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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<strong>Winning</strong> <strong>Without</strong> <strong>Competition</strong>: <strong>How</strong> <strong>to</strong><br />

<strong>Break</strong> <strong>Out</strong> <strong>of</strong> a <strong>Commodity</strong> Market<br />

An Educational Leadership Series for Precast<br />

Concrete Company Strategic Leaders<br />

Pamphlet 5<br />

Strategic Alignment: Creating<br />

Differentiation in Fact versus in Theory<br />

Created for the Precast Concrete Institute by Plantes<br />

Company, a strategic marketing consultancy. © 2001<br />

Plantes Company, Madison, Wisconsin.<br />

Pamphlet #5 Page 183

Strategic Alignment: Creating Differentiation in Fact<br />

versus in Theory<br />

Key Messages<br />

• Strategy without execution is a plan that sits on a shelf, at least until next year.<br />

Communication <strong>of</strong> the competitive strategy and alignment <strong>of</strong> departmental<br />

and team actions <strong>to</strong> the strategy is required <strong>to</strong> create the desired<br />

differentiation.<br />

• Annual plans are the current year execution <strong>of</strong> strategies; they are the<br />

itineraries for attaining the organization’s strategic goals and vision.<br />

• The marketing-sales plan, operational plan, leadership plan, and financial<br />

plan must be aligned with one another.<br />

• Process improvement that is not linked <strong>to</strong> creating a meaningful point <strong>of</strong><br />

distinction from the competition is a feel-good exercise that will help the<br />

bot<strong>to</strong>m line in the short term, but is unlikely <strong>to</strong> create a meaningful shift in<br />

your market position.<br />

• The Balanced Score Card is a useful <strong>to</strong>ol for measuring whether strategy is<br />

being executed and whether the strategy is having its anticipated effect on key<br />

performance measures. Linking individual and process objectives <strong>to</strong> balanced<br />

score card measures is a critical part <strong>of</strong> alignment.<br />

• The leadership team plan is also a critical part <strong>of</strong> alignment. It will insure that<br />

the organization creates future leaders and that <strong>to</strong>day’s leaders are doing the<br />

work only they can do: setting direction and creating change <strong>to</strong> align the<br />

organization <strong>to</strong> create its desired future.<br />

• Systematic review <strong>of</strong> market changes will help the organization evolve its<br />

competitive strategy so as <strong>to</strong> maintain differentiation. A marketing<br />

department plays a critical role in this process.<br />

• There are two types <strong>of</strong> marketing – strategic and tactical. Tactical marketing<br />

decisions, e.g., pricing and advertising are – for the most part – the domain <strong>of</strong><br />

the marketing pr<strong>of</strong>essional, working in collaboration with the Sales<br />

Department. Strategic marketing decisions, e.g., competitive and growth<br />

strategy decisions, must rest with the entire leadership team. The Marketing<br />

Department creates the strategic analysis used by the leadership team <strong>to</strong> both<br />

identify strategic issues and opportunities and define new strategies.<br />

• Ignoring needed marketing activities is like driving without being able <strong>to</strong> see<br />

beyond two feet. Organizations without strong marketing skills are generally<br />

unfocused and reactive.<br />

• Sales and Marketing serve different roles in a company. There is great danger<br />

in combining the two roles in the same person as sales requirements always<br />

win out over marketing. Sales is the most expensive resource in the company.<br />

You must therefore minimize how much time is spent on non-selling<br />

activities. Don’t ask sales people <strong>to</strong> do Marketing’s work.<br />

Pamphlet #5 Page 184

Introduction<br />

One <strong>of</strong> the greatest failures <strong>of</strong> strategic planning is the lack <strong>of</strong> execution on the<br />

other side <strong>of</strong> planning. Great ideas and newfound desire for strong leadership<br />

emerge from strategy retreats, only <strong>to</strong> be left <strong>to</strong> notebooks and memories a few<br />

months later. Sound familiar? A trip plan without an accompanying itinerary is<br />

<strong>of</strong>ten <strong>to</strong> blame. If we plan <strong>to</strong> travel <strong>to</strong> Phoenix, but follow whatever roads<br />

promise fun (the organizational equivalent <strong>of</strong> sales and margin), the probability<br />

we will get <strong>to</strong> Phoenix is very remote.<br />

Act Three <strong>of</strong> the change process is about alignment: changing the work <strong>of</strong> the<br />

organization and changing how people work with one another in order <strong>to</strong> “fit” the<br />

organization and its activities <strong>to</strong> the new competitive strategy. This work is the<br />

change process. Acts One and Two have, for all intents and purposes, been<br />

preparation for change, the creation <strong>of</strong> the "plan" so <strong>to</strong> speak. Absent action,<br />

there is no change.<br />

Change becomes part <strong>of</strong> daily work when leadership links annual planning and<br />

other key decisions about the organization <strong>to</strong> the new strategies. For example, a<br />

company will not start selling <strong>to</strong> owners in the absence <strong>of</strong> sales force training and<br />

changes in sales incentives. Marketing <strong>to</strong> owners will also be needed for the sales<br />

force <strong>to</strong> succeed in their initial efforts. Part <strong>of</strong> the change for companies in<br />

commodity markets will be <strong>to</strong> introduce marketing skills and philosophies in<strong>to</strong><br />

the company. And, <strong>of</strong>ten times, changes in the culture <strong>of</strong> the organization are<br />

needed <strong>to</strong> better support the new strategies. For example, if an organization<br />

wants <strong>to</strong> become more cus<strong>to</strong>mer-driven, the people in the organization need <strong>to</strong><br />

first learn <strong>to</strong> listen <strong>to</strong> one another internally. Relationships outside the company<br />

usually mirror relationships inside. If people fail <strong>to</strong> listen internally there is<br />

typically a failure <strong>to</strong> listen externally.<br />

Change occurs in two directions: the work people do and how they do this work.<br />

Pamphlet Five addresses changing the work <strong>of</strong> the organization. Pamphlets Six<br />

and Seven address how work is done. Pamphlet Six discusses strategic<br />

leadership. Changes in the work people do and how they do their work come<br />

<strong>to</strong>gether in the presence <strong>of</strong> strong leadership. A strategic leader always uses<br />

<strong>to</strong>day’s work <strong>to</strong> model desired behavior, <strong>to</strong> foster change and renewal, <strong>to</strong><br />

maintain spirit and momentum, <strong>to</strong> help others know and fully use their gifts, and<br />

<strong>to</strong> reinforce an inspiring and meaningful vision. When leaders do this work, the<br />

vision becomes reality as the competitive strategy gets executed.<br />

Pamphlet Seven addresses culture change, i.e., changing how people work<br />

<strong>to</strong>gether.<br />

Align Everything<br />

The key principle <strong>to</strong> remember in executing change is that anything that is not<br />

consistent with the strategy will deter the success <strong>of</strong> your strategy. Everything.<br />

Pamphlet #5 Page 185

This includes your organizational structure, your measures, the processes you reengineer,<br />

measures and incentives, the types <strong>of</strong> people hired, job goals, how you<br />

lead. Everything.<br />

In fact, every organization with a new competitive strategy will face a moment <strong>of</strong><br />

truth in which it needs <strong>to</strong> decide whether it was really serious about the<br />

competitive strategy or not. These moments <strong>of</strong> truth arise from a fundamental<br />

principle <strong>of</strong> markets: <strong>to</strong> gain leadership in one market segment requires you <strong>to</strong><br />

not secure leadership in a segment with conflicting requirements for the<br />

organization. In the case <strong>of</strong> a health care products company, the president<br />

needed <strong>to</strong> sell a recently acquired company, recognizing that the acquisition was<br />

no longer consistent with the future strategy <strong>of</strong> the organization. In another<br />

example, a commercial sewing company walked away from a $1M medical sewing<br />

cus<strong>to</strong>mer in order <strong>to</strong> have the resources <strong>to</strong> devote <strong>to</strong> its strategic market, fabric<br />

accessories for the power sports vehicle market.<br />

Whatever the moment <strong>of</strong> truth, they are tests <strong>of</strong> whether the organization has the<br />

resolve <strong>to</strong> execute strategy. You can be sure individuals in your organization will<br />

be looking at these tests <strong>to</strong> understand the real message about what’s important<br />

or not important. Therefore, when you face and resolve your moment <strong>of</strong> truth,<br />

communicate it broadly throughout the organization as <strong>to</strong> why you arrived at the<br />

decision and <strong>to</strong>ok the steps the strategy suggested.<br />

Alignment answers the following questions:<br />

• <strong>How</strong> do we create the differentiation in fact?<br />

~ What are the key processes that build the core competency and create the<br />

organization’s differentiation?<br />

~ What processes must I get "right" <strong>to</strong> meet minimum cus<strong>to</strong>mer<br />

requirements <strong>to</strong> be considered?<br />

~ What process goals should we establish <strong>to</strong> achieve our key strategic goals?<br />

• <strong>How</strong> should we organize <strong>to</strong> manage and run the company on a daily basis <strong>to</strong><br />

insure key processes achieve what we need them <strong>to</strong> achieve?<br />

• Do we need a marketing department?<br />

• <strong>How</strong> will we achieve our sales and margin goals?<br />

• What must we change in our key processes and other operational activity <strong>to</strong><br />

support the sales-marketing plan and achieve process goals?<br />

• What partners do we need?<br />

• <strong>How</strong> will we measure success?<br />

• What must the leadership team accomplish working as a team <strong>to</strong> enhance the<br />

capacity <strong>of</strong> the organization <strong>to</strong> succeed?<br />

• Is our competitive strategy still aligned with the evolving market place and<br />

competi<strong>to</strong>r dynamics?<br />

The first steps in the alignment plan will be obvious <strong>to</strong> you. But, clearly,<br />

alignment cannot be planned entirely in advance. Change becomes a process <strong>of</strong><br />

being alert <strong>to</strong> where the organization is not in alignment with the strategy and<br />

Pamphlet #5 Page 186

then responding. The response brings things in<strong>to</strong> alignment. At times, the<br />

response can include changing the strategy if the market place has changed and<br />

assumptions that supported the original business model no longer hold true.<br />

What you are essentially doing in Act Three is redesigning the organizational<br />

system from scratch, given its design (i.e., its purpose, vision, guiding principles,<br />

competitive strategies and strategic goals). (See Pamphlet Four for a description<br />

<strong>of</strong> these design parameters.) A systems view is critical in this work, as the<br />

success <strong>of</strong> the organization in achieving its aim will depend not just on the<br />

effectiveness <strong>of</strong> the strategy, but on how well your organization works as a<br />

system, as this will determine the success <strong>of</strong> execution. (See Pamphlet Two.)<br />

<strong>How</strong> Do We Create the Differentiation in Fact?<br />

The outcomes <strong>of</strong> any system are a perfect reflection <strong>of</strong> what the system was<br />

designed <strong>to</strong> accomplish. Beyond this, the first step <strong>to</strong> change is <strong>to</strong> acknowledge<br />

that you are accountable for any <strong>of</strong> the results you don’t like. The key <strong>to</strong><br />

successful differentiation is not just the identification <strong>of</strong> ways <strong>to</strong> differentiate the<br />

firm that are meaningful <strong>to</strong> cus<strong>to</strong>mers and that cannot be easily duplicated but <strong>to</strong><br />

create this difference. The creation <strong>of</strong> differentiation (or the maintenance <strong>of</strong><br />

differentiation) is accomplished by designing and operating key processes that<br />

are at the heart <strong>of</strong> differentiation. This is true whether the differentiation is in a<br />

product or service or the business model. And, if you lack the distinction you<br />

desire, you look first and foremost at how your processes are working.<br />

There are a number <strong>of</strong> steps <strong>to</strong> creating "process-based" differentiation:<br />

• Identify the key processes that create the differentiation, what I’ll refer <strong>to</strong> as<br />

strategic processes<br />

• Redesign or improve key processes <strong>to</strong> eliminate problems, create competitive<br />

advantage and secure differentiation<br />

• Create a culture <strong>of</strong> continuous improvement in processes<br />

• Deploy limited resources <strong>to</strong> redesign and improve processes that are at the<br />

heart <strong>of</strong> competitive vic<strong>to</strong>ries and that promise financial payback<br />

• Create measures that will help you better understand how the organization is<br />

doing and better align individual and group activities <strong>to</strong> desired outcomes<br />

• Keep the leadership team focused on the unique role <strong>of</strong> leadership so that the<br />

operational agenda does not crowd out critical organizational change work<br />

Success in these steps depends on strong systems thinking skills throughout the<br />

leadership team and management ranks. (See Sidebar A: Systems Thinking)<br />

Why do we take a process focus? We do this for a number <strong>of</strong> reasons.<br />

• First, the organization is only as good as its underlying processes. They are at<br />

the heart <strong>of</strong> core competencies, cus<strong>to</strong>mer value and competitive advantage.<br />

Pamphlet #5 Page 187

• Second, you can’t fix a problem by fixing the individual parts. You must look<br />

at the whole. This is because it’s the interaction <strong>of</strong> parts, not the parts<br />

themselves that define behavior and dictate outcomes in any system. If Sales<br />

keeps on selling more than the capacity <strong>of</strong> Operations, success will not be<br />

forthcoming. In fact, the recurring backlogs in an organization where Sales<br />

oversells will, in fact, set in motion reduced cus<strong>to</strong>mer satisfaction that will<br />

eventually reduce the success <strong>of</strong> the selling organization.<br />

• Third, a process focus creates an empowered organization. It focuses<br />

managers and leaders on the work only managers and leaders can do, i.e.,<br />

improving the interactions between the different processes and making sure<br />

processes are designed well. It is up <strong>to</strong> others, the "workers," <strong>to</strong> actually do<br />

the operational work <strong>of</strong> the processes. When leadership focuses on their<br />

unique roles as leaders and managers, the rest <strong>of</strong> the company’s productivity,<br />

morale and creativity increase. This is especially important because a key<br />

strategic leadership practice is enabling others <strong>to</strong> do their best. Doing<br />

people’s work versus removing barriers that undermine their ability <strong>to</strong> do<br />

their work creates credibility as a leader.<br />

• Finally, a process focus lets you eliminate problems versus treat their<br />

symp<strong>to</strong>ms. There is entirely <strong>to</strong>o much time spent in organizations <strong>to</strong>day<br />

treating the symp<strong>to</strong>ms <strong>of</strong> problems as opposed <strong>to</strong> eliminating them through<br />

process improvement and process redesign.<br />

About Processes<br />

With systems thinking, we begin <strong>to</strong> look at the organization as a series <strong>of</strong><br />

processes that interact, dramatically affecting the results <strong>of</strong> the organization. A<br />

process is a series <strong>of</strong> cross-functional actions that produces a result <strong>of</strong> value <strong>to</strong><br />

someone else in the organization, the cus<strong>to</strong>mer or the ultimate end-user.<br />

Processes are <strong>of</strong>ten thought <strong>of</strong> as fairly linear (e.g., the creation <strong>of</strong> forms,<br />

erection, measurement <strong>of</strong> financial outcomes). In fact, there are many critical<br />

processes that are without clear inputs, flows or outputs. For example,<br />

leadership is a process as is building strategic alliances with a key cus<strong>to</strong>mer or<br />

supplier.<br />

There are two types <strong>of</strong> processes: operational processes and management or<br />

administrative processes. Operational processes deal with what works gets done<br />

<strong>to</strong> produce the organization’s output and what jobs and actions are required <strong>to</strong><br />

support the effort <strong>of</strong> getting the work done. The external cus<strong>to</strong>mers provide<br />

measures <strong>of</strong> the effectiveness <strong>of</strong> operational processes. Examples <strong>of</strong> operational<br />

processes would include: marketing <strong>to</strong> owners; getting the order; finalizing the<br />

design; developing a labor force; developing subs; making the structure. Note<br />

that this is a very different view <strong>of</strong> the organization than the traditional silos <strong>of</strong><br />

sales and marketing, administration, purchasing, project management and onsite<br />

construction. From a strategic leadership perspective, processes almost<br />

always cut across different functions.<br />

Pamphlet #5 Page 188

Management and administrative processes affect how the work gets done.<br />

Typically, each management or administrative process serves multiple<br />

operational processes. The measurement <strong>of</strong> process success is whether it<br />

provides internal cus<strong>to</strong>mers with what they need <strong>to</strong> best conduct the operational<br />

processes, i.e., <strong>to</strong> meet cus<strong>to</strong>mer needs and create differentiation for the<br />

company’s <strong>of</strong>ferings. Examples <strong>of</strong> management processes would include:<br />

evaluation <strong>of</strong> performance; measurement <strong>of</strong> financial outcomes; insuring<br />

compliance with OSHA regulations.<br />

There are many "lens" for looking at processes. A narrow but deep view lets us<br />

see micro processes, e.g., pouring the concrete and mixing the concrete. Macro<br />

processes reflect a broad lens, e.g., manufacturing structural components. Macro<br />

processes are also called, "organizational subsystems," as they contain multiple<br />

processes.<br />

The key steps for aligning processes <strong>to</strong> execute the competitive strategy include<br />

the following:<br />

• Make sure that your competitive strategy is clear and well unders<strong>to</strong>od within<br />

the organization.<br />

• Diagram the flow <strong>of</strong> work by identifying the subprocesses and then build up<br />

in<strong>to</strong> the macro processes, both linear work flow and non-work flow processes.<br />

• Determine the most important macro processes <strong>to</strong> focus on, i.e., those that are<br />

critical issues affecting your competitiveness or are a source <strong>of</strong> existing or<br />

potential differentiation.<br />

• Decide whether process improvement or redesign will be used <strong>to</strong> enhance<br />

process outcomes and prioritize projects <strong>of</strong> each type. The improvement and<br />

redesign projects with the highest priority become key objectives in the<br />

operational plan for the organization, which will be discussed below. In this<br />

way, strategy is driving operational change initiatives.<br />

Entire books are written about how <strong>to</strong> do process improvement and process<br />

redesign. Therefore, it is not the intent <strong>of</strong> this pamphlet <strong>to</strong> teach process<br />

improvement. Rather, we will focus on how <strong>to</strong> approach process improvement in<br />

a way that creates alignment <strong>of</strong> the organization <strong>to</strong> its competitive strategy.<br />

Identifying Strategic Processes<br />

Critical processes refer <strong>to</strong> the 3-5 key macro level processes that, when<br />

successfully designed and managed, do the most <strong>to</strong> differentiate your company’s<br />

<strong>of</strong>ferings and secure a market leadership position. Critical processes let you<br />

execute the firm’s competitive strategy effectively and efficiently. They are at the<br />

heart <strong>of</strong> competitive advantage.<br />

The key attributes <strong>of</strong> critical processes include:<br />

• They are few in number.<br />

Pamphlet #5 Page 189

• They are linked horizontally and vertically.<br />

• They can be diagrammed in terms <strong>of</strong> their interaction with other parts <strong>of</strong> the<br />

organization.<br />

• They can be measured—although not always easily measured.<br />

• They can be improved.<br />

• They have a major impact on differentiation <strong>of</strong> the firm, cus<strong>to</strong>mer value,<br />

return on assets and organizational goals.<br />

The first step in process improvement is <strong>to</strong> identify the macro processes <strong>of</strong> the<br />

organization (Chart One: Macro Process View <strong>of</strong> a Precast Company gives an<br />

example). One approach <strong>to</strong> selecting critical processes from this list is <strong>to</strong><br />

categorize each macro process in<strong>to</strong> one <strong>of</strong> the following categories <strong>of</strong> importance:<br />

• Identity: It serves a major role in creating the desired differentiation <strong>of</strong> your<br />

company.<br />

• Priority: It meets a cus<strong>to</strong>mer requirement and strongly influences how well<br />

identity processes are carried out and how the firm stands versus the<br />

competition.<br />

• Background: It supports other processes; many management processes fall<br />

here.<br />

• Mandated: It is required by, for example, government <strong>of</strong>ficials.<br />

• Folklore: These are processes that have been in place in the past, but are not<br />

necessarily needed <strong>to</strong>day.<br />

Chart Two: Example <strong>of</strong> the Process Salience <strong>of</strong> Different PC-PS Companies shows<br />

an example <strong>of</strong> process categorization for two precast firms, each with very<br />

different competitive strategies. (For more information on this <strong>to</strong>pic, see Keen,<br />

whose work guided the thoughts in this section.)<br />

Identity and priority processes, or those that could be identity and priority<br />

processes, become the strategic processes for the organization. Organizations<br />

should focus improvement and redesign efforts on background processes only if<br />

they are becoming, or could become, a priority process. Mandated processes take<br />

on strategic important if changing them has a major positive impact on the<br />

pr<strong>of</strong>itability <strong>of</strong> the firm. In general, background processes do not pass this test.<br />

Any folklore process should be removed.<br />

After categorizing processes, the organization must select which critical processes<br />

it wants <strong>to</strong> improve or redesign so as <strong>to</strong> achieve greater success. The key <strong>to</strong> doing<br />

this is <strong>to</strong> determine which critical processes <strong>of</strong> the organization already perform<br />

above average versus which perform at or below average. Because <strong>of</strong> limited<br />

resources, the organization may choose <strong>to</strong> moni<strong>to</strong>r performance <strong>of</strong> critical<br />

processes with above average performance in order <strong>to</strong> maintain a lead. Any<br />

critical processes that are at or below the performance <strong>of</strong> other competi<strong>to</strong>rs, i.e.,<br />

that are not best in class, must be improved or redesigned.<br />

Pamphlet #5 Page 190

What should you do about a process performing below the competition that is not<br />

a critical process? You should only improve or redesign the process if:<br />

• It will eventually become a cus<strong>to</strong>mer requirement.<br />

• It could enhance your value <strong>to</strong> the cus<strong>to</strong>mer and differentiation in cus<strong>to</strong>mers’<br />

eyes.<br />

• There is a financial payback <strong>to</strong> improving the process.<br />

Selecting processes <strong>to</strong> improve or redesign is at the heart <strong>of</strong> successful strategic<br />

leadership. All <strong>to</strong>o <strong>of</strong>ten, process improvement resources are focused on<br />

processes that are not identity processes. As a result, organizations "get better,"<br />

but they don’t necessarily create differentiation, which is the key <strong>to</strong> breaking out<br />

<strong>of</strong> a commodity box. (See Pamphlet One).<br />

Redesign or Improvement?<br />

The next critical decision by the leadership and departmental team is <strong>to</strong> identify<br />

whether process improvement or process redesign is needed. Often times both<br />

are used, as evidenced in Chart Three: Organizations Combine Process<br />

Redesigning and Improvement Efforts. Process improvement can be as simple as<br />

insuring that everyone uses the same process, i.e., that standardization around<br />

the process is created. Or, it can focus on incremental redesign <strong>of</strong> the process,<br />

e.g., insertion <strong>of</strong> an additional step (e.g., a phone call) <strong>to</strong> make sure plans are<br />

approved by the architect before the weekly manufacturing schedule is set.<br />

Process improvement is used when the current process works well, but you would<br />

like it <strong>to</strong> be better.<br />

Process redesign is used when:<br />

• A straightforward and identifiable process does not really exist.<br />

• The current process is entirely way <strong>to</strong>o complex <strong>to</strong> be managed well.<br />

• Creating differentiation demands that the process produce significantly<br />

different outcomes.<br />

Both company fac<strong>to</strong>rs and process fac<strong>to</strong>rs enter in<strong>to</strong> the decision on whether <strong>to</strong><br />

improve or redesign. Company fac<strong>to</strong>rs include:<br />

• Organizational leadership style<br />

• Business conditions<br />

• Type <strong>of</strong> change required<br />

• Commitment level <strong>to</strong> change<br />

• Organizational skills with regard <strong>to</strong> change and process improvement<br />

• What has worked effectively in the past<br />

• Willingness <strong>to</strong> engage in true strategic planning (vs. annual business<br />

planning)<br />

Pamphlet #5 Page 191

Process Fac<strong>to</strong>rs include:<br />

• Extent <strong>of</strong> problem<br />

• Whether the problem is in the process or its containing system<br />

• Time frame before results are needed<br />

Process Improvement<br />

The focus <strong>of</strong> process improvement is <strong>to</strong> improve process outcomes incrementally.<br />

The key steps in process improvement are (Joiner):<br />

• Step One: Define the project, i.e., what problem are you trying <strong>to</strong> solve with<br />

what process.<br />

• Step Two: Understand in detail the process status quo—how it works, its<br />

effectiveness and what causes variations in its effectiveness. (See Sidebar B:<br />

Variation)<br />

• Step Three: Understand why the results <strong>of</strong> the process are what they are.<br />

• Step Four: Develop and try solutions that address deep causes <strong>of</strong> the<br />

problem.<br />

• Step Five: Evaluate the solutions, select one and create and evaluate plans <strong>to</strong><br />

implement the solution.<br />

• Step Six: Maintain the gains by standardizing work methods <strong>of</strong> products.<br />

• Step Seven: Anticipate future improvement in order <strong>to</strong> preserve lessons from<br />

this effort.<br />

(See Appendix One for a more detailed description <strong>of</strong> these steps.)<br />

It is critical, while engaged in process redesign, <strong>to</strong> understand not just what’s<br />

going on with the process but how the process interacts with the rest <strong>of</strong> the<br />

organization. Suppose your organization is trying <strong>to</strong> speed up the completion <strong>of</strong><br />

shop floor drawings. Many teams would jump immediately at the idea <strong>of</strong> getting<br />

architect approvals earlier. But, there are many ways <strong>to</strong> increase speed besides<br />

increasing the speed <strong>of</strong> the architect’s approval. And, there are many aspects <strong>of</strong><br />

shop floor drawings an organization needs <strong>to</strong> be concerned about beyond speed,<br />

e.g., the cost <strong>to</strong> complete the drawings, the efficiency <strong>of</strong> the design for<br />

manufacturability and the accuracy <strong>of</strong> the design.<br />

Everyone must understand the competitive strategy so that in designing changes<br />

<strong>to</strong> increase speed, you do not impair other process dimensions that are also<br />

critical <strong>to</strong> your competitive position, i.e., those that drive your differentiation or<br />

are required for consideration in the marketplace. This is why systems thinking<br />

Pamphlet #5 Page 192

is so important. It prevents improving part <strong>of</strong> the organization at the expense <strong>of</strong><br />

other parts <strong>of</strong> the organization.<br />

Team Exercise: Process Improvement<br />

Appendix Two provides an exercise you can follow <strong>to</strong> develop a feel for process<br />

improvement. After competing the exercise, answer the following questions:<br />

• Do we have a process orientation in our company? If not, should we?<br />

• Which <strong>of</strong> our processes need <strong>to</strong> be improved? If we could really improve<br />

these, would it make us more competitive or pr<strong>of</strong>itable? Would it create<br />

differentiation from our competition?<br />

• Are we willing <strong>to</strong> commit resources <strong>to</strong> process improvement?<br />

• Do we need any outside help <strong>to</strong> be more effective in process improvement?<br />

Process Redesign<br />

Organizations succeed by doing the right things right, not just doing things right.<br />

Redesign is about doing the right things; process improvement is about doing<br />

things right. Process redesign is very sophisticated work. It’s not done overnight<br />

with a simple six-step process. It requires careful understanding <strong>of</strong> the current<br />

process and deep insights in<strong>to</strong> the reasons <strong>to</strong>day’s outcomes are what they are.<br />

Nevertheless, process redesign has tremendous opportunities for payback.<br />

Process redesign dissolves the problem, i.e., the problem no longer appears. It<br />

differs from fixing the process, which handles a problem better. Fixing modifies<br />

the existing system. It removes what’s wrong by adding, deleting or modifying a<br />

step in the existing system. Redesigning, on the other hand, starts with a blank<br />

sheet <strong>of</strong> paper.<br />

Process redesign is based on the following concepts:<br />

• Each system is well designed <strong>to</strong> act as it behaves. In other words, you get<br />

exactly what your process or system was designed <strong>to</strong> create.<br />

• Each person in the system is acting rationally within the context <strong>of</strong> the<br />

system.<br />

• Often times the limitations <strong>of</strong> the system are defined by what’s going on<br />

around the system, i.e., in the containing system. The most important<br />

limitations may not be in the system itself.<br />

• To change a system’s outcomes, behavior and operation, you need <strong>to</strong> change:<br />

~ Its structure (i.e., what are the parts and how are they organized)<br />

~ Its motivations (i.e., incentives, rewards and beliefs, why participants do<br />

as they do and who benefits from current behaviors and why)<br />

~ Its key processes (i.e., how the work gets done)<br />

Pamphlet #5 Page 193

~ Its function (i.e., what work gets done, in other words, what is a system’s<br />

intended output)<br />

Or, you must influence the containing system (e.g., other suppliers or general<br />

contrac<strong>to</strong>rs) <strong>to</strong> work more in the favor <strong>of</strong> the system.<br />

Process redesign work is focused on identifying all the characteristics <strong>of</strong> the<br />

system that create the undesired and desired characteristics <strong>of</strong> the current system<br />

or process. You won’t be able <strong>to</strong> do this work without a deep understanding <strong>of</strong><br />

the motivations and beliefs that drive how people work and relate <strong>to</strong> one another<br />

in your organization. You need <strong>to</strong> get at different dimensions <strong>of</strong> motivation, how<br />

they operate within the system and why they produce the system outcomes that<br />

occur. This work also what lets you understand the nature <strong>of</strong> culture change<br />

that’s needed. (See Pamphlet Seven.)<br />

Team Exercise: Process Redesign<br />

To get a feel for process redesign, discuss the following questions about shop<br />

floor drawing approval:<br />

• Where is speed <strong>of</strong> approval not an issue?<br />

~ In what kinds <strong>of</strong> projects?<br />

~ With regard <strong>to</strong> what kinds <strong>of</strong> suppliers/subs?<br />

~ In what kinds <strong>of</strong> roles?<br />

• Who holds the power <strong>to</strong> affect speed <strong>of</strong> approval and why do they delay?<br />

~ Who really drives when things get done and why is this person in the<br />

driver’s seat?<br />

~ Who can delay approval and why is it in their interest <strong>to</strong> do so?<br />

• What scope <strong>of</strong> services would lead us <strong>to</strong> be in charge <strong>of</strong> approvals?<br />

• What is it about our overall system that would make delays on approval<br />

irrelevant <strong>to</strong> meeting cus<strong>to</strong>mer erection dates?<br />

• <strong>How</strong> could we hand the design <strong>of</strong>f <strong>to</strong> those in charge <strong>of</strong> approvals? <strong>How</strong> could<br />

we eliminate the need for approvals?<br />

• Who benefits from the current system? Who would be concerned if it<br />

changed significantly?<br />

You should engage in process redesign when:<br />

• No process is in place<br />

• Significant market changes are occurring<br />

• The process spreads across multiple locations/business units<br />

• There is high urgency <strong>to</strong> fix/improve this part <strong>of</strong> your business for cost or<br />

cus<strong>to</strong>mer satisfaction reasons or <strong>to</strong> create competitive differentiation<br />

• There are several problems and/or several root causes <strong>of</strong> the problem<br />

Chart Four: Which Improvement Approach <strong>to</strong> Use? provides a useful <strong>to</strong>ol for<br />

deciding between process improvement and redesign.<br />

Pamphlet #5 Page 194

The logic for process redesign work is similar <strong>to</strong> that for the 7-Step improvement<br />

process, but the steps embrace multiple problems and causes. The steps are:<br />

• Plan<br />

~ Identify desired outcomes and measures <strong>of</strong> process<br />

~ Create the "as is" process map. Take baseline measurements and identify<br />

process "disconnects," i.e., missing, illogical or redundant steps or flawed<br />

logic<br />

~ Theorize and test ways <strong>to</strong> stratify where problems appear<br />

~ Theorize and test causes <strong>of</strong> problems<br />

• Do<br />

~ Pretend you are starting from scratch. <strong>How</strong> would you (ideally) organize<br />

this process <strong>to</strong> eliminate problems?<br />

~ Seek broad-based feedback on one or more "should" designs and select<br />

and modify "should" process map accordingly. Use evaluation criteria <strong>to</strong><br />

choose among options<br />

• Check<br />

~ Does new process <strong>of</strong>fer improvement over basement measurement?<br />

• Act<br />

~ "Institutionalize" the new process<br />

- Educate<br />

- Standardize<br />

- Establish improvement goals and manage<br />

As you envision a redesign, it is important <strong>to</strong> keep the following principles in<br />

mind:<br />

• Eliminate waste<br />

• Simplify<br />

• Create alternate paths when a uniform approach will not work<br />

• Increase speed (establish concurrent activities wherever possible vs. linear,<br />

sequenced activities).<br />

• Use technology when it adds value<br />

Team Exercise: Process Redesign, continued<br />

Appendix Three provides a process redesign exercise. After completing the<br />

process redesign exercise, discuss the following questions as a team:<br />

• Are there processes that should be completely redefined from the start if we<br />

want <strong>to</strong> genuinely execute our competitive strategy?<br />

• What would be the benefit <strong>of</strong> doing this?<br />

• <strong>How</strong> can we get started?<br />

Leadership’s Role in Process Improvement and Redesign<br />

Pamphlet #5 Page 195

The leadership team has a very strong and defined role in certain elements <strong>of</strong><br />

process alignment and a very weak role in others (See Chart Five: Senior<br />

Management’s Role in Process Edge). They take the lead in defining the critical<br />

processes in the context <strong>of</strong> competitive strategy and creating the idealized overall<br />

design <strong>of</strong> the organization (i.e., the organizational chart). It’s also their role <strong>to</strong><br />

make sure that the goals for different processes and the measures <strong>of</strong> success <strong>of</strong><br />

those processes are aligned with the competitive strategy and the organization’s<br />

strategic goals. They also play a leading role in terms <strong>of</strong> major redesign efforts,<br />

while serving in a coaching role in continuous process improvement activities.<br />

While process improvement is the work <strong>of</strong> lower level management and the<br />

workers themselves, the leadership team must also make sure improvement<br />

priorities are defined and resources are allocated <strong>to</strong> achieve desired<br />

improvements.<br />

Some leadership teams encourage their companies <strong>to</strong> adopt what’s called a<br />

continuous improvement philosophy. When a continuous improvement process<br />

is in place, every process in the organization is measured and improvements are<br />

made on a regular basis. The fundamental concept behind continuous<br />

improvement is that process improvement is for the benefit <strong>of</strong> the cus<strong>to</strong>mer. The<br />

focus is on cus<strong>to</strong>mers, where cus<strong>to</strong>mers include both internal individuals as well<br />

as external cus<strong>to</strong>mers.<br />

A process improvement focus insures that different parts <strong>of</strong> the organizations<br />

clearly understand who their internal and external cus<strong>to</strong>mers are, their needs and<br />

expectations and the purpose and the desired output from their part <strong>of</strong> the<br />

organization. With a process improvement focus, individuals who are part <strong>of</strong> the<br />

process get feedback from cus<strong>to</strong>mers and change in response <strong>to</strong> the cus<strong>to</strong>mer’s<br />

needs and expectations. Jay <strong>How</strong>ell, a colleague, argues that the key philosophies<br />

<strong>of</strong> a process improvement focus include:<br />

• Performance is measured. Continuous improvement means that there is a<br />

long-term commitment <strong>to</strong> regularly measure and improve processes <strong>to</strong><br />

produce outputs <strong>of</strong> high value.<br />

• Everyone is involved in improvement. Continuous improvement becomes the<br />

work <strong>of</strong> everyone in the organization as opposed <strong>to</strong> a defined or imposed<br />

management solution. This builds teamwork and creates an environment <strong>of</strong><br />

trust and open communications. As a result, process improvement ideas are<br />

surfaced by everyone in the organization.<br />

• Leaders and others develop systems thinking skills. Organizations with<br />

continuous improvement philosophies help people in the organization think<br />

in new ways. The work <strong>of</strong> the organization is viewed not as a collection <strong>of</strong><br />

fragmented production units, but rather as a whole focused on providing<br />

output that’s highly valued and differentiated in the eyes <strong>of</strong> the cus<strong>to</strong>mer. A<br />

systems view replaces a focus on blaming individuals for problems with a<br />

Pamphlet #5 Page 196

desire <strong>to</strong> -- continually discovering new ways <strong>to</strong> improve the organization for<br />

the benefit <strong>of</strong> cus<strong>to</strong>mers.<br />

It’s important <strong>to</strong> note that the process goals should always supercede functional<br />

goals because the process goals, especially processes that cut across functions,<br />

drive what the different functions or departments spend their time on. Rummler<br />

& Brache comment, "If we had <strong>to</strong> pick one <strong>of</strong> the three levels as the greatest area<br />

<strong>of</strong> opportunity for most organizations, it would be the process level. We are<br />

learning that it’s not enough <strong>to</strong> manage results. The way in which those results<br />

are achieved, i.e., the process, is also important. If we are achieving the results,<br />

we need <strong>to</strong> know why. If we are not achieving the results, we need <strong>to</strong> know why.<br />

In both cases <strong>to</strong> a great degree the answer lies in the processes."<br />

<strong>How</strong> should we organize <strong>to</strong> manage and run the company on a daily<br />

basis <strong>to</strong> insure key processes achieve what we need them <strong>to</strong> achieve?<br />

Organizational structure (the “white chart” that shows who reports <strong>to</strong> whom) is<br />

one <strong>of</strong> the strongest leverage points for aligning the organization <strong>to</strong> fit its<br />

strategies. It is critical <strong>to</strong> creating culture change and for getting people <strong>to</strong> focus<br />

on the right kind <strong>of</strong> work, performing <strong>to</strong> the right set <strong>of</strong> measures. After your<br />

strategy is designed and you understand the critical processes <strong>of</strong> your<br />

organization and its strategic goals, start with a blank sheet <strong>of</strong> paper and design<br />

the ideal organizational structure. Do not think at this stage about what people<br />

will fit where. All that can come later. It is always better <strong>to</strong> make decisions<br />

knowing what is ideal. (See Nadler)<br />

Many companies with a continuous quality improvement philosophy organize<br />

their company by process teams, instead <strong>of</strong> functions. This shift can be<br />

instrumental in creating more effective processes, as the new structure changes<br />

relationships and therefore culture. Nevertheless, changing organizational<br />

structure alone is not sufficient for creating strong processes. People also have <strong>to</strong><br />

be willing <strong>to</strong> work collaboratively <strong>to</strong> make the processes work well. Chart Six:<br />

Collaboration vs. Cooperation shows the difference between organizations in<br />

which the functions only cooperate with each other versus those in which<br />

collaboration is present. What we see here is that collaboration eliminates, or<br />

significantly reduces problems, whereas cooperation causes problems <strong>to</strong> be<br />

shifted <strong>to</strong> another part <strong>of</strong> the organization, which then must absorb the cost<br />

associated with the problem. Absent collaborative cultures, organizational<br />

change <strong>of</strong>ten times does little <strong>to</strong> improve operational effectiveness. (See Sidebar<br />

C: Structure Affects, but Does Not alone Determine, Behavior.)<br />

Do You Need a Marketing Department?<br />

You would never consider asking the direc<strong>to</strong>r <strong>of</strong> accounting in your firm <strong>to</strong> also<br />

run the plant. Yet, many precast companies either delegate marketing<br />

responsibility <strong>to</strong> the sales direc<strong>to</strong>r or leave the market role unfilled. This is one <strong>of</strong><br />

Pamphlet #5 Page 197

the biggest errors in your industry. <strong>Without</strong> marketing, your organization will<br />

remain operations driven and compete as a commodity supplier.<br />

Still not convinced? Let’s try it another way. In the absence <strong>of</strong> a marketing<br />

pr<strong>of</strong>essional, the CEO and members <strong>of</strong> the leadership team “own” the marketing<br />

role. <strong>How</strong> effective are you at this job?<br />

Team Exercise: <strong>How</strong> Well is Marketing Being Done in your Organization?<br />

Complete the Job Description Questionnaire in Appendix Four independently<br />

and then summarize the individual answers <strong>to</strong> create a team response. On any<br />

line item where a number <strong>of</strong> respondents entered “No” under “Done Well” or<br />

“Done Regularly,” ask:<br />

• What are the implications <strong>of</strong> this gap?<br />

• <strong>How</strong> might we be a stronger company if we filled this gap?<br />

• What are the implications <strong>of</strong> asking sales or some other function <strong>to</strong> take on<br />

this role?<br />

• What is not getting done or not getting done as well?<br />

Then, looking collectively at the gaps, ask:<br />

• Would the investment in good marketing pr<strong>of</strong>essionals be worth the return we<br />

would get from filling these gaps?<br />

What is Marketing?<br />

There are a number <strong>of</strong> definitions <strong>of</strong> marketing:<br />

• The activities <strong>of</strong> identifying, designing, promoting and delivering goods<br />

and services <strong>to</strong> cus<strong>to</strong>mers – in exchange for money.<br />

• The discipline required <strong>to</strong> make decisions that maximize cus<strong>to</strong>mer and<br />

company value, i.e.:<br />

• Product line and business scope<br />

• Growth strategy<br />

• Distribution strategy<br />

• Value proposition <strong>to</strong> cus<strong>to</strong>mer that differentiates the company from<br />

its current and future competi<strong>to</strong>rs<br />

• Pricing<br />

• “Promotional” expenditures <strong>to</strong> ensure fiscal year sales and pr<strong>of</strong>it<br />

objectives are met<br />

• Defining market segments; understanding their needs; identifying what is<br />

required <strong>to</strong> meet the needs <strong>of</strong> “target” market segments (i.e., those <strong>of</strong><br />

greatest priority <strong>to</strong> the firm); and communicating with members <strong>of</strong> the<br />

target segments. (Hiebing and Cooper)<br />

• Identifying the changes needed <strong>to</strong>day <strong>to</strong> ensure success in <strong>to</strong>morrow’s<br />

markets while attracting cus<strong>to</strong>mers <strong>to</strong> <strong>to</strong>day’s <strong>of</strong>fering.<br />

Pamphlet #5 Page 198

Two types <strong>of</strong> marketing activities create strong financial and market place results.<br />

Tactical marketing focuses the organization on the target markets in which the<br />

company’s current goods and services can be sold most successfully. The<br />

purposes <strong>of</strong> tactical marketing activities are <strong>to</strong>:<br />

• Raise awareness <strong>of</strong> the company’s <strong>of</strong>fering – a key driver <strong>of</strong> whether a<br />

company gets considered by potential cus<strong>to</strong>mers. This then affects the<br />

company’s market share.<br />

• Enhance the image <strong>of</strong> the company in the target market cus<strong>to</strong>mers’ eyes<br />

• Work with associates inside the company <strong>to</strong> insure current product lines (as<br />

opposed <strong>to</strong> individual orders) are as pr<strong>of</strong>itable as they can be. Product line<br />

extensions and cost reduction activities are examples <strong>of</strong> this work. The<br />

Marketing Department’s role in these activities is <strong>to</strong> insure products meet the<br />

needs <strong>of</strong> target markets.<br />

• Increase the sale force efficiency and effectiveness by leading them <strong>to</strong> the right<br />

target markets, pr<strong>of</strong>iling “desired cus<strong>to</strong>mer” attributes, creating cus<strong>to</strong>mer<br />

awareness and providing effective selling <strong>to</strong>ols.<br />

Strategic marketing focuses on how markets, competi<strong>to</strong>rs and cus<strong>to</strong>mers are<br />

changing and what the company needs <strong>to</strong> do differently <strong>to</strong> secure and maintain a<br />

leadership position. When David Packard argued, “Marketing is <strong>to</strong>o important <strong>to</strong><br />

leave <strong>to</strong> the marketing department,” he was talking about strategic marketing.<br />

The leadership team as a whole must “own” the company’s strategic decisions<br />

regarding where and how <strong>to</strong> compete and grow, and how <strong>to</strong> align operations <strong>to</strong><br />

win in targeted markets – much as they own the financial performance <strong>of</strong> the<br />

company. The marketing department owns the “process” for identifying changes<br />

needed in the company and its strategies <strong>to</strong> enable it <strong>to</strong> remain competitive (i.e.,<br />

new products, services and channels). The marketing department is also<br />

responsible for creating a strong marketing understanding process. (In this<br />

sense, Marketing is like the finance department. They both oversee a process <strong>of</strong><br />

collecting and interpreting data and insuring it is used in company decisions.<br />

Finance focuses on financial and operational information and marketing focuses<br />

on market information.) But the actual strategic decisions remain the leadership<br />

team’s responsibility.<br />

Chart Seven: Tactical vs. Strategic Marketing lists the significant tactical and<br />

strategic marketing activities/decisions. One way <strong>to</strong> think about these differences<br />

is <strong>to</strong> think <strong>of</strong> tactical marketing as “inside <strong>to</strong> the outside,” i.e., where <strong>to</strong> focus the<br />

company <strong>to</strong>day within the broader market, and strategic marketing as “outside <strong>to</strong><br />

the inside,” i.e., what do market changes imply for how the company must<br />

change? The role <strong>of</strong> the marketing department in the context <strong>of</strong> the overall<br />

company is summarized in Chart Eight: The Marketing Department’s Role.<br />

Sales and Marketing Are as Different as Precast and Wood<br />

Technologies<br />

Asking the Sales Department <strong>to</strong> take on the marketing role will not close the<br />

marketing gap. Sales serves a very different role in the company than Marketing.<br />

Pamphlet #5 Page 199

Their role is <strong>to</strong> represent the company <strong>to</strong> the cus<strong>to</strong>mer and secure orders. Sales<br />

effectiveness is driven by:<br />

• Focusing on the right potential cus<strong>to</strong>mer<br />

• Understanding the cus<strong>to</strong>mer’s needs<br />

• Showing how the company’s <strong>of</strong>ferings can best address the cus<strong>to</strong>mer’s needs<br />

• Supporting the cus<strong>to</strong>mer through issues and questions that arise in the buying<br />

process prior <strong>to</strong> sign <strong>of</strong>f <strong>to</strong> the project manager<br />

• Developing a trusting and open relationship with ongoing buyers<br />

Marketing and Sales are involved in the selling process at different stages.<br />

Marketing’s influence ends before the order is won. The objectives <strong>of</strong> Marketing<br />

are <strong>to</strong>:<br />

• Make sure the company produces products and services that cus<strong>to</strong>mers want.<br />

• Create awareness <strong>of</strong> the company and the benefits <strong>of</strong> its<br />

technologies/<strong>of</strong>ferings.<br />

• Help the company get considered – i.e., encourage a cus<strong>to</strong>mer <strong>to</strong> seek<br />

information from the sales rep or company.<br />

• Create a favorable company image in the cus<strong>to</strong>mer’s mind.<br />

The difference between sales and marketing is like the difference between<br />

planting a field and harvesting the crop. Marketing pr<strong>of</strong>essionals plant the field.<br />

They create awareness about the company among potential cus<strong>to</strong>mers and then<br />

direct sales representatives <strong>to</strong> the markets and channels where they can be most<br />

successful. (This is tactical marketing.) Marketing also plays a key role in<br />

making the company more attractive <strong>to</strong> potential matches in the future. (This is<br />

strategic marketing.) Sales makes the matches, i.e., they harvest the rich crop<br />

that marketing (and operations) have helped create. Chart Nine describes the<br />

different perspectives <strong>of</strong> sales and marketing as a result <strong>of</strong> their different roles.<br />

Different roles demand different skills. As a result, different types <strong>of</strong> people are<br />

generally attracted <strong>to</strong> sales and marketing roles. Sales people have high empathy<br />

and a keen need <strong>to</strong> win frequently and regularly. <strong>Out</strong>going in personality, they<br />

are comfortable developing relationships. They “put themselves up for rejection”<br />

daily, as long as the prospect for a vic<strong>to</strong>ry exists. Like hunters in a difficult<br />

jungle, effective salespeople are independent, self-motivated and untiring.<br />

Marketing people work as much on the “intellectual” side as on the “relationship”<br />

side <strong>of</strong> issues. They love a <strong>to</strong>ugh intellectual challenge and, while <strong>of</strong>tentimes<br />

people-oriented, they <strong>of</strong>ten see the problem as more engaging than the people.<br />

They would either be the organizers <strong>of</strong> a safari or the environmentalists making<br />

sure the jungle ecology is healthy. Relative <strong>to</strong> Sales, they enjoy working on things<br />

with a longer time frame. A good marketing person is excellent working “across”<br />

the organization, i.e., with different functions <strong>of</strong> the company.<br />

There is some overlap in skills. Marketing people must be good at selling ideas.<br />

And, a great consultative salesperson bringing cus<strong>to</strong>mized project solutions <strong>to</strong><br />

one cus<strong>to</strong>mer is not unlike marketing people who do this type <strong>of</strong> work for target<br />

Pamphlet #5 Page 200

markets as a whole versus for an individual cus<strong>to</strong>mer. Making good decisions for<br />

an entire target market demands the marketing person have outstanding<br />

analytical and interviewing skills and be able <strong>to</strong> make insightful business<br />

decisions involving difficult trade-<strong>of</strong>fs. Many CEO’s argue that Marketing is the<br />

best training ground for general management. Chart Ten outlines a comparison<br />

<strong>of</strong> duties and qualifications for sales and marketing pr<strong>of</strong>essionals.<br />

Sales Can’t Do Marketing Well<br />

Three problems arise when a company uses the sales role <strong>to</strong> do the marketing<br />

role:<br />

• It is very expensive.<br />

• Sales will not get the work done on time – or done at all.<br />

• When Sales takes on marketing activities, they are a biased source <strong>of</strong><br />

information.<br />

It is very expensive.<br />

From an opportunity cost perspective, selling resources are the most expensive in<br />

your organization. For every hour the sales organization is diverted from direct<br />

selling activities (i.e., getting the company considered, overseeing the internal<br />

process for developing a proposal that is high value for the cus<strong>to</strong>mer and the<br />

company, winning the order and developing the relationship), the company is<br />

losing gross margin potential.<br />

Sales will not get the work done on time – or done at all.<br />

The urgent always drives out the important, in sales and elsewhere. When Sales<br />

wears both the marketing and sales hats, marketing is what suffers. Therefore,<br />

you must consider what activities are not getting done when individual sales<br />

pr<strong>of</strong>essionals and their managers are responsible for both sales and marketing<br />

roles.<br />

Team Exercise: Wearing Two Hats<br />

Individually complete the exercise in Appendix Five. As a group, discuss the<br />

items that fall in<strong>to</strong> the “follow up later this week” boxes. The activities identified<br />

under “follow up later this week” or “follow up later this month” are typically<br />

marketing activities.<br />

When Sales takes on marketing activities, they are a biased source <strong>of</strong> information.<br />

To understand the bias Sales brings <strong>to</strong> the marketing role, one must think about<br />

how a good sales person carries out his or her role in the organization – getting<br />

the company considered and securing orders. A good sales person will spend<br />

time with cus<strong>to</strong>mers who have a high potential <strong>to</strong> purchase within the next 12-18<br />

months. As a result, the sales person may not be listening in places where<br />

important information about your company’s position within the market and<br />

about market changes can be gained, i.e.,<br />

• Lost cus<strong>to</strong>mers<br />

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• Non-cus<strong>to</strong>mers who are buying complementary products <strong>of</strong> other<br />

technologies, but not your technology, i.e., they may be potential cus<strong>to</strong>mers in<br />

the future<br />

• Manufacturers and providers <strong>of</strong> complementary products and services<br />

• Competitive technology suppliers<br />

• Your company’s suppliers who <strong>of</strong>ten have key insights in<strong>to</strong> the building<br />

marketplace<br />

In addition <strong>to</strong> talking <strong>to</strong> a biased sample, Sales is always listening for information<br />

that will help secure an order. Sales people are focused on a much narrower set<br />

<strong>of</strong> issues than that which a marketing person would explore and learn about in<br />

the marketplace. Furthermore, the cus<strong>to</strong>mer – knowing the role <strong>of</strong> the sales force<br />

– is <strong>of</strong>tentimes leery <strong>of</strong> <strong>of</strong>fering information that might reduce his opportunity <strong>to</strong><br />

push for price concessions. The cus<strong>to</strong>mer may also be reluctant <strong>to</strong> share<br />

information he deems is not pertinent <strong>to</strong> someone in the sales function. For<br />

example, many organizations use their sales force <strong>to</strong> gain information about whey<br />

the company loses orders. Cus<strong>to</strong>mers will always tell sales people that the<br />

company lost the order due <strong>to</strong> price, because they want <strong>to</strong> get the very best price<br />

possible in the future. They will rarely criticize sales performance <strong>to</strong> sales<br />

representatives, for example. Market research pr<strong>of</strong>essionals, on the other hand,<br />

are able <strong>to</strong> gain a much better perspective on why the company loses cus<strong>to</strong>mers,<br />

which is a key part <strong>of</strong> a strategic assessment.<br />

As a result <strong>of</strong> these sources <strong>of</strong> bias, sales people <strong>of</strong>fer an important, but<br />

nonetheless biased, view <strong>of</strong> the marketplace. It is <strong>of</strong>ten said in marketing circles<br />

that if you ask the sales department <strong>to</strong> define the specifications for a new product,<br />

the product will be out <strong>of</strong> date before it is introduced <strong>to</strong> the marketplace.<br />

In light <strong>of</strong> these problems – it’s expensive, Sales does not get the job done, and<br />

biased information results – separate marketing resources are <strong>of</strong> great value in<br />

any organization. Strong tactical marketing creates:<br />

• More effective forecasting<br />

• More time the sales team can spend on selling<br />

• More focus throughout the company<br />

• More effective selling because the sales force is better focused, has stronger<br />

selling <strong>to</strong>ols and aids, and there is prior awareness <strong>of</strong> the company<br />

• Better measures <strong>of</strong> how the organization is performing in its markets<br />

• More successful product introductions<br />

• Better feedback on the quality and cost position <strong>of</strong> the company so as <strong>to</strong> create<br />

quality and cost improvements<br />

• Activities <strong>to</strong> minimize sales losses should the market decline<br />

• More realized opportunities identified and pursued<br />

• Higher pr<strong>of</strong>its through stronger pricing approaches<br />

Strong strategic marketing creates:<br />

• A stronger, more effective market understanding process<br />

• More focus throughout the company<br />

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• Conscious decisions <strong>of</strong> where and how <strong>to</strong> compete, which are key <strong>to</strong><br />

differentiation and breaking out <strong>of</strong> a commodity market (see Pamphlet One)<br />

• Early warning <strong>of</strong> emerging risks and key opportunities<br />

• Stronger products and secure <strong>of</strong>ferings<br />

• More focused and effective resource allocation<br />

• Higher pricing through better differentiation<br />

• Greater partnership opportunities<br />

• Stronger awareness and understanding <strong>of</strong> current and potential competi<strong>to</strong>rs<br />

While Sales and Marketing must work <strong>to</strong>gether effectively, it is important that<br />

Marketing not serve in the role <strong>of</strong> sales assistants. In particular, it is very<br />

important not <strong>to</strong> use Marketing <strong>to</strong>:<br />

• Evaluate specific sales representatives’ performance<br />

• Generate leads by calling on individual accounts<br />

• Create individual sales representative forecasts<br />

• Be the sales person for accounts with longer-term potential<br />

• Maintain all information in a cus<strong>to</strong>mer database<br />

• Write proposals for a specific job<br />

• Serve as the engineer for new product development activities<br />

• Train Sales on selling skills (Marketing does train Sales on what <strong>to</strong><br />

communicate in discussing why the company or its products are better than<br />

that <strong>of</strong> the competition)<br />

• Set prices in front <strong>of</strong> the cus<strong>to</strong>mer (Marketing does set pricing policies and<br />

works with Sales in cases where policies are not effective)<br />

• Review contracts for accuracy or legality<br />

Finally, it’s important that Sales support Marketing in fulfilling the marketing<br />

role. Sales pr<strong>of</strong>essionals help Marketing by:<br />

• Making cus<strong>to</strong>mer contacts on behalf <strong>of</strong> Marketing<br />

• Providing feedback on product ideas and communications materials<br />

• Providing Marketing with an in-field understanding <strong>of</strong> how the products are<br />

working<br />

• Helping the Marketing people understand the sales process<br />

• Providing a record <strong>of</strong> won and lost orders and insights in<strong>to</strong> market size and<br />

why orders are won and lost<br />

• Providing information on the competi<strong>to</strong>r<br />

• Identifying who the key opinion leaders are<br />

• Defining tradeshow requirements<br />

If you are considering adding a marketing person <strong>to</strong> your staff, Appendix Six<br />

contains a job description that can help you get started.<br />

<strong>How</strong> Will We Achieve our Sales and Margin Goals?<br />

The Marketing Plan (This section draws heavily from Hiebing and Cooper)<br />

Pamphlet #5 Page 203

The Marketing Plan is <strong>to</strong> competitive strategy what the weekly itinerary is <strong>to</strong> a<br />

two-month trip or what production and capacity planning is <strong>to</strong> operations. The<br />

marketing-sales plan answers the following questions:<br />

• Where do we want <strong>to</strong> end up at the end <strong>of</strong> the year typically expressed in sales<br />

and margin terms?<br />

• What products and services will be the focus <strong>of</strong> proactive marketing and<br />

selling?<br />

• What are the priority target markets, i.e., groups <strong>of</strong> cus<strong>to</strong>mers with similar<br />

needs defined in a way sales can identify whether cus<strong>to</strong>mer fits or not?<br />

• What outcomes are needed in each target market <strong>to</strong> achieve our sales and<br />

margin goals?<br />

• What marketing and sales strategies will we use <strong>to</strong> create these outcomes?<br />

The tactical marketing plan translates the competitive strategy decisions and<br />

company-wide strategic goals in<strong>to</strong> annual two-year action plans that drive the<br />

work <strong>of</strong> the organization going forward. The tactical marketing-sales plan<br />

insures you have a plan <strong>to</strong> achieve your sales objectives and that the activities <strong>of</strong><br />

the marketing organization are aligned with the competitive strategy <strong>of</strong> the<br />

organization. The tactical marketing-sales plan also insures that operations<br />

(manufacturing design and erection) understand what marketing and sales need<br />

from operations (and vice versa) <strong>to</strong> fulfill their role in helping the organization<br />

execute strategy and achieve strategic goals. The role <strong>of</strong> management is <strong>to</strong> insure<br />

that the marketing-sales plan and the operations plan are in alignment so that<br />

everyone’s efforts will support one another.<br />

Hiebing and Cooper present the tactical marketing plan as a ten-step process<br />

which starts with a business review and ends with evaluating whether or not the<br />

results <strong>of</strong> the business are consistent with what was planned. Chart 11: Ten Steps<br />

<strong>to</strong> Disciplined Marketing Planning presents the ten steps <strong>to</strong> disciplined<br />

marketing planning. Development <strong>of</strong> the marketing-sales plan starts with a<br />

business review. This is basically an update <strong>of</strong> the strategic assessment <strong>of</strong> the<br />

organization (See Pamphlet Four). The review is used <strong>to</strong> identify problems and<br />

opportunities facing the organization, which the annual marketing-sales and<br />

operational plans will address. This review helps you assess whether or not your<br />

strategic plan is in fact working effectively and then modify the competitive<br />

strategy, if necessary.<br />

Problems and opportunities should be ranked according <strong>to</strong> impact,<br />

probability <strong>of</strong> success if addressed, potential return and criticalness <strong>to</strong><br />

competitive strategy execution. It is <strong>of</strong>ten times helpful <strong>to</strong> differentiate problems<br />

and opportunities in terms <strong>of</strong> those that affect where your firm competes, e.g.,<br />

target market products and services and geographies versus those that affect how<br />

your firm is different than the competition, e.g., pricing pressures, quality issues,<br />

speed issues, etc.<br />

The sales objectives stem directly from the strategic goals <strong>of</strong> the organization,<br />

one <strong>of</strong> which is typically defined around revenue, gross margin and operating<br />

Pamphlet #5 Page 204

pr<strong>of</strong>itability. From these sales objectives, Step Four <strong>of</strong> the marketing plan<br />

identifies the specific target markets and target cus<strong>to</strong>mers the<br />

organization will focus on over the next two years and what outcomes or market<br />

and objectives we want within these target markets. This step creates the critical<br />

link between the actions <strong>of</strong> cus<strong>to</strong>mers and the desired sales results for the<br />

organization (See Chart Twelve: Interlocking Sales Objectives).<br />

In selecting target markets, it’s important <strong>to</strong> remember that all marketing plans<br />

boil down <strong>to</strong> one question: “Whom are we trying <strong>to</strong> precondition <strong>to</strong> make selling<br />

as ‘effortless’ as possible?" There are many potential target markets for any<br />

organization. The role <strong>of</strong> the marketing plan is <strong>to</strong> prioritize who is the ideal<br />

target market for each product or technology <strong>of</strong>fering and then for the company<br />

as a whole. Fac<strong>to</strong>rs you might <strong>to</strong> consider in deciding on target markets include:<br />

• Who are the heavy users?<br />

• What are the strategic market segments?<br />

• Which have the best growth prospects?<br />

• Where is the highest pr<strong>of</strong>itability and loyalty?<br />

• Which are most attractive?<br />

• Where is awareness high, or where could it be high?<br />

• Which are most favorably inclined <strong>to</strong> work with us?<br />

The key decision in Step Four is <strong>to</strong> identify the target cus<strong>to</strong>mer groups that will<br />

be the primary focus <strong>of</strong> the marketing-sales plans. Choose large, pr<strong>of</strong>itable,<br />

growing and well-defined targets. The secondary targets include: influencers;<br />

low volume but easy-<strong>to</strong>-access cus<strong>to</strong>mer groups that are <strong>to</strong>o small <strong>to</strong> be primary,<br />

but nevertheless can contribute <strong>to</strong> the financial outcomes <strong>of</strong> the firm; and other<br />

attractive targets that didn’t make the priority list for primary targets.<br />

The marketing objectives identify what needs <strong>to</strong> be accomplished, that is,<br />

ends that need <strong>to</strong> be achieved within each target market <strong>to</strong> achieve the sales<br />

objectives and the strategic goals <strong>of</strong> the organization. Defining marketing<br />

objectives are where most marketing plans fall apart. The marketing objectives<br />

must be:<br />

• Specific<br />

• Measurable<br />

• Have a defined time for completion<br />

• Achievable<br />

• Focus on achieving a specific target market behavior such as awareness,<br />

consideration or selection<br />

• Typically require multiple actions <strong>to</strong> be achieved<br />

• Relevant – they collectively insure you achieve your sales objectives<br />

Examples <strong>of</strong> marketing objectives would be:<br />

• Secure two parking deck jobs with leading design-build teams<br />

• Increase wall panel sales 25% <strong>to</strong> general contrac<strong>to</strong>rs<br />

Pamphlet #5 Page 205

• Achieve a 90% repeat purchasing with <strong>to</strong>p tier contrac<strong>to</strong>rs this year<br />

• Drop the block business<br />

• Be positioned <strong>to</strong> <strong>of</strong>fer steel and precast frames <strong>to</strong> the <strong>to</strong>p-tier contrac<strong>to</strong>rs by<br />

Quarter 3<br />

• Secure $2M in orders in Quarter 4<br />

Step Five is the marketing plan strategy development stage. In this case, we are<br />

referring <strong>to</strong> the plan strategies which will enable the organization <strong>to</strong> execute its<br />

competitive and growth strategies. There are two types <strong>of</strong> plan strategies: the<br />

communications positioning strategy and marketing strategies.<br />

The communications positioning strategy summarizes what you will<br />

communicate about your product and business relative <strong>to</strong> competitive <strong>of</strong>fering. It<br />

is the “umbrella” or basis <strong>of</strong> all <strong>of</strong> your communications. It defines, confirms and<br />

reaffirms the most important reason for the product’s existence and why it should<br />

be purchased. It must be consistent with the strategic positioning <strong>of</strong> the<br />

organization. Communications positioning differs from strategic positioning in<br />

that the former speaks <strong>to</strong> a very strong emotional appeal <strong>of</strong> working with the<br />

company, while the strategic positioning speaks more <strong>to</strong> "objective and rationale"<br />

basis <strong>of</strong> superior value.<br />

There are a number <strong>of</strong> different approaches <strong>to</strong> communications positioning, each<br />

centered on one theme. Consider a precast bridge company that wants <strong>to</strong><br />

compete on speed:<br />

• Focus on a product difference. Steel bridges takes five times longer than<br />

precast bridges. Can you afford the difference?<br />

• Focus on the key attribute or benefit. You get <strong>to</strong> drive faster and get home <strong>to</strong><br />

your kids earlier.<br />

• Focus on problems with the category <strong>to</strong> show that you’re different, e.g., if<br />

building material subs only create headaches for you, you’re talking <strong>to</strong> the<br />

wrong sub.<br />

• Focus on the competi<strong>to</strong>r. Steel can save you money, but only on the bid. We<br />

save you time. That’s real money.<br />

• Associate with something that the target market already likes. Taxpayers<br />

love parks, city services and grade schools. With precast bridge expanders,<br />

you <strong>to</strong>o can be loved by taxpayers.<br />

• Focus on a problem that your product or service solves. There’s $2M <strong>of</strong> new<br />

funds available from the Feds for bridges. Too bad you lack the staff <strong>to</strong> go<br />

after this goldmine. With the precast industry’s help, you <strong>to</strong>o can get bridges<br />

designed and erected fast.<br />

Which communications positioning do you choose? Select the one that:<br />

• Is most meaningful<br />

• Is feasible.<br />

• Creates the greatest differentiation versus the competition<br />

• Is completely consistent with the strategic positioning<br />

Pamphlet #5 Page 206

• Creates an umbrella that will be enduring over time<br />

You may also want <strong>to</strong> actually test your communications positioning with several<br />

groups <strong>of</strong> cus<strong>to</strong>mers from each target market group. Since there is considerable<br />

overlap in different communication <strong>to</strong>ols, it is critical that the chosen<br />

communications positioning be consistent across all target markets.<br />

Marketing strategies explain how you will achieve a specific marketing<br />

objective. They are descriptive, and neither quantifiable nor measurable. Areas<br />

<strong>to</strong> consider include:<br />

• Build market or steel share strategies<br />

• Location-specific strategies<br />

• Seasonality strategies<br />

• Competitive strategies<br />

• Product strategies<br />

• Pricing strategies<br />

• Selling strategies, e.g., bridge strategies, price justification and target<br />

cus<strong>to</strong>mer pr<strong>of</strong>ile<br />

• Promotion strategies<br />

• Advertising strategies<br />

• Merchandising strategies<br />

• Publicity strategies<br />

Communications programs help you achieve your marketing objectives. The<br />

communication goals are therefore sub-objectives <strong>of</strong> marketing objectives.<br />

Goals are developed by first asking, "What does the marketing plan hope <strong>to</strong><br />

accomplish in terms <strong>of</strong> sales, awareness, image, education, leads and new<br />

accounts, etc.?" From this, you then establish what you have <strong>to</strong> accomplish in<br />

terms <strong>of</strong> your communication pieces. Communication objectives can be broad,<br />

(i.e., create a positive company image) as well as very specific (i.e., generate 50<br />

Class A sales leads during fiscal year ’01).<br />

Always keep in mind that marketing communications is an arm <strong>of</strong> marketing and<br />

its primary purpose is <strong>to</strong> help you achieve your marketing objectives. Don’t begin<br />

by saying, "I need a brochure." Rather begin by analyzing your marketing<br />

objectives and strategies and asking, "What objectives can communications<br />

potentially help you achieve?" (See Chart Thirteen: The<br />

Marketing/Communications Link) for an example <strong>of</strong> how communications can<br />

help achieve marketing objectives and strategies.)<br />

Note that in looking at the target markets, communication <strong>to</strong>ols will focus on<br />

both broad audiences as well as narrow audiences. Advertising is <strong>of</strong>ten times<br />

focused on members <strong>of</strong> a target market as well as others, whereas a direct mail<br />

program would be directed <strong>to</strong> a very specific group <strong>of</strong> people within a target<br />

market. Also keep in mind that your employees and members <strong>of</strong> your community<br />

are important target audiences as well. Pizza Hut and British Air campaigns are<br />

Pamphlet #5 Page 207

great examples <strong>of</strong> using their advertising <strong>to</strong> communicate points <strong>of</strong><br />

differentiation that their employees can learn about and be proud <strong>of</strong>.<br />

Once you understand how communications can be used, you then create<br />

communications objectives which are really sub-objectives <strong>of</strong> your marketing<br />

objectives. (See Chart Fourteen: Communications Objectives). There are a<br />

number <strong>of</strong> potential communication <strong>to</strong>ols you can use <strong>to</strong> achieve your<br />

communication objectives. They include: general advertising; direct mail; sales<br />

brochures and sales aids, product displays, Website, publicity news releases,<br />

promotions, summaries, newsletters, executive correspondence, etc. Each <strong>to</strong>ol<br />

serves a specific role in terms <strong>of</strong> helping you achieve your communications<br />

objectives. (See Chart Fifteen: Communications Tools).<br />

The keys <strong>to</strong> successful communications include:<br />

• Ensure your communications program contributes <strong>to</strong> the attainment <strong>of</strong> your<br />

marketing goals and is always consistent with your strategic positioning.<br />

• Create a written plan, with specified objectives, strategies, tactics, timetable,<br />

budget, measures.<br />

• Develop an integrated campaign in which communications elements reinforce<br />

one another -- not independent ads and sales sheets that work alone.<br />

• Maintain consistency in your message and its creative execution across the<br />

marketplace and over time.<br />

• Promise only what you can deliver; and substantiate your claims.<br />

• Convey your company’s points <strong>of</strong> distinction and value in terms that are<br />

meaningful <strong>to</strong> each cus<strong>to</strong>mer segment.<br />

• Evaluate alternative creative executions relative <strong>to</strong> the communications<br />

strategy; don’t focus on graphic design or clever creative work at the expense<br />

<strong>of</strong> strategy. Test concepts with target cus<strong>to</strong>mers.<br />

• Communicate your strategic positioning, communications positioning and<br />

program plans <strong>to</strong> employees.<br />

Also recognize that communication <strong>to</strong>ols aren’t the only tactical <strong>to</strong>ols. Other<br />

marketing <strong>to</strong>ols include: promotions, new products and service introductions,<br />

new target market groups, joint ventures, pricing strategies, etc.<br />

Sales Plan<br />

The sales plan takes the overall marketing plan and prioritizes specific cus<strong>to</strong>mers<br />

in<strong>to</strong> A, B and C accounts. A are the most important accounts and will receive the<br />

most time from the sales representatives. Individual sales representatives then<br />

develop account strategies for A, and possibly B accounts <strong>to</strong> win orders.<br />

The sales plan also breaks overall sales and margin goals down in<strong>to</strong> the goals for<br />

specific sales representatives or regions <strong>of</strong> the country. The sales plan also<br />

identifies the key objectives <strong>of</strong> the sales force required <strong>to</strong> achieve the sales-<br />

Pamphlet #5 Page 208

marketing plan objectives. In essence, the sales plan is the functional plan for<br />

sales that underlies achievement <strong>of</strong> the marketing-sales plan <strong>of</strong> the organization.<br />

What must we change in our operations <strong>to</strong> support the salesmarketing<br />

plan and achieve process goals?<br />

The Operational Plan<br />

The operational plan 0utlines what operations (engineering, finance,<br />

manufacturing and erection) must accomplish in the next two years. The<br />

operational plan objectives must be specific, measurable statements <strong>of</strong> outcomes<br />

that are desired in the organization. For each objective, it’s critical <strong>to</strong> identify:<br />

• Why this objective is important<br />

• Past barriers <strong>to</strong> accomplishment<br />

• Root causes <strong>of</strong> why problems exist or the opportunity exists<br />

• Strategies that will be used <strong>to</strong> address the root causes<br />

• Action plans<br />

• Budget<br />

• Timetables<br />

Examples <strong>of</strong> operational plan objectives include:<br />

• Create a more uniform wall panel surface and architectural panel surface<br />

• Build a strategic partnership with a steel fabrica<strong>to</strong>r.<br />

• Reduce design approval process cycle time by three weeks<br />

Like marketing and sales objectives, operational objectives must also be:<br />

• Specific<br />

• Measurable<br />

• Have a defined time for completion<br />

• Achievable<br />

• Typically require multiple actions <strong>to</strong> be achieved<br />

• Relevant – they collectively insure you achieve your sales objectives<br />

The process improvement and process redesign goals are translated in<strong>to</strong><br />

operational plan objectives <strong>to</strong> insure that the work <strong>of</strong> operations includes not just<br />

producing products and services that are sold, but creating changes in how<br />

products and services are produced so as <strong>to</strong> better achieve cus<strong>to</strong>mer and financial<br />

expectations. The operational plan should also address activities related <strong>to</strong><br />

managing the core competencies that underlie the strategic positioning. The keys<br />

<strong>to</strong> managing a company’s core competency are <strong>to</strong>:<br />

• Insure everyone in the organization knows what it is and how their part <strong>of</strong> the<br />

organization contributes <strong>to</strong> it<br />

• Establish plans <strong>to</strong> acquire competencies needed for the future<br />

• Strengthen them<br />

Pamphlet #5 Page 209

• Deploy them in<strong>to</strong> new markets, which is the best way <strong>to</strong> leverage your<br />

resources and dramatically increase your return on investment in core<br />

competencies (new market development steps would likely be addressed in<br />

the marketing-sales plan)<br />

• Protect and defend them<br />

Financial Plan<br />

Most <strong>of</strong> you are in organizations that have an annual or two-year financial plan.<br />

When leadership oversees the process <strong>of</strong> "aligning" the organization <strong>to</strong> its<br />

strategies, the financial plan becomes the <strong>to</strong>ol for testing whether resources are<br />

being effectively deployed <strong>to</strong> execute strategy. Individual departments are asked<br />

<strong>to</strong> create budgets consistent with achieving the objectives <strong>of</strong> the marketing,<br />

operations and sales plans. If the resources required do not yield the desired<br />

pr<strong>of</strong>itability, it’s back <strong>to</strong> the drawing board <strong>to</strong> find ways <strong>to</strong> execute strategy and<br />

achieve financial targets. Sometimes execution <strong>of</strong> strategy must slow down; other<br />

times groups become more creative in developing execution approaches.<br />

The financial planning process also insures that all departments understand the<br />

overall objectives <strong>of</strong> the organization (defined through the marketing plan and<br />

the operational plan), and are budgeting accordingly. The process <strong>of</strong> linking<br />

strategy <strong>to</strong> financial plans does not create a more hectic budget process. If<br />

anything, it helps the process -- as there is less bickering across departments on<br />

what is and is not a priority.<br />

What Partners Do We Need?<br />

A critical decision is which activities should your organization do themselves<br />

versus partner with others <strong>to</strong> do? A “not invented here” syndrome can paralyze a<br />

company. But the opposite side—relying <strong>to</strong>o much on others—can strip a<br />

company <strong>of</strong> core competencies and competitive advantage.<br />

Through strategic alliances, organizations can "marry" their expertise, core<br />

competencies, products, and services <strong>to</strong> create incremental value that is greater<br />

than either can provide independently, and greater than the value <strong>of</strong>fered by their<br />

joint competition. This allows both organizations <strong>to</strong> achieve significant<br />

competitive differentiation, which is particularly important in mature,<br />

commodity-like markets such as the PC-PS industry. (See Sidebar D: The<br />

Benefits <strong>of</strong> Strategic Alliances.)<br />

Business experts define strategic alliances in a variety <strong>of</strong> ways. Perhaps the most<br />

pertinent definition is that <strong>of</strong>fered by author Jordan D. Lewis, who defines a<br />

strategic alliance as "a relationship between firms in which they cooperate <strong>to</strong><br />

produce more value (higher benefits or a lower cost) than is possible in a<br />

(traditional) market transaction." 1 Several important concepts are inherent in<br />

this definition:<br />

Pamphlet #5 Page 210

Collaboration<br />

Crucial <strong>to</strong> a strategic alliance is the notion <strong>of</strong> collaboration. Partners must<br />

collaborate <strong>to</strong> create new value for their cus<strong>to</strong>mers. The extent <strong>of</strong> collaboration<br />

may be broad and all-inclusive, or it may pertain only <strong>to</strong> certain aspects <strong>of</strong> the<br />

business. An alliance may form, for example, around certain types <strong>of</strong> products,<br />

such as stadiums or parking garages, or around certain delivery methods, such as<br />

design-build. If the alliance is limited in some manner, the partners continue <strong>to</strong><br />

act independently in other areas <strong>of</strong> their businesses.<br />

Collaboration may also occur at a variety <strong>of</strong> levels. It may take the form <strong>of</strong> a<br />

consortia, such as PC-21, in which the companies pool resources <strong>to</strong> achieve a<br />

common goal. It may take the form <strong>of</strong> a joint venture, in which the firms pool<br />

different competencies and learn from each other in a shared-ownership model;<br />

in this case, the rest <strong>of</strong> the organization remains independent. Or, it may form as<br />

a value-chain partnership, a strategic alliance between companies that are<br />

connected on the value chain.<br />

Regardless <strong>of</strong> the scope or level, an effective collaborative relationship<br />

includes:<br />

• A commitment <strong>to</strong> mutual relationships and goals<br />

• A jointly developed structure and shared responsibility<br />

• Mutual authority and accountability for success<br />

• Sharing <strong>of</strong> resources, risks and rewards<br />

Change<br />

By definition, a strategic alliance requires that both partners change in order <strong>to</strong><br />

jointly enhance overall value for the cus<strong>to</strong>mer. If only your company, for<br />

example, changes in order <strong>to</strong> secure work, but your client does not alter its<br />

organization or work processes, you have not formed a strategic alliance. Rather,<br />

in this case, you are winning business by being cus<strong>to</strong>mer-driven. [Your cus<strong>to</strong>mer<br />

may perceive you as a "partner"-- perhaps even repay your efforts by allowing you<br />

<strong>to</strong> see the last bid or selecting you on the basis <strong>of</strong> "fair" pricing -- but in reality<br />

you have not formed a strategic alliance.]<br />

"This difference is where most initiatives <strong>to</strong> form supply alliances bog down.<br />

Overlooking the needs for substantial changes in management and organization<br />

styles, and for broad and deep inter-firm links, many companies (seeking <strong>to</strong><br />

partner with their suppliers) assume the process is a mechanical one: Just reduce<br />

the supply base, establish a supplier rating system, mandate cross-functional<br />

teams, and everything is set <strong>to</strong> go. This assumption is wrong. Only a consistent,<br />

long-term commitment from <strong>to</strong>p management <strong>to</strong> wide-ranging transformation<br />

leads <strong>to</strong> the best results." - J. Lewis<br />

Pamphlet #5 Page 211

Structure<br />

Strategic alliances can be structured in a number <strong>of</strong> ways, ranging from<br />

"gentlemen's agreements" <strong>to</strong> detailed legal contracts. Informal cooperation,<br />

formal contracts, and equity alliances such as joint ventures and minority<br />

investments are common examples. These may involve just two companies, or<br />

multiple firms in a "network alliance."<br />

The structure <strong>of</strong> the strategic alliance should be subservient <strong>to</strong> the partnership<br />

objectives, as well as <strong>to</strong> the nature <strong>of</strong> the relationships. This is true for the<br />

management, policy-setting and governance structure, as well.<br />

Strategic Alliance Opportunities<br />

Within the PC-PS industry, you may wish <strong>to</strong> consider strategic alliances with<br />

other precasters, your suppliers, other subcontrac<strong>to</strong>rs, and various cus<strong>to</strong>mers,<br />

including contrac<strong>to</strong>rs, design-build firms, owners and developers. Because firms<br />

must retain their independence even when pursuing interdependent strategic<br />

alliances, organizations will rarely limit themselves <strong>to</strong> one partner. This suggests<br />

that your precast firm can enter in<strong>to</strong> multiple strategic alliances, yet continue <strong>to</strong><br />

bid for work from other cus<strong>to</strong>mers.<br />

Strategic alliances do require, however, that the set <strong>of</strong> changes you make <strong>to</strong><br />

enhance value with one organization is not broadly and equally shared with that<br />

organization's competi<strong>to</strong>rs. If you jointly developed an information network with<br />

one client, for example, you would not share it with that cus<strong>to</strong>mer's competi<strong>to</strong>rs.<br />

Just as you can build alliances with your cus<strong>to</strong>mers, your suppliers can enter in<strong>to</strong><br />

strategic alliances with your firm <strong>to</strong> increase the combined value you <strong>of</strong>fer <strong>to</strong> your<br />

clients and the building owner. The alliance between High Concrete Structures<br />

and MasterBuilders, a collaboration <strong>of</strong> technological development and marketing,<br />

is an excellent example <strong>of</strong> this.<br />

Alliances improve the competitiveness <strong>of</strong> both partners through their many<br />

benefits. Alliances also <strong>of</strong>fer a means <strong>of</strong> overcoming many <strong>of</strong> the disadvantages<br />

typically associated with traditional transactions -- the guarded, <strong>of</strong>ten<br />

antagonistic relationships in which little information is shared and there is little<br />

opportunity <strong>to</strong> enhance value.<br />

In effective strategic alliances, the linkages between companies are broad, deep<br />

and unique. The greatest value from cooperation comes from integrating each<br />

firm's separate processes in<strong>to</strong> seamless operations. Instead <strong>of</strong> lowest price from<br />

the supplier, for example, the emphasis is on lowest <strong>to</strong>tal cost. Rather than<br />

seeking the fastest separate response times, the goal is shortest combined cycle<br />

time. As a result, the most productive cus<strong>to</strong>mer-supplier interfaces require<br />

multi-functional teams which must be involved in depth. To create the most<br />

value, a supplier must adapt its organization for each cus<strong>to</strong>mer's interface,<br />

reflecting the need for resources, structures and practices that are unique for<br />

each situation.<br />

Pamphlet #5 Page 212

Rather than contracts, effective alliances are based on strong commitments.<br />

Many alliances function without any contracts at all. They are sustained by a<br />

mutual need, a common objective seen as important enough <strong>to</strong> dominate any<br />

issue, a willingness <strong>to</strong> share the benefits and a trusting relationship. To an<br />

important extent, alliances are between people. When adjustments must be<br />

made, only people who trust and understand each other can make them in a way<br />

that maintains commitments. Only people who share a vision and the<br />

enthusiasm <strong>to</strong> make it a reality will invest the efforts needed for an alliance <strong>to</strong><br />

succeed.<br />

Both organizations must trust one another, and maintain ongoing efforts <strong>to</strong><br />

develop relationships at multiple levels. Open sharing <strong>of</strong> information allows each<br />

partner <strong>to</strong> identify collaborative opportunities <strong>to</strong> increase the value they bring <strong>to</strong><br />

the marketplace. The need for trust requires that you select a partner that will be<br />

committed <strong>to</strong> the relationship and compatible with your organization.<br />

Both partners must maintain a long-term outlook which encourages each <strong>to</strong><br />

engage in relationship building and information sharing; this will promote<br />

identification <strong>of</strong> emerging opportunities that increase value. Finally, both must<br />

appropriately manage the risks that are associated with dissolution <strong>of</strong> the<br />

strategic alliance. (See Sidebar E: Benefits and Key Success Fac<strong>to</strong>rs <strong>of</strong> Strategic<br />

Alliances).<br />

<strong>How</strong> Will We Measure Success? The Balanced Score Card<br />

Measuring the results <strong>of</strong> your organization on finances alone is fraught with<br />

problems. Saavy organizations increasingly use a <strong>to</strong>ol called a Balanced Score<br />

Card <strong>to</strong> measure whether or not strategy is being executed and, if so, is it creating<br />

desired results. (See Kaplan references for more information on the Balanced<br />

Score Card.)<br />

The objectives <strong>of</strong> the Balanced Score Card include:<br />

• Provide a set <strong>of</strong> performance measures which capture the intent <strong>of</strong> the<br />

business strategy and help drive it forward<br />

• Expand management’s focus <strong>to</strong> include all <strong>of</strong> those capabilities required <strong>to</strong><br />

achieve the strategy<br />

• Direct the focus <strong>of</strong> the entire organization <strong>to</strong>ward those performance<br />

measures critical <strong>to</strong> long-term success<br />

• Create a dynamic performance measurement system which adapts <strong>to</strong> the<br />

changing needs <strong>of</strong> the business<br />

• Provide a basis for setting long-term performance objectives which drive<br />

performance improvements<br />

The keys <strong>to</strong> creating a Balanced Score Card include:<br />

Pamphlet #5 Page 213

• Establish the critical success fac<strong>to</strong>rs: core competencies, accomplishments,<br />

management decisions and organizational characteristics that are critical <strong>to</strong><br />

executing strategy and achieving the vision. These summarize what needs <strong>to</strong><br />

happen for the organization <strong>to</strong> succeed.<br />

• With this, you can then identify Balanced Scorecard measures, i.e., units <strong>of</strong><br />

information (financial or non-financial) that provide meaningful feedback <strong>to</strong><br />

strategy execution and, with this, success <strong>to</strong>wards achievement <strong>of</strong> the critical<br />

success fac<strong>to</strong>rs.<br />

Balanced Score Card measures are usually developed for four categories:<br />

• Financial<br />

• Cus<strong>to</strong>mer<br />

• Operations<br />

• Innovation<br />

You can, however, develop other categories that reflect your overall areas <strong>of</strong><br />

emphasis in building a winning company. Within each category, you then select<br />

leading (i.e., early measures) and lagging (i.e., late measures) <strong>of</strong> outcomes. For<br />

example, awareness levels may be a leading indica<strong>to</strong>r <strong>of</strong> sales, with win rate the<br />

lagging indica<strong>to</strong>r. Balanced Score Card measures are established at the company<br />

level. Then, each team or functional group level creates measures that stem from<br />

the company measures, but better reflect what the smaller group can directly<br />

influence. E.g., suppose one <strong>of</strong> the organizational measurements was win rate.<br />

The sales department measures related <strong>to</strong> this measure could be:<br />

• Consideration rate<br />

• # hours in front <strong>of</strong> existing cus<strong>to</strong>mers<br />

What must the leadership team accomplish working as a team <strong>to</strong><br />

enhance the capacity <strong>of</strong> the organization <strong>to</strong> succeed?<br />

Pamphlet Two focuses on the role <strong>of</strong> the senior leadership team and Pamphlet Six<br />

on developing strategic leadership skills. Reading about leadership is useful.<br />

Becoming a differentiated supplier requires you <strong>to</strong> translate awareness about<br />

leadership’s role and a desire <strong>to</strong> improve leadership skills in<strong>to</strong> a plan <strong>to</strong> improve<br />

leadership skills throughout the company, starting with the senior team.<br />

Otherwise, dreams exist, but there is no change in reality. Slowly but surely,<br />

ambitions start <strong>to</strong> shrink and rose-colored glasses are used <strong>to</strong> convince yourself<br />

that <strong>to</strong>day’s reality is really not that bad. (See Sidebar F: Most <strong>of</strong> us choose <strong>to</strong><br />

ignore the crossroads we face, choosing slow death over deep personal change.)<br />

The leadership team plan outlines the work activities <strong>of</strong> the leadership team (as a<br />

team, not as individual managers <strong>of</strong> different parts <strong>of</strong> the organization) over the<br />

coming year. Like other key teams, there should be objectives and action steps<br />

and miles<strong>to</strong>nes. The work <strong>of</strong> leadership development and personal change is a<br />

Pamphlet #5 Page 214

critical part <strong>of</strong> this plan. (See Pamphlet Six.) Key decisions the leadership team<br />

must make over the coming year and any work in anticipation <strong>of</strong> these decisions<br />

should also be outlined. Examples <strong>of</strong> leadership team objectives include:<br />

• Revamp the performance evaluation system, shifting <strong>to</strong> 360 degree feedback<br />

systems<br />

• Design the balanced score card measures, consistent with our strategies<br />

• Create more trust and collaboration within our group<br />

The leadership team plan should also identify how the leadership team will<br />

measure their success as a team. Examples <strong>of</strong> measures include:<br />

• Scores on leadership assessment <strong>to</strong>ols (See Pamphlet Six)<br />

• Completion <strong>of</strong> key objectives<br />

• Survey <strong>of</strong> employees assessing their view <strong>of</strong> our performance as a team (E.g.,<br />

are we doing the right things and demonstrating strong leadership practices<br />

in how we work with others?)<br />

• Each individual makes progress on his personal development objectives<br />

Many senior leadership teams also create plans for the broader leadership group<br />

that includes all the managers <strong>of</strong> the company. Broadening the scope <strong>of</strong> the<br />

team’s activities insures that <strong>to</strong>morrow’s senior leaders are being developed<br />

<strong>to</strong>day.<br />

Summary<br />

Many companies have great planning systems, but they are focused on financial<br />

outcomes alone. Others have great ideas about how <strong>to</strong> be different than the<br />

competition, but their ideas never get translated in<strong>to</strong> actions. Year-by-year they<br />

are doing the same old things. Both companies fail their people and their<br />

cus<strong>to</strong>mers. Companies need <strong>to</strong> get different and get better. Companies<br />

competing as commodities need new strategies. Existing market leaders need<br />

enhanced points <strong>of</strong> differentiation. Both must develop even better execution<br />

skills <strong>to</strong> create the organization’s desired future. Even the lowest cost provider in<br />

a commodity market must be attuned <strong>to</strong> changes as companies with different<br />

business models can disrupt a market and threaten the lowest provider’s<br />

position.<br />

Act Three <strong>of</strong> the change process is where the rubber hits the road. Implementation<br />

<strong>of</strong> new competitive strategies or enhancing execution <strong>of</strong> an existing<br />

competitive strategy creates superior value for cus<strong>to</strong>mers and therefore market<br />

vic<strong>to</strong>ries. Implementation is enhanced by balanced score card measures and<br />

annual marketing, sales, operational, financial, partnering, and leadership team<br />

plans that translate strategy in<strong>to</strong> desired near-term outcomes. This focuses all<br />

the efforts and initiatives <strong>of</strong> the organization on a shared direction.<br />

In a very real sense, implementation is the art <strong>of</strong> introducing and managing<br />

change. Management <strong>to</strong>ols, such as budgeting, measurements and rewards,<br />

Pamphlet #5 Page 215

individual job objectives, timetables and evaluation <strong>of</strong> results are all valuable in<br />

this work. Chart Sixteen provides a framework for how these <strong>to</strong>ols fit <strong>to</strong>gether. A<br />

critical point <strong>of</strong> alignment for companies in business-<strong>to</strong>-business markets is<br />

<strong>of</strong>tentimes creating a marketing department.<br />

The planning systems outlined in this chapter serve <strong>to</strong> align the work <strong>of</strong> the<br />

organization with its strategies <strong>to</strong> actually change (versus plan <strong>to</strong> change) the<br />

organization. But they serve other roles as well. This framework places<br />

leadership in the role <strong>of</strong> creating processes <strong>to</strong> align activities, thereby pulling<br />

them out <strong>of</strong> the work <strong>of</strong> daily operations. This opens the space for others <strong>to</strong> do<br />

the daily work, thereby enabling all employees <strong>to</strong> develop and use their inherent<br />

gifts. Use <strong>of</strong> this framework also creates a feeling <strong>of</strong> community—we are all in<br />

this <strong>to</strong>gether, each with distinct and important roles. Aligned planning is a key<br />

<strong>to</strong>ol for building collaboration and tackling the "system" causes <strong>of</strong> distrust and<br />

weakened relationships across parts <strong>of</strong> the organization. With all these<br />

advantages, what are you waiting for?<br />

Questions <strong>to</strong> Ask Going Forward<br />

• Is our competitive strategy known and unders<strong>to</strong>od across the organization?<br />

• Do we understand which processes are or will be at the heart <strong>of</strong> or<br />

marketplace and financial success?<br />

• Do individuals, departments and process teams know how they contribute <strong>to</strong><br />

our points <strong>of</strong> differentiation and core competencies?<br />

• Do we have the right skills? Are we creating, preserving and enhancing our<br />

core competencies?<br />

• Are we structured effectively <strong>to</strong> execute our strategies?<br />

• In our estimation, can one person serve as both the marketing and sales<br />

pr<strong>of</strong>essional, i.e., can a marketing pr<strong>of</strong>essional cover sales and vice versa?<br />

• What is not getting done in our organization when Sales is responsible for<br />

both the sales and marketing roles?<br />

• Does our company have a market understanding process in place that is as<br />

strong or stronger than its financial/operational information process?<br />

• Are our decisions and actions integrated around a well conceived, long-term<br />

competitive strategy? Who in our organization is helping us define the<br />

strategy and insure it “works” in the marketplace?<br />

• Are our measures consistent with our strategies? Do we have both leading<br />

and lagging indica<strong>to</strong>rs <strong>of</strong> success in strategy execution?<br />

• Are our planning systems focusing everyone in the same direction? Is it the<br />

right direction?<br />

• Are we deploying process improvement resources on the right processes?<br />

• Are we "fixing" processes when we should be redesigning them from scratch?<br />

• <strong>How</strong> should we change our "budget" process <strong>to</strong> better support our desire <strong>to</strong> be<br />

strategic leaders and <strong>to</strong> insure we are competing as a differentiated supplier<br />

rather than a commodity supplier?<br />

Pamphlet #5 Page 216

Sidebar A: Systems Thinking<br />

A systems perspective comes from looking at your organization from the<br />

“balcony.” Systems thinkers look beyond what is immediately apparent, seeking<br />

the root cause <strong>of</strong> visible problems. They also look for changes that will support<br />

multiple, versus a singular, opportunity. Systems thinkers are in the habit <strong>of</strong><br />

viewing their organization in terms <strong>of</strong> interdependencies, interactions, sequences<br />

and processes that underlie the results <strong>of</strong> the organization. System thinkers do<br />

not see results being achieved through independent events and a linear chain <strong>of</strong><br />

occurrences.<br />

A systems view leads us <strong>to</strong> understand a number <strong>of</strong> things:<br />

• You cannot evaluate a system without knowing its purpose. Varying purposes<br />

create chronically dysfunctional systems. This is why competitive strategy<br />

becomes so important for an organization as well as vision, purpose and<br />

guiding principles. It insures that individuals are all aiming in the same<br />

direction. Effective alignment, as executed through sales, marketing,<br />

financial, operational and leadership plans, insures that individuals are going<br />

in the same direction as well.<br />

• When an organization fails, the system is at fault. When people fail, the<br />

system is most <strong>of</strong>ten at fault. Always blaming people will not improve<br />

organizational results.<br />

• Errors can stay in the system a long time if the root cause is not treated.<br />

• It’s more expensive <strong>to</strong> treat problems downstream <strong>of</strong> where they occur as<br />

opposed <strong>to</strong> eliminating the problems from the start.<br />

• Anyone in the organization that inherits problems from another part <strong>of</strong> the<br />

organization begins <strong>to</strong> build up a certain level <strong>of</strong> defensiveness. "Rules" get<br />

created that slowly erode collaboration -- and even cooperation -- between the<br />

different parts <strong>of</strong> the organization.<br />

Rummler and Brakke, two noted operational improvement specialists, say it all<br />

when they comment, "An organization behaves as a system whether it is managed<br />

as a system or not."<br />

Sidebar B: Variation<br />

Process improvement uses a set <strong>of</strong> statistical <strong>to</strong>ols that allow you <strong>to</strong> measure<br />

variation. Whatever variation there is must be differentiated between what is<br />

called "common" or "systemic" variation and special cause variation. The former<br />

is recurring variation that reflects an ongoing, underlying problem that you can<br />

anticipate will occur. For example, delivery <strong>of</strong> product beyond the promised date<br />

is <strong>of</strong>ten times due <strong>to</strong> systemic variation. It may be due <strong>to</strong> poor systems, weak<br />

communications or staffing that is <strong>to</strong>o lean. Nevertheless, there are sometimes<br />

special or unique causes <strong>of</strong> variation. These are highly unusual, i.e., once in a<br />

blue moon events that cause an outcome which is significantly outside normal<br />

variation. These are the kinds <strong>of</strong> events that do not appear with a recurring<br />

Pamphlet #5 Page 217

pattern, i.e., an unexpected snow s<strong>to</strong>rm in Atlanta will reduce daily output <strong>of</strong> a<br />

precast work team. One way <strong>to</strong> differentiate special versus common cause is <strong>to</strong><br />

ask if this is a unique problem or an example <strong>of</strong> a larger class <strong>of</strong> problems and<br />

second ask, "If I replace the workers, would I still have this problem?"<br />

The following table gives an example <strong>of</strong> special versus common cause drivers <strong>of</strong><br />

delays in architect’s approvals:<br />

Special Causes Common Causes<br />

• Architect’s wife dies in car accident<br />

• Drawings delivered <strong>to</strong> wrong <strong>of</strong>fice,<br />

where they sat for days<br />

• Architect does not appreciate need<br />

for speedy approval<br />

• Architect is understaffed<br />

• Architect is unfamiliar with precast<br />

and therefore needs <strong>to</strong> find outside<br />

help prior <strong>to</strong> approval<br />

• Other parts <strong>of</strong> design that affect us<br />

are not yet complete<br />

• Approvals are used <strong>to</strong> help finalize<br />

the drawings<br />

The key <strong>to</strong> minimizing adverse outcomes from special variation is <strong>to</strong> ensure you<br />

have a process in place <strong>to</strong> get timely data that reveals special causes quickly so<br />

that you can react <strong>to</strong> them. In a hospital setting, for example, highly difficult<br />

cases are flagged early on so that a case manager can help oversee the care <strong>of</strong> a<br />

patient. The goal is <strong>to</strong> contain damage with an immediate remedy. It is<br />

important <strong>to</strong> understand what’s different this time, i.e., what’s causing the special<br />

cause outcome, as this special cause outcome could in fact become a common<br />

cause at some point. If you think it might become a common cause at some<br />

point, then you must develop a longer-term remedy.<br />

<strong>How</strong> do you deal with special causes?<br />

• Get timely data so that special causes are revealed quickly<br />

• Contain damage with an immediate remedy<br />

• Search for the cause -- what was different? Could it be a common cause at<br />

some point?<br />

• If so, develop a longer-term remedy<br />

The focus <strong>of</strong> continuous process improvement, and process redesign for that<br />

matter, is <strong>to</strong> adjust common causes <strong>of</strong> adverse outcomes. Here you look at all the<br />

data, not a single data point, and you stratify the data in<strong>to</strong> high occurrence causes<br />

and low occurrence causes and you focus initially on improving or limiting the<br />

high occurrence causes. You may ultimately treat different classes <strong>of</strong> projects<br />

differently if you see correlations between sources <strong>of</strong> problems and types <strong>of</strong><br />

projects.<br />

Pamphlet #5 Page 218

Trying <strong>to</strong> understand the causes forces you <strong>to</strong> play detective in terms <strong>of</strong> figuring<br />

out:<br />

• Who is involved?<br />

• What and where is the cause <strong>of</strong> the problem?<br />

• When does the problem occur?<br />

• What types <strong>of</strong> projects does it occur on?<br />

You use these types <strong>of</strong> questions <strong>to</strong> identify how you will "study" or measure how<br />

a process is working. Collecting data helps you focus on the true location <strong>of</strong> the<br />

problem. Once you identify the location <strong>of</strong> the problem, you then hypothesize<br />

why the problem arises and determine potential solutions <strong>to</strong> this. (See Steps<br />

Three and Four in Appendix One.)<br />

Sidebar C: Structure Affects, but Does Not alone Determine, Behavior<br />

“<strong>Break</strong>ing the Functional Mindset in Process Organizations,” Harvard Business<br />

Review, Sept./Oct. 1996.<br />

• Authors compare companies in the same industry – electronics<br />

• Reorganization <strong>of</strong> operations along process lines made no difference <strong>to</strong> cycle<br />

time performance unless it was accompanied by new management approaches<br />

that create a culture <strong>of</strong> collaboration by focusing on:<br />

• Teamwork skills<br />

• A collective sense <strong>of</strong> responsibility <strong>to</strong> process outcomes<br />

• Key “collaboration” <strong>to</strong>ols used <strong>to</strong> make process reorganizations succeed<br />

included:<br />

• Structure jobs with overlapping responsibilities<br />

• Base rewards on group performance<br />

• Layout work area so people can see each other’s work<br />

• Change procedures <strong>to</strong> enable collaboration<br />

• Using the above <strong>to</strong>ol(s) increased cycle time 7.5 times in process-complete<br />

organizations<br />

• Functional organizations were 3.5 times faster than process-complete<br />

organizations not using collaboration <strong>to</strong>ols<br />

Sidebar D: Benefits <strong>of</strong> Strategic Alliances<br />

• Enhance product value<br />

~ Superior timing<br />

~ Create new or improved performances<br />

~ Lower costs and risks<br />

~ Provide more value in use<br />

~ Offer a stronger product line<br />

~ Compatibility that increases product appeal<br />

~ Enhance product images<br />

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• Improve market access<br />

~ Produce better advertising<br />

~ Open new marketing channels<br />

~ Gain better channel control<br />

~ Improve supply links<br />

~ Lower input costs<br />

• Strengthen operations<br />

~ Create new and improved processes<br />

~ Use facilities more productively<br />

~ Cooperate <strong>to</strong> develop operating standards<br />

• Add technological strengths<br />

~ Add technology <strong>to</strong> your skill base<br />

~ Increase R&D creativity<br />

~ Build needed scale<br />

~ Ease major technology transitions<br />

~ Use market pull <strong>to</strong> encourage others' development<br />

• Enhance strategic growth<br />

~ Overcome market entry barriers<br />

~ Pave your growth path<br />

~ Join <strong>to</strong> explore new opportunities<br />

• Organizational reinforcement<br />

~ Learn from others<br />

~ Focus with a partial spin-<strong>of</strong>f<br />

• Build financial strength<br />

~ Produce more income<br />

~ Reduce administrative costs<br />

~ Reduce investment exposure<br />

• Look for wider synergies that will generate yet more advantages<br />

Source: Partnerships for Pr<strong>of</strong>it, J. Lewis<br />

Sidebar E: Key Success Fac<strong>to</strong>rs <strong>of</strong> Strategic<br />

• Do the "basics" right<br />

~ Select a good partner<br />

~ Define specific objectives<br />

~ Establish a structure that supports the strategy<br />

• Build trust and ongoing relationships<br />

• Maintain independence in the face <strong>of</strong> inter-dependency<br />

• Manage risks<br />

• Maintain a long-term outlook<br />

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Sidebar F: Most <strong>of</strong> us choose <strong>to</strong> ignore the crossroads we face,<br />

choosing slow death over deep personal change<br />

The Tyranny <strong>of</strong> the In-Basket<br />

“When an executive admits that a change is needed but opts out not <strong>to</strong> make it,<br />

the executive is making a conscious choice. The water is slowly heating up and<br />

the executive knows that the leap <strong>to</strong> safety is possible, the strategic thought being,<br />

‘If I can hang on just a couple more years the problem will belong <strong>to</strong> someone<br />

else.’ <strong>How</strong>ever, when he leaps <strong>to</strong> safety, the rest <strong>of</strong> the work force is left with the<br />

problem. In this scenario, self-interest triumphs over collective responsibility.<br />

The selection <strong>of</strong> slow death has some moral over<strong>to</strong>nes. It involves the violation <strong>of</strong><br />

trust and responsibility, <strong>of</strong>ten leading <strong>to</strong> guilt. Because <strong>of</strong> the moral implications,<br />

the issue becomes undiscussable in the organization. Organizational members<br />

fake ignorance <strong>of</strong> the situation, while fully understanding that the organization is<br />

in serious trouble. The impact <strong>of</strong> this problem is enormous.<br />

“People slowly lose hope and begin <strong>to</strong> feel trapped by their circumstances. They<br />

<strong>of</strong>ten cope by withdrawing or conversely by staying busy with insignificant issues.<br />

Others who know how <strong>to</strong> lead and who understand deep change and the<br />

enormous investment <strong>of</strong> energy and resources that are necessary cannot bring<br />

themselves <strong>to</strong> initiate the process because they lack energy. There is no energy<br />

left. They are victims <strong>of</strong> burnout. So they continue <strong>to</strong> go through the motions<br />

finding it difficult <strong>to</strong> discover interest and relevance in their work.<br />

“What they need is deep change at the personal level, a re-invention <strong>of</strong> their<br />

pr<strong>of</strong>essional role, a revolution in their priority list, a recognition that<br />

maintenance is production and that their absolute ‘must” really must be<br />

delegated <strong>to</strong> someone else. Few people are very good at re-inventing themselves.<br />

They <strong>of</strong>ten choose the destructive alternative <strong>of</strong> staying very busy. It may not be<br />

effective behavior, but has the effect <strong>of</strong> a good narcotic. It diverts attention from<br />

the real issue and temporarily saves them from having <strong>to</strong> tackle and resolve the<br />

actual problem.” (QuinnDeep Change)<br />

Pamphlet #5 Page 221

Administrative Processes<br />

Manage finances<br />

Ensure safety and OSHA compliance<br />

Material understanding and innovation<br />

Supplier management<br />

Hire, train, deploy the work force<br />

Project<br />

Management<br />

New product<br />

development and<br />

introduction<br />

Make the order<br />

Ship and erect<br />

Design<br />

Ideas<br />

Win the<br />

order<br />

Schedule<br />

Complete<br />

Drawings<br />

Market <strong>to</strong> cus<strong>to</strong>mers<br />

and get considered<br />

Operational Processes<br />

Chart One:<br />

Macro Process View <strong>of</strong> a Precast Company

• Hire, train, deploy work force<br />

• Supplier management<br />

• Material understanding and innovation<br />

• Reduce waste and cost<br />

• Firm A makes industrial wall panels. They face a<br />

“commodity” market in which they are the highest<br />

cost producer. As a result, they are losing<br />

money. Their strategy is <strong>to</strong> innovate wall panels<br />

<strong>to</strong> significantly increase their value (electrical built<br />

in, easier installation, innovative insulation<br />

material, time savings on window framing, etc.)<br />

They believe they will earn a premium on this new<br />

product that exceeds their cost <strong>of</strong> differentiation.<br />

• Firm B competes on cost and speed <strong>of</strong> bridge<br />

beams and building/structural components (double<br />

T’s, etc.). They work in an area <strong>of</strong> significant<br />

labor shortages. They are already the<br />

fastest/lowest cost supplier. They do not want <strong>to</strong><br />

lose their lead, however, rising labor cost and<br />

labor shortages threaten this.<br />

• Your firm<br />

• Ensure safety and OSHA compliance<br />

• New product development and introduction<br />

•Manage project finances and schedule<br />

• Ship and erect the order<br />

• Make the order<br />

• Complete the drawings<br />

• Schedule project, team, special forms<br />

• Get the order<br />

• Conceptualize the solution (value engineering)<br />

• Market <strong>to</strong> cus<strong>to</strong>mers<br />

Your role is <strong>to</strong> assess process salience <strong>of</strong><br />

Firm A or B, C and D.<br />

Generic Macro Processes<br />

Chart Two: Process Salience <strong>of</strong><br />

Different PC-PS Companies

•Hire, train, deploy work force P I<br />

• Supplier management B I<br />

• Material understanding and innovation I B<br />

• Reduce waste and cost P I<br />

•Ensure safety and OSHA compliance M P<br />

• New product development and introduction I P<br />

•Manage project finances and schedule P P<br />

• Ship and erect the order on time and budget P I<br />

• Make the order on time and budget P I<br />

• Complete the drawings accurately/on time I I<br />

• Schedule project, team, special forms B I<br />

• Get the order B P<br />

• Conceptualize the solution (value engineering) I I<br />


Macro Processes<br />

I=identity; P=priority; M=mandated; B=background<br />

• Market <strong>to</strong> cus<strong>to</strong>mers B I<br />

Chart Two: Process Salience <strong>of</strong><br />

Different PC-PS Companies

Time<br />

Redesign<br />

Continuous Improvement<br />

Redesign<br />

Cumulative<br />

Improvement<br />

Chart Three<br />

Organizations Combine Process<br />

Redesigning and Improvement Efforts

* Changed market conditions, new competitive strategy or severe cus<strong>to</strong>mer/cost/competi<strong>to</strong>r<br />

problems exist.<br />

Process Redesign:<br />

Fundamental Change<br />

Process Improvement:<br />

Incremental Change<br />

No<br />

Situation demands<br />

we do things very<br />

differently *<br />

No<br />

It’s way <strong>to</strong>o<br />

complex and not<br />

unders<strong>to</strong>od<br />

Yes<br />

Yes<br />

No<br />

Standardize<br />

Yes<br />

Yes<br />

Yes<br />

No<br />

7 Step Process<br />

Improvement<br />

Yes<br />

Yes<br />

Yes<br />

Yes<br />

No<br />

PDCA<br />

Yes<br />

Yes<br />

Yes<br />

Yes<br />

Yes<br />

Yes<br />

Fix the obvious<br />

(do-check)<br />

Does situation<br />

suggest only need<br />

is getting better?<br />

Does a straight<br />

forward and<br />

identifiable<br />

process exist?<br />

Does<br />

everyone<br />

use the<br />

same<br />

process?<br />

Is the<br />

solution <strong>to</strong><br />

the<br />

problem<br />

known?<br />

Is implementation<br />

<strong>of</strong> the<br />

solution<br />

unders<strong>to</strong>od<br />

and low risk?<br />

Are you<br />

sure about<br />

your yes’s?<br />

Chart Four:<br />

Which Improvement Approach <strong>to</strong> Use?

Continuous Process<br />

Improvement Activities<br />

5-10%<br />

Establish Continue Process<br />

Improvement Priorities<br />

20%<br />

Define critical processes in<br />

context <strong>of</strong> competitive strategy<br />

Create an “idealized” overall<br />

organizational design<br />

Align macro process goals and<br />

measurements <strong>of</strong> success <strong>to</strong> your<br />

competitive strategy and<br />

organizational goals<br />

Oversee major breakthrough<br />

process redesign<br />

80%<br />

High<br />

100%<br />

Chart Five:<br />

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<br />

amount <strong>of</strong> information and insight he has.<br />

Erection Crew Will not work outside current<br />

geographies<br />

Spend long time away from<br />

home<br />

Manufacturing Tell Sales they will no longer<br />

accept difficult-standard shapes<br />

for architectural precast panels<br />

at market prices; a 55%<br />

premium is expected<br />

Work overtime, incur scraprework<br />

costs<br />

Engineering Send an extraordinary number<br />

<strong>of</strong> pieces <strong>to</strong> production with a<br />

very short lead time<br />

Re-engineer how design<br />

process works so that<br />

manufacturing has smoother,<br />

steadier work flow<br />

Marketing, Sales and<br />

Production work with<br />

Engineering <strong>to</strong> create even<br />

more design process changes<br />

that help smooth production<br />

Engineering, Construction and<br />

Manufacturing work <strong>to</strong>gether<br />

<strong>to</strong> create a cast-in-place system<br />

for all odd shapes--this is now a<br />

Construction Division service<br />

<strong>of</strong>fering<br />

Engineering, Finance and<br />

Erection identify strategic<br />

partner for U.S. erection that<br />

trains under home-based<br />

company teams<br />

Sales Sales promises dates that the<br />

plant is unlikely <strong>to</strong> meet<br />

Sales spends extra time and<br />

effort convincing owner the<br />

wait is worthwhile<br />

Sales, Marketing, Engineering<br />

and Production work <strong>to</strong>gether<br />

<strong>to</strong> create "quick" building<br />

system that <strong>of</strong>fers faster lead<br />

times<br />

<strong>Competition</strong>:<br />

Shift the Burden<br />

Cooperation and<br />

Coordination:<br />

Absorb or Split or Minimize<br />

the Burden<br />

Collaboration:<br />

Eliminate the Burden<br />

Chart Six: Examples <strong>of</strong> Collaboration vs. the<br />


Tactical<br />

PCI<br />

Company<br />

Strategic Activities/Decisions<br />

• Product line <strong>of</strong>fering<br />

• Served cus<strong>to</strong>mer market segments<br />

• Strategic positioning, i.e., the company’s value<br />

proposition <strong>to</strong> its cus<strong>to</strong>mers<br />

• Pricing strategies<br />

• Geographic scope<br />

• Business development priorities and growth<br />

strategy<br />

• Distribution channel selection<br />

• Operational priorities and critical processes<br />

Market<br />

Strategic<br />

Tactical Activities/Decisions<br />

• New product introduction<br />

• Product modification and obsolescence<br />

• Sales support material and other promotional<br />

and communication efforts<br />

• Target cus<strong>to</strong>mers and communication<br />

positioning<br />

• Forecasting<br />

• Training, with respect <strong>to</strong> product/cus<strong>to</strong>mer<br />

(not selling skills)<br />

• Key cus<strong>to</strong>mer interfaces<br />

• Pricing policies<br />

Chart Seven: Tactical vs. Strategic<br />


~ Where company competes, i.e., business scope ~ Participate in broad-based decision-making<br />

(geographies, products/services, market segments) regarding where and how company competes<br />

~ <strong>How</strong> company will win market share, i.e., strategic ~ Identify specific products and market segments<br />

positioning within overall scope<br />

~ Operational strategy (structure, core competencies, ~ Select positioning for specific products<br />

etc.) consistent with company-wide positioning<br />

~ ID <strong>of</strong> critical processes ~ Create and communicate market understanding<br />

~ Allocation <strong>of</strong> resources broadly and facilitate use in decision-making<br />

~ Purpose, guiding principles and vision ~ Represent the voice <strong>of</strong> the cus<strong>to</strong>mer in strategic<br />

decisions<br />

~ Identify marketing resources required for<br />

achieving near-term sales/pr<strong>of</strong>it objectives<br />

and long-term vision<br />

Company Strategic Decisions Marketing Department's Role<br />

Chart Eight: The Marketing Department's Role

New Product and New Market Development ~ Identify ideas for new products/new markets<br />

and develop proposals/plans<br />

~ Specification<br />

~ Trials<br />

~ Introduction plan<br />

~ Participation in reviews, project team<br />

meetings, etc.<br />

Get the Order ~ Marketing activities <strong>to</strong> ensure sales forecast<br />

is achieved (e.g., advertising, promotion, etc.)<br />

and sales representatives are more efficient and<br />

effective<br />

~ Pricing policies<br />

~ Selected field support<br />

Manufacture-Ship the Order ~ Identify cus<strong>to</strong>mer issues/needs<br />

~ Forecasting for production planning<br />

~ Help prioritize cost reduction activities and<br />

ensure cus<strong>to</strong>mer value not compromised<br />

~ Analyze geographical options for expanding<br />

productive capacity (e.g., competi<strong>to</strong>r risks,<br />

acquisition targets, etc.)<br />

~ Help specify supplier requirements that affect cus<strong>to</strong>mer<br />

satisfaction<br />

~ Post-project cus<strong>to</strong>mer satisfaction assessment<br />

Key Company Processes Marketing Department's Role<br />

The Marketing Department's Role (continued)

Chart Nine: The Differing<br />

Perspectives <strong>of</strong> Sales and Marketing<br />

Sales Makes Matches<br />

Marketing Identifies and<br />

Attracts Potential Matches<br />

and Helps Insure Future<br />

Matches<br />

Thinks about<br />

Cus<strong>to</strong>mers as:<br />

• Potential orders • A marketplace<br />

Groups Cus<strong>to</strong>mers by: • Probability (buy this year) • Needs<br />

• Probability (we will win)<br />

Where He/She Works: • In the field with cus<strong>to</strong>mers • In company<br />

who will buy and with • In field (universities,<br />

influencers<br />

regula<strong>to</strong>ry boards,<br />

competi<strong>to</strong>rs, substitutes,<br />

compliments and lost,<br />

current, long-term potential<br />

cus<strong>to</strong>mers<br />

Relationship <strong>to</strong><br />

Cus<strong>to</strong>mer and<br />

Company:<br />

• Company <strong>to</strong> cus<strong>to</strong>mer • Cus<strong>to</strong>mer <strong>to</strong> company<br />

Listens for: • Current cus<strong>to</strong>mer needs and • Market changes<br />

how I tailor what our • Future products and<br />

company <strong>of</strong>fers <strong>to</strong> meet services <strong>of</strong> company<br />

these needs<br />

• Business context <strong>of</strong><br />

cus<strong>to</strong>mer/non-cus<strong>to</strong>mer<br />

• Barriers <strong>to</strong> sales<br />

effectiveness <strong>to</strong>day<br />

Key Things <strong>to</strong> • Time • Resources<br />

Prioritize:<br />

• Segments<br />

• Products and services<br />

• Source <strong>of</strong> advantage<br />

• Competi<strong>to</strong>rs<br />

• Geographies<br />

Measures <strong>of</strong> Personal • Sales<br />

• ROI/EVA<br />

Success:<br />

• Repeat business<br />

• Market share <strong>of</strong> opinion<br />

• Margin<br />

leaders' business<br />

• Market share<br />

• Sustainability <strong>of</strong> success<br />

• Market share and growth

S<br />

A<br />

L<br />

E<br />

S<br />

~ Specific cus<strong>to</strong>mer<br />

understanding<br />

~ Identifying &<br />

prioritizing<br />

targeted accounts<br />

~ Securing<br />

contracts/sales<br />

~ Exhibits<br />

~ Marketingsales<br />

plan<br />

~ Market<br />

understanding<br />

~ Presentation<br />

~ Building<br />

relationships<br />

~ Negotiating<br />

~ Closing<br />

~ Product,<br />

technology<br />

~ Selling<br />

~ Empathy<br />

~ Flexibility<br />

~ Listening<br />

~ Works independently<br />

~ Sees “people”<br />

side <strong>of</strong><br />

everything<br />

M<br />

A<br />

R<br />

K<br />

E<br />

T<br />

I<br />

N<br />

G<br />

Ownership<br />

~ Market<br />

understanding<br />

process<br />

~ Product line<br />

specification<br />

~ Pricing policies<br />

~ Product intro &<br />

obsolescence<br />

~ Clinical trials<br />

~ Marketing-sales<br />

plan<br />

~ Positioning<br />

Participation<br />

~ Operational<br />

plan<br />

~ Cost<br />

reduction<br />

projects<br />

~ Exhibits<br />

~ Selected<br />

accounts<br />

Skills<br />

~ Analytical<br />

~ Conceptual<br />

~ Project<br />

management<br />

~ Strategic<br />

planning<br />

~ Product<br />

promotion<br />

~ Systems<br />

thinking<br />

Knowledge<br />

~ Finance<br />

~ Advertising<br />

~ New product<br />

assessment &<br />

development<br />

~ Market trends<br />

~ Forecasting<br />

~ Market research<br />

~ General<br />

management<br />

Traits<br />

~ Teamwork<br />

~ Listening<br />

~ Patient for<br />

long-term vs.<br />

short-term<br />

results<br />

~ Can cut <strong>to</strong> the<br />

core<br />

~ Enthusiastic<br />

about product<br />

area<br />

Chart 10: Duties and Qualifications

• Initiate an “executive<br />

level” relationship with<br />

target accounts<br />

• Predispose target accounts<br />

<strong>to</strong> receiving a sales call<br />

• Generate sales leads from<br />

target accounts<br />

• Create a positive image <strong>of</strong><br />

your company in the<br />

minds <strong>of</strong> target cus<strong>to</strong>mers<br />

• Increase wall<br />

panel sales<br />

25% in FY 97<br />

• Steal market share<br />

from competi<strong>to</strong>rs by<br />

differentiating our<br />

company on the basis<br />

<strong>of</strong> speed<br />

• Communicate your point<br />

<strong>of</strong> distinction <strong>to</strong> target<br />

competitive accounts<br />

Marketing Goal<br />

Marketing Strategy<br />

<strong>How</strong> Communications<br />

May Help<br />

Chart 13: The Marketing/Communications Link

• Generate sales leads<br />

from target accounts<br />

• Arm the sales force with<br />

sales support materials<br />

• Product positioning<br />

strategies<br />

• Communicate your<br />

company’s point <strong>of</strong><br />

distinction (i.e.<br />

incremental value<br />

associated with product<br />

from your company)<br />

• Market building<br />

strategies<br />

• Communicate the<br />

introduc<strong>to</strong>ry promotion<br />

• Selling strategies<br />

• Stimulate interest in new<br />

product<br />

• Launch new<br />

product XYZ<br />

in Q2 FY97<br />

• Introduc<strong>to</strong>ry<br />

promotions<br />

• Announce new product<br />

availability<br />

Marketing Goal<br />

Marketing Strategy<br />

<strong>How</strong> Communications<br />

May Help<br />

Chart 13: The Marketing/Communications Link

* Ideally, this should be quantified through market research.<br />

• Initiate an “executive<br />

level” relationship<br />

with target accounts<br />

• Predispose target<br />

accounts <strong>to</strong> receiving a<br />

sales call<br />

• Gain executive level and<br />

sales level entry in<strong>to</strong> 15<br />

target competitive accounts<br />

by beginning <strong>of</strong> Q3<br />

• Generate sales leads<br />

from target accounts<br />

• Generate 100 sales leads<br />

from target competitive<br />

accounts by end Q2<br />

• Create a positive<br />

image <strong>of</strong> your<br />

company in the minds<br />

<strong>of</strong> target cus<strong>to</strong>mers<br />

• Redefine the company’s<br />

image in the minds <strong>of</strong> target<br />

cus<strong>to</strong>mers*<br />

• Increase wall<br />

panel sales<br />

25% in FY 97<br />

• Communicate your<br />

point <strong>of</strong> distinction <strong>to</strong><br />

target competitive<br />

accounts<br />

• Increase awareness <strong>of</strong> the<br />

company’s point <strong>of</strong><br />

distinction within target<br />

accounts*<br />

Marketing Goal<br />

<strong>How</strong> Communications<br />

May Help<br />

Communications<br />

Objectives<br />

Chart 14: Communications Objectives

* Ideally, this should be quantified through market research.<br />

• Generate sales leads<br />

from target accounts<br />

• Generate 180 sales leads<br />

from target accounts by Q3<br />

• Arm the sales force<br />

with sales support<br />

materials<br />

• Create sales support<br />

materials by end Q1<br />

• Communicate your<br />

company’s point <strong>of</strong><br />

distinction<br />

• Create awareness <strong>of</strong> the<br />

company’s point <strong>of</strong><br />

distinction*<br />

• Communicate the<br />

introduc<strong>to</strong>ry promotion<br />

• Generate interest in new<br />

product, including 250<br />

inquiries regarding the<br />

promotion<br />

• Stimulate interest in<br />

new product<br />

• Launch new<br />

product XYZ<br />

in Q2 FY 97<br />

• Announce new product<br />

availability<br />

• Create awareness <strong>of</strong> new<br />

product availability among<br />

target cus<strong>to</strong>mers*<br />

Marketing Goal<br />

<strong>How</strong> Communications<br />

May Help<br />

Communications<br />

Objectives<br />

Chart 14: Communications Objectives

Seminars, Newsletters, AV, ~ Educate; inform; initiate relationships<br />

Executive Correspondence<br />

Promotion ~ Provide incremental value <strong>to</strong> product<br />

~ Create incentive<br />

Publicity/News Releases ~ Reinforce advertising messages<br />

~ Increase awareness<br />

Sales Brochures/Sales Aids ~ Reinforce advertising messages<br />

AV, Product Displays, Website ~ Sell the product/service concept<br />

Direct Mail ~ Reinforce advertising messages<br />

~ Generate sales leads<br />

~ Pre-dispose cus<strong>to</strong>mer <strong>to</strong> sales call<br />

Journal Advertising ~ Convey strategic positioning<br />

~ Communicate points <strong>of</strong> distinction<br />

~ Increase awareness<br />

~ Build image<br />

Tools<br />

Communications Objectives<br />

Chart 15: Communications Tools

• Gain executive level<br />

and sales level entry<br />

in<strong>to</strong> 15 target<br />

competitive accounts<br />

by beginning <strong>of</strong> Q3<br />

• Executive correspondence<br />

• Newsletter<br />

• Generate 100 sales<br />

leads from target<br />

competitive accounts<br />

by end Q2<br />

• Tradeshows<br />

• Direct mail<br />

• Advertising<br />

• Web site<br />

• Redefine the<br />

company’s image in<br />

the minds <strong>of</strong> target<br />

cus<strong>to</strong>mers<br />

• Journal advertising<br />

• Publicity<br />

• Increase wall<br />

panel sales<br />

25% in FY 97<br />

• Increase awareness <strong>of</strong><br />

the company’s point <strong>of</strong><br />

distinction within<br />

target accounts<br />

• Journal advertising<br />

• Publicity/news releases<br />

Marketing Goal<br />

Communications<br />

Objectives<br />

Potential Tools<br />

Chart 15: Communications Tools

• Generate 180 sales<br />

leads from target<br />

accounts by Q3<br />

• Direct mail<br />

• Advertising<br />

• Publicity<br />

• Create sales support<br />

materials by end Q1<br />

• Company positioning<br />

brochure<br />

• Product literature<br />

• Sales aids<br />

• Promotion fliers<br />

• Increase wall<br />

panel sales<br />

25% in FY 97<br />

• Create awareness <strong>of</strong><br />

new product<br />

availability among<br />

target cus<strong>to</strong>mers<br />

• Generate interest in<br />

new product<br />

• Create awareness <strong>of</strong><br />

the company’s point <strong>of</strong><br />

distinction<br />

• Journal advertising<br />

• Tradeshows<br />

• Publicity-feature articles,<br />

news releases<br />

• Web site<br />

Marketing Goal<br />

Communications<br />

Objectives<br />

Potential Tools<br />

Chart 15: Communications Tools

Is it working?<br />

Evaluation<br />

Execution<br />

Company-Wide Budgets & Timetables<br />

What’s our itinerary for<br />

getting there?<br />

Organizational Structure<br />

Marketing & Sales Plans<br />

Operational & Partnership Plans<br />

Leadership Team Plan<br />

Finance Plan<br />

Business Assessment<br />

Problems &<br />

Opportunities<br />

Tactical<br />

Where do we want <strong>to</strong> end up?<br />

Vision and Strategic Goals<br />

What direction do we follow<br />

<strong>to</strong> get there?<br />

Competitive Strategy Decisions<br />

Where are we?<br />

Strategic Problems & Opportunities<br />

Strategic<br />

Where are we?<br />

Strategic Assessment<br />

Chart Sixteen:<br />

Overview <strong>of</strong> the Alignment Process

Plantes Company July 1997 PCI:I<br />

• Overview <strong>of</strong> process flow diagram (SIPOC) <strong>to</strong> ID major players and interconnections<br />

• Data describing the needs <strong>of</strong> the cus<strong>to</strong>mer(s)<br />

• Baseline measure(s)<br />

• Mission statement or objective for the team doing the process improvement<br />

Tools Used and Likely <strong>Out</strong>puts from Step 1:<br />

• What is the problem we're experiencing, what is the gap?<br />

• Which processes are involved in this problem?<br />

• Which <strong>of</strong> these processes do we think is directly related <strong>to</strong> the problem? Why?<br />

• What are the key steps in the process (what is it that we do)?<br />

• Why do we perform the process (what are we trying <strong>to</strong> accomplish)?<br />

• Who is involved in these processes?<br />

• What are the results <strong>of</strong> the process (what are the outputs)?<br />

• Who are the key cus<strong>to</strong>mers <strong>of</strong> the process and what are their needs (who uses the results, and what<br />

qualities <strong>to</strong> they require in those results)?<br />

• What are the boundaries within which the project team will work <strong>to</strong> improve the process?<br />

• What baseline measure(s) can we use <strong>to</strong> help us determine how well we are currently meeting<br />

cus<strong>to</strong>mer needs, and then how much we have improved the process (how will we know if we've<br />

made any improvement)?<br />

• Who will sponsor this team's work?<br />

Questions Answered:<br />

Step 1 Goal: To define the project’s purpose and scope<br />

Appendix One<br />

Joiner 7-Step Method, Step 1: Define the Project

Plantes Company July 1997 PCI:I<br />

Reduce time from contract approval <strong>to</strong><br />

approved shop floor drawings.<br />

Purpose <strong>of</strong> Project:<br />

6<br />

Process Aim:<br />

Why do we do<br />

what we do: <strong>to</strong><br />

make sure<br />

components we<br />

deliver are<br />

erectable and fit<br />

the overall<br />

building solution<br />

GC<br />

3<br />

Who supplies<br />

what we need <strong>to</strong><br />

do what we do?<br />

2<br />

What do we<br />

require <strong>to</strong> do<br />

what we do?<br />

1<br />

What do we do?<br />

4<br />

What are the<br />

results <strong>of</strong><br />

what we do?<br />

5<br />

Who uses<br />

what we do?<br />

Structural<br />

Drawings<br />

Owner<br />

Int<br />

Prepare<br />

No<br />

Architects’<br />

Drawings<br />

Yes<br />

Architect<br />

Source<br />

Check<br />

Submit<br />

Approved<br />

Approved<br />

Drawings<br />

Contract<br />

Ex<br />

Prepare<br />

No<br />

Engineer <strong>of</strong> Record<br />

Plant<br />

Suppliers Inputs Process Steps <strong>Out</strong>comes Cus<strong>to</strong>mers<br />

GOAL: Define the project’s purpose and scope (SIPOC)<br />

Joiner 7-Step Method<br />

Step 1: Define the Project

Plantes Company July 1997 PCI:I<br />

• Detailed flowchart <strong>of</strong> the process <strong>to</strong> understand steps in the process<br />

• Run chart/control chart <strong>of</strong> the baseline measure(s)<br />

• Pare<strong>to</strong> diagrams, his<strong>to</strong>grams, scatter plots, and others showing stratified symp<strong>to</strong>ms<br />

Tools Used and Likely <strong>Out</strong>puts from Step 2:<br />

• <strong>How</strong> does the process work currently? What is the his<strong>to</strong>ry?<br />

• What results does the process currently produce? What kind <strong>of</strong> variation do we see in the results?<br />

• Are there ways we could simplify the process without sacrificing the desired quality <strong>of</strong> the results?<br />

• What strategy for reducing variation makes sense?<br />

• Can we draw a picture <strong>of</strong> the process?<br />

• What type(s) <strong>of</strong> symp<strong>to</strong>ms <strong>of</strong> the problem occur?<br />

• Where do the symp<strong>to</strong>ms <strong>of</strong> the problem occur?<br />

• When do the symp<strong>to</strong>ms <strong>of</strong> the problem occur?<br />

• Who is involved when the symp<strong>to</strong>ms occur (suppliers, cus<strong>to</strong>mers and employees)<br />

Questions Answered:<br />

Step 2 Goal: To further focus the improvement effort by gathering data on<br />

the current situation<br />

Joiner 7-Step Method<br />

Step 2: Assess the Current Situation

Plantes Company July 1997 PCI:I<br />

Measurement may lead you <strong>to</strong> redefine the problem!<br />

Resubmittals<br />

Wall<br />

Panel<br />

Structural<br />

AP<br />

Resubmittal<br />

N<br />

Y<br />

Y<br />

% N<br />

N<br />

#<br />

N Y<br />

Y<br />

Frequency Frequency<br />

Days<br />

1 2 3 4 5 6<br />

No resubmittal<br />

Project #<br />

Time Until Approved<br />

Shop Floor Drawings in Days<br />

Days<br />

STEP 2A: Investigate the problem by measuring outcomes<br />

GOAL: To further focus the improvement effort by gathering data on the<br />

current situation<br />

Joiner 7-Step Method<br />

Step 2: Assess the Current Situation

Plantes Company July 1997 PCI:I<br />

What<br />

~ Complex projects<br />

What<br />

~ Fast track projects<br />

Where<br />

~ Between project architect and her boss<br />

Where<br />

~ Openings<br />

~ Structural pieces, not architectural precast<br />

When<br />

~ Large # people in approval process<br />

~ Mechanical sub is not yet selected<br />

~ GC or architect do not yet need our drawings<br />

When<br />

~ Incomplete architect drawings<br />

~ Bed is changed<br />

Who<br />

~ Mechanical sub<br />

~ GC not familiar with precast<br />

~ Our designers, not our engineers<br />

Who<br />

~ John and Jim, not Frank or Jeff<br />

~ Architect, not designers<br />

Source <strong>of</strong> Delay Hypotheses Source <strong>of</strong> Resubmittal Hypotheses<br />

STEP 2B: Play detective --Hypothesize who was involved? Where was cause <strong>of</strong><br />

delay? When does delay occur? What type <strong>of</strong> project?<br />

GOAL: To further focus the improvement effort by gathering data on the<br />

current situation<br />

Joiner 7-Step Method<br />

Step 2: Assess the Current Situation

Plantes Company July 1997 PCI:I<br />

Where?<br />

Who? What Type <strong>of</strong> Project?<br />

Non-AP AP Other Openings<br />

Non-AP<br />

1<br />

2 3 4<br />

DB<br />

CM<br />

%<br />

Resubmitted<br />

GC<br />

Resubmittals<br />

GOAL: To further focus the improvement effort by gatheringses <strong>to</strong> identify what<br />

<strong>to</strong> measure, then measure <strong>to</strong> identify true location <strong>of</strong> problem<br />

Joiner 7-Step Method<br />

Step 2: Assess the Current Situation

Plantes Company July 1997 PCI:I<br />

STEP 2D: Hypothesize why the problem arises. You may need <strong>to</strong> do further<br />

detective work and measurement.<br />

GOAL: To further focus the improvement effort by gathering data on the current<br />

situation.<br />

Joiner 7-Step Method<br />

Step 2: Assess the Current Situation

Plantes Company July 1997 PCI:I<br />

• Cause and effect or tree diagram mapping out possible causes<br />

• A list <strong>of</strong> theories about likely causes<br />

• Data <strong>to</strong> verify the theories<br />

Tools Used and Likely <strong>Out</strong>puts from Step 3:<br />

• What could possibly cause the symp<strong>to</strong>ms we're seeing? What are possible deeper causes?<br />

• Of the possible causes, which seem <strong>to</strong> be the likely causes? <strong>How</strong> do we know?<br />

Questions Answered:<br />

Step 3 Goal: To identify and verify deep causes with data; <strong>to</strong> pave the way for<br />

effective solutions<br />

Joiner 7-Step Method<br />

Step 3: Cause Analysis

Plantes Company July 1997 PCI:I<br />

Deep Causes ! ! !<br />

Secretary did not<br />

provide as a priority<br />

Did not receive<br />

notice<br />

Has not used PC<br />

in past<br />

We did not alert<br />

Does not understand<br />

PC role in bldg. process<br />

and no process ???<br />

Mechanical sub<br />

not selected<br />

Mechanical sub<br />

is late<br />

Not informed<br />

Does not understand<br />

building process<br />

Lack mechanicals<br />

Not aware <strong>of</strong><br />

due date<br />

Not aware <strong>of</strong><br />

effect <strong>of</strong> delay<br />

Has more<br />

pressing problems<br />

Lacks information<br />

<strong>to</strong> approve<br />

Architects feels<br />

no urgency<br />

-- Do for each “why” you choose <strong>to</strong> address<br />

GOAL: To identify and verify deep causes with data so as <strong>to</strong> pave the way for<br />

effective solutions<br />

Joiner 7-Step Method<br />

Step 3: Cause Analysis

Plantes Company July 1997 PCI:I<br />

• Matrix <strong>of</strong> possible solutions and criteria for choosing solution(s)<br />

• Plan for small scale tests <strong>of</strong> solution(s)<br />

• Results from small scale test(s)<br />

• Plan and execution <strong>of</strong> full scale implementation <strong>of</strong> best solution<br />

Tools Used and Likely <strong>Out</strong>puts from Step 4:<br />

• What possible solutions could address the deep cause <strong>of</strong> our problem?<br />

• What criteria are useful for comparing the solutions?<br />

• Which is the best solutions?<br />

• <strong>How</strong> can we test our solution(s) on a small scale?<br />

• What results do we get from our small scale test?<br />

Questions Answered:<br />

Step 4 Goal: To develop and try out solutions that address deep causes <strong>of</strong> the<br />

problem<br />

Joiner 7-Step Method<br />

Step 4: Solutions

Plantes Company July 1997 PCI:I<br />

Solution<br />

4<br />

Solution<br />

3<br />

Solution<br />

2<br />

Solution<br />

1<br />

Criteria<br />

1<br />

Criteria<br />

2<br />

Criteria<br />

3<br />

Criteria<br />

4<br />

Criteria<br />

5<br />

GOAL: To develop and try out solutions that address deep causes <strong>of</strong> the problem.<br />

Joiner 7-Step Method<br />

Step 4: Solutions

Plantes Company July 1997 PCI:I<br />

• Run chart/control chart <strong>of</strong> baseline measure(s) <strong>to</strong> demonstrate improvement<br />

• Stratified data showing symp<strong>to</strong>m reduction<br />

Tools Used and Likely <strong>Out</strong>puts from Step 5:<br />

• What results does the process now produce?<br />

• Do the results demonstrate improvement? Enough improvement?<br />

• What did we learn from implementation that will help us <strong>to</strong> plan for process improvement<br />

elsewhere?<br />

Questions Answered:<br />

Step 5 Goal: To evaluate both the solution and the plans used <strong>to</strong> implement<br />

the solution<br />

Joiner 7-Step Method<br />

Step 5: Results

Plantes Company July 1997 PCI:I<br />

• New flowchart <strong>of</strong> the process reflecting the improvements made<br />

• Plans for maintaining the gains<br />

• Plans for educating/training relevant individuals<br />

Tools Used and Likely <strong>Out</strong>puts from Step 6:<br />

• <strong>How</strong> do we convey the necessary information <strong>to</strong> the necessary individuals in the organization <strong>to</strong><br />

assure that everyone who needs <strong>to</strong> knows about the improvement?<br />

• What is in place <strong>to</strong> prevent backsliding?<br />

• What, if anything, does the greater organization need <strong>to</strong> know about the improvements?<br />

Questions Answered:<br />

Step 6 Goal: To maintain the gains by standardizing work methods or products<br />

Joiner 7-Step Method<br />

Step 6: Standardization

Plantes Company July 1997 PCI:I<br />

• documentation <strong>of</strong> lessons learned throughout this cycle <strong>of</strong> improvement<br />

• recommendations for the next cycle <strong>of</strong> improvement<br />

• data <strong>to</strong> support recommendations<br />

Tools Used and Likely <strong>Out</strong>puts from Step 7:<br />

• What remaining improvement needs are there for this process?<br />

• What is the next, most important opportunity for improvement?<br />

• What did we learn from this project about this process, and process improvement in general?<br />

Questions Answered:<br />

Step 7 Goal: To anticipate future improvements and <strong>to</strong> preserve lessons from<br />

this effort<br />

Joiner 7-Step Method<br />

Step 7: Future Plans

C. What baseline measure will you use <strong>to</strong> assess performance <strong>of</strong> the shop<br />

floor drawing process along the dimension <strong>of</strong> the problem you’ve<br />

elected <strong>to</strong> focus on?<br />

B. What specific problem do you want <strong>to</strong> work on (e.g., accuracy, speed,<br />

cost <strong>to</strong> complete, inefficient design for manufacturability)?<br />

A. What are the problems you experience in the shop floor drawings<br />

process?<br />

I. Project Definition<br />

Appendix 2: Process Improvement Exercise

– If speed is the problem, where are all the places delay occurs<br />

– If accuracy is the problem, what type <strong>of</strong> mistakes emerge and<br />

where might they occur?<br />

– What are the types <strong>of</strong> cus<strong>to</strong>mers or buildings or products where<br />

problems are most likely <strong>to</strong> emerge?<br />

– When do the problems occur?<br />

– Who in your company is involved (but not <strong>to</strong> blame for)in the<br />

mistakes?<br />

B. Hypothesize a pare<strong>to</strong> chart for your company for one <strong>of</strong> the ways you<br />

stratified the appearance <strong>of</strong> the problem (e.g., create a chart for when,<br />

where, who or what or some other stratification). Use the stratification<br />

approach you feel would most likely reveal insight in<strong>to</strong> the<br />

appearance <strong>of</strong> the problem if you collected real life data. (See<br />

example on the next page.)<br />

A. Identify the different ways the specific problem appears by using<br />

different stratifications (when, what, where and who) for the<br />

appearance <strong>of</strong> the problem. E.g.,<br />

II. Current Situation: Detective Work!<br />

Process Improvement Exercise (continued)

Architect<br />

approves<br />

our<br />

submitted<br />

final<br />

drawing<br />

We<br />

receive<br />

prints<br />

from<br />

architect<br />

PC-PC<br />

engineer<br />

turnaround<br />

PC-PS<br />

manufacturer<br />

approval<br />

Other<br />

Stratification Choice:<br />

Source <strong>of</strong> delay<br />

stratified by where in<br />

the process the delay<br />

appears<br />

10<br />

14<br />

18<br />

32<br />

101<br />

Frequency<br />


Problem: Speed <strong>of</strong> shop floor drawing completion.<br />

Process Improvement Exercise (continued)

B. For each <strong>to</strong>p level cause, ask why? why? why? <strong>to</strong> build the tree<br />

diagram <strong>to</strong> lower levels.<br />

C. Of the possible causes, which do you feel are the likely key causes?<br />

D. Back in the <strong>of</strong>fice, how could you identify what is the root cause <strong>of</strong><br />

the problem you are focusing on? (See example on the next page.)<br />

A. Create a tree diagram <strong>to</strong> brains<strong>to</strong>rm the root cause(s) <strong>of</strong> the highest<br />

frequency fac<strong>to</strong>r identified (hypothesized) in Step II.<br />

III. Cause Analysis: Brains<strong>to</strong>rming the Why<br />

Process Improvement Exercise (continued)

We lack<br />

standard methods<br />

Our process changes<br />

regularly<br />

No one is<br />

responsible<br />

Architects do not<br />

have set assistants<br />

We failed <strong>to</strong> alert<br />

firm as <strong>to</strong> due date<br />

Secretary failed <strong>to</strong><br />

tell architect<br />

Etc.<br />

PC-PS drawing<br />

not made from<br />

final prints<br />

Architects<br />

are overworked<br />

Architect was unaware<br />

<strong>of</strong> our due date<br />

Etc.<br />

Architects’ delay<br />


Process Improvement Exercise (continued)

• As you proceed through the steps, the exercise will become more and more hypothetical.<br />

Minimize your time spent on IV and V.<br />

NOTE:<br />

A. Assume you’ve implemented the solution. <strong>How</strong> will you decide it’s an improvement?<br />

V. Evaluation <strong>of</strong> Solution<br />

A. Hypothesize the most significant driver (i.e., the root cause) <strong>of</strong> the high frequency<br />

occurrence <strong>of</strong> the problem you elected <strong>to</strong> focus on.<br />

B. What are the different ways you would eliminate this?<br />

C. What criteria will you use <strong>to</strong> choose one solution over the other?<br />

IV. Solution<br />

Process Improvement Exercise (continued)

A) Identify ways you could measure the<br />

performance outcomes <strong>of</strong> your company’s<br />

“Get the Order” process<br />

B) Create the “as is” process map for your<br />

organization’s “Get the Order” process<br />

(Don’t get hung up here – move on if you<br />

get stuck)<br />

C) Theorize (where, how, when, <strong>to</strong> whom)<br />

problems appear and identify problems you<br />

feel are most important <strong>to</strong> solve (consider<br />

cus<strong>to</strong>mer satisfaction, cost and success and<br />

ramification on execution speed, cost,<br />

quality if order is won)<br />

D) Brains<strong>to</strong>rm potential causes <strong>of</strong> problems<br />

and hypothesize which are most significant<br />

E) Identify at least two new ways <strong>to</strong> design the<br />

“get the order” process that eliminate the<br />

most important problems<br />

F) <strong>How</strong> will you evaluate one solution vs.<br />

another?<br />

10) Where do you prioritize cus<strong>to</strong>mers?<br />

9) Does/should process differ for existing vs. new<br />

cus<strong>to</strong>mers?<br />

8) <strong>How</strong> does completed work relate <strong>to</strong> getting the<br />

next order from a cus<strong>to</strong>mer?<br />

7) Are there any subs that are at the owner’s table<br />

early? <strong>How</strong> did they do that?<br />

6) <strong>How</strong> is scheduling connected <strong>to</strong> the “get the<br />

order process<br />

5) Who does the estimating and what +/-’s result<br />

from this<br />

4) Types <strong>of</strong> cus<strong>to</strong>mers<br />

3) When is material decision made?<br />

2) <strong>How</strong> do cus<strong>to</strong>mers hear about you?<br />

1) ID <strong>of</strong> target cus<strong>to</strong>mer<br />

Steps Fac<strong>to</strong>rs <strong>to</strong> Consider<br />

Appendix Three:<br />

Company Process Redesign Exercise #1

Job Description Exercise (continued)<br />

~ Articulate reasons why your company/material should be used<br />

~ Keep your company's name/capabilities in front <strong>of</strong>:<br />

- existing cus<strong>to</strong>mers<br />

- new cus<strong>to</strong>mers<br />

~ Find out why you lost business<br />

~ ID market changes and assess their implications--risks and<br />

opportunities<br />

~ Determine your strengths and weaknesses vs. competition<br />

(PC and other materials) and the associated risks and opportunities<br />

~ Systematic pricing comparisons vs. competition in order <strong>to</strong> ensure<br />

you are not leaving money on the table<br />

~ Tools <strong>to</strong> make it easier for sales <strong>to</strong> secure new orders or do<br />

"negotiated" work<br />

~ Sales force training on products and markets<br />

~ New product identification<br />

~ New market identification<br />

~ ID changes needed in existing products<br />

Responsibility? Well? Regularly?<br />

Who Holds Is it Done (Yes or No)<br />

Appendix 4: Job Description Exercise<br />

Who's Doing Marketing's Job in Your Company

Responsibility? Well? Regularly?<br />

~ Attendance at construction industry seminars/meetings <strong>to</strong><br />

learn more about market trends<br />

~ Analysis <strong>of</strong> cus<strong>to</strong>mer/product/market pr<strong>of</strong>itability and plans <strong>to</strong><br />

improve pr<strong>of</strong>itability<br />

~ Developing and executing plans <strong>to</strong> enter new products/markets<br />

~ Development and execution <strong>of</strong> educational programs and services<br />

for designers<br />

~ Represent "voice <strong>of</strong> cus<strong>to</strong>mer" in key decisions about resource<br />

prioritizations and organizational/product changes<br />

~ Forecasting market size so you can decide on a fair "stretch"<br />

goal for sales<br />

~ Evaluating your market share: what is it and why is it what it is<br />

~ Measuring cus<strong>to</strong>mer satisfaction and assessing changes<br />

~ Identifying unmet cus<strong>to</strong>mer needs (existing, new and lost cus<strong>to</strong>mers)<br />

~ Understanding cus<strong>to</strong>mers' strategic issues for next 3-5 years<br />

(existing, new and lost cus<strong>to</strong>mers)<br />

Who Holds Is it Done (Yes or No)<br />

Who's Doing Marketing's Job in Your Company

• Which items did I prioritize <strong>to</strong><br />

handle <strong>to</strong>day?<br />

• What did I hand <strong>of</strong>f <strong>to</strong> other people?<br />

• What will I do with what remains<br />

this week? this month?<br />

• What insights have I gained?<br />

It’s the task we all dread -- sorting through our in-basket after being away<br />

from the <strong>of</strong>fice for a full week. But it has <strong>to</strong> be done, and, following your<br />

relaxing vacation, you’re up <strong>to</strong> the challenge. As the sales direc<strong>to</strong>r <strong>of</strong> a<br />

PC-PS company with three sales reps reporting <strong>to</strong> you, you’re under a lot<br />

<strong>of</strong> pressure from your general manager <strong>to</strong> make sure the numbers come in<br />

this year. But you’ll be well compensated for your efforts, through both<br />

salary and generous sales commissions.<br />

Your Assignment: Working individually, sort through your<br />

in-basket and decide what <strong>to</strong> do. (Assume that no<br />

regional association exists <strong>to</strong> help you.)<br />

Then record your answers <strong>to</strong> the<br />

following questions:<br />

Appendix Five: The In-Basket Exercise

17<br />

Note from Boss:<br />

Revised FY 96 and<br />

FY 97 sales forecast<br />

due Friday<br />

18<br />

Need <strong>to</strong> complete<br />

first draft <strong>of</strong> revised<br />

sales terri<strong>to</strong>ries by<br />

end <strong>of</strong> the month<br />

19<br />

Industry trade magazine<br />

needs final artwork<br />

for your advertisement<br />

by end <strong>of</strong> day<br />

20<br />

Cus<strong>to</strong>mer is refusing <strong>to</strong><br />

make progress payments<br />

on completed product<br />

inven<strong>to</strong>ried at the plant<br />

25<br />

Reps report companies not<br />

in your geography are now<br />

bidding on precast jobs<br />

you’re going after<br />

13<br />

Feature article trade<br />

magazine, “The Use <strong>of</strong><br />

Design-Build Concept <strong>to</strong><br />

Increase by 50% in<br />

Next Five Years”<br />

14<br />

Need mailing list<br />

for company program<br />

and plant <strong>to</strong>ur for<br />

architects by Friday<br />

15<br />

Identify two sales<br />

people <strong>to</strong> attend PCI<br />

sales training<br />

school<br />

16<br />

Memo from a sales<br />

rep: The job we didn’t<br />

bid that was going<br />

masonry has just gone<br />

tilt-up<br />

24<br />

Three reps report work looks<br />

great for ‘97 but ‘98<br />

looks bleak from what they<br />

can ascertain<br />

9<br />

We lost the frame part<br />

<strong>of</strong> another order <strong>to</strong> a<br />

steel frame company<br />

10<br />

A new contrac<strong>to</strong>r is in<br />

<strong>to</strong>wn. Sounds like the name<br />

you <strong>to</strong>ld me who does<br />

tilt-up.<br />

11<br />

ABC project bid date<br />

has been moved<br />

forward and is due<br />

one week earlier<br />

12<br />

3-Day National Strategic<br />

Marketing Seminar for<br />

general contrac<strong>to</strong>rs; $1500.<br />

Deadline <strong>to</strong>day. Owners,<br />

contrac<strong>to</strong>rs, D/B on agenda.<br />

23<br />

Report in newspaper:<br />

residential construction<br />

continues <strong>to</strong> grow. Labor<br />

shortages are driving prices<br />

dangerously high.<br />

5<br />

Missed delivery date<br />

on Johnson project<br />

due <strong>to</strong> lack <strong>of</strong> approved<br />

shop drawings<br />

6<br />

New sales rep starts<br />

next week; need <strong>to</strong><br />

finalize his orientation<br />

7<br />

Perceived partnership<br />

XYZ Contrac<strong>to</strong>r is degrading<br />

<strong>to</strong> a low-bid situation<br />

due <strong>to</strong> new project manager<br />

8<br />

Another architect has<br />

questions on how <strong>to</strong><br />

use panels for<br />

school building<br />

22<br />

Note from your friend, the<br />

company’s engineering VP:<br />

“I keep getting job <strong>of</strong>fers<br />

from DB firms. Is it time<br />

<strong>to</strong> leave?”<br />

1<br />

New Dodge Data reports<br />

arrived showing regional<br />

market trends<br />

2<br />

New national fire<br />

codes being revised<br />

3<br />

Smith project manager is<br />

rejecting erected product<br />

for quality issues<br />

4<br />

A new company in <strong>to</strong>wn<br />

is planning <strong>to</strong> build its<br />

headquarters and wants<br />

<strong>to</strong> know your capabilities<br />

21<br />

Old cus<strong>to</strong>mer calls <strong>to</strong> complain<br />

About how long lead times<br />

Are for precast this year.<br />

Your In-Basket Messages

What did I learn?<br />


WEEK<br />


Item To<br />

DO TODAY<br />


In-Basket Worksheet

Appendix Six:<br />

Marketing Manager Job Description<br />




Position Overview<br />

The marketing department is the "voice <strong>of</strong> the cus<strong>to</strong>mer" in an<br />

organization. Absent a strong marketing function, the organization<br />

becomes operationally and financially driven (at the expense <strong>of</strong> long-term<br />

market position) or sales driven. Effective marketing is critical in any<br />

market in which the buyer, the buying criteria or the competition is<br />

changing.<br />

Within Company XYZ, the Marketing Manager will serve or participate in<br />

a number <strong>of</strong> crucial roles:<br />

1) Participate in broad-based decision-making regarding where <strong>to</strong> compete<br />

(target cus<strong>to</strong>mers, markets, products, technologies, services) and how <strong>to</strong><br />

compete (the company's strategic positioning, differentiation and valueadded).<br />

2) Develop strategies <strong>to</strong> promote the sales <strong>of</strong> current products in both<br />

existing and new markets.<br />

3) Develop project proposals and business plans for new products, and<br />

participate on new product project teams, serving as the marketing<br />

representative and the voice <strong>of</strong> the cus<strong>to</strong>mer.<br />

4) Select a specific positioning strategy for each <strong>of</strong> the company's products,<br />

consistent with the company's overall strategic positioning.<br />

5) Serve as the spokesperson <strong>of</strong> the cus<strong>to</strong>mer within the company,<br />

ensuring that cus<strong>to</strong>mer needs and views are conveyed and taken in<strong>to</strong><br />

account as part <strong>of</strong> all strategic decisions.<br />

6) Identify the marketing resources required <strong>to</strong> achieve near-term sales<br />

and pr<strong>of</strong>it objectives, as well as the long term vision.<br />

7) Oversee and/or conduct marketing activities <strong>to</strong> enhance the efforts <strong>of</strong><br />

the sales force, helping <strong>to</strong> ensure that the sales forecast is achieved. This<br />

includes the provision <strong>of</strong> sales support materials and select field support,<br />

for example, visits <strong>to</strong> key accounts.<br />

8) Conduct forecasting the production planning.<br />

Plantes Company Page 270

Marketing Manager Job Description (continued)<br />

Specific Duties <strong>of</strong> the Marketing Manager Position<br />

The Marketing Manager for Company XYZ will be responsible for all<br />

tactical marketing activities and be a key participant in strategic<br />

marketing decisions. In the short-term, emphasis will be on tactical<br />

activities <strong>to</strong> swiftly gear up efforts <strong>to</strong> promote existing products within<br />

current markets. Also crucial will be near-term market research and<br />

other activities <strong>to</strong> gather the market information essential <strong>to</strong> determining<br />

where and how <strong>to</strong> compete.<br />

Over time, emphasis will include the strategic aspects <strong>of</strong> marketing,<br />

including identification <strong>of</strong> new markets and new product development.<br />

Tactical Marketing Functions / Activities<br />

The Marketing Manager will direct and implement the following tactical<br />

marketing functions, at times directing the activities <strong>of</strong> external resources<br />

such as communications consultants or agencies, market research firms,<br />

etc.<br />

• Conduct market research.<br />

• Define target cus<strong>to</strong>mers and communications positioning platform.<br />

• Develop and implement marketing programs that support sales<br />

representatives' selling efforts, enabling them <strong>to</strong> be more effective on<br />

the job.<br />

~ sales support materials, including sales aids and promotional<br />

literature (company positioning and product/service)<br />

~ advertising programs <strong>to</strong> generate awareness, pique interest<br />

andconvey value-added benefits and company differentiation<br />

~ direct mail campaigns <strong>to</strong> generate sales leads<br />

~ trade shows, exhibits and seminars<br />

~ new product/service introductions<br />

• Identify ways <strong>to</strong> increase sales <strong>of</strong> current products<br />

~ new applications within existing cus<strong>to</strong>mer base<br />

~ new types <strong>of</strong> cus<strong>to</strong>mers<br />

• Define product obsolescence and modification strategies.<br />

• Implement new product introductions.<br />

Plantes Company Page 271

Marketing Manager Job Description (continued)<br />

Strategic Marketing Functions /Activities<br />

The Marketing Manager will participate in the following strategic<br />

marketing functions, bringing <strong>to</strong> the decision-making process the crucial<br />

market information and cus<strong>to</strong>mer voice essential for successful strategic<br />

decisions.<br />

• Gather market information <strong>to</strong> assist the company's efforts <strong>to</strong>:<br />

~ define the product line<br />

~ define served market segments<br />

~ determine the company's strategic and product positioning<br />

~ establish pricing policies<br />

~ determine the company's target geographic scope<br />

~ select distribution channels<br />

~ define operational priorities<br />

• Play a proactive role in developing and identifying new products<br />

and markets.<br />

The Marketing Manager will not:<br />

• Develop the communications pieces.<br />

Rather, the marketing person sets the objectives and is the "client" <strong>of</strong> the<br />

communications expert<br />

• Develop the overall geographic strategy.<br />

Rather, the marketing person will help gather information <strong>to</strong> assist in<br />

decision about geographic scope.<br />

• Define the long-term strategy <strong>of</strong> the company in terms <strong>of</strong> products,<br />

technologies and way our company is differentiated from the<br />

competition; the marketing person.<br />

Rather the marketing person will help gather information <strong>to</strong> assist our<br />

decision making in this area.<br />

• Manage new product development teams.<br />

Rather the marketing person will serve as the "voice <strong>of</strong> the cus<strong>to</strong>mer' on<br />

these teams, defining needed specifications. He/she will also help us<br />

create priorities within potential development projects.<br />

• Focus primarily on bridge beams and utility concrete products.<br />

Rather the marketing person will focus on the precast-prestressed building<br />

business.<br />

Plantes Company Page 272

Marketing Manager Job Description (continued)<br />

Position Objectives<br />

Short-Term<br />

To identify opportunities <strong>to</strong> better capitalize on Company XYZ's existing<br />

products and current markets. Further, <strong>to</strong> develop a written marketing<br />

plan <strong>to</strong> accomplish this. This plan will include specific objectives,<br />

strategies, tactics and action plans, as well as both a timetable and budget.<br />

Long-Term<br />

To identify markets for existing products, and pr<strong>of</strong>itable new products.<br />

Further, <strong>to</strong> develop a written business plan <strong>to</strong> accomplish this. This plan<br />

will include specific objectives, strategies, tactics and action plans, as well<br />

as both a timetable and budget.<br />

Position Interfaces<br />

The Marketing Manager will interface with essentially all functional areas<br />

with the company, always serving as the voice <strong>of</strong> the cus<strong>to</strong>mer. In<br />

particular, this position will interface with Sales, Engineering, Cus<strong>to</strong>mer<br />

Service, Production and Project/Product Managers. Additionally, the<br />

Marketing Manager will be the primary liaison <strong>to</strong> key opinion leaders and<br />

companies with complementary products lines, serving as the<br />

headquarters representative.<br />

Instructions for the Recruiter<br />

1. Job description attached<br />

2. Type <strong>of</strong> person we are looking for:<br />

~ Strong willed ~ Persistent<br />

~ Educa<strong>to</strong>r, persuasive ~ Team player<br />

~ Enthusiastic ~ Good listener<br />

~ Highly driven<br />

~ Makes things happen, is accountable, takes ownership<br />

~ Aggressive women tend <strong>to</strong> do well in our company (we have<br />

examples we can share)<br />

~ Good people skills (will have <strong>to</strong> deal with multiple business units<br />

with strong managers)<br />

Plantes Company Page 273

Marketing Manager Job Description (continued)<br />

3. Skills/knowledge<br />

~ Business analysis<br />

~ Sales force marketing support<br />

~ Competi<strong>to</strong>r analysis<br />

~ New product development<br />

~ Market research-secondary and primary<br />

~ Research capabilities<br />

~ Written, presentation and one-on-one communication skills<br />

3. Background (in order <strong>of</strong> priority)<br />

~ Experience in turning commodity products in<strong>to</strong> value-added<br />

solutions<br />

~ Business-<strong>to</strong>-business marketing in industries in which there are<br />

multiple types <strong>of</strong> cus<strong>to</strong>mers affecting purchase decision, thus<br />

making the selling and marketing process more complex, e.g.,<br />

° purchasing agent and engineer<br />

° designers and owners (e.g., an <strong>of</strong>fice partitions company)<br />

° distribu<strong>to</strong>r and distribu<strong>to</strong>r's cus<strong>to</strong>mer<br />

° subcomponent manufacturer and final product manufacturer<br />

~ Evidence <strong>of</strong> interest in/experience with technical areas<br />

~ Construction experience not required and may be a negative<br />

4. Work his<strong>to</strong>ry must demonstrate:<br />

~ Development <strong>of</strong> marketing strategies and execution <strong>of</strong> effective<br />

marketing programs; has written a marketing plan<br />

~ Research: definition <strong>of</strong> objectives; how <strong>to</strong> do it; how <strong>to</strong> use findings<br />

~ Ability <strong>to</strong> prioritize<br />

Other Notes<br />

• This position is a research/tactical marketing position. It would be<br />

desirable <strong>to</strong> move this person in<strong>to</strong> longer-term strategic marketing<br />

analyses and decision-making. A person with the skills <strong>to</strong> grow in<strong>to</strong><br />

more <strong>of</strong> a strategic thinker would be welcomed. But the position<br />

responsibilities initially will be tactical/research focused. Good tactical<br />

marketing skills are essential. We are not looking for a salessupport/research-support<br />

person. We need someone who can identify<br />

and execute marketing strategies <strong>to</strong> expand sales <strong>of</strong> our current<br />

products/technologies in existing markets and identify new, related<br />

products <strong>to</strong> serve existing markets.<br />

Plantes Company Page 274

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