from the sales representatives. Individual sales representatives then
develop account strategies for A, and possibly B accounts to win orders.
The sales plan also breaks overall sales and margin goals down into the goals for
specific sales representatives or regions of the country. The sales plan also
identifies the key objectives of the sales force required to achieve the sales-
Pamphlet #5 Page 208
marketing plan objectives. In essence, the sales plan is the functional plan for
sales that underlies achievement of the marketing-sales plan of the organization.
What must we change in our operations to support the salesmarketing
plan and achieve process goals?
The Operational Plan
The operational plan 0utlines what operations (engineering, finance,
manufacturing and erection) must accomplish in the next two years. The
operational plan objectives must be specific, measurable statements of outcomes
that are desired in the organization. For each objective, it’s critical to identify:
• Why this objective is important
• Past barriers to accomplishment
• Root causes of why problems exist or the opportunity exists
• Strategies that will be used to address the root causes
• Action plans
• Budget
• Timetables
Examples of operational plan objectives include:
• Create a more uniform wall panel surface and architectural panel surface
• Build a strategic partnership with a steel fabricator.
• Reduce design approval process cycle time by three weeks
Like marketing and sales objectives, operational objectives must also be:
• Specific
• Measurable
• Have a defined time for completion
• Achievable
• Typically require multiple actions to be achieved
• Relevant – they collectively insure you achieve your sales objectives
The process improvement and process redesign goals are translated into
operational plan objectives to insure that the work of operations includes not just
producing products and services that are sold, but creating changes in how
products and services are produced so as to better achieve customer and financial
expectations. The operational plan should also address activities related to
managing the core competencies that underlie the strategic positioning. The keys
to managing a company’s core competency are to:
• Insure everyone in the organization knows what it is and how their part of the
organization contributes to it
• Establish plans to acquire competencies needed for the future
• Strengthen them
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• Deploy them into new markets, which is the best way to leverage your
resources and dramatically increase your return on investment in core
competencies (new market development steps would likely be addressed in
the marketing-sales plan)
• Protect and defend them
Financial Plan
Most of you are in organizations that have an annual or two-year financial plan.
When leadership oversees the process of "aligning" the organization to its
strategies, the financial plan becomes the tool for testing whether resources are
being effectively deployed to execute strategy. Individual departments are asked
to create budgets consistent with achieving the objectives of the marketing,
operations and sales plans. If the resources required do not yield the desired
profitability, it’s back to the drawing board to find ways to execute strategy and
achieve financial targets. Sometimes execution of strategy must slow down; other
times groups become more creative in developing execution approaches.
The financial planning process also insures that all departments understand the
overall objectives of the organization (defined through the marketing plan and
the operational plan), and are budgeting accordingly. The process of linking
strategy to financial plans does not create a more hectic budget process. If
anything, it helps the process -- as there is less bickering across departments on
what is and is not a priority.
What Partners Do We Need?
A critical decision is which activities should your organization do themselves
versus partner with others to do? A “not invented here” syndrome can paralyze a
company. But the opposite side—relying too much on others—can strip a
company of core competencies and competitive advantage.
Through strategic alliances, organizations can "marry" their expertise, core
competencies, products, and services to create incremental value that is greater
than either can provide independently, and greater than the value offered by their
joint competition. This allows both organizations to achieve significant
competitive differentiation, which is particularly important in mature,
commodity-like markets such as the PC-PS industry. (See Sidebar D: The
Benefits of Strategic Alliances.)
Business experts define strategic alliances in a variety of ways. Perhaps the most
pertinent definition is that offered by author Jordan D. Lewis, who defines a
strategic alliance as "a relationship between firms in which they cooperate to
produce more value (higher benefits or a lower cost) than is possible in a
(traditional) market transaction." 1 Several important concepts are inherent in
this definition:
Pamphlet #5 Page 210
Collaboration
Crucial to a strategic alliance is the notion of collaboration. Partners must
collaborate to create new value for their customers. The extent of collaboration
may be broad and all-inclusive, or it may pertain only to certain aspects of the
business. An alliance may form, for example, around certain types of products,
such as stadiums or parking garages, or around certain delivery methods, such as
design-build. If the alliance is limited in some manner, the partners continue to
act independently in other areas of their businesses.
Collaboration may also occur at a variety of levels. It may take the form of a
consortia, such as PC-21, in which the companies pool resources to achieve a
common goal. It may take the form of a joint venture, in which the firms pool
different competencies and learn from each other in a shared-ownership model;
in this case, the rest of the organization remains independent. Or, it may form as
a value-chain partnership, a strategic alliance between companies that are
connected on the value chain.
Regardless of the scope or level, an effective collaborative relationship
includes:
• A commitment to mutual relationships and goals
• A jointly developed structure and shared responsibility
• Mutual authority and accountability for success
• Sharing of resources, risks and rewards
Change
By definition, a strategic alliance requires that both partners change in order to
jointly enhance overall value for the customer. If only your company, for
example, changes in order to secure work, but your client does not alter its
organization or work processes, you have not formed a strategic alliance. Rather,
in this case, you are winning business by being customer-driven. [Your customer
may perceive you as a "partner"-- perhaps even repay your efforts by allowing you
to see the last bid or selecting you on the basis of "fair" pricing -- but in reality
you have not formed a strategic alliance.]
"This difference is where most initiatives to form supply alliances bog down.
Overlooking the needs for substantial changes in management and organization
styles, and for broad and deep inter-firm links, many companies (seeking to
partner with their suppliers) assume the process is a mechanical one: Just reduce
the supply base, establish a supplier rating system, mandate cross-functional
teams, and everything is set to go. This assumption is wrong. Only a consistent,
long-term commitment from top management to wide-ranging transformation
leads to the best results." - J. Lewis
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Structure
Strategic alliances can be structured in a number of ways, ranging from
"gentlemen's agreements" to detailed legal contracts. Informal cooperation,
formal contracts, and equity alliances such as joint ventures and minority
investments are common examples. These may involve just two companies, or
multiple firms in a "network alliance."
The structure of the strategic alliance should be subservient to the partnership
objectives, as well as to the nature of the relationships. This is true for the
management, policy-setting and governance structure, as well.
Strategic Alliance Opportunities
Within the PC-PS industry, you may wish to consider strategic alliances with
other precasters, your suppliers, other subcontractors, and various customers,
including contractors, design-build firms, owners and developers. Because firms
must retain their independence even when pursuing interdependent strategic
alliances, organizations will rarely limit themselves to one partner. This suggests
that your precast firm can enter into multiple strategic alliances, yet continue to
bid for work from other customers.
Strategic alliances do require, however, that the set of changes you make to
enhance value with one organization is not broadly and equally shared with that
organization's competitors. If you jointly developed an information network with
one client, for example, you would not share it with that customer's competitors.
Just as you can build alliances with your customers, your suppliers can enter into
strategic alliances with your firm to increase the combined value you offer to your
clients and the building owner. The alliance between High Concrete Structures
and MasterBuilders, a collaboration of technological development and marketing,
is an excellent example of this.
Alliances improve the competitiveness of both partners through their many
benefits. Alliances also offer a means of overcoming many of the disadvantages
typically associated with traditional transactions -- the guarded, often
antagonistic relationships in which little information is shared and there is little
opportunity to enhance value.
In effective strategic alliances, the linkages between companies are broad, deep
and unique. The greatest value from cooperation comes from integrating each
firm's separate processes into seamless operations. Instead of lowest price from
the supplier, for example, the emphasis is on lowest total cost. Rather than
seeking the fastest separate response times, the goal is shortest combined cycle
time. As a result, the most productive customer-supplier interfaces require
multi-functional teams which must be involved in depth. To create the most
value, a supplier must adapt its organization for each customer's interface,
reflecting the need for resources, structures and practices that are unique for
each situation.
Pamphlet #5 Page 212
Rather than contracts, effective alliances are based on strong commitments.
Many alliances function without any contracts at all. They are sustained by a
mutual need, a common objective seen as important enough to dominate any
issue, a willingness to share the benefits and a trusting relationship. To an
important extent, alliances are between people. When adjustments must be
made, only people who trust and understand each other can make them in a way
that maintains commitments. Only people who share a vision and the
enthusiasm to make it a reality will invest the efforts needed for an alliance to
succeed.
Both organizations must trust one another, and maintain ongoing efforts to
develop relationships at multiple levels. Open sharing of information allows each
partner to identify collaborative opportunities to increase the value they bring to
the marketplace. The need for trust requires that you select a partner that will be
committed to the relationship and compatible with your organization.
Both partners must maintain a long-term outlook which encourages each to
engage in relationship building and information sharing; this will promote
identification of emerging opportunities that increase value. Finally, both must
appropriately manage the risks that are associated with dissolution of the
strategic alliance. (See Sidebar E: Benefits and Key Success Factors of Strategic
Alliances).
How Will We Measure Success? The Balanced Score Card
Measuring the results of your organization on finances alone is fraught with
problems. Saavy organizations increasingly use a tool called a Balanced Score
Card to measure whether or not strategy is being executed and, if so, is it creating
desired results. (See Kaplan references for more information on the Balanced
Score Card.)
The objectives of the Balanced Score Card include:
• Provide a set of performance measures which capture the intent of the
business strategy and help drive it forward
• Expand management’s focus to include all of those capabilities required to
achieve the strategy
• Direct the focus of the entire organization toward those performance
measures critical to long-term success
• Create a dynamic performance measurement system which adapts to the
changing needs of the business
• Provide a basis for setting long-term performance objectives which drive
performance improvements
The keys to creating a Balanced Score Card include:
Pamphlet #5 Page 213
• Establish the critical success factors: core competencies, accomplishments,
management decisions and organizational characteristics that are critical to
executing strategy and achieving the vision. These summarize what needs to
happen for the organization to succeed.
• With this, you can then identify Balanced Scorecard measures, i.e., units of
information (financial or non-financial) that provide meaningful feedback to
strategy execution and, with this, success towards achievement of the critical
success factors.
Balanced Score Card measures are usually developed for four categories:
• Financial
• Customer
• Operations
• Innovation
You can, however, develop other categories that reflect your overall areas of
emphasis in building a winning company. Within each category, you then select
leading (i.e., early measures) and lagging (i.e., late measures) of outcomes. For
example, awareness levels may be a leading indicator of sales, with win rate the
lagging indicator. Balanced Score Card measures are established at the company
level. Then, each team or functional group level creates measures that stem from
the company measures, but better reflect what the smaller group can directly
influence. E.g., suppose one of the organizational measurements was win rate.
The sales department measures related to this measure could be:
• Consideration rate
• # hours in front of existing customers
What must the leadership team accomplish working as a team to
enhance the capacity of the organization to succeed?
Pamphlet Two focuses on the role of the senior leadership team and Pamphlet Six
on developing strategic leadership skills. Reading about leadership is useful.
Becoming a differentiated supplier requires you to translate awareness about
leadership’s role and a desire to improve leadership skills into a plan to improve
leadership skills throughout the company, starting with the senior team.
Otherwise, dreams exist, but there is no change in reality. Slowly but surely,
ambitions start to shrink and rose-colored glasses are used to convince yourself
that today’s reality is really not that bad. (See Sidebar F: Most of us choose to
ignore the crossroads we face, choosing slow death over deep personal change.)
The leadership team plan outlines the work activities of the leadership team (as a
team, not as individual managers of different parts of the organization) over the
coming year. Like other key teams, there should be objectives and action steps
and milestones. The work of leadership development and personal change is a
Pamphlet #5 Page 214
critical part of this plan. (See Pamphlet Six.) Key decisions the leadership team
must make over the coming year and any work in anticipation of these decisions
should also be outlined. Examples of leadership team objectives include:
• Revamp the performance evaluation system, shifting to 360 degree feedback
systems
• Design the balanced score card measures, consistent with our strategies
• Create more trust and collaboration within our group
The leadership team plan should also identify how the leadership team will
measure their success as a team. Examples of measures include:
• Scores on leadership assessment tools (See Pamphlet Six)
• Completion of key objectives
• Survey of employees assessing their view of our performance as a team (E.g.,
are we doing the right things and demonstrating strong leadership practices
in how we work with others?)
• Each individual makes progress on his personal development objectives
Many senior leadership teams also create plans for the broader leadership group
that includes all the managers of the company. Broadening the scope of the
team’s activities insures that tomorrow’s senior leaders are being developed
today.
Summary
Many companies have great planning systems, but they are focused on financial
outcomes alone. Others have great ideas about how to be different than the
competition, but their ideas never get translated into actions. Year-by-year they
are doing the same old things. Both companies fail their people and their
customers. Companies need to get different and get better. Companies
competing as commodities need new strategies. Existing market leaders need
enhanced points of differentiation. Both must develop even better execution
skills to create the organization’s desired future. Even the lowest cost provider in
a commodity market must be attuned to changes as companies with different
business models can disrupt a market and threaten the lowest provider’s
position.
Act Three of the change process is where the rubber hits the road. Implementation
of new competitive strategies or enhancing execution of an existing
competitive strategy creates superior value for customers and therefore market
victories. Implementation is enhanced by balanced score card measures and
annual marketing, sales, operational, financial, partnering, and leadership team
plans that translate strategy into desired near-term outcomes. This focuses all
the efforts and initiatives of the organization on a shared direction.
In a very real sense, implementation is the art of introducing and managing
change. Management tools, such as budgeting, measurements and rewards,
Pamphlet #5 Page 215
individual job objectives, timetables and evaluation of results are all valuable in
this work. Chart Sixteen provides a framework for how these tools fit together. A
critical point of alignment for companies in business-to-business markets is
oftentimes creating a marketing department.
The planning systems outlined in this chapter serve to align the work of the
organization with its strategies to actually change (versus plan to change) the
organization. But they serve other roles as well. This framework places
leadership in the role of creating processes to align activities, thereby pulling
them out of the work of daily operations. This opens the space for others to do
the daily work, thereby enabling all employees to develop and use their inherent
gifts. Use of this framework also creates a feeling of community—we are all in
this together, each with distinct and important roles. Aligned planning is a key
tool for building collaboration and tackling the "system" causes of distrust and
weakened relationships across parts of the organization. With all these
advantages, what are you waiting for?
Questions to Ask Going Forward
• Is our competitive strategy known and understood across the organization?
• Do we understand which processes are or will be at the heart of or
marketplace and financial success?
• Do individuals, departments and process teams know how they contribute to
our points of differentiation and core competencies?
• Do we have the right skills? Are we creating, preserving and enhancing our
core competencies?
• Are we structured effectively to execute our strategies?
• In our estimation, can one person serve as both the marketing and sales
professional, i.e., can a marketing professional cover sales and vice versa?
• What is not getting done in our organization when Sales is responsible for
both the sales and marketing roles?
• Does our company have a market understanding process in place that is as
strong or stronger than its financial/operational information process?
• Are our decisions and actions integrated around a well conceived, long-term
competitive strategy? Who in our organization is helping us define the
strategy and insure it “works” in the marketplace?
• Are our measures consistent with our strategies? Do we have both leading
and lagging indicators of success in strategy execution?
• Are our planning systems focusing everyone in the same direction? Is it the
right direction?
• Are we deploying process improvement resources on the right processes?
• Are we "fixing" processes when we should be redesigning them from scratch?
• How should we change our "budget" process to better support our desire to be
strategic leaders and to insure we are competing as a differentiated supplier
rather than a commodity supplier?
Pamphlet #5 Page 216
Sidebar A: Systems Thinking
A systems perspective comes from looking at your organization from the
“balcony.” Systems thinkers look beyond what is immediately apparent, seeking
the root cause of visible problems. They also look for changes that will support
multiple, versus a singular, opportunity. Systems thinkers are in the habit of
viewing their organization in terms of interdependencies, interactions, sequences
and processes that underlie the results of the organization. System thinkers do
not see results being achieved through independent events and a linear chain of
occurrences.
A systems view leads us to understand a number of things:
• You cannot evaluate a system without knowing its purpose. Varying purposes
create chronically dysfunctional systems. This is why competitive strategy
becomes so important for an organization as well as vision, purpose and
guiding principles. It insures that individuals are all aiming in the same
direction. Effective alignment, as executed through sales, marketing,
financial, operational and leadership plans, insures that individuals are going
in the same direction as well.
• When an organization fails, the system is at fault. When people fail, the
system is most often at fault. Always blaming people will not improve
organizational results.
• Errors can stay in the system a long time if the root cause is not treated.
• It’s more expensive to treat problems downstream of where they occur as
opposed to eliminating the problems from the start.
• Anyone in the organization that inherits problems from another part of the
organization begins to build up a certain level of defensiveness. "Rules" get
created that slowly erode collaboration -- and even cooperation -- between the
different parts of the organization.
Rummler and Brakke, two noted operational improvement specialists, say it all
when they comment, "An organization behaves as a system whether it is managed
as a system or not."
Sidebar B: Variation
Process improvement uses a set of statistical tools that allow you to measure
variation. Whatever variation there is must be differentiated between what is
called "common" or "systemic" variation and special cause variation. The former
is recurring variation that reflects an ongoing, underlying problem that you can
anticipate will occur. For example, delivery of product beyond the promised date
is often times due to systemic variation. It may be due to poor systems, weak
communications or staffing that is too lean. Nevertheless, there are sometimes
special or unique causes of variation. These are highly unusual, i.e., once in a
blue moon events that cause an outcome which is significantly outside normal
variation. These are the kinds of events that do not appear with a recurring
Pamphlet #5 Page 217
pattern, i.e., an unexpected snow storm in Atlanta will reduce daily output of a
precast work team. One way to differentiate special versus common cause is to
ask if this is a unique problem or an example of a larger class of problems and
second ask, "If I replace the workers, would I still have this problem?"
The following table gives an example of special versus common cause drivers of
delays in architect’s approvals:
Special Causes Common Causes
• Architect’s wife dies in car accident
• Drawings delivered to wrong office,
where they sat for days
• Architect does not appreciate need
for speedy approval
• Architect is understaffed
• Architect is unfamiliar with precast
and therefore needs to find outside
help prior to approval
• Other parts of design that affect us
are not yet complete
• Approvals are used to help finalize
the drawings
The key to minimizing adverse outcomes from special variation is to ensure you
have a process in place to get timely data that reveals special causes quickly so
that you can react to them. In a hospital setting, for example, highly difficult
cases are flagged early on so that a case manager can help oversee the care of a
patient. The goal is to contain damage with an immediate remedy. It is
important to understand what’s different this time, i.e., what’s causing the special
cause outcome, as this special cause outcome could in fact become a common
cause at some point. If you think it might become a common cause at some
point, then you must develop a longer-term remedy.
How do you deal with special causes?
• Get timely data so that special causes are revealed quickly
• Contain damage with an immediate remedy
• Search for the cause -- what was different? Could it be a common cause at
some point?
• If so, develop a longer-term remedy
The focus of continuous process improvement, and process redesign for that
matter, is to adjust common causes of adverse outcomes. Here you look at all the
data, not a single data point, and you stratify the data into high occurrence causes
and low occurrence causes and you focus initially on improving or limiting the
high occurrence causes. You may ultimately treat different classes of projects
differently if you see correlations between sources of problems and types of
projects.
Pamphlet #5 Page 218
Trying to understand the causes forces you to play detective in terms of figuring
out:
• Who is involved?
• What and where is the cause of the problem?
• When does the problem occur?
• What types of projects does it occur on?
You use these types of questions to identify how you will "study" or measure how
a process is working. Collecting data helps you focus on the true location of the
problem. Once you identify the location of the problem, you then hypothesize
why the problem arises and determine potential solutions to this. (See Steps
Three and Four in Appendix One.)
Sidebar C: Structure Affects, but Does Not alone Determine, Behavior
“Breaking the Functional Mindset in Process Organizations,” Harvard Business
Review, Sept./Oct. 1996.
• Authors compare companies in the same industry – electronics
• Reorganization of operations along process lines made no difference to cycle
time performance unless it was accompanied by new management approaches
that create a culture of collaboration by focusing on:
• Teamwork skills
• A collective sense of responsibility to process outcomes
• Key “collaboration” tools used to make process reorganizations succeed
included:
• Structure jobs with overlapping responsibilities
• Base rewards on group performance
• Layout work area so people can see each other’s work
• Change procedures to enable collaboration
• Using the above tool(s) increased cycle time 7.5 times in process-complete
organizations
• Functional organizations were 3.5 times faster than process-complete
organizations not using collaboration tools
Sidebar D: Benefits of Strategic Alliances
• Enhance product value
~ Superior timing
~ Create new or improved performances
~ Lower costs and risks
~ Provide more value in use
~ Offer a stronger product line
~ Compatibility that increases product appeal
~ Enhance product images
Pamphlet #5 Page 219
• Improve market access
~ Produce better advertising
~ Open new marketing channels
~ Gain better channel control
~ Improve supply links
~ Lower input costs
• Strengthen operations
~ Create new and improved processes
~ Use facilities more productively
~ Cooperate to develop operating standards
• Add technological strengths
~ Add technology to your skill base
~ Increase R&D creativity
~ Build needed scale
~ Ease major technology transitions
~ Use market pull to encourage others' development
• Enhance strategic growth
~ Overcome market entry barriers
~ Pave your growth path
~ Join to explore new opportunities
• Organizational reinforcement
~ Learn from others
~ Focus with a partial spin-off
• Build financial strength
~ Produce more income
~ Reduce administrative costs
~ Reduce investment exposure
• Look for wider synergies that will generate yet more advantages
Source: Partnerships for Profit, J. Lewis
Sidebar E: Key Success Factors of Strategic
• Do the "basics" right
~ Select a good partner
~ Define specific objectives
~ Establish a structure that supports the strategy
• Build trust and ongoing relationships
• Maintain independence in the face of inter-dependency
• Manage risks
• Maintain a long-term outlook
Pamphlet #5 Page 220
Sidebar F: Most of us choose to ignore the crossroads we face,
choosing slow death over deep personal change
The Tyranny of the In-Basket
“When an executive admits that a change is needed but opts out not to make it,
the executive is making a conscious choice. The water is slowly heating up and
the executive knows that the leap to safety is possible, the strategic thought being,
‘If I can hang on just a couple more years the problem will belong to someone
else.’ However, when he leaps to safety, the rest of the work force is left with the
problem. In this scenario, self-interest triumphs over collective responsibility.
The selection of slow death has some moral overtones. It involves the violation of
trust and responsibility, often leading to guilt. Because of the moral implications,
the issue becomes undiscussable in the organization. Organizational members
fake ignorance of the situation, while fully understanding that the organization is
in serious trouble. The impact of this problem is enormous.
“People slowly lose hope and begin to feel trapped by their circumstances. They
often cope by withdrawing or conversely by staying busy with insignificant issues.
Others who know how to lead and who understand deep change and the
enormous investment of energy and resources that are necessary cannot bring
themselves to initiate the process because they lack energy. There is no energy
left. They are victims of burnout. So they continue to go through the motions
finding it difficult to discover interest and relevance in their work.
“What they need is deep change at the personal level, a re-invention of their
professional role, a revolution in their priority list, a recognition that
maintenance is production and that their absolute ‘must” really must be
delegated to someone else. Few people are very good at re-inventing themselves.
They often choose the destructive alternative of staying very busy. It may not be
effective behavior, but has the effect of a good narcotic. It diverts attention from
the real issue and temporarily saves them from having to tackle and resolve the
actual problem.” (QuinnDeep Change)
Pamphlet #5 Page 221
Administrative Processes
Manage finances
Ensure safety and OSHA compliance
Material understanding and innovation
Supplier management
Hire, train, deploy the work force
Project
Management
New product
development and
introduction
Make the order
Ship and erect
Design
Ideas
Win the
order
Schedule
Complete
Drawings
Market to customers
and get considered
Operational Processes
Chart One:
Macro Process View of a Precast Company
• Hire, train, deploy work force
• Supplier management
• Material understanding and innovation
• Reduce waste and cost
• Firm A makes industrial wall panels. They face a
“commodity” market in which they are the highest
cost producer. As a result, they are losing
money. Their strategy is to innovate wall panels
to significantly increase their value (electrical built
in, easier installation, innovative insulation
material, time savings on window framing, etc.)
They believe they will earn a premium on this new
product that exceeds their cost of differentiation.
• Firm B competes on cost and speed of bridge
beams and building/structural components (double
T’s, etc.). They work in an area of significant
labor shortages. They are already the
fastest/lowest cost supplier. They do not want to
lose their lead, however, rising labor cost and
labor shortages threaten this.
• Your firm
• Ensure safety and OSHA compliance
• New product development and introduction
•Manage project finances and schedule
• Ship and erect the order
• Make the order
• Complete the drawings
• Schedule project, team, special forms
• Get the order
• Conceptualize the solution (value engineering)
• Market to customers
Your role is to assess process salience of
Firm A or B, C and D.
Generic Macro Processes
Chart Two: Process Salience of
Different PC-PS Companies
•Hire, train, deploy work force P I
• Supplier management B I
• Material understanding and innovation I B
• Reduce waste and cost P I
•Ensure safety and OSHA compliance M P
• New product development and introduction I P
•Manage project finances and schedule P P
• Ship and erect the order on time and budget P I
• Make the order on time and budget P I
• Complete the drawings accurately/on time I I
• Schedule project, team, special forms B I
• Get the order B P
• Conceptualize the solution (value engineering) I I
FIRM A FIRM B Your FIRM
Macro Processes
I=identity; P=priority; M=mandated; B=background
• Market to customers B I
Chart Two: Process Salience of
Different PC-PS Companies
Time
Redesign
Continuous Improvement
Redesign
Cumulative
Improvement
Chart Three
Organizations Combine Process
Redesigning and Improvement Efforts
* Changed market conditions, new competitive strategy or severe customer/cost/competitor
problems exist.
Process Redesign:
Fundamental Change
Process Improvement:
Incremental Change
No
Situation demands
we do things very
differently *
No
It’s way too
complex and not
understood
Yes
Yes
No
Standardize
Yes
Yes
Yes
No
7 Step Process
Improvement
Yes
Yes
Yes
Yes
No
PDCA
Yes
Yes
Yes
Yes
Yes
Yes
Fix the obvious
(do-check)
Does situation
suggest only need
is getting better?
Does a straight
forward and
identifiable
process exist?
Does
everyone
use the
same
process?
Is the
solution to
the
problem
known?
Is implementation
of the
solution
understood
and low risk?
Are you
sure about
your yes’s?
Chart Four:
Which Improvement Approach to Use?
Continuous Process
Improvement Activities
5-10%
Establish Continue Process
Improvement Priorities
20%
Define critical processes in
context of competitive strategy
Create an “idealized” overall
organizational design
Align macro process goals and
measurements of success to your
competitive strategy and
organizational goals
Oversee major breakthrough
process redesign
80%
High
100%
Chart Five:
Senior Management’s Role in Process Edge
In hierarchical cultures, the "referee" decides which solution is "best". His success in "eliminating" the burden depends directly on the
amount of information and insight he has.
Erection Crew Will not work outside current
geographies
Spend long time away from
home
Manufacturing Tell Sales they will no longer
accept difficult-standard shapes
for architectural precast panels
at market prices; a 55%
premium is expected
Work overtime, incur scraprework
costs
Engineering Send an extraordinary number
of pieces to production with a
very short lead time
Re-engineer how design
process works so that
manufacturing has smoother,
steadier work flow
Marketing, Sales and
Production work with
Engineering to create even
more design process changes
that help smooth production
Engineering, Construction and
Manufacturing work together
to create a cast-in-place system
for all odd shapes--this is now a
Construction Division service
offering
Engineering, Finance and
Erection identify strategic
partner for U.S. erection that
trains under home-based
company teams
Sales Sales promises dates that the
plant is unlikely to meet
Sales spends extra time and
effort convincing owner the
wait is worthwhile
Sales, Marketing, Engineering
and Production work together
to create "quick" building
system that offers faster lead
times
Competition:
Shift the Burden
Cooperation and
Coordination:
Absorb or Split or Minimize
the Burden
Collaboration:
Eliminate the Burden
Chart Six: Examples of Collaboration vs. the
Alternatives
Tactical
PCI
Company
Strategic Activities/Decisions
• Product line offering
• Served customer market segments
• Strategic positioning, i.e., the company’s value
proposition to its customers
• Pricing strategies
• Geographic scope
• Business development priorities and growth
strategy
• Distribution channel selection
• Operational priorities and critical processes
Market
Strategic
Tactical Activities/Decisions
• New product introduction
• Product modification and obsolescence
• Sales support material and other promotional
and communication efforts
• Target customers and communication
positioning
• Forecasting
• Training, with respect to product/customer
(not selling skills)
• Key customer interfaces
• Pricing policies
Chart Seven: Tactical vs. Strategic
Marketing
~ Where company competes, i.e., business scope ~ Participate in broad-based decision-making
(geographies, products/services, market segments) regarding where and how company competes
~ How company will win market share, i.e., strategic ~ Identify specific products and market segments
positioning within overall scope
~ Operational strategy (structure, core competencies, ~ Select positioning for specific products
etc.) consistent with company-wide positioning
~ ID of critical processes ~ Create and communicate market understanding
~ Allocation of resources broadly and facilitate use in decision-making
~ Purpose, guiding principles and vision ~ Represent the voice of the customer in strategic
decisions
~ Identify marketing resources required for
achieving near-term sales/profit objectives
and long-term vision
Company Strategic Decisions Marketing Department's Role
Chart Eight: The Marketing Department's Role
New Product and New Market Development ~ Identify ideas for new products/new markets
and develop proposals/plans
~ Specification
~ Trials
~ Introduction plan
~ Participation in reviews, project team
meetings, etc.
Get the Order ~ Marketing activities to ensure sales forecast
is achieved (e.g., advertising, promotion, etc.)
and sales representatives are more efficient and
effective
~ Pricing policies
~ Selected field support
Manufacture-Ship the Order ~ Identify customer issues/needs
~ Forecasting for production planning
~ Help prioritize cost reduction activities and
ensure customer value not compromised
~ Analyze geographical options for expanding
productive capacity (e.g., competitor risks,
acquisition targets, etc.)
~ Help specify supplier requirements that affect customer
satisfaction
~ Post-project customer satisfaction assessment
Key Company Processes Marketing Department's Role
The Marketing Department's Role (continued)
Chart Nine: The Differing
Perspectives of Sales and Marketing
Sales Makes Matches
Marketing Identifies and
Attracts Potential Matches
and Helps Insure Future
Matches
Thinks about
Customers as:
• Potential orders • A marketplace
Groups Customers by: • Probability (buy this year) • Needs
• Probability (we will win)
Where He/She Works: • In the field with customers • In company
who will buy and with • In field (universities,
influencers
regulatory boards,
competitors, substitutes,
compliments and lost,
current, long-term potential
customers
Relationship to
Customer and
Company:
• Company to customer • Customer to company
Listens for: • Current customer needs and • Market changes
how I tailor what our • Future products and
company offers to meet services of company
these needs
• Business context of
customer/non-customer
• Barriers to sales
effectiveness today
Key Things to • Time • Resources
Prioritize:
• Segments
• Products and services
• Source of advantage
• Competitors
• Geographies
Measures of Personal • Sales
• ROI/EVA
Success:
• Repeat business
• Market share of opinion
• Margin
leaders' business
• Market share
• Sustainability of success
• Market share and growth
S
A
L
E
S
~ Specific customer
understanding
~ Identifying &
prioritizing
targeted accounts
~ Securing
contracts/sales
~ Exhibits
~ Marketingsales
plan
~ Market
understanding
~ Presentation
~ Building
relationships
~ Negotiating
~ Closing
~ Product,
technology
~ Selling
~ Empathy
~ Flexibility
~ Listening
~ Works independently
~ Sees “people”
side of
everything
M
A
R
K
E
T
I
N
G
Ownership
~ Market
understanding
process
~ Product line
specification
~ Pricing policies
~ Product intro &
obsolescence
~ Clinical trials
~ Marketing-sales
plan
~ Positioning
Participation
~ Operational
plan
~ Cost
reduction
projects
~ Exhibits
~ Selected
accounts
Skills
~ Analytical
~ Conceptual
~ Project
management
~ Strategic
planning
~ Product
promotion
~ Systems
thinking
Knowledge
~ Finance
~ Advertising
~ New product
assessment &
development
~ Market trends
~ Forecasting
~ Market research
~ General
management
Traits
~ Teamwork
~ Listening
~ Patient for
long-term vs.
short-term
results
~ Can cut to the
core
~ Enthusiastic
about product
area
Chart 10: Duties and Qualifications
• Initiate an “executive
level” relationship with
target accounts
• Predispose target accounts
to receiving a sales call
• Generate sales leads from
target accounts
• Create a positive image of
your company in the
minds of target customers
• Increase wall
panel sales
25% in FY 97
• Steal market share
from competitors by
differentiating our
company on the basis
of speed
• Communicate your point
of distinction to target
competitive accounts
Marketing Goal
Marketing Strategy
How Communications
May Help
Chart 13: The Marketing/Communications Link
• Generate sales leads
from target accounts
• Arm the sales force with
sales support materials
• Product positioning
strategies
• Communicate your
company’s point of
distinction (i.e.
incremental value
associated with product
from your company)
• Market building
strategies
• Communicate the
introductory promotion
• Selling strategies
• Stimulate interest in new
product
• Launch new
product XYZ
in Q2 FY97
• Introductory
promotions
• Announce new product
availability
Marketing Goal
Marketing Strategy
How Communications
May Help
Chart 13: The Marketing/Communications Link
* Ideally, this should be quantified through market research.
• Initiate an “executive
level” relationship
with target accounts
• Predispose target
accounts to receiving a
sales call
• Gain executive level and
sales level entry into 15
target competitive accounts
by beginning of Q3
• Generate sales leads
from target accounts
• Generate 100 sales leads
from target competitive
accounts by end Q2
• Create a positive
image of your
company in the minds
of target customers
• Redefine the company’s
image in the minds of target
customers*
• Increase wall
panel sales
25% in FY 97
• Communicate your
point of distinction to
target competitive
accounts
• Increase awareness of the
company’s point of
distinction within target
accounts*
Marketing Goal
How Communications
May Help
Communications
Objectives
Chart 14: Communications Objectives
* Ideally, this should be quantified through market research.
• Generate sales leads
from target accounts
• Generate 180 sales leads
from target accounts by Q3
• Arm the sales force
with sales support
materials
• Create sales support
materials by end Q1
• Communicate your
company’s point of
distinction
• Create awareness of the
company’s point of
distinction*
• Communicate the
introductory promotion
• Generate interest in new
product, including 250
inquiries regarding the
promotion
• Stimulate interest in
new product
• Launch new
product XYZ
in Q2 FY 97
• Announce new product
availability
• Create awareness of new
product availability among
target customers*
Marketing Goal
How Communications
May Help
Communications
Objectives
Chart 14: Communications Objectives
Seminars, Newsletters, AV, ~ Educate; inform; initiate relationships
Executive Correspondence
Promotion ~ Provide incremental value to product
~ Create incentive
Publicity/News Releases ~ Reinforce advertising messages
~ Increase awareness
Sales Brochures/Sales Aids ~ Reinforce advertising messages
AV, Product Displays, Website ~ Sell the product/service concept
Direct Mail ~ Reinforce advertising messages
~ Generate sales leads
~ Pre-dispose customer to sales call
Journal Advertising ~ Convey strategic positioning
~ Communicate points of distinction
~ Increase awareness
~ Build image
Tools
Communications Objectives
Chart 15: Communications Tools
• Gain executive level
and sales level entry
into 15 target
competitive accounts
by beginning of Q3
• Executive correspondence
• Newsletter
• Generate 100 sales
leads from target
competitive accounts
by end Q2
• Tradeshows
• Direct mail
• Advertising
• Web site
• Redefine the
company’s image in
the minds of target
customers
• Journal advertising
• Publicity
• Increase wall
panel sales
25% in FY 97
• Increase awareness of
the company’s point of
distinction within
target accounts
• Journal advertising
• Publicity/news releases
Marketing Goal
Communications
Objectives
Potential Tools
Chart 15: Communications Tools
• Generate 180 sales
leads from target
accounts by Q3
• Direct mail
• Advertising
• Publicity
• Create sales support
materials by end Q1
• Company positioning
brochure
• Product literature
• Sales aids
• Promotion fliers
• Increase wall
panel sales
25% in FY 97
• Create awareness of
new product
availability among
target customers
• Generate interest in
new product
• Create awareness of
the company’s point of
distinction
• Journal advertising
• Tradeshows
• Publicity-feature articles,
news releases
• Web site
Marketing Goal
Communications
Objectives
Potential Tools
Chart 15: Communications Tools
Is it working?
Evaluation
Execution
Company-Wide Budgets & Timetables
What’s our itinerary for
getting there?
Organizational Structure
Marketing & Sales Plans
Operational & Partnership Plans
Leadership Team Plan
Finance Plan
Business Assessment
Problems &
Opportunities
Tactical
Where do we want to end up?
Vision and Strategic Goals
What direction do we follow
to get there?
Competitive Strategy Decisions
Where are we?
Strategic Problems & Opportunities
Strategic
Where are we?
Strategic Assessment
Chart Sixteen:
Overview of the Alignment Process
Plantes Company July 1997 PCI:I
• Overview of process flow diagram (SIPOC) to ID major players and interconnections
• Data describing the needs of the customer(s)
• Baseline measure(s)
• Mission statement or objective for the team doing the process improvement
Tools Used and Likely Outputs from Step 1:
• What is the problem we're experiencing, what is the gap?
• Which processes are involved in this problem?
• Which of these processes do we think is directly related to the problem? Why?
• What are the key steps in the process (what is it that we do)?
• Why do we perform the process (what are we trying to accomplish)?
• Who is involved in these processes?
• What are the results of the process (what are the outputs)?
• Who are the key customers of the process and what are their needs (who uses the results, and what
qualities to they require in those results)?
• What are the boundaries within which the project team will work to improve the process?
• What baseline measure(s) can we use to help us determine how well we are currently meeting
customer needs, and then how much we have improved the process (how will we know if we've
made any improvement)?
• Who will sponsor this team's work?
Questions Answered:
Step 1 Goal: To define the project’s purpose and scope
Appendix One
Joiner 7-Step Method, Step 1: Define the Project
Plantes Company July 1997 PCI:I
Reduce time from contract approval to
approved shop floor drawings.
Purpose of Project:
6
Process Aim:
Why do we do
what we do: to
make sure
components we
deliver are
erectable and fit
the overall
building solution
GC
3
Who supplies
what we need to
do what we do?
2
What do we
require to do
what we do?
1
What do we do?
4
What are the
results of
what we do?
5
Who uses
what we do?
Structural
Drawings
Owner
Int
Prepare
No
Architects’
Drawings
Yes
Architect
Source
Check
Submit
Approved
Approved
Drawings
Contract
Ex
Prepare
No
Engineer of Record
Plant
Suppliers Inputs Process Steps Outcomes Customers
GOAL: Define the project’s purpose and scope (SIPOC)
Joiner 7-Step Method
Step 1: Define the Project
Plantes Company July 1997 PCI:I
• Detailed flowchart of the process to understand steps in the process
• Run chart/control chart of the baseline measure(s)
• Pareto diagrams, histograms, scatter plots, and others showing stratified symptoms
Tools Used and Likely Outputs from Step 2:
• How does the process work currently? What is the history?
• What results does the process currently produce? What kind of variation do we see in the results?
• Are there ways we could simplify the process without sacrificing the desired quality of the results?
• What strategy for reducing variation makes sense?
• Can we draw a picture of the process?
• What type(s) of symptoms of the problem occur?
• Where do the symptoms of the problem occur?
• When do the symptoms of the problem occur?
• Who is involved when the symptoms occur (suppliers, customers and employees)
Questions Answered:
Step 2 Goal: To further focus the improvement effort by gathering data on
the current situation
Joiner 7-Step Method
Step 2: Assess the Current Situation
Plantes Company July 1997 PCI:I
Measurement may lead you to redefine the problem!
Resubmittals
Wall
Panel
Structural
AP
Resubmittal
N
Y
Y
% N
N
#
N Y
Y
Frequency Frequency
Days
1 2 3 4 5 6
No resubmittal
Project #
Time Until Approved
Shop Floor Drawings in Days
Days
STEP 2A: Investigate the problem by measuring outcomes
GOAL: To further focus the improvement effort by gathering data on the
current situation
Joiner 7-Step Method
Step 2: Assess the Current Situation
Plantes Company July 1997 PCI:I
What
~ Complex projects
What
~ Fast track projects
Where
~ Between project architect and her boss
Where
~ Openings
~ Structural pieces, not architectural precast
When
~ Large # people in approval process
~ Mechanical sub is not yet selected
~ GC or architect do not yet need our drawings
When
~ Incomplete architect drawings
~ Bed is changed
Who
~ Mechanical sub
~ GC not familiar with precast
~ Our designers, not our engineers
Who
~ John and Jim, not Frank or Jeff
~ Architect, not designers
Source of Delay Hypotheses Source of Resubmittal Hypotheses
STEP 2B: Play detective --Hypothesize who was involved? Where was cause of
delay? When does delay occur? What type of project?
GOAL: To further focus the improvement effort by gathering data on the
current situation
Joiner 7-Step Method
Step 2: Assess the Current Situation
Plantes Company July 1997 PCI:I
Where?
Who? What Type of Project?
Non-AP AP Other Openings
Non-AP
1
2 3 4
DB
CM
%
Resubmitted
GC
Resubmittals
GOAL: To further focus the improvement effort by gatheringses to identify what
to measure, then measure to identify true location of problem
Joiner 7-Step Method
Step 2: Assess the Current Situation
Plantes Company July 1997 PCI:I
STEP 2D: Hypothesize why the problem arises. You may need to do further
detective work and measurement.
GOAL: To further focus the improvement effort by gathering data on the current
situation.
Joiner 7-Step Method
Step 2: Assess the Current Situation
Plantes Company July 1997 PCI:I
• Cause and effect or tree diagram mapping out possible causes
• A list of theories about likely causes
• Data to verify the theories
Tools Used and Likely Outputs from Step 3:
• What could possibly cause the symptoms we're seeing? What are possible deeper causes?
• Of the possible causes, which seem to be the likely causes? How do we know?
Questions Answered:
Step 3 Goal: To identify and verify deep causes with data; to pave the way for
effective solutions
Joiner 7-Step Method
Step 3: Cause Analysis
Plantes Company July 1997 PCI:I
Deep Causes ! ! !
Secretary did not
provide as a priority
Did not receive
notice
Has not used PC
in past
We did not alert
Does not understand
PC role in bldg. process
and no process ???
Mechanical sub
not selected
Mechanical sub
is late
Not informed
Does not understand
building process
Lack mechanicals
Not aware of
due date
Not aware of
effect of delay
Has more
pressing problems
Lacks information
to approve
Architects feels
no urgency
-- Do for each “why” you choose to address
GOAL: To identify and verify deep causes with data so as to pave the way for
effective solutions
Joiner 7-Step Method
Step 3: Cause Analysis
Plantes Company July 1997 PCI:I
• Matrix of possible solutions and criteria for choosing solution(s)
• Plan for small scale tests of solution(s)
• Results from small scale test(s)
• Plan and execution of full scale implementation of best solution
Tools Used and Likely Outputs from Step 4:
• What possible solutions could address the deep cause of our problem?
• What criteria are useful for comparing the solutions?
• Which is the best solutions?
• How can we test our solution(s) on a small scale?
• What results do we get from our small scale test?
Questions Answered:
Step 4 Goal: To develop and try out solutions that address deep causes of the
problem
Joiner 7-Step Method
Step 4: Solutions
Plantes Company July 1997 PCI:I
Solution
4
Solution
3
Solution
2
Solution
1
Criteria
1
Criteria
2
Criteria
3
Criteria
4
Criteria
5
GOAL: To develop and try out solutions that address deep causes of the problem.
Joiner 7-Step Method
Step 4: Solutions
Plantes Company July 1997 PCI:I
• Run chart/control chart of baseline measure(s) to demonstrate improvement
• Stratified data showing symptom reduction
Tools Used and Likely Outputs from Step 5:
• What results does the process now produce?
• Do the results demonstrate improvement? Enough improvement?
• What did we learn from implementation that will help us to plan for process improvement
elsewhere?
Questions Answered:
Step 5 Goal: To evaluate both the solution and the plans used to implement
the solution
Joiner 7-Step Method
Step 5: Results
Plantes Company July 1997 PCI:I
• New flowchart of the process reflecting the improvements made
• Plans for maintaining the gains
• Plans for educating/training relevant individuals
Tools Used and Likely Outputs from Step 6:
• How do we convey the necessary information to the necessary individuals in the organization to
assure that everyone who needs to knows about the improvement?
• What is in place to prevent backsliding?
• What, if anything, does the greater organization need to know about the improvements?
Questions Answered:
Step 6 Goal: To maintain the gains by standardizing work methods or products
Joiner 7-Step Method
Step 6: Standardization
Plantes Company July 1997 PCI:I
• documentation of lessons learned throughout this cycle of improvement
• recommendations for the next cycle of improvement
• data to support recommendations
Tools Used and Likely Outputs from Step 7:
• What remaining improvement needs are there for this process?
• What is the next, most important opportunity for improvement?
• What did we learn from this project about this process, and process improvement in general?
Questions Answered:
Step 7 Goal: To anticipate future improvements and to preserve lessons from
this effort
Joiner 7-Step Method
Step 7: Future Plans
C. What baseline measure will you use to assess performance of the shop
floor drawing process along the dimension of the problem you’ve
elected to focus on?
B. What specific problem do you want to work on (e.g., accuracy, speed,
cost to complete, inefficient design for manufacturability)?
A. What are the problems you experience in the shop floor drawings
process?
I. Project Definition
Appendix 2: Process Improvement Exercise
– If speed is the problem, where are all the places delay occurs
– If accuracy is the problem, what type of mistakes emerge and
where might they occur?
– What are the types of customers or buildings or products where
problems are most likely to emerge?
– When do the problems occur?
– Who in your company is involved (but not to blame for)in the
mistakes?
B. Hypothesize a pareto chart for your company for one of the ways you
stratified the appearance of the problem (e.g., create a chart for when,
where, who or what or some other stratification). Use the stratification
approach you feel would most likely reveal insight into the
appearance of the problem if you collected real life data. (See
example on the next page.)
A. Identify the different ways the specific problem appears by using
different stratifications (when, what, where and who) for the
appearance of the problem. E.g.,
II. Current Situation: Detective Work!
Process Improvement Exercise (continued)
Architect
approves
our
submitted
final
drawing
We
receive
prints
from
architect
PC-PC
engineer
turnaround
PC-PS
manufacturer
approval
Other
Stratification Choice:
Source of delay
stratified by where in
the process the delay
appears
10
14
18
32
101
Frequency
EXAMPLE
Problem: Speed of shop floor drawing completion.
Process Improvement Exercise (continued)
B. For each top level cause, ask why? why? why? to build the tree
diagram to lower levels.
C. Of the possible causes, which do you feel are the likely key causes?
D. Back in the office, how could you identify what is the root cause of
the problem you are focusing on? (See example on the next page.)
A. Create a tree diagram to brainstorm the root cause(s) of the highest
frequency factor identified (hypothesized) in Step II.
III. Cause Analysis: Brainstorming the Why
Process Improvement Exercise (continued)
We lack
standard methods
Our process changes
regularly
No one is
responsible
Architects do not
have set assistants
We failed to alert
firm as to due date
Secretary failed to
tell architect
Etc.
PC-PS drawing
not made from
final prints
Architects
are overworked
Architect was unaware
of our due date
Etc.
Architects’ delay
EXAMPLE
Process Improvement Exercise (continued)
• As you proceed through the steps, the exercise will become more and more hypothetical.
Minimize your time spent on IV and V.
NOTE:
A. Assume you’ve implemented the solution. How will you decide it’s an improvement?
V. Evaluation of Solution
A. Hypothesize the most significant driver (i.e., the root cause) of the high frequency
occurrence of the problem you elected to focus on.
B. What are the different ways you would eliminate this?
C. What criteria will you use to choose one solution over the other?
IV. Solution
Process Improvement Exercise (continued)
A) Identify ways you could measure the
performance outcomes of your company’s
“Get the Order” process
B) Create the “as is” process map for your
organization’s “Get the Order” process
(Don’t get hung up here – move on if you
get stuck)
C) Theorize (where, how, when, to whom)
problems appear and identify problems you
feel are most important to solve (consider
customer satisfaction, cost and success and
ramification on execution speed, cost,
quality if order is won)
D) Brainstorm potential causes of problems
and hypothesize which are most significant
E) Identify at least two new ways to design the
“get the order” process that eliminate the
most important problems
F) How will you evaluate one solution vs.
another?
10) Where do you prioritize customers?
9) Does/should process differ for existing vs. new
customers?
8) How does completed work relate to getting the
next order from a customer?
7) Are there any subs that are at the owner’s table
early? How did they do that?
6) How is scheduling connected to the “get the
order process
5) Who does the estimating and what +/-’s result
from this
4) Types of customers
3) When is material decision made?
2) How do customers hear about you?
1) ID of target customer
Steps Factors to Consider
Appendix Three:
Company Process Redesign Exercise #1
Job Description Exercise (continued)
~ Articulate reasons why your company/material should be used
~ Keep your company's name/capabilities in front of:
- existing customers
- new customers
~ Find out why you lost business
~ ID market changes and assess their implications--risks and
opportunities
~ Determine your strengths and weaknesses vs. competition
(PC and other materials) and the associated risks and opportunities
~ Systematic pricing comparisons vs. competition in order to ensure
you are not leaving money on the table
~ Tools to make it easier for sales to secure new orders or do
"negotiated" work
~ Sales force training on products and markets
~ New product identification
~ New market identification
~ ID changes needed in existing products
Responsibility? Well? Regularly?
Who Holds Is it Done (Yes or No)
Appendix 4: Job Description Exercise
Who's Doing Marketing's Job in Your Company
Responsibility? Well? Regularly?
~ Attendance at construction industry seminars/meetings to
learn more about market trends
~ Analysis of customer/product/market profitability and plans to
improve profitability
~ Developing and executing plans to enter new products/markets
~ Development and execution of educational programs and services
for designers
~ Represent "voice of customer" in key decisions about resource
prioritizations and organizational/product changes
~ Forecasting market size so you can decide on a fair "stretch"
goal for sales
~ Evaluating your market share: what is it and why is it what it is
~ Measuring customer satisfaction and assessing changes
~ Identifying unmet customer needs (existing, new and lost customers)
~ Understanding customers' strategic issues for next 3-5 years
(existing, new and lost customers)
Who Holds Is it Done (Yes or No)
Who's Doing Marketing's Job in Your Company
• Which items did I prioritize to
handle today?
• What did I hand off to other people?
• What will I do with what remains
this week? this month?
• What insights have I gained?
It’s the task we all dread -- sorting through our in-basket after being away
from the office for a full week. But it has to be done, and, following your
relaxing vacation, you’re up to the challenge. As the sales director of a
PC-PS company with three sales reps reporting to you, you’re under a lot
of pressure from your general manager to make sure the numbers come in
this year. But you’ll be well compensated for your efforts, through both
salary and generous sales commissions.
Your Assignment: Working individually, sort through your
in-basket and decide what to do. (Assume that no
regional association exists to help you.)
Then record your answers to the
following questions:
Appendix Five: The In-Basket Exercise
17
Note from Boss:
Revised FY 96 and
FY 97 sales forecast
due Friday
18
Need to complete
first draft of revised
sales territories by
end of the month
19
Industry trade magazine
needs final artwork
for your advertisement
by end of day
20
Customer is refusing to
make progress payments
on completed product
inventoried at the plant
25
Reps report companies not
in your geography are now
bidding on precast jobs
you’re going after
13
Feature article trade
magazine, “The Use of
Design-Build Concept to
Increase by 50% in
Next Five Years”
14
Need mailing list
for company program
and plant tour for
architects by Friday
15
Identify two sales
people to attend PCI
sales training
school
16
Memo from a sales
rep: The job we didn’t
bid that was going
masonry has just gone
tilt-up
24
Three reps report work looks
great for ‘97 but ‘98
looks bleak from what they
can ascertain
9
We lost the frame part
of another order to a
steel frame company
10
A new contractor is in
town. Sounds like the name
you told me who does
tilt-up.
11
ABC project bid date
has been moved
forward and is due
one week earlier
12
3-Day National Strategic
Marketing Seminar for
general contractors; $1500.
Deadline today. Owners,
contractors, D/B on agenda.
23
Report in newspaper:
residential construction
continues to grow. Labor
shortages are driving prices
dangerously high.
5
Missed delivery date
on Johnson project
due to lack of approved
shop drawings
6
New sales rep starts
next week; need to
finalize his orientation
7
Perceived partnership
XYZ Contractor is degrading
to a low-bid situation
due to new project manager
8
Another architect has
questions on how to
use panels for
school building
22
Note from your friend, the
company’s engineering VP:
“I keep getting job offers
from DB firms. Is it time
to leave?”
1
New Dodge Data reports
arrived showing regional
market trends
2
New national fire
codes being revised
3
Smith project manager is
rejecting erected product
for quality issues
4
A new company in town
is planning to build its
headquarters and wants
to know your capabilities
21
Old customer calls to complain
About how long lead times
Are for precast this year.
Your In-Basket Messages
What did I learn?
FOLLOW UP LATER THIS
WEEK
FOLLOW UP LATER THIS MONTH
Item To
DO TODAY
HAND OFF TO
In-Basket Worksheet
Appendix Six:
Marketing Manager Job Description
TITLE: MARKETING MANAGER
REPORTS TO: VICE CHAIRMAN
GEOGRAPHIC SCOPE: U.S. MARKET
Position Overview
The marketing department is the "voice of the customer" in an
organization. Absent a strong marketing function, the organization
becomes operationally and financially driven (at the expense of long-term
market position) or sales driven. Effective marketing is critical in any
market in which the buyer, the buying criteria or the competition is
changing.
Within Company XYZ, the Marketing Manager will serve or participate in
a number of crucial roles:
1) Participate in broad-based decision-making regarding where to compete
(target customers, markets, products, technologies, services) and how to
compete (the company's strategic positioning, differentiation and valueadded).
2) Develop strategies to promote the sales of current products in both
existing and new markets.
3) Develop project proposals and business plans for new products, and
participate on new product project teams, serving as the marketing
representative and the voice of the customer.
4) Select a specific positioning strategy for each of the company's products,
consistent with the company's overall strategic positioning.
5) Serve as the spokesperson of the customer within the company,
ensuring that customer needs and views are conveyed and taken into
account as part of all strategic decisions.
6) Identify the marketing resources required to achieve near-term sales
and profit objectives, as well as the long term vision.
7) Oversee and/or conduct marketing activities to enhance the efforts of
the sales force, helping to ensure that the sales forecast is achieved. This
includes the provision of sales support materials and select field support,
for example, visits to key accounts.
8) Conduct forecasting the production planning.
Plantes Company Page 270
Marketing Manager Job Description (continued)
Specific Duties of the Marketing Manager Position
The Marketing Manager for Company XYZ will be responsible for all
tactical marketing activities and be a key participant in strategic
marketing decisions. In the short-term, emphasis will be on tactical
activities to swiftly gear up efforts to promote existing products within
current markets. Also crucial will be near-term market research and
other activities to gather the market information essential to determining
where and how to compete.
Over time, emphasis will include the strategic aspects of marketing,
including identification of new markets and new product development.
Tactical Marketing Functions / Activities
The Marketing Manager will direct and implement the following tactical
marketing functions, at times directing the activities of external resources
such as communications consultants or agencies, market research firms,
etc.
• Conduct market research.
• Define target customers and communications positioning platform.
• Develop and implement marketing programs that support sales
representatives' selling efforts, enabling them to be more effective on
the job.
~ sales support materials, including sales aids and promotional
literature (company positioning and product/service)
~ advertising programs to generate awareness, pique interest
andconvey value-added benefits and company differentiation
~ direct mail campaigns to generate sales leads
~ trade shows, exhibits and seminars
~ new product/service introductions
• Identify ways to increase sales of current products
~ new applications within existing customer base
~ new types of customers
• Define product obsolescence and modification strategies.
• Implement new product introductions.
Plantes Company Page 271
Marketing Manager Job Description (continued)
Strategic Marketing Functions /Activities
The Marketing Manager will participate in the following strategic
marketing functions, bringing to the decision-making process the crucial
market information and customer voice essential for successful strategic
decisions.
• Gather market information to assist the company's efforts to:
~ define the product line
~ define served market segments
~ determine the company's strategic and product positioning
~ establish pricing policies
~ determine the company's target geographic scope
~ select distribution channels
~ define operational priorities
• Play a proactive role in developing and identifying new products
and markets.
The Marketing Manager will not:
• Develop the communications pieces.
Rather, the marketing person sets the objectives and is the "client" of the
communications expert
• Develop the overall geographic strategy.
Rather, the marketing person will help gather information to assist in
decision about geographic scope.
• Define the long-term strategy of the company in terms of products,
technologies and way our company is differentiated from the
competition; the marketing person.
Rather the marketing person will help gather information to assist our
decision making in this area.
• Manage new product development teams.
Rather the marketing person will serve as the "voice of the customer' on
these teams, defining needed specifications. He/she will also help us
create priorities within potential development projects.
• Focus primarily on bridge beams and utility concrete products.
Rather the marketing person will focus on the precast-prestressed building
business.
Plantes Company Page 272
Marketing Manager Job Description (continued)
Position Objectives
Short-Term
To identify opportunities to better capitalize on Company XYZ's existing
products and current markets. Further, to develop a written marketing
plan to accomplish this. This plan will include specific objectives,
strategies, tactics and action plans, as well as both a timetable and budget.
Long-Term
To identify markets for existing products, and profitable new products.
Further, to develop a written business plan to accomplish this. This plan
will include specific objectives, strategies, tactics and action plans, as well
as both a timetable and budget.
Position Interfaces
The Marketing Manager will interface with essentially all functional areas
with the company, always serving as the voice of the customer. In
particular, this position will interface with Sales, Engineering, Customer
Service, Production and Project/Product Managers. Additionally, the
Marketing Manager will be the primary liaison to key opinion leaders and
companies with complementary products lines, serving as the
headquarters representative.
Instructions for the Recruiter
1. Job description attached
2. Type of person we are looking for:
~ Strong willed ~ Persistent
~ Educator, persuasive ~ Team player
~ Enthusiastic ~ Good listener
~ Highly driven
~ Makes things happen, is accountable, takes ownership
~ Aggressive women tend to do well in our company (we have
examples we can share)
~ Good people skills (will have to deal with multiple business units
with strong managers)
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Marketing Manager Job Description (continued)
3. Skills/knowledge
~ Business analysis
~ Sales force marketing support
~ Competitor analysis
~ New product development
~ Market research-secondary and primary
~ Research capabilities
~ Written, presentation and one-on-one communication skills
3. Background (in order of priority)
~ Experience in turning commodity products into value-added
solutions
~ Business-to-business marketing in industries in which there are
multiple types of customers affecting purchase decision, thus
making the selling and marketing process more complex, e.g.,
° purchasing agent and engineer
° designers and owners (e.g., an office partitions company)
° distributor and distributor's customer
° subcomponent manufacturer and final product manufacturer
~ Evidence of interest in/experience with technical areas
~ Construction experience not required and may be a negative
4. Work history must demonstrate:
~ Development of marketing strategies and execution of effective
marketing programs; has written a marketing plan
~ Research: definition of objectives; how to do it; how to use findings
~ Ability to prioritize
Other Notes
• This position is a research/tactical marketing position. It would be
desirable to move this person into longer-term strategic marketing
analyses and decision-making. A person with the skills to grow into
more of a strategic thinker would be welcomed. But the position
responsibilities initially will be tactical/research focused. Good tactical
marketing skills are essential. We are not looking for a salessupport/research-support
person. We need someone who can identify
and execute marketing strategies to expand sales of our current
products/technologies in existing markets and identify new, related
products to serve existing markets.
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