20.03.2013 Views

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 ...

SHOW MORE
SHOW LESS

Do you know the secret to free website traffic?

Use this trick to increase the number of new potential customers.

Winning Without Competition: How to

Break Out of a Commodity Market

An Educational Leadership Series for Precast

Concrete Company Strategic Leaders

Pamphlet 5

Strategic Alignment: Creating

Differentiation in Fact versus in Theory

Created for the Precast Concrete Institute by Plantes

Company, a strategic marketing consultancy. © 2001

Plantes Company, Madison, Wisconsin.

Pamphlet #5 Page 183


Strategic Alignment: Creating Differentiation in Fact

versus in Theory

Key Messages

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

Communication of the competitive strategy and alignment of departmental

and team actions to the strategy is required to create the desired

differentiation.

• Annual plans are the current year execution of strategies; they are the

itineraries for attaining the organization’s strategic goals and vision.

• The marketing-sales plan, operational plan, leadership plan, and financial

plan must be aligned with one another.

• Process improvement that is not linked to creating a meaningful point of

distinction from the competition is a feel-good exercise that will help the

bottom line in the short term, but is unlikely to create a meaningful shift in

your market position.

• The Balanced Score Card is a useful tool for measuring whether strategy is

being executed and whether the strategy is having its anticipated effect on key

performance measures. Linking individual and process objectives to balanced

score card measures is a critical part of alignment.

• The leadership team plan is also a critical part of alignment. It will insure that

the organization creates future leaders and that today’s leaders are doing the

work only they can do: setting direction and creating change to align the

organization to create its desired future.

• Systematic review of market changes will help the organization evolve its

competitive strategy so as to maintain differentiation. A marketing

department plays a critical role in this process.

• There are two types of marketing – strategic and tactical. Tactical marketing

decisions, e.g., pricing and advertising are – for the most part – the domain of

the marketing professional, working in collaboration with the Sales

Department. Strategic marketing decisions, e.g., competitive and growth

strategy decisions, must rest with the entire leadership team. The Marketing

Department creates the strategic analysis used by the leadership team to both

identify strategic issues and opportunities and define new strategies.

• Ignoring needed marketing activities is like driving without being able to see

beyond two feet. Organizations without strong marketing skills are generally

unfocused and reactive.

• Sales and Marketing serve different roles in a company. There is great danger

in combining the two roles in the same person as sales requirements always

win out over marketing. Sales is the most expensive resource in the company.

You must therefore minimize how much time is spent on non-selling

activities. Don’t ask sales people to do Marketing’s work.

Pamphlet #5 Page 184


Introduction

One of the greatest failures of strategic planning is the lack of execution on the

other side of planning. Great ideas and newfound desire for strong leadership

emerge from strategy retreats, only to be left to notebooks and memories a few

months later. Sound familiar? A trip plan without an accompanying itinerary is

often to blame. If we plan to travel to Phoenix, but follow whatever roads

promise fun (the organizational equivalent of sales and margin), the probability

we will get to Phoenix is very remote.

Act Three of the change process is about alignment: changing the work of the

organization and changing how people work with one another in order to “fit” the

organization and its activities to the new competitive strategy. This work is the

change process. Acts One and Two have, for all intents and purposes, been

preparation for change, the creation of the "plan" so to speak. Absent action,

there is no change.

Change becomes part of daily work when leadership links annual planning and

other key decisions about the organization to the new strategies. For example, a

company will not start selling to owners in the absence of sales force training and

changes in sales incentives. Marketing to owners will also be needed for the sales

force to succeed in their initial efforts. Part of the change for companies in

commodity markets will be to introduce marketing skills and philosophies into

the company. And, often times, changes in the culture of the organization are

needed to better support the new strategies. For example, if an organization

wants to become more customer-driven, the people in the organization need to

first learn to listen to one another internally. Relationships outside the company

usually mirror relationships inside. If people fail to listen internally there is

typically a failure to listen externally.

Change occurs in two directions: the work people do and how they do this work.

Pamphlet Five addresses changing the work of the organization. Pamphlets Six

and Seven address how work is done. Pamphlet Six discusses strategic

leadership. Changes in the work people do and how they do their work come

together in the presence of strong leadership. A strategic leader always uses

today’s work to model desired behavior, to foster change and renewal, to

maintain spirit and momentum, to help others know and fully use their gifts, and

to reinforce an inspiring and meaningful vision. When leaders do this work, the

vision becomes reality as the competitive strategy gets executed.

Pamphlet Seven addresses culture change, i.e., changing how people work

together.

Align Everything

The key principle to remember in executing change is that anything that is not

consistent with the strategy will deter the success of your strategy. Everything.

Pamphlet #5 Page 185


This includes your organizational structure, your measures, the processes you reengineer,

measures and incentives, the types of people hired, job goals, how you

lead. Everything.

In fact, every organization with a new competitive strategy will face a moment of

truth in which it needs to decide whether it was really serious about the

competitive strategy or not. These moments of truth arise from a fundamental

principle of markets: to gain leadership in one market segment requires you to

not secure leadership in a segment with conflicting requirements for the

organization. In the case of a health care products company, the president

needed to sell a recently acquired company, recognizing that the acquisition was

no longer consistent with the future strategy of the organization. In another

example, a commercial sewing company walked away from a $1M medical sewing

customer in order to have the resources to devote to its strategic market, fabric

accessories for the power sports vehicle market.

Whatever the moment of truth, they are tests of whether the organization has the

resolve to execute strategy. You can be sure individuals in your organization will

be looking at these tests to understand the real message about what’s important

or not important. Therefore, when you face and resolve your moment of truth,

communicate it broadly throughout the organization as to why you arrived at the

decision and took the steps the strategy suggested.

Alignment answers the following questions:

How do we create the differentiation in fact?

~ What are the key processes that build the core competency and create the

organization’s differentiation?

~ What processes must I get "right" to meet minimum customer

requirements to be considered?

~ What process goals should we establish to achieve our key strategic goals?

How should we organize to manage and run the company on a daily basis to

insure key processes achieve what we need them to achieve?

• Do we need a marketing department?

How will we achieve our sales and margin goals?

• What must we change in our key processes and other operational activity to

support the sales-marketing plan and achieve process goals?

• What partners do we need?

How will we measure success?

• What must the leadership team accomplish working as a team to enhance the

capacity of the organization to succeed?

• Is our competitive strategy still aligned with the evolving market place and

competitor dynamics?

The first steps in the alignment plan will be obvious to you. But, clearly,

alignment cannot be planned entirely in advance. Change becomes a process of

being alert to where the organization is not in alignment with the strategy and

Pamphlet #5 Page 186


then responding. The response brings things into alignment. At times, the

response can include changing the strategy if the market place has changed and

assumptions that supported the original business model no longer hold true.

What you are essentially doing in Act Three is redesigning the organizational

system from scratch, given its design (i.e., its purpose, vision, guiding principles,

competitive strategies and strategic goals). (See Pamphlet Four for a description

of these design parameters.) A systems view is critical in this work, as the

success of the organization in achieving its aim will depend not just on the

effectiveness of the strategy, but on how well your organization works as a

system, as this will determine the success of execution. (See Pamphlet Two.)

How Do We Create the Differentiation in Fact?

The outcomes of any system are a perfect reflection of what the system was

designed to accomplish. Beyond this, the first step to change is to acknowledge

that you are accountable for any of the results you don’t like. The key to

successful differentiation is not just the identification of ways to differentiate the

firm that are meaningful to customers and that cannot be easily duplicated but to

create this difference. The creation of differentiation (or the maintenance of

differentiation) is accomplished by designing and operating key processes that

are at the heart of differentiation. This is true whether the differentiation is in a

product or service or the business model. And, if you lack the distinction you

desire, you look first and foremost at how your processes are working.

There are a number of steps to creating "process-based" differentiation:

• Identify the key processes that create the differentiation, what I’ll refer to as

strategic processes

• Redesign or improve key processes to eliminate problems, create competitive

advantage and secure differentiation

• Create a culture of continuous improvement in processes

• Deploy limited resources to redesign and improve processes that are at the

heart of competitive victories and that promise financial payback

• Create measures that will help you better understand how the organization is

doing and better align individual and group activities to desired outcomes

• Keep the leadership team focused on the unique role of leadership so that the

operational agenda does not crowd out critical organizational change work

Success in these steps depends on strong systems thinking skills throughout the

leadership team and management ranks. (See Sidebar A: Systems Thinking)

Why do we take a process focus? We do this for a number of reasons.

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

the heart of core competencies, customer value and competitive advantage.

Pamphlet #5 Page 187


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

at the whole. This is because it’s the interaction of parts, not the parts

themselves that define behavior and dictate outcomes in any system. If Sales

keeps on selling more than the capacity of Operations, success will not be

forthcoming. In fact, the recurring backlogs in an organization where Sales

oversells will, in fact, set in motion reduced customer satisfaction that will

eventually reduce the success of the selling organization.

• Third, a process focus creates an empowered organization. It focuses

managers and leaders on the work only managers and leaders can do, i.e.,

improving the interactions between the different processes and making sure

processes are designed well. It is up to others, the "workers," to actually do

the operational work of the processes. When leadership focuses on their

unique roles as leaders and managers, the rest of the company’s productivity,

morale and creativity increase. This is especially important because a key

strategic leadership practice is enabling others to do their best. Doing

people’s work versus removing barriers that undermine their ability to do

their work creates credibility as a leader.

• Finally, a process focus lets you eliminate problems versus treat their

symptoms. There is entirely too much time spent in organizations today

treating the symptoms of problems as opposed to eliminating them through

process improvement and process redesign.

About Processes

With systems thinking, we begin to look at the organization as a series of

processes that interact, dramatically affecting the results of the organization. A

process is a series of cross-functional actions that produces a result of value to

someone else in the organization, the customer or the ultimate end-user.

Processes are often thought of as fairly linear (e.g., the creation of forms,

erection, measurement of financial outcomes). In fact, there are many critical

processes that are without clear inputs, flows or outputs. For example,

leadership is a process as is building strategic alliances with a key customer or

supplier.

There are two types of processes: operational processes and management or

administrative processes. Operational processes deal with what works gets done

to produce the organization’s output and what jobs and actions are required to

support the effort of getting the work done. The external customers provide

measures of the effectiveness of operational processes. Examples of operational

processes would include: marketing to owners; getting the order; finalizing the

design; developing a labor force; developing subs; making the structure. Note

that this is a very different view of the organization than the traditional silos of

sales and marketing, administration, purchasing, project management and onsite

construction. From a strategic leadership perspective, processes almost

always cut across different functions.

Pamphlet #5 Page 188


Management and administrative processes affect how the work gets done.

Typically, each management or administrative process serves multiple

operational processes. The measurement of process success is whether it

provides internal customers with what they need to best conduct the operational

processes, i.e., to meet customer needs and create differentiation for the

company’s offerings. Examples of management processes would include:

evaluation of performance; measurement of financial outcomes; insuring

compliance with OSHA regulations.

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

see micro processes, e.g., pouring the concrete and mixing the concrete. Macro

processes reflect a broad lens, e.g., manufacturing structural components. Macro

processes are also called, "organizational subsystems," as they contain multiple

processes.

The key steps for aligning processes to execute the competitive strategy include

the following:

• Make sure that your competitive strategy is clear and well understood within

the organization.

• Diagram the flow of work by identifying the subprocesses and then build up

into the macro processes, both linear work flow and non-work flow processes.

• Determine the most important macro processes to focus on, i.e., those that are

critical issues affecting your competitiveness or are a source of existing or

potential differentiation.

• Decide whether process improvement or redesign will be used to enhance

process outcomes and prioritize projects of each type. The improvement and

redesign projects with the highest priority become key objectives in the

operational plan for the organization, which will be discussed below. In this

way, strategy is driving operational change initiatives.

Entire books are written about how to do process improvement and process

redesign. Therefore, it is not the intent of this pamphlet to teach process

improvement. Rather, we will focus on how to approach process improvement in

a way that creates alignment of the organization to its competitive strategy.

Identifying Strategic Processes

Critical processes refer to the 3-5 key macro level processes that, when

successfully designed and managed, do the most to differentiate your company’s

offerings and secure a market leadership position. Critical processes let you

execute the firm’s competitive strategy effectively and efficiently. They are at the

heart of competitive advantage.

The key attributes of critical processes include:

• They are few in number.

Pamphlet #5 Page 189


• They are linked horizontally and vertically.

• They can be diagrammed in terms of their interaction with other parts of the

organization.

• They can be measured—although not always easily measured.

• They can be improved.

• They have a major impact on differentiation of the firm, customer value,

return on assets and organizational goals.

The first step in process improvement is to identify the macro processes of the

organization (Chart One: Macro Process View of a Precast Company gives an

example). One approach to selecting critical processes from this list is to

categorize each macro process into one of the following categories of importance:

• Identity: It serves a major role in creating the desired differentiation of your

company.

• Priority: It meets a customer requirement and strongly influences how well

identity processes are carried out and how the firm stands versus the

competition.

• Background: It supports other processes; many management processes fall

here.

• Mandated: It is required by, for example, government officials.

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

necessarily needed today.

Chart Two: Example of the Process Salience of Different PC-PS Companies shows

an example of process categorization for two precast firms, each with very

different competitive strategies. (For more information on this topic, see Keen,

whose work guided the thoughts in this section.)

Identity and priority processes, or those that could be identity and priority

processes, become the strategic processes for the organization. Organizations

should focus improvement and redesign efforts on background processes only if

they are becoming, or could become, a priority process. Mandated processes take

on strategic important if changing them has a major positive impact on the

profitability of the firm. In general, background processes do not pass this test.

Any folklore process should be removed.

After categorizing processes, the organization must select which critical processes

it wants to improve or redesign so as to achieve greater success. The key to doing

this is to determine which critical processes of the organization already perform

above average versus which perform at or below average. Because of limited

resources, the organization may choose to monitor performance of critical

processes with above average performance in order to maintain a lead. Any

critical processes that are at or below the performance of other competitors, i.e.,

that are not best in class, must be improved or redesigned.

Pamphlet #5 Page 190


What should you do about a process performing below the competition that is not

a critical process? You should only improve or redesign the process if:

• It will eventually become a customer requirement.

• It could enhance your value to the customer and differentiation in customers’

eyes.

• There is a financial payback to improving the process.

Selecting processes to improve or redesign is at the heart of successful strategic

leadership. All too often, process improvement resources are focused on

processes that are not identity processes. As a result, organizations "get better,"

but they don’t necessarily create differentiation, which is the key to breaking out

of a commodity box. (See Pamphlet One).

Redesign or Improvement?

The next critical decision by the leadership and departmental team is to identify

whether process improvement or process redesign is needed. Often times both

are used, as evidenced in Chart Three: Organizations Combine Process

Redesigning and Improvement Efforts. Process improvement can be as simple as

insuring that everyone uses the same process, i.e., that standardization around

the process is created. Or, it can focus on incremental redesign of the process,

e.g., insertion of an additional step (e.g., a phone call) to make sure plans are

approved by the architect before the weekly manufacturing schedule is set.

Process improvement is used when the current process works well, but you would

like it to be better.

Process redesign is used when:

• A straightforward and identifiable process does not really exist.

• The current process is entirely way too complex to be managed well.

• Creating differentiation demands that the process produce significantly

different outcomes.

Both company factors and process factors enter into the decision on whether to

improve or redesign. Company factors include:

• Organizational leadership style

• Business conditions

• Type of change required

• Commitment level to change

• Organizational skills with regard to change and process improvement

• What has worked effectively in the past

• Willingness to engage in true strategic planning (vs. annual business

planning)

Pamphlet #5 Page 191


Process Factors include:

• Extent of problem

• Whether the problem is in the process or its containing system

• Time frame before results are needed

Process Improvement

The focus of process improvement is to improve process outcomes incrementally.

The key steps in process improvement are (Joiner):

• Step One: Define the project, i.e., what problem are you trying to solve with

what process.

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

effectiveness and what causes variations in its effectiveness. (See Sidebar B:

Variation)

• Step Three: Understand why the results of the process are what they are.

• Step Four: Develop and try solutions that address deep causes of the

problem.

• Step Five: Evaluate the solutions, select one and create and evaluate plans to

implement the solution.

• Step Six: Maintain the gains by standardizing work methods of products.

• Step Seven: Anticipate future improvement in order to preserve lessons from

this effort.

(See Appendix One for a more detailed description of these steps.)

It is critical, while engaged in process redesign, to understand not just what’s

going on with the process but how the process interacts with the rest of the

organization. Suppose your organization is trying to speed up the completion of

shop floor drawings. Many teams would jump immediately at the idea of getting

architect approvals earlier. But, there are many ways to increase speed besides

increasing the speed of the architect’s approval. And, there are many aspects of

shop floor drawings an organization needs to be concerned about beyond speed,

e.g., the cost to complete the drawings, the efficiency of the design for

manufacturability and the accuracy of the design.

Everyone must understand the competitive strategy so that in designing changes

to increase speed, you do not impair other process dimensions that are also

critical to your competitive position, i.e., those that drive your differentiation or

are required for consideration in the marketplace. This is why systems thinking

Pamphlet #5 Page 192


is so important. It prevents improving part of the organization at the expense of

other parts of the organization.

Team Exercise: Process Improvement

Appendix Two provides an exercise you can follow to develop a feel for process

improvement. After competing the exercise, answer the following questions:

• Do we have a process orientation in our company? If not, should we?

• Which of our processes need to be improved? If we could really improve

these, would it make us more competitive or profitable? Would it create

differentiation from our competition?

• Are we willing to commit resources to process improvement?

• Do we need any outside help to be more effective in process improvement?

Process Redesign

Organizations succeed by doing the right things right, not just doing things right.

Redesign is about doing the right things; process improvement is about doing

things right. Process redesign is very sophisticated work. It’s not done overnight

with a simple six-step process. It requires careful understanding of the current

process and deep insights into the reasons today’s outcomes are what they are.

Nevertheless, process redesign has tremendous opportunities for payback.

Process redesign dissolves the problem, i.e., the problem no longer appears. It

differs from fixing the process, which handles a problem better. Fixing modifies

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

step in the existing system. Redesigning, on the other hand, starts with a blank

sheet of paper.

Process redesign is based on the following concepts:

• Each system is well designed to act as it behaves. In other words, you get

exactly what your process or system was designed to create.

• Each person in the system is acting rationally within the context of the

system.

• Often times the limitations of the system are defined by what’s going on

around the system, i.e., in the containing system. The most important

limitations may not be in the system itself.

• To change a system’s outcomes, behavior and operation, you need to change:

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

~ Its motivations (i.e., incentives, rewards and beliefs, why participants do

as they do and who benefits from current behaviors and why)

~ Its key processes (i.e., how the work gets done)

Pamphlet #5 Page 193


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

intended output)

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

contractors) to work more in the favor of the system.

Process redesign work is focused on identifying all the characteristics of the

system that create the undesired and desired characteristics of the current system

or process. You won’t be able to do this work without a deep understanding of

the motivations and beliefs that drive how people work and relate to one another

in your organization. You need to get at different dimensions of motivation, how

they operate within the system and why they produce the system outcomes that

occur. This work also what lets you understand the nature of culture change

that’s needed. (See Pamphlet Seven.)

Team Exercise: Process Redesign

To get a feel for process redesign, discuss the following questions about shop

floor drawing approval:

• Where is speed of approval not an issue?

~ In what kinds of projects?

~ With regard to what kinds of suppliers/subs?

~ In what kinds of roles?

• Who holds the power to affect speed of approval and why do they delay?

~ Who really drives when things get done and why is this person in the

driver’s seat?

~ Who can delay approval and why is it in their interest to do so?

• What scope of services would lead us to be in charge of approvals?

• What is it about our overall system that would make delays on approval

irrelevant to meeting customer erection dates?

How could we hand the design off to those in charge of approvals? How could

we eliminate the need for approvals?

• Who benefits from the current system? Who would be concerned if it

changed significantly?

You should engage in process redesign when:

• No process is in place

• Significant market changes are occurring

• The process spreads across multiple locations/business units

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

customer satisfaction reasons or to create competitive differentiation

• There are several problems and/or several root causes of the problem

Chart Four: Which Improvement Approach to Use? provides a useful tool for

deciding between process improvement and redesign.

Pamphlet #5 Page 194


The logic for process redesign work is similar to that for the 7-Step improvement

process, but the steps embrace multiple problems and causes. The steps are:

• Plan

~ Identify desired outcomes and measures of process

~ Create the "as is" process map. Take baseline measurements and identify

process "disconnects," i.e., missing, illogical or redundant steps or flawed

logic

~ Theorize and test ways to stratify where problems appear

~ Theorize and test causes of problems

• Do

~ Pretend you are starting from scratch. How would you (ideally) organize

this process to eliminate problems?

~ Seek broad-based feedback on one or more "should" designs and select

and modify "should" process map accordingly. Use evaluation criteria to

choose among options

• Check

~ Does new process offer improvement over basement measurement?

• Act

~ "Institutionalize" the new process

- Educate

- Standardize

- Establish improvement goals and manage

As you envision a redesign, it is important to keep the following principles in

mind:

• Eliminate waste

• Simplify

• Create alternate paths when a uniform approach will not work

• Increase speed (establish concurrent activities wherever possible vs. linear,

sequenced activities).

• Use technology when it adds value

Team Exercise: Process Redesign, continued

Appendix Three provides a process redesign exercise. After completing the

process redesign exercise, discuss the following questions as a team:

• Are there processes that should be completely redefined from the start if we

want to genuinely execute our competitive strategy?

• What would be the benefit of doing this?

How can we get started?

Leadership’s Role in Process Improvement and Redesign

Pamphlet #5 Page 195


The leadership team has a very strong and defined role in certain elements of

process alignment and a very weak role in others (See Chart Five: Senior

Management’s Role in Process Edge). They take the lead in defining the critical

processes in the context of competitive strategy and creating the idealized overall

design of the organization (i.e., the organizational chart). It’s also their role to

make sure that the goals for different processes and the measures of success of

those processes are aligned with the competitive strategy and the organization’s

strategic goals. They also play a leading role in terms of major redesign efforts,

while serving in a coaching role in continuous process improvement activities.

While process improvement is the work of lower level management and the

workers themselves, the leadership team must also make sure improvement

priorities are defined and resources are allocated to achieve desired

improvements.

Some leadership teams encourage their companies to adopt what’s called a

continuous improvement philosophy. When a continuous improvement process

is in place, every process in the organization is measured and improvements are

made on a regular basis. The fundamental concept behind continuous

improvement is that process improvement is for the benefit of the customer. The

focus is on customers, where customers include both internal individuals as well

as external customers.

A process improvement focus insures that different parts of the organizations

clearly understand who their internal and external customers are, their needs and

expectations and the purpose and the desired output from their part of the

organization. With a process improvement focus, individuals who are part of the

process get feedback from customers and change in response to the customer’s

needs and expectations. Jay Howell, a colleague, argues that the key philosophies

of a process improvement focus include:

• Performance is measured. Continuous improvement means that there is a

long-term commitment to regularly measure and improve processes to

produce outputs of high value.

• Everyone is involved in improvement. Continuous improvement becomes the

work of everyone in the organization as opposed to a defined or imposed

management solution. This builds teamwork and creates an environment of

trust and open communications. As a result, process improvement ideas are

surfaced by everyone in the organization.

• Leaders and others develop systems thinking skills. Organizations with

continuous improvement philosophies help people in the organization think

in new ways. The work of the organization is viewed not as a collection of

fragmented production units, but rather as a whole focused on providing

output that’s highly valued and differentiated in the eyes of the customer. A

systems view replaces a focus on blaming individuals for problems with a

Pamphlet #5 Page 196


desire to -- continually discovering new ways to improve the organization for

the benefit of customers.

It’s important to note that the process goals should always supercede functional

goals because the process goals, especially processes that cut across functions,

drive what the different functions or departments spend their time on. Rummler

& Brache comment, "If we had to pick one of the three levels as the greatest area

of opportunity for most organizations, it would be the process level. We are

learning that it’s not enough to manage results. The way in which those results

are achieved, i.e., the process, is also important. If we are achieving the results,

we need to know why. If we are not achieving the results, we need to know why.

In both cases to a great degree the answer lies in the processes."

How should we organize to manage and run the company on a daily

basis to insure key processes achieve what we need them to achieve?

Organizational structure (the “white chart” that shows who reports to whom) is

one of the strongest leverage points for aligning the organization to fit its

strategies. It is critical to creating culture change and for getting people to focus

on the right kind of work, performing to the right set of measures. After your

strategy is designed and you understand the critical processes of your

organization and its strategic goals, start with a blank sheet of paper and design

the ideal organizational structure. Do not think at this stage about what people

will fit where. All that can come later. It is always better to make decisions

knowing what is ideal. (See Nadler)

Many companies with a continuous quality improvement philosophy organize

their company by process teams, instead of functions. This shift can be

instrumental in creating more effective processes, as the new structure changes

relationships and therefore culture. Nevertheless, changing organizational

structure alone is not sufficient for creating strong processes. People also have to

be willing to work collaboratively to make the processes work well. Chart Six:

Collaboration vs. Cooperation shows the difference between organizations in

which the functions only cooperate with each other versus those in which

collaboration is present. What we see here is that collaboration eliminates, or

significantly reduces problems, whereas cooperation causes problems to be

shifted to another part of the organization, which then must absorb the cost

associated with the problem. Absent collaborative cultures, organizational

change often times does little to improve operational effectiveness. (See Sidebar

C: Structure Affects, but Does Not alone Determine, Behavior.)

Do You Need a Marketing Department?

You would never consider asking the director of accounting in your firm to also

run the plant. Yet, many precast companies either delegate marketing

responsibility to the sales director or leave the market role unfilled. This is one of

Pamphlet #5 Page 197


the biggest errors in your industry. Without marketing, your organization will

remain operations driven and compete as a commodity supplier.

Still not convinced? Let’s try it another way. In the absence of a marketing

professional, the CEO and members of the leadership team “own” the marketing

role. How effective are you at this job?

Team Exercise: How Well is Marketing Being Done in your Organization?

Complete the Job Description Questionnaire in Appendix Four independently

and then summarize the individual answers to create a team response. On any

line item where a number of respondents entered “No” under “Done Well” or

“Done Regularly,” ask:

• What are the implications of this gap?

How might we be a stronger company if we filled this gap?

• What are the implications of asking sales or some other function to take on

this role?

• What is not getting done or not getting done as well?

Then, looking collectively at the gaps, ask:

• Would the investment in good marketing professionals be worth the return we

would get from filling these gaps?

What is Marketing?

There are a number of definitions of marketing:

• The activities of identifying, designing, promoting and delivering goods

and services to customers – in exchange for money.

• The discipline required to make decisions that maximize customer and

company value, i.e.:

• Product line and business scope

• Growth strategy

• Distribution strategy

• Value proposition to customer that differentiates the company from

its current and future competitors

• Pricing

• “Promotional” expenditures to ensure fiscal year sales and profit

objectives are met

• Defining market segments; understanding their needs; identifying what is

required to meet the needs of “target” market segments (i.e., those of

greatest priority to the firm); and communicating with members of the

target segments. (Hiebing and Cooper)

• Identifying the changes needed today to ensure success in tomorrow’s

markets while attracting customers to today’s offering.

Pamphlet #5 Page 198


Two types of marketing activities create strong financial and market place results.

Tactical marketing focuses the organization on the target markets in which the

company’s current goods and services can be sold most successfully. The

purposes of tactical marketing activities are to:

• Raise awareness of the company’s offering – a key driver of whether a

company gets considered by potential customers. This then affects the

company’s market share.

• Enhance the image of the company in the target market customers’ eyes

• Work with associates inside the company to insure current product lines (as

opposed to individual orders) are as profitable as they can be. Product line

extensions and cost reduction activities are examples of this work. The

Marketing Department’s role in these activities is to insure products meet the

needs of target markets.

• Increase the sale force efficiency and effectiveness by leading them to the right

target markets, profiling “desired customer” attributes, creating customer

awareness and providing effective selling tools.

Strategic marketing focuses on how markets, competitors and customers are

changing and what the company needs to do differently to secure and maintain a

leadership position. When David Packard argued, “Marketing is too important to

leave to the marketing department,” he was talking about strategic marketing.

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

regarding where and how to compete and grow, and how to align operations to

win in targeted markets – much as they own the financial performance of the

company. The marketing department owns the “process” for identifying changes

needed in the company and its strategies to enable it to remain competitive (i.e.,

new products, services and channels). The marketing department is also

responsible for creating a strong marketing understanding process. (In this

sense, Marketing is like the finance department. They both oversee a process of

collecting and interpreting data and insuring it is used in company decisions.

Finance focuses on financial and operational information and marketing focuses

on market information.) But the actual strategic decisions remain the leadership

team’s responsibility.

Chart Seven: Tactical vs. Strategic Marketing lists the significant tactical and

strategic marketing activities/decisions. One way to think about these differences

is to think of tactical marketing as “inside to the outside,” i.e., where to focus the

company today within the broader market, and strategic marketing as “outside to

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

change? The role of the marketing department in the context of the overall

company is summarized in Chart Eight: The Marketing Department’s Role.

Sales and Marketing Are as Different as Precast and Wood

Technologies

Asking the Sales Department to take on the marketing role will not close the

marketing gap. Sales serves a very different role in the company than Marketing.

Pamphlet #5 Page 199


Their role is to represent the company to the customer and secure orders. Sales

effectiveness is driven by:

• Focusing on the right potential customer

• Understanding the customer’s needs

• Showing how the company’s offerings can best address the customer’s needs

• Supporting the customer through issues and questions that arise in the buying

process prior to sign off to the project manager

• Developing a trusting and open relationship with ongoing buyers

Marketing and Sales are involved in the selling process at different stages.

Marketing’s influence ends before the order is won. The objectives of Marketing

are to:

• Make sure the company produces products and services that customers want.

• Create awareness of the company and the benefits of its

technologies/offerings.

• Help the company get considered – i.e., encourage a customer to seek

information from the sales rep or company.

• Create a favorable company image in the customer’s mind.

The difference between sales and marketing is like the difference between

planting a field and harvesting the crop. Marketing professionals plant the field.

They create awareness about the company among potential customers and then

direct sales representatives to the markets and channels where they can be most

successful. (This is tactical marketing.) Marketing also plays a key role in

making the company more attractive to potential matches in the future. (This is

strategic marketing.) Sales makes the matches, i.e., they harvest the rich crop

that marketing (and operations) have helped create. Chart Nine describes the

different perspectives of sales and marketing as a result of their different roles.

Different roles demand different skills. As a result, different types of people are

generally attracted to sales and marketing roles. Sales people have high empathy

and a keen need to win frequently and regularly. Outgoing in personality, they

are comfortable developing relationships. They “put themselves up for rejection”

daily, as long as the prospect for a victory exists. Like hunters in a difficult

jungle, effective salespeople are independent, self-motivated and untiring.

Marketing people work as much on the “intellectual” side as on the “relationship”

side of issues. They love a tough intellectual challenge and, while oftentimes

people-oriented, they often see the problem as more engaging than the people.

They would either be the organizers of a safari or the environmentalists making

sure the jungle ecology is healthy. Relative to Sales, they enjoy working on things

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

the organization, i.e., with different functions of the company.

There is some overlap in skills. Marketing people must be good at selling ideas.

And, a great consultative salesperson bringing customized project solutions to

one customer is not unlike marketing people who do this type of work for target

Pamphlet #5 Page 200


markets as a whole versus for an individual customer. Making good decisions for

an entire target market demands the marketing person have outstanding

analytical and interviewing skills and be able to make insightful business

decisions involving difficult trade-offs. Many CEO’s argue that Marketing is the

best training ground for general management. Chart Ten outlines a comparison

of duties and qualifications for sales and marketing professionals.

Sales Can’t Do Marketing Well

Three problems arise when a company uses the sales role to do the marketing

role:

• It is very expensive.

• Sales will not get the work done on time – or done at all.

• When Sales takes on marketing activities, they are a biased source of

information.

It is very expensive.

From an opportunity cost perspective, selling resources are the most expensive in

your organization. For every hour the sales organization is diverted from direct

selling activities (i.e., getting the company considered, overseeing the internal

process for developing a proposal that is high value for the customer and the

company, winning the order and developing the relationship), the company is

losing gross margin potential.

Sales will not get the work done on time – or done at all.

The urgent always drives out the important, in sales and elsewhere. When Sales

wears both the marketing and sales hats, marketing is what suffers. Therefore,

you must consider what activities are not getting done when individual sales

professionals and their managers are responsible for both sales and marketing

roles.

Team Exercise: Wearing Two Hats

Individually complete the exercise in Appendix Five. As a group, discuss the

items that fall into the “follow up later this week” boxes. The activities identified

under “follow up later this week” or “follow up later this month” are typically

marketing activities.

When Sales takes on marketing activities, they are a biased source of information.

To understand the bias Sales brings to the marketing role, one must think about

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

the company considered and securing orders. A good sales person will spend

time with customers who have a high potential to purchase within the next 12-18

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

important information about your company’s position within the market and

about market changes can be gained, i.e.,

• Lost customers

Pamphlet #5 Page 201


• Non-customers who are buying complementary products of other

technologies, but not your technology, i.e., they may be potential customers in

the future

• Manufacturers and providers of complementary products and services

• Competitive technology suppliers

• Your company’s suppliers who often have key insights into the building

marketplace

In addition to talking to a biased sample, Sales is always listening for information

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

of issues than that which a marketing person would explore and learn about in

the marketplace. Furthermore, the customer – knowing the role of the sales force

– is oftentimes leery of offering information that might reduce his opportunity to

push for price concessions. The customer may also be reluctant to share

information he deems is not pertinent to someone in the sales function. For

example, many organizations use their sales force to gain information about whey

the company loses orders. Customers will always tell sales people that the

company lost the order due to price, because they want to get the very best price

possible in the future. They will rarely criticize sales performance to sales

representatives, for example. Market research professionals, on the other hand,

are able to gain a much better perspective on why the company loses customers,

which is a key part of a strategic assessment.

As a result of these sources of bias, sales people offer an important, but

nonetheless biased, view of the marketplace. It is often said in marketing circles

that if you ask the sales department to define the specifications for a new product,

the product will be out of date before it is introduced to the marketplace.

In light of these problems – it’s expensive, Sales does not get the job done, and

biased information results – separate marketing resources are of great value in

any organization. Strong tactical marketing creates:

• More effective forecasting

• More time the sales team can spend on selling

• More focus throughout the company

• More effective selling because the sales force is better focused, has stronger

selling tools and aids, and there is prior awareness of the company

• Better measures of how the organization is performing in its markets

• More successful product introductions

• Better feedback on the quality and cost position of the company so as to create

quality and cost improvements

• Activities to minimize sales losses should the market decline

• More realized opportunities identified and pursued

• Higher profits through stronger pricing approaches

Strong strategic marketing creates:

• A stronger, more effective market understanding process

• More focus throughout the company

Pamphlet #5 Page 202


• Conscious decisions of where and how to compete, which are key to

differentiation and breaking out of a commodity market (see Pamphlet One)

• Early warning of emerging risks and key opportunities

• Stronger products and secure offerings

• More focused and effective resource allocation

• Higher pricing through better differentiation

• Greater partnership opportunities

• Stronger awareness and understanding of current and potential competitors

While Sales and Marketing must work together effectively, it is important that

Marketing not serve in the role of sales assistants. In particular, it is very

important not to use Marketing to:

• Evaluate specific sales representatives’ performance

• Generate leads by calling on individual accounts

• Create individual sales representative forecasts

• Be the sales person for accounts with longer-term potential

• Maintain all information in a customer database

• Write proposals for a specific job

• Serve as the engineer for new product development activities

• Train Sales on selling skills (Marketing does train Sales on what to

communicate in discussing why the company or its products are better than

that of the competition)

• Set prices in front of the customer (Marketing does set pricing policies and

works with Sales in cases where policies are not effective)

• Review contracts for accuracy or legality

Finally, it’s important that Sales support Marketing in fulfilling the marketing

role. Sales professionals help Marketing by:

• Making customer contacts on behalf of Marketing

• Providing feedback on product ideas and communications materials

• Providing Marketing with an in-field understanding of how the products are

working

• Helping the Marketing people understand the sales process

• Providing a record of won and lost orders and insights into market size and

why orders are won and lost

• Providing information on the competitor

• Identifying who the key opinion leaders are

• Defining tradeshow requirements

If you are considering adding a marketing person to your staff, Appendix Six

contains a job description that can help you get started.

How Will We Achieve our Sales and Margin Goals?

The Marketing Plan (This section draws heavily from Hiebing and Cooper)

Pamphlet #5 Page 203


The Marketing Plan is to competitive strategy what the weekly itinerary is to a

two-month trip or what production and capacity planning is to operations. The

marketing-sales plan answers the following questions:

• Where do we want to end up at the end of the year typically expressed in sales

and margin terms?

• What products and services will be the focus of proactive marketing and

selling?

• What are the priority target markets, i.e., groups of customers with similar

needs defined in a way sales can identify whether customer fits or not?

• What outcomes are needed in each target market to achieve our sales and

margin goals?

• What marketing and sales strategies will we use to create these outcomes?

The tactical marketing plan translates the competitive strategy decisions and

company-wide strategic goals into annual two-year action plans that drive the

work of the organization going forward. The tactical marketing-sales plan

insures you have a plan to achieve your sales objectives and that the activities of

the marketing organization are aligned with the competitive strategy of the

organization. The tactical marketing-sales plan also insures that operations

(manufacturing design and erection) understand what marketing and sales need

from operations (and vice versa) to fulfill their role in helping the organization

execute strategy and achieve strategic goals. The role of management is to insure

that the marketing-sales plan and the operations plan are in alignment so that

everyone’s efforts will support one another.

Hiebing and Cooper present the tactical marketing plan as a ten-step process

which starts with a business review and ends with evaluating whether or not the

results of the business are consistent with what was planned. Chart 11: Ten Steps

to Disciplined Marketing Planning presents the ten steps to disciplined

marketing planning. Development of the marketing-sales plan starts with a

business review. This is basically an update of the strategic assessment of the

organization (See Pamphlet Four). The review is used to identify problems and

opportunities facing the organization, which the annual marketing-sales and

operational plans will address. This review helps you assess whether or not your

strategic plan is in fact working effectively and then modify the competitive

strategy, if necessary.

Problems and opportunities should be ranked according to impact,

probability of success if addressed, potential return and criticalness to

competitive strategy execution. It is often times helpful to differentiate problems

and opportunities in terms of those that affect where your firm competes, e.g.,

target market products and services and geographies versus those that affect how

your firm is different than the competition, e.g., pricing pressures, quality issues,

speed issues, etc.

The sales objectives stem directly from the strategic goals of the organization,

one of which is typically defined around revenue, gross margin and operating

Pamphlet #5 Page 204


profitability. From these sales objectives, Step Four of the marketing plan

identifies the specific target markets and target customers the

organization will focus on over the next two years and what outcomes or market

and objectives we want within these target markets. This step creates the critical

link between the actions of customers and the desired sales results for the

organization (See Chart Twelve: Interlocking Sales Objectives).

In selecting target markets, it’s important to remember that all marketing plans

boil down to one question: “Whom are we trying to precondition to make selling

as ‘effortless’ as possible?" There are many potential target markets for any

organization. The role of the marketing plan is to prioritize who is the ideal

target market for each product or technology offering and then for the company

as a whole. Factors you might to consider in deciding on target markets include:

• Who are the heavy users?

• What are the strategic market segments?

• Which have the best growth prospects?

• Where is the highest profitability and loyalty?

• Which are most attractive?

• Where is awareness high, or where could it be high?

• Which are most favorably inclined to work with us?

The key decision in Step Four is to identify the target customer groups that will

be the primary focus of the marketing-sales plans. Choose large, profitable,

growing and well-defined targets. The secondary targets include: influencers;

low volume but easy-to-access customer groups that are too small to be primary,

but nevertheless can contribute to the financial outcomes of the firm; and other

attractive targets that didn’t make the priority list for primary targets.

The marketing objectives identify what needs to be accomplished, that is,

ends that need to be achieved within each target market to achieve the sales

objectives and the strategic goals of the organization. Defining marketing

objectives are where most marketing plans fall apart. The marketing objectives

must be:

• Specific

• Measurable

• Have a defined time for completion

• Achievable

• Focus on achieving a specific target market behavior such as awareness,

consideration or selection

• Typically require multiple actions to be achieved

• Relevant – they collectively insure you achieve your sales objectives

Examples of marketing objectives would be:

• Secure two parking deck jobs with leading design-build teams

• Increase wall panel sales 25% to general contractors

Pamphlet #5 Page 205


• Achieve a 90% repeat purchasing with top tier contractors this year

• Drop the block business

• Be positioned to offer steel and precast frames to the top-tier contractors by

Quarter 3

• Secure $2M in orders in Quarter 4

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

referring to the plan strategies which will enable the organization to execute its

competitive and growth strategies. There are two types of plan strategies: the

communications positioning strategy and marketing strategies.

The communications positioning strategy summarizes what you will

communicate about your product and business relative to competitive offering. It

is the “umbrella” or basis of all of your communications. It defines, confirms and

reaffirms the most important reason for the product’s existence and why it should

be purchased. It must be consistent with the strategic positioning of the

organization. Communications positioning differs from strategic positioning in

that the former speaks to a very strong emotional appeal of working with the

company, while the strategic positioning speaks more to "objective and rationale"

basis of superior value.

There are a number of different approaches to communications positioning, each

centered on one theme. Consider a precast bridge company that wants to

compete on speed:

• Focus on a product difference. Steel bridges takes five times longer than

precast bridges. Can you afford the difference?

• Focus on the key attribute or benefit. You get to drive faster and get home to

your kids earlier.

• Focus on problems with the category to show that you’re different, e.g., if

building material subs only create headaches for you, you’re talking to the

wrong sub.

• Focus on the competitor. Steel can save you money, but only on the bid. We

save you time. That’s real money.

• Associate with something that the target market already likes. Taxpayers

love parks, city services and grade schools. With precast bridge expanders,

you too can be loved by taxpayers.

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

funds available from the Feds for bridges. Too bad you lack the staff to go

after this goldmine. With the precast industry’s help, you too can get bridges

designed and erected fast.

Which communications positioning do you choose? Select the one that:

• Is most meaningful

• Is feasible.

• Creates the greatest differentiation versus the competition

• Is completely consistent with the strategic positioning

Pamphlet #5 Page 206


• Creates an umbrella that will be enduring over time

You may also want to actually test your communications positioning with several

groups of customers from each target market group. Since there is considerable

overlap in different communication tools, it is critical that the chosen

communications positioning be consistent across all target markets.

Marketing strategies explain how you will achieve a specific marketing

objective. They are descriptive, and neither quantifiable nor measurable. Areas

to consider include:

• Build market or steel share strategies

• Location-specific strategies

• Seasonality strategies

• Competitive strategies

• Product strategies

• Pricing strategies

• Selling strategies, e.g., bridge strategies, price justification and target

customer profile

• Promotion strategies

• Advertising strategies

• Merchandising strategies

• Publicity strategies

Communications programs help you achieve your marketing objectives. The

communication goals are therefore sub-objectives of marketing objectives.

Goals are developed by first asking, "What does the marketing plan hope to

accomplish in terms of sales, awareness, image, education, leads and new

accounts, etc.?" From this, you then establish what you have to accomplish in

terms of your communication pieces. Communication objectives can be broad,

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

Class A sales leads during fiscal year ’01).

Always keep in mind that marketing communications is an arm of marketing and

its primary purpose is to help you achieve your marketing objectives. Don’t begin

by saying, "I need a brochure." Rather begin by analyzing your marketing

objectives and strategies and asking, "What objectives can communications

potentially help you achieve?" (See Chart Thirteen: The

Marketing/Communications Link) for an example of how communications can

help achieve marketing objectives and strategies.)

Note that in looking at the target markets, communication tools will focus on

both broad audiences as well as narrow audiences. Advertising is often times

focused on members of a target market as well as others, whereas a direct mail

program would be directed to a very specific group of people within a target

market. Also keep in mind that your employees and members of your community

are important target audiences as well. Pizza Hut and British Air campaigns are

Pamphlet #5 Page 207


great examples of using their advertising to communicate points of

differentiation that their employees can learn about and be proud of.

Once you understand how communications can be used, you then create

communications objectives which are really sub-objectives of your marketing

objectives. (See Chart Fourteen: Communications Objectives). There are a

number of potential communication tools you can use to achieve your

communication objectives. They include: general advertising; direct mail; sales

brochures and sales aids, product displays, Website, publicity news releases,

promotions, summaries, newsletters, executive correspondence, etc. Each tool

serves a specific role in terms of helping you achieve your communications

objectives. (See Chart Fifteen: Communications Tools).

The keys to successful communications include:

• Ensure your communications program contributes to the attainment of your

marketing goals and is always consistent with your strategic positioning.

• Create a written plan, with specified objectives, strategies, tactics, timetable,

budget, measures.

• Develop an integrated campaign in which communications elements reinforce

one another -- not independent ads and sales sheets that work alone.

• Maintain consistency in your message and its creative execution across the

marketplace and over time.

• Promise only what you can deliver; and substantiate your claims.

• Convey your company’s points of distinction and value in terms that are

meaningful to each customer segment.

• Evaluate alternative creative executions relative to the communications

strategy; don’t focus on graphic design or clever creative work at the expense

of strategy. Test concepts with target customers.

• Communicate your strategic positioning, communications positioning and

program plans to employees.

Also recognize that communication tools aren’t the only tactical tools. Other

marketing tools include: promotions, new products and service introductions,

new target market groups, joint ventures, pricing strategies, etc.

Sales Plan

The sales plan takes the overall marketing plan and prioritizes specific customers

into A, B and C accounts. A are the most important accounts and will receive the

most time from the sales representatives. Individual sales representatives then

develop account strategies for A, and possibly B accounts to win orders.

The sales plan also breaks overall sales and margin goals down into the goals for

specific sales representatives or regions of the country. The sales plan also

identifies the key objectives of the sales force required to achieve the sales-

Pamphlet #5 Page 208


marketing plan objectives. In essence, the sales plan is the functional plan for

sales that underlies achievement of the marketing-sales plan of the organization.

What must we change in our operations to support the salesmarketing

plan and achieve process goals?

The Operational Plan

The operational plan 0utlines what operations (engineering, finance,

manufacturing and erection) must accomplish in the next two years. The

operational plan objectives must be specific, measurable statements of outcomes

that are desired in the organization. For each objective, it’s critical to identify:

• Why this objective is important

• Past barriers to accomplishment

• Root causes of why problems exist or the opportunity exists

• Strategies that will be used to address the root causes

• Action plans

• Budget

• Timetables

Examples of operational plan objectives include:

• Create a more uniform wall panel surface and architectural panel surface

• Build a strategic partnership with a steel fabricator.

• Reduce design approval process cycle time by three weeks

Like marketing and sales objectives, operational objectives must also be:

• Specific

• Measurable

• Have a defined time for completion

• Achievable

• Typically require multiple actions to be achieved

• Relevant – they collectively insure you achieve your sales objectives

The process improvement and process redesign goals are translated into

operational plan objectives to insure that the work of operations includes not just

producing products and services that are sold, but creating changes in how

products and services are produced so as to better achieve customer and financial

expectations. The operational plan should also address activities related to

managing the core competencies that underlie the strategic positioning. The keys

to managing a company’s core competency are to:

• Insure everyone in the organization knows what it is and how their part of the

organization contributes to it

• Establish plans to acquire competencies needed for the future

• Strengthen them

Pamphlet #5 Page 209


• Deploy them into new markets, which is the best way to leverage your

resources and dramatically increase your return on investment in core

competencies (new market development steps would likely be addressed in

the marketing-sales plan)

• Protect and defend them

Financial Plan

Most of you are in organizations that have an annual or two-year financial plan.

When leadership oversees the process of "aligning" the organization to its

strategies, the financial plan becomes the tool for testing whether resources are

being effectively deployed to execute strategy. Individual departments are asked

to create budgets consistent with achieving the objectives of the marketing,

operations and sales plans. If the resources required do not yield the desired

profitability, it’s back to the drawing board to find ways to execute strategy and

achieve financial targets. Sometimes execution of strategy must slow down; other

times groups become more creative in developing execution approaches.

The financial planning process also insures that all departments understand the

overall objectives of the organization (defined through the marketing plan and

the operational plan), and are budgeting accordingly. The process of linking

strategy to financial plans does not create a more hectic budget process. If

anything, it helps the process -- as there is less bickering across departments on

what is and is not a priority.

What Partners Do We Need?

A critical decision is which activities should your organization do themselves

versus partner with others to do? A “not invented here” syndrome can paralyze a

company. But the opposite side—relying too much on others—can strip a

company of core competencies and competitive advantage.

Through strategic alliances, organizations can "marry" their expertise, core

competencies, products, and services to create incremental value that is greater

than either can provide independently, and greater than the value offered by their

joint competition. This allows both organizations to achieve significant

competitive differentiation, which is particularly important in mature,

commodity-like markets such as the PC-PS industry. (See Sidebar D: The

Benefits of Strategic Alliances.)

Business experts define strategic alliances in a variety of ways. Perhaps the most

pertinent definition is that offered by author Jordan D. Lewis, who defines a

strategic alliance as "a relationship between firms in which they cooperate to

produce more value (higher benefits or a lower cost) than is possible in a

(traditional) market transaction." 1 Several important concepts are inherent in

this definition:

Pamphlet #5 Page 210


Collaboration

Crucial to a strategic alliance is the notion of collaboration. Partners must

collaborate to create new value for their customers. The extent of collaboration

may be broad and all-inclusive, or it may pertain only to certain aspects of the

business. An alliance may form, for example, around certain types of products,

such as stadiums or parking garages, or around certain delivery methods, such as

design-build. If the alliance is limited in some manner, the partners continue to

act independently in other areas of their businesses.

Collaboration may also occur at a variety of levels. It may take the form of a

consortia, such as PC-21, in which the companies pool resources to achieve a

common goal. It may take the form of a joint venture, in which the firms pool

different competencies and learn from each other in a shared-ownership model;

in this case, the rest of the organization remains independent. Or, it may form as

a value-chain partnership, a strategic alliance between companies that are

connected on the value chain.

Regardless of the scope or level, an effective collaborative relationship

includes:

• A commitment to mutual relationships and goals

• A jointly developed structure and shared responsibility

• Mutual authority and accountability for success

• Sharing of resources, risks and rewards

Change

By definition, a strategic alliance requires that both partners change in order to

jointly enhance overall value for the customer. If only your company, for

example, changes in order to secure work, but your client does not alter its

organization or work processes, you have not formed a strategic alliance. Rather,

in this case, you are winning business by being customer-driven. [Your customer

may perceive you as a "partner"-- perhaps even repay your efforts by allowing you

to see the last bid or selecting you on the basis of "fair" pricing -- but in reality

you have not formed a strategic alliance.]

"This difference is where most initiatives to form supply alliances bog down.

Overlooking the needs for substantial changes in management and organization

styles, and for broad and deep inter-firm links, many companies (seeking to

partner with their suppliers) assume the process is a mechanical one: Just reduce

the supply base, establish a supplier rating system, mandate cross-functional

teams, and everything is set to go. This assumption is wrong. Only a consistent,

long-term commitment from top management to wide-ranging transformation

leads to the best results." - J. Lewis

Pamphlet #5 Page 211


Structure

Strategic alliances can be structured in a number of ways, ranging from

"gentlemen's agreements" to detailed legal contracts. Informal cooperation,

formal contracts, and equity alliances such as joint ventures and minority

investments are common examples. These may involve just two companies, or

multiple firms in a "network alliance."

The structure of the strategic alliance should be subservient to the partnership

objectives, as well as to the nature of the relationships. This is true for the

management, policy-setting and governance structure, as well.

Strategic Alliance Opportunities

Within the PC-PS industry, you may wish to consider strategic alliances with

other precasters, your suppliers, other subcontractors, and various customers,

including contractors, design-build firms, owners and developers. Because firms

must retain their independence even when pursuing interdependent strategic

alliances, organizations will rarely limit themselves to one partner. This suggests

that your precast firm can enter into multiple strategic alliances, yet continue to

bid for work from other customers.

Strategic alliances do require, however, that the set of changes you make to

enhance value with one organization is not broadly and equally shared with that

organization's competitors. If you jointly developed an information network with

one client, for example, you would not share it with that customer's competitors.

Just as you can build alliances with your customers, your suppliers can enter into

strategic alliances with your firm to increase the combined value you offer to your

clients and the building owner. The alliance between High Concrete Structures

and MasterBuilders, a collaboration of technological development and marketing,

is an excellent example of this.

Alliances improve the competitiveness of both partners through their many

benefits. Alliances also offer a means of overcoming many of the disadvantages

typically associated with traditional transactions -- the guarded, often

antagonistic relationships in which little information is shared and there is little

opportunity to enhance value.

In effective strategic alliances, the linkages between companies are broad, deep

and unique. The greatest value from cooperation comes from integrating each

firm's separate processes into seamless operations. Instead of lowest price from

the supplier, for example, the emphasis is on lowest total cost. Rather than

seeking the fastest separate response times, the goal is shortest combined cycle

time. As a result, the most productive customer-supplier interfaces require

multi-functional teams which must be involved in depth. To create the most

value, a supplier must adapt its organization for each customer's interface,

reflecting the need for resources, structures and practices that are unique for

each situation.

Pamphlet #5 Page 212


Rather than contracts, effective alliances are based on strong commitments.

Many alliances function without any contracts at all. They are sustained by a

mutual need, a common objective seen as important enough to dominate any

issue, a willingness to share the benefits and a trusting relationship. To an

important extent, alliances are between people. When adjustments must be

made, only people who trust and understand each other can make them in a way

that maintains commitments. Only people who share a vision and the

enthusiasm to make it a reality will invest the efforts needed for an alliance to

succeed.

Both organizations must trust one another, and maintain ongoing efforts to

develop relationships at multiple levels. Open sharing of information allows each

partner to identify collaborative opportunities to increase the value they bring to

the marketplace. The need for trust requires that you select a partner that will be

committed to the relationship and compatible with your organization.

Both partners must maintain a long-term outlook which encourages each to

engage in relationship building and information sharing; this will promote

identification of emerging opportunities that increase value. Finally, both must

appropriately manage the risks that are associated with dissolution of the

strategic alliance. (See Sidebar E: Benefits and Key Success Factors of Strategic

Alliances).

How Will We Measure Success? The Balanced Score Card

Measuring the results of your organization on finances alone is fraught with

problems. Saavy organizations increasingly use a tool called a Balanced Score

Card to measure whether or not strategy is being executed and, if so, is it creating

desired results. (See Kaplan references for more information on the Balanced

Score Card.)

The objectives of the Balanced Score Card include:

• Provide a set of performance measures which capture the intent of the

business strategy and help drive it forward

• Expand management’s focus to include all of those capabilities required to

achieve the strategy

• Direct the focus of the entire organization toward those performance

measures critical to long-term success

• Create a dynamic performance measurement system which adapts to the

changing needs of the business

• Provide a basis for setting long-term performance objectives which drive

performance improvements

The keys to creating a Balanced Score Card include:

Pamphlet #5 Page 213


• Establish the critical success factors: core competencies, accomplishments,

management decisions and organizational characteristics that are critical to

executing strategy and achieving the vision. These summarize what needs to

happen for the organization to succeed.

• With this, you can then identify Balanced Scorecard measures, i.e., units of

information (financial or non-financial) that provide meaningful feedback to

strategy execution and, with this, success towards achievement of the critical

success factors.

Balanced Score Card measures are usually developed for four categories:

• Financial

• Customer

• Operations

• Innovation

You can, however, develop other categories that reflect your overall areas of

emphasis in building a winning company. Within each category, you then select

leading (i.e., early measures) and lagging (i.e., late measures) of outcomes. For

example, awareness levels may be a leading indicator of sales, with win rate the

lagging indicator. Balanced Score Card measures are established at the company

level. Then, each team or functional group level creates measures that stem from

the company measures, but better reflect what the smaller group can directly

influence. E.g., suppose one of the organizational measurements was win rate.

The sales department measures related to this measure could be:

• Consideration rate

• # hours in front of existing customers

What must the leadership team accomplish working as a team to

enhance the capacity of the organization to succeed?

Pamphlet Two focuses on the role of the senior leadership team and Pamphlet Six

on developing strategic leadership skills. Reading about leadership is useful.

Becoming a differentiated supplier requires you to translate awareness about

leadership’s role and a desire to improve leadership skills into a plan to improve

leadership skills throughout the company, starting with the senior team.

Otherwise, dreams exist, but there is no change in reality. Slowly but surely,

ambitions start to shrink and rose-colored glasses are used to convince yourself

that today’s reality is really not that bad. (See Sidebar F: Most of us choose to

ignore the crossroads we face, choosing slow death over deep personal change.)

The leadership team plan outlines the work activities of the leadership team (as a

team, not as individual managers of different parts of the organization) over the

coming year. Like other key teams, there should be objectives and action steps

and milestones. The work of leadership development and personal change is a

Pamphlet #5 Page 214


critical part of this plan. (See Pamphlet Six.) Key decisions the leadership team

must make over the coming year and any work in anticipation of these decisions

should also be outlined. Examples of leadership team objectives include:

• Revamp the performance evaluation system, shifting to 360 degree feedback

systems

• Design the balanced score card measures, consistent with our strategies

• Create more trust and collaboration within our group

The leadership team plan should also identify how the leadership team will

measure their success as a team. Examples of measures include:

• Scores on leadership assessment tools (See Pamphlet Six)

• Completion of key objectives

• Survey of employees assessing their view of our performance as a team (E.g.,

are we doing the right things and demonstrating strong leadership practices

in how we work with others?)

• Each individual makes progress on his personal development objectives

Many senior leadership teams also create plans for the broader leadership group

that includes all the managers of the company. Broadening the scope of the

team’s activities insures that tomorrow’s senior leaders are being developed

today.

Summary

Many companies have great planning systems, but they are focused on financial

outcomes alone. Others have great ideas about how to be different than the

competition, but their ideas never get translated into actions. Year-by-year they

are doing the same old things. Both companies fail their people and their

customers. Companies need to get different and get better. Companies

competing as commodities need new strategies. Existing market leaders need

enhanced points of differentiation. Both must develop even better execution

skills to create the organization’s desired future. Even the lowest cost provider in

a commodity market must be attuned to changes as companies with different

business models can disrupt a market and threaten the lowest provider’s

position.

Act Three of the change process is where the rubber hits the road. Implementation

of new competitive strategies or enhancing execution of an existing

competitive strategy creates superior value for customers and therefore market

victories. Implementation is enhanced by balanced score card measures and

annual marketing, sales, operational, financial, partnering, and leadership team

plans that translate strategy into desired near-term outcomes. This focuses all

the efforts and initiatives of the organization on a shared direction.

In a very real sense, implementation is the art of introducing and managing

change. Management tools, such as budgeting, measurements and rewards,

Pamphlet #5 Page 215


individual job objectives, timetables and evaluation of results are all valuable in

this work. Chart Sixteen provides a framework for how these tools fit together. A

critical point of alignment for companies in business-to-business markets is

oftentimes creating a marketing department.

The planning systems outlined in this chapter serve to align the work of the

organization with its strategies to actually change (versus plan to change) the

organization. But they serve other roles as well. This framework places

leadership in the role of creating processes to align activities, thereby pulling

them out of the work of daily operations. This opens the space for others to do

the daily work, thereby enabling all employees to develop and use their inherent

gifts. Use of this framework also creates a feeling of community—we are all in

this together, each with distinct and important roles. Aligned planning is a key

tool for building collaboration and tackling the "system" causes of distrust and

weakened relationships across parts of the organization. With all these

advantages, what are you waiting for?

Questions to Ask Going Forward

• Is our competitive strategy known and understood across the organization?

• Do we understand which processes are or will be at the heart of or

marketplace and financial success?

• Do individuals, departments and process teams know how they contribute to

our points of differentiation and core competencies?

• Do we have the right skills? Are we creating, preserving and enhancing our

core competencies?

• Are we structured effectively to execute our strategies?

• In our estimation, can one person serve as both the marketing and sales

professional, i.e., can a marketing professional cover sales and vice versa?

• What is not getting done in our organization when Sales is responsible for

both the sales and marketing roles?

• Does our company have a market understanding process in place that is as

strong or stronger than its financial/operational information process?

• Are our decisions and actions integrated around a well conceived, long-term

competitive strategy? Who in our organization is helping us define the

strategy and insure it “works” in the marketplace?

• Are our measures consistent with our strategies? Do we have both leading

and lagging indicators of success in strategy execution?

• Are our planning systems focusing everyone in the same direction? Is it the

right direction?

• Are we deploying process improvement resources on the right processes?

• Are we "fixing" processes when we should be redesigning them from scratch?

How should we change our "budget" process to better support our desire to be

strategic leaders and to insure we are competing as a differentiated supplier

rather than a commodity supplier?

Pamphlet #5 Page 216


Sidebar A: Systems Thinking

A systems perspective comes from looking at your organization from the

“balcony.” Systems thinkers look beyond what is immediately apparent, seeking

the root cause of visible problems. They also look for changes that will support

multiple, versus a singular, opportunity. Systems thinkers are in the habit of

viewing their organization in terms of interdependencies, interactions, sequences

and processes that underlie the results of the organization. System thinkers do

not see results being achieved through independent events and a linear chain of

occurrences.

A systems view leads us to understand a number of things:

• You cannot evaluate a system without knowing its purpose. Varying purposes

create chronically dysfunctional systems. This is why competitive strategy

becomes so important for an organization as well as vision, purpose and

guiding principles. It insures that individuals are all aiming in the same

direction. Effective alignment, as executed through sales, marketing,

financial, operational and leadership plans, insures that individuals are going

in the same direction as well.

• When an organization fails, the system is at fault. When people fail, the

system is most often at fault. Always blaming people will not improve

organizational results.

• Errors can stay in the system a long time if the root cause is not treated.

• It’s more expensive to treat problems downstream of where they occur as

opposed to eliminating the problems from the start.

• Anyone in the organization that inherits problems from another part of the

organization begins to build up a certain level of defensiveness. "Rules" get

created that slowly erode collaboration -- and even cooperation -- between the

different parts of the organization.

Rummler and Brakke, two noted operational improvement specialists, say it all

when they comment, "An organization behaves as a system whether it is managed

as a system or not."

Sidebar B: Variation

Process improvement uses a set of statistical tools that allow you to measure

variation. Whatever variation there is must be differentiated between what is

called "common" or "systemic" variation and special cause variation. The former

is recurring variation that reflects an ongoing, underlying problem that you can

anticipate will occur. For example, delivery of product beyond the promised date

is often times due to systemic variation. It may be due to poor systems, weak

communications or staffing that is too lean. Nevertheless, there are sometimes

special or unique causes of variation. These are highly unusual, i.e., once in a

blue moon events that cause an outcome which is significantly outside normal

variation. These are the kinds of events that do not appear with a recurring

Pamphlet #5 Page 217


pattern, i.e., an unexpected snow storm in Atlanta will reduce daily output of a

precast work team. One way to differentiate special versus common cause is to

ask if this is a unique problem or an example of a larger class of problems and

second ask, "If I replace the workers, would I still have this problem?"

The following table gives an example of special versus common cause drivers of

delays in architect’s approvals:

Special Causes Common Causes

• Architect’s wife dies in car accident

• Drawings delivered to wrong office,

where they sat for days

• Architect does not appreciate need

for speedy approval

• Architect is understaffed

• Architect is unfamiliar with precast

and therefore needs to find outside

help prior to approval

• Other parts of design that affect us

are not yet complete

• Approvals are used to help finalize

the drawings

The key to minimizing adverse outcomes from special variation is to ensure you

have a process in place to get timely data that reveals special causes quickly so

that you can react to them. In a hospital setting, for example, highly difficult

cases are flagged early on so that a case manager can help oversee the care of a

patient. The goal is to contain damage with an immediate remedy. It is

important to understand what’s different this time, i.e., what’s causing the special

cause outcome, as this special cause outcome could in fact become a common

cause at some point. If you think it might become a common cause at some

point, then you must develop a longer-term remedy.

How do you deal with special causes?

• Get timely data so that special causes are revealed quickly

• Contain damage with an immediate remedy

• Search for the cause -- what was different? Could it be a common cause at

some point?

• If so, develop a longer-term remedy

The focus of continuous process improvement, and process redesign for that

matter, is to adjust common causes of adverse outcomes. Here you look at all the

data, not a single data point, and you stratify the data into high occurrence causes

and low occurrence causes and you focus initially on improving or limiting the

high occurrence causes. You may ultimately treat different classes of projects

differently if you see correlations between sources of problems and types of

projects.

Pamphlet #5 Page 218


Trying to understand the causes forces you to play detective in terms of figuring

out:

• Who is involved?

• What and where is the cause of the problem?

• When does the problem occur?

• What types of projects does it occur on?

You use these types of questions to identify how you will "study" or measure how

a process is working. Collecting data helps you focus on the true location of the

problem. Once you identify the location of the problem, you then hypothesize

why the problem arises and determine potential solutions to this. (See Steps

Three and Four in Appendix One.)

Sidebar C: Structure Affects, but Does Not alone Determine, Behavior

Breaking the Functional Mindset in Process Organizations,” Harvard Business

Review, Sept./Oct. 1996.

• Authors compare companies in the same industry – electronics

• Reorganization of operations along process lines made no difference to cycle

time performance unless it was accompanied by new management approaches

that create a culture of collaboration by focusing on:

• Teamwork skills

• A collective sense of responsibility to process outcomes

• Key “collaboration” tools used to make process reorganizations succeed

included:

• Structure jobs with overlapping responsibilities

• Base rewards on group performance

• Layout work area so people can see each other’s work

• Change procedures to enable collaboration

• Using the above tool(s) increased cycle time 7.5 times in process-complete

organizations

• Functional organizations were 3.5 times faster than process-complete

organizations not using collaboration tools

Sidebar D: Benefits of Strategic Alliances

• Enhance product value

~ Superior timing

~ Create new or improved performances

~ Lower costs and risks

~ Provide more value in use

~ Offer a stronger product line

~ Compatibility that increases product appeal

~ Enhance product images

Pamphlet #5 Page 219


• Improve market access

~ Produce better advertising

~ Open new marketing channels

~ Gain better channel control

~ Improve supply links

~ Lower input costs

• Strengthen operations

~ Create new and improved processes

~ Use facilities more productively

~ Cooperate to develop operating standards

• Add technological strengths

~ Add technology to your skill base

~ Increase R&D creativity

~ Build needed scale

~ Ease major technology transitions

~ Use market pull to encourage others' development

• Enhance strategic growth

~ Overcome market entry barriers

~ Pave your growth path

~ Join to explore new opportunities

• Organizational reinforcement

~ Learn from others

~ Focus with a partial spin-off

• Build financial strength

~ Produce more income

~ Reduce administrative costs

~ Reduce investment exposure

• Look for wider synergies that will generate yet more advantages

Source: Partnerships for Profit, J. Lewis

Sidebar E: Key Success Factors of Strategic

• Do the "basics" right

~ Select a good partner

~ Define specific objectives

~ Establish a structure that supports the strategy

• Build trust and ongoing relationships

• Maintain independence in the face of inter-dependency

• Manage risks

• Maintain a long-term outlook

Pamphlet #5 Page 220


Sidebar F: Most of us choose to ignore the crossroads we face,

choosing slow death over deep personal change

The Tyranny of the In-Basket

“When an executive admits that a change is needed but opts out not to make it,

the executive is making a conscious choice. The water is slowly heating up and

the executive knows that the leap to safety is possible, the strategic thought being,

‘If I can hang on just a couple more years the problem will belong to someone

else.’ However, when he leaps to safety, the rest of the work force is left with the

problem. In this scenario, self-interest triumphs over collective responsibility.

The selection of slow death has some moral overtones. It involves the violation of

trust and responsibility, often leading to guilt. Because of the moral implications,

the issue becomes undiscussable in the organization. Organizational members

fake ignorance of the situation, while fully understanding that the organization is

in serious trouble. The impact of this problem is enormous.

“People slowly lose hope and begin to feel trapped by their circumstances. They

often cope by withdrawing or conversely by staying busy with insignificant issues.

Others who know how to lead and who understand deep change and the

enormous investment of energy and resources that are necessary cannot bring

themselves to initiate the process because they lack energy. There is no energy

left. They are victims of burnout. So they continue to go through the motions

finding it difficult to discover interest and relevance in their work.

“What they need is deep change at the personal level, a re-invention of their

professional role, a revolution in their priority list, a recognition that

maintenance is production and that their absolute ‘must” really must be

delegated to someone else. Few people are very good at re-inventing themselves.

They often choose the destructive alternative of staying very busy. It may not be

effective behavior, but has the effect of a good narcotic. It diverts attention from

the real issue and temporarily saves them from having to tackle and resolve the

actual problem.” (QuinnDeep Change)

Pamphlet #5 Page 221


Administrative Processes

Manage finances

Ensure safety and OSHA compliance

Material understanding and innovation

Supplier management

Hire, train, deploy the work force

Project

Management

New product

development and

introduction

Make the order

Ship and erect

Design

Ideas

Win the

order

Schedule

Complete

Drawings

Market to customers

and get considered

Operational Processes

Chart One:

Macro Process View of a Precast Company


• Hire, train, deploy work force

• Supplier management

• Material understanding and innovation

• Reduce waste and cost

• Firm A makes industrial wall panels. They face a

“commodity” market in which they are the highest

cost producer. As a result, they are losing

money. Their strategy is to innovate wall panels

to significantly increase their value (electrical built

in, easier installation, innovative insulation

material, time savings on window framing, etc.)

They believe they will earn a premium on this new

product that exceeds their cost of differentiation.

• Firm B competes on cost and speed of bridge

beams and building/structural components (double

T’s, etc.). They work in an area of significant

labor shortages. They are already the

fastest/lowest cost supplier. They do not want to

lose their lead, however, rising labor cost and

labor shortages threaten this.

• Your firm

• Ensure safety and OSHA compliance

• New product development and introduction

•Manage project finances and schedule

• Ship and erect the order

• Make the order

• Complete the drawings

• Schedule project, team, special forms

• Get the order

• Conceptualize the solution (value engineering)

• Market to customers

Your role is to assess process salience of

Firm A or B, C and D.

Generic Macro Processes

Chart Two: Process Salience of

Different PC-PS Companies


•Hire, train, deploy work force P I

• Supplier management B I

• Material understanding and innovation I B

• Reduce waste and cost P I

•Ensure safety and OSHA compliance M P

• New product development and introduction I P

•Manage project finances and schedule P P

• Ship and erect the order on time and budget P I

• Make the order on time and budget P I

• Complete the drawings accurately/on time I I

• Schedule project, team, special forms B I

• Get the order B P

• Conceptualize the solution (value engineering) I I

FIRM A FIRM B Your FIRM

Macro Processes

I=identity; P=priority; M=mandated; B=background

• Market to customers B I

Chart Two: Process Salience of

Different PC-PS Companies


Time

Redesign

Continuous Improvement

Redesign

Cumulative

Improvement

Chart Three

Organizations Combine Process

Redesigning and Improvement Efforts


* Changed market conditions, new competitive strategy or severe customer/cost/competitor

problems exist.

Process Redesign:

Fundamental Change

Process Improvement:

Incremental Change

No

Situation demands

we do things very

differently *

No

It’s way too

complex and not

understood

Yes

Yes

No

Standardize

Yes

Yes

Yes

No

7 Step Process

Improvement

Yes

Yes

Yes

Yes

No

PDCA

Yes

Yes

Yes

Yes

Yes

Yes

Fix the obvious

(do-check)

Does situation

suggest only need

is getting better?

Does a straight

forward and

identifiable

process exist?

Does

everyone

use the

same

process?

Is the

solution to

the

problem

known?

Is implementation

of the

solution

understood

and low risk?

Are you

sure about

your yes’s?

Chart Four:

Which Improvement Approach to Use?


Continuous Process

Improvement Activities

5-10%

Establish Continue Process

Improvement Priorities

20%

Define critical processes in

context of competitive strategy

Create an “idealized” overall

organizational design

Align macro process goals and

measurements of success to your

competitive strategy and

organizational goals

Oversee major breakthrough

process redesign

80%

High

100%

Chart Five:

Senior Management’s Role in Process Edge


In hierarchical cultures, the "referee" decides which solution is "best". His success in "eliminating" the burden depends directly on the

amount of information and insight he has.

Erection Crew Will not work outside current

geographies

Spend long time away from

home

Manufacturing Tell Sales they will no longer

accept difficult-standard shapes

for architectural precast panels

at market prices; a 55%

premium is expected

Work overtime, incur scraprework

costs

Engineering Send an extraordinary number

of pieces to production with a

very short lead time

Re-engineer how design

process works so that

manufacturing has smoother,

steadier work flow

Marketing, Sales and

Production work with

Engineering to create even

more design process changes

that help smooth production

Engineering, Construction and

Manufacturing work together

to create a cast-in-place system

for all odd shapes--this is now a

Construction Division service

offering

Engineering, Finance and

Erection identify strategic

partner for U.S. erection that

trains under home-based

company teams

Sales Sales promises dates that the

plant is unlikely to meet

Sales spends extra time and

effort convincing owner the

wait is worthwhile

Sales, Marketing, Engineering

and Production work together

to create "quick" building

system that offers faster lead

times

Competition:

Shift the Burden

Cooperation and

Coordination:

Absorb or Split or Minimize

the Burden

Collaboration:

Eliminate the Burden

Chart Six: Examples of Collaboration vs. the

Alternatives


Tactical

PCI

Company

Strategic Activities/Decisions

• Product line offering

• Served customer market segments

• Strategic positioning, i.e., the company’s value

proposition to its customers

• Pricing strategies

• Geographic scope

• Business development priorities and growth

strategy

• Distribution channel selection

• Operational priorities and critical processes

Market

Strategic

Tactical Activities/Decisions

• New product introduction

• Product modification and obsolescence

• Sales support material and other promotional

and communication efforts

• Target customers and communication

positioning

• Forecasting

• Training, with respect to product/customer

(not selling skills)

• Key customer interfaces

• Pricing policies

Chart Seven: Tactical vs. Strategic

Marketing


~ Where company competes, i.e., business scope ~ Participate in broad-based decision-making

(geographies, products/services, market segments) regarding where and how company competes

~ How company will win market share, i.e., strategic ~ Identify specific products and market segments

positioning within overall scope

~ Operational strategy (structure, core competencies, ~ Select positioning for specific products

etc.) consistent with company-wide positioning

~ ID of critical processes ~ Create and communicate market understanding

~ Allocation of resources broadly and facilitate use in decision-making

~ Purpose, guiding principles and vision ~ Represent the voice of the customer in strategic

decisions

~ Identify marketing resources required for

achieving near-term sales/profit objectives

and long-term vision

Company Strategic Decisions Marketing Department's Role

Chart Eight: The Marketing Department's Role


New Product and New Market Development ~ Identify ideas for new products/new markets

and develop proposals/plans

~ Specification

~ Trials

~ Introduction plan

~ Participation in reviews, project team

meetings, etc.

Get the Order ~ Marketing activities to ensure sales forecast

is achieved (e.g., advertising, promotion, etc.)

and sales representatives are more efficient and

effective

~ Pricing policies

~ Selected field support

Manufacture-Ship the Order ~ Identify customer issues/needs

~ Forecasting for production planning

~ Help prioritize cost reduction activities and

ensure customer value not compromised

~ Analyze geographical options for expanding

productive capacity (e.g., competitor risks,

acquisition targets, etc.)

~ Help specify supplier requirements that affect customer

satisfaction

~ Post-project customer satisfaction assessment

Key Company Processes Marketing Department's Role

The Marketing Department's Role (continued)


Chart Nine: The Differing

Perspectives of Sales and Marketing

Sales Makes Matches

Marketing Identifies and

Attracts Potential Matches

and Helps Insure Future

Matches

Thinks about

Customers as:

• Potential orders • A marketplace

Groups Customers by: • Probability (buy this year) • Needs

• Probability (we will win)

Where He/She Works: • In the field with customers • In company

who will buy and with • In field (universities,

influencers

regulatory boards,

competitors, substitutes,

compliments and lost,

current, long-term potential

customers

Relationship to

Customer and

Company:

• Company to customer • Customer to company

Listens for: • Current customer needs and • Market changes

how I tailor what our • Future products and

company offers to meet services of company

these needs

• Business context of

customer/non-customer

• Barriers to sales

effectiveness today

Key Things to • Time • Resources

Prioritize:

• Segments

• Products and services

• Source of advantage

• Competitors

• Geographies

Measures of Personal • Sales

• ROI/EVA

Success:

• Repeat business

• Market share of opinion

• Margin

leaders' business

• Market share

• Sustainability of success

• Market share and growth


S

A

L

E

S

~ Specific customer

understanding

~ Identifying &

prioritizing

targeted accounts

~ Securing

contracts/sales

~ Exhibits

~ Marketingsales

plan

~ Market

understanding

~ Presentation

~ Building

relationships

~ Negotiating

~ Closing

~ Product,

technology

~ Selling

~ Empathy

~ Flexibility

~ Listening

~ Works independently

~ Sees “people”

side of

everything

M

A

R

K

E

T

I

N

G

Ownership

~ Market

understanding

process

~ Product line

specification

~ Pricing policies

~ Product intro &

obsolescence

~ Clinical trials

~ Marketing-sales

plan

~ Positioning

Participation

~ Operational

plan

~ Cost

reduction

projects

~ Exhibits

~ Selected

accounts

Skills

~ Analytical

~ Conceptual

~ Project

management

~ Strategic

planning

~ Product

promotion

~ Systems

thinking

Knowledge

~ Finance

~ Advertising

~ New product

assessment &

development

~ Market trends

~ Forecasting

~ Market research

~ General

management

Traits

~ Teamwork

~ Listening

~ Patient for

long-term vs.

short-term

results

~ Can cut to the

core

~ Enthusiastic

about product

area

Chart 10: Duties and Qualifications


• Initiate an “executive

level” relationship with

target accounts

• Predispose target accounts

to receiving a sales call

• Generate sales leads from

target accounts

• Create a positive image of

your company in the

minds of target customers

• Increase wall

panel sales

25% in FY 97

• Steal market share

from competitors by

differentiating our

company on the basis

of speed

• Communicate your point

of distinction to target

competitive accounts

Marketing Goal

Marketing Strategy

How Communications

May Help

Chart 13: The Marketing/Communications Link


• Generate sales leads

from target accounts

• Arm the sales force with

sales support materials

• Product positioning

strategies

• Communicate your

company’s point of

distinction (i.e.

incremental value

associated with product

from your company)

• Market building

strategies

• Communicate the

introductory promotion

• Selling strategies

• Stimulate interest in new

product

• Launch new

product XYZ

in Q2 FY97

• Introductory

promotions

• Announce new product

availability

Marketing Goal

Marketing Strategy

How Communications

May Help

Chart 13: The Marketing/Communications Link


* Ideally, this should be quantified through market research.

• Initiate an “executive

level” relationship

with target accounts

• Predispose target

accounts to receiving a

sales call

• Gain executive level and

sales level entry into 15

target competitive accounts

by beginning of Q3

• Generate sales leads

from target accounts

• Generate 100 sales leads

from target competitive

accounts by end Q2

• Create a positive

image of your

company in the minds

of target customers

• Redefine the company’s

image in the minds of target

customers*

• Increase wall

panel sales

25% in FY 97

• Communicate your

point of distinction to

target competitive

accounts

• Increase awareness of the

company’s point of

distinction within target

accounts*

Marketing Goal

How Communications

May Help

Communications

Objectives

Chart 14: Communications Objectives


* Ideally, this should be quantified through market research.

• Generate sales leads

from target accounts

• Generate 180 sales leads

from target accounts by Q3

• Arm the sales force

with sales support

materials

• Create sales support

materials by end Q1

• Communicate your

company’s point of

distinction

• Create awareness of the

company’s point of

distinction*

• Communicate the

introductory promotion

• Generate interest in new

product, including 250

inquiries regarding the

promotion

• Stimulate interest in

new product

• Launch new

product XYZ

in Q2 FY 97

• Announce new product

availability

• Create awareness of new

product availability among

target customers*

Marketing Goal

How Communications

May Help

Communications

Objectives

Chart 14: Communications Objectives


Seminars, Newsletters, AV, ~ Educate; inform; initiate relationships

Executive Correspondence

Promotion ~ Provide incremental value to product

~ Create incentive

Publicity/News Releases ~ Reinforce advertising messages

~ Increase awareness

Sales Brochures/Sales Aids ~ Reinforce advertising messages

AV, Product Displays, Website ~ Sell the product/service concept

Direct Mail ~ Reinforce advertising messages

~ Generate sales leads

~ Pre-dispose customer to sales call

Journal Advertising ~ Convey strategic positioning

~ Communicate points of distinction

~ Increase awareness

~ Build image

Tools

Communications Objectives

Chart 15: Communications Tools


• Gain executive level

and sales level entry

into 15 target

competitive accounts

by beginning of Q3

• Executive correspondence

• Newsletter

• Generate 100 sales

leads from target

competitive accounts

by end Q2

• Tradeshows

• Direct mail

• Advertising

• Web site

• Redefine the

company’s image in

the minds of target

customers

• Journal advertising

• Publicity

• Increase wall

panel sales

25% in FY 97

• Increase awareness of

the company’s point of

distinction within

target accounts

• Journal advertising

• Publicity/news releases

Marketing Goal

Communications

Objectives

Potential Tools

Chart 15: Communications Tools


• Generate 180 sales

leads from target

accounts by Q3

• Direct mail

• Advertising

• Publicity

• Create sales support

materials by end Q1

• Company positioning

brochure

• Product literature

• Sales aids

• Promotion fliers

• Increase wall

panel sales

25% in FY 97

• Create awareness of

new product

availability among

target customers

• Generate interest in

new product

• Create awareness of

the company’s point of

distinction

• Journal advertising

• Tradeshows

• Publicity-feature articles,

news releases

• Web site

Marketing Goal

Communications

Objectives

Potential Tools

Chart 15: Communications Tools


Is it working?

Evaluation

Execution

Company-Wide Budgets & Timetables

What’s our itinerary for

getting there?

Organizational Structure

Marketing & Sales Plans

Operational & Partnership Plans

Leadership Team Plan

Finance Plan

Business Assessment

Problems &

Opportunities

Tactical

Where do we want to end up?

Vision and Strategic Goals

What direction do we follow

to get there?

Competitive Strategy Decisions

Where are we?

Strategic Problems & Opportunities

Strategic

Where are we?

Strategic Assessment

Chart Sixteen:

Overview of the Alignment Process


Plantes Company July 1997 PCI:I

• Overview of process flow diagram (SIPOC) to ID major players and interconnections

• Data describing the needs of the customer(s)

• Baseline measure(s)

• Mission statement or objective for the team doing the process improvement

Tools Used and Likely Outputs from Step 1:

• What is the problem we're experiencing, what is the gap?

• Which processes are involved in this problem?

• Which of these processes do we think is directly related to the problem? Why?

• What are the key steps in the process (what is it that we do)?

• Why do we perform the process (what are we trying to accomplish)?

• Who is involved in these processes?

• What are the results of the process (what are the outputs)?

• Who are the key customers of the process and what are their needs (who uses the results, and what

qualities to they require in those results)?

• What are the boundaries within which the project team will work to improve the process?

• What baseline measure(s) can we use to help us determine how well we are currently meeting

customer needs, and then how much we have improved the process (how will we know if we've

made any improvement)?

• Who will sponsor this team's work?

Questions Answered:

Step 1 Goal: To define the project’s purpose and scope

Appendix One

Joiner 7-Step Method, Step 1: Define the Project


Plantes Company July 1997 PCI:I

Reduce time from contract approval to

approved shop floor drawings.

Purpose of Project:

6

Process Aim:

Why do we do

what we do: to

make sure

components we

deliver are

erectable and fit

the overall

building solution

GC

3

Who supplies

what we need to

do what we do?

2

What do we

require to do

what we do?

1

What do we do?

4

What are the

results of

what we do?

5

Who uses

what we do?

Structural

Drawings

Owner

Int

Prepare

No

Architects’

Drawings

Yes

Architect

Source

Check

Submit

Approved

Approved

Drawings

Contract

Ex

Prepare

No

Engineer of Record

Plant

Suppliers Inputs Process Steps Outcomes Customers

GOAL: Define the project’s purpose and scope (SIPOC)

Joiner 7-Step Method

Step 1: Define the Project


Plantes Company July 1997 PCI:I

• Detailed flowchart of the process to understand steps in the process

• Run chart/control chart of the baseline measure(s)

• Pareto diagrams, histograms, scatter plots, and others showing stratified symptoms

Tools Used and Likely Outputs from Step 2:

How does the process work currently? What is the history?

• What results does the process currently produce? What kind of variation do we see in the results?

• Are there ways we could simplify the process without sacrificing the desired quality of the results?

• What strategy for reducing variation makes sense?

• Can we draw a picture of the process?

• What type(s) of symptoms of the problem occur?

• Where do the symptoms of the problem occur?

• When do the symptoms of the problem occur?

• Who is involved when the symptoms occur (suppliers, customers and employees)

Questions Answered:

Step 2 Goal: To further focus the improvement effort by gathering data on

the current situation

Joiner 7-Step Method

Step 2: Assess the Current Situation


Plantes Company July 1997 PCI:I

Measurement may lead you to redefine the problem!

Resubmittals

Wall

Panel

Structural

AP

Resubmittal

N

Y

Y

% N

N

#

N Y

Y

Frequency Frequency

Days

1 2 3 4 5 6

No resubmittal

Project #

Time Until Approved

Shop Floor Drawings in Days

Days

STEP 2A: Investigate the problem by measuring outcomes

GOAL: To further focus the improvement effort by gathering data on the

current situation

Joiner 7-Step Method

Step 2: Assess the Current Situation


Plantes Company July 1997 PCI:I

What

~ Complex projects

What

~ Fast track projects

Where

~ Between project architect and her boss

Where

~ Openings

~ Structural pieces, not architectural precast

When

~ Large # people in approval process

~ Mechanical sub is not yet selected

~ GC or architect do not yet need our drawings

When

~ Incomplete architect drawings

~ Bed is changed

Who

~ Mechanical sub

~ GC not familiar with precast

~ Our designers, not our engineers

Who

~ John and Jim, not Frank or Jeff

~ Architect, not designers

Source of Delay Hypotheses Source of Resubmittal Hypotheses

STEP 2B: Play detective --Hypothesize who was involved? Where was cause of

delay? When does delay occur? What type of project?

GOAL: To further focus the improvement effort by gathering data on the

current situation

Joiner 7-Step Method

Step 2: Assess the Current Situation


Plantes Company July 1997 PCI:I

Where?

Who? What Type of Project?

Non-AP AP Other Openings

Non-AP

1

2 3 4

DB

CM

%

Resubmitted

GC

Resubmittals

GOAL: To further focus the improvement effort by gatheringses to identify what

to measure, then measure to identify true location of problem

Joiner 7-Step Method

Step 2: Assess the Current Situation


Plantes Company July 1997 PCI:I

STEP 2D: Hypothesize why the problem arises. You may need to do further

detective work and measurement.

GOAL: To further focus the improvement effort by gathering data on the current

situation.

Joiner 7-Step Method

Step 2: Assess the Current Situation


Plantes Company July 1997 PCI:I

• Cause and effect or tree diagram mapping out possible causes

• A list of theories about likely causes

• Data to verify the theories

Tools Used and Likely Outputs from Step 3:

• What could possibly cause the symptoms we're seeing? What are possible deeper causes?

• Of the possible causes, which seem to be the likely causes? How do we know?

Questions Answered:

Step 3 Goal: To identify and verify deep causes with data; to pave the way for

effective solutions

Joiner 7-Step Method

Step 3: Cause Analysis


Plantes Company July 1997 PCI:I

Deep Causes ! ! !

Secretary did not

provide as a priority

Did not receive

notice

Has not used PC

in past

We did not alert

Does not understand

PC role in bldg. process

and no process ???

Mechanical sub

not selected

Mechanical sub

is late

Not informed

Does not understand

building process

Lack mechanicals

Not aware of

due date

Not aware of

effect of delay

Has more

pressing problems

Lacks information

to approve

Architects feels

no urgency

-- Do for each “why” you choose to address

GOAL: To identify and verify deep causes with data so as to pave the way for

effective solutions

Joiner 7-Step Method

Step 3: Cause Analysis


Plantes Company July 1997 PCI:I

• Matrix of possible solutions and criteria for choosing solution(s)

• Plan for small scale tests of solution(s)

• Results from small scale test(s)

• Plan and execution of full scale implementation of best solution

Tools Used and Likely Outputs from Step 4:

• What possible solutions could address the deep cause of our problem?

• What criteria are useful for comparing the solutions?

• Which is the best solutions?

How can we test our solution(s) on a small scale?

• What results do we get from our small scale test?

Questions Answered:

Step 4 Goal: To develop and try out solutions that address deep causes of the

problem

Joiner 7-Step Method

Step 4: Solutions


Plantes Company July 1997 PCI:I

Solution

4

Solution

3

Solution

2

Solution

1

Criteria

1

Criteria

2

Criteria

3

Criteria

4

Criteria

5

GOAL: To develop and try out solutions that address deep causes of the problem.

Joiner 7-Step Method

Step 4: Solutions


Plantes Company July 1997 PCI:I

• Run chart/control chart of baseline measure(s) to demonstrate improvement

• Stratified data showing symptom reduction

Tools Used and Likely Outputs from Step 5:

• What results does the process now produce?

• Do the results demonstrate improvement? Enough improvement?

• What did we learn from implementation that will help us to plan for process improvement

elsewhere?

Questions Answered:

Step 5 Goal: To evaluate both the solution and the plans used to implement

the solution

Joiner 7-Step Method

Step 5: Results


Plantes Company July 1997 PCI:I

• New flowchart of the process reflecting the improvements made

• Plans for maintaining the gains

• Plans for educating/training relevant individuals

Tools Used and Likely Outputs from Step 6:

How do we convey the necessary information to the necessary individuals in the organization to

assure that everyone who needs to knows about the improvement?

• What is in place to prevent backsliding?

• What, if anything, does the greater organization need to know about the improvements?

Questions Answered:

Step 6 Goal: To maintain the gains by standardizing work methods or products

Joiner 7-Step Method

Step 6: Standardization


Plantes Company July 1997 PCI:I

• documentation of lessons learned throughout this cycle of improvement

• recommendations for the next cycle of improvement

• data to support recommendations

Tools Used and Likely Outputs from Step 7:

• What remaining improvement needs are there for this process?

• What is the next, most important opportunity for improvement?

• What did we learn from this project about this process, and process improvement in general?

Questions Answered:

Step 7 Goal: To anticipate future improvements and to preserve lessons from

this effort

Joiner 7-Step Method

Step 7: Future Plans


C. What baseline measure will you use to assess performance of the shop

floor drawing process along the dimension of the problem you’ve

elected to focus on?

B. What specific problem do you want to work on (e.g., accuracy, speed,

cost to complete, inefficient design for manufacturability)?

A. What are the problems you experience in the shop floor drawings

process?

I. Project Definition

Appendix 2: Process Improvement Exercise


– If speed is the problem, where are all the places delay occurs

– If accuracy is the problem, what type of mistakes emerge and

where might they occur?

– What are the types of customers or buildings or products where

problems are most likely to emerge?

– When do the problems occur?

– Who in your company is involved (but not to blame for)in the

mistakes?

B. Hypothesize a pareto chart for your company for one of the ways you

stratified the appearance of the problem (e.g., create a chart for when,

where, who or what or some other stratification). Use the stratification

approach you feel would most likely reveal insight into the

appearance of the problem if you collected real life data. (See

example on the next page.)

A. Identify the different ways the specific problem appears by using

different stratifications (when, what, where and who) for the

appearance of the problem. E.g.,

II. Current Situation: Detective Work!

Process Improvement Exercise (continued)


Architect

approves

our

submitted

final

drawing

We

receive

prints

from

architect

PC-PC

engineer

turnaround

PC-PS

manufacturer

approval

Other

Stratification Choice:

Source of delay

stratified by where in

the process the delay

appears

10

14

18

32

101

Frequency

EXAMPLE

Problem: Speed of shop floor drawing completion.

Process Improvement Exercise (continued)


B. For each top level cause, ask why? why? why? to build the tree

diagram to lower levels.

C. Of the possible causes, which do you feel are the likely key causes?

D. Back in the office, how could you identify what is the root cause of

the problem you are focusing on? (See example on the next page.)

A. Create a tree diagram to brainstorm the root cause(s) of the highest

frequency factor identified (hypothesized) in Step II.

III. Cause Analysis: Brainstorming the Why

Process Improvement Exercise (continued)


We lack

standard methods

Our process changes

regularly

No one is

responsible

Architects do not

have set assistants

We failed to alert

firm as to due date

Secretary failed to

tell architect

Etc.

PC-PS drawing

not made from

final prints

Architects

are overworked

Architect was unaware

of our due date

Etc.

Architects’ delay

EXAMPLE

Process Improvement Exercise (continued)


• As you proceed through the steps, the exercise will become more and more hypothetical.

Minimize your time spent on IV and V.

NOTE:

A. Assume you’ve implemented the solution. How will you decide it’s an improvement?

V. Evaluation of Solution

A. Hypothesize the most significant driver (i.e., the root cause) of the high frequency

occurrence of the problem you elected to focus on.

B. What are the different ways you would eliminate this?

C. What criteria will you use to choose one solution over the other?

IV. Solution

Process Improvement Exercise (continued)


A) Identify ways you could measure the

performance outcomes of your company’s

“Get the Order” process

B) Create the “as is” process map for your

organization’s “Get the Order” process

(Don’t get hung up here – move on if you

get stuck)

C) Theorize (where, how, when, to whom)

problems appear and identify problems you

feel are most important to solve (consider

customer satisfaction, cost and success and

ramification on execution speed, cost,

quality if order is won)

D) Brainstorm potential causes of problems

and hypothesize which are most significant

E) Identify at least two new ways to design the

“get the order” process that eliminate the

most important problems

F) How will you evaluate one solution vs.

another?

10) Where do you prioritize customers?

9) Does/should process differ for existing vs. new

customers?

8) How does completed work relate to getting the

next order from a customer?

7) Are there any subs that are at the owner’s table

early? How did they do that?

6) How is scheduling connected to the “get the

order process

5) Who does the estimating and what +/-’s result

from this

4) Types of customers

3) When is material decision made?

2) How do customers hear about you?

1) ID of target customer

Steps Factors to Consider

Appendix Three:

Company Process Redesign Exercise #1


Job Description Exercise (continued)

~ Articulate reasons why your company/material should be used

~ Keep your company's name/capabilities in front of:

- existing customers

- new customers

~ Find out why you lost business

~ ID market changes and assess their implications--risks and

opportunities

~ Determine your strengths and weaknesses vs. competition

(PC and other materials) and the associated risks and opportunities

~ Systematic pricing comparisons vs. competition in order to ensure

you are not leaving money on the table

~ Tools to make it easier for sales to secure new orders or do

"negotiated" work

~ Sales force training on products and markets

~ New product identification

~ New market identification

~ ID changes needed in existing products

Responsibility? Well? Regularly?

Who Holds Is it Done (Yes or No)

Appendix 4: Job Description Exercise

Who's Doing Marketing's Job in Your Company


Responsibility? Well? Regularly?

~ Attendance at construction industry seminars/meetings to

learn more about market trends

~ Analysis of customer/product/market profitability and plans to

improve profitability

~ Developing and executing plans to enter new products/markets

~ Development and execution of educational programs and services

for designers

~ Represent "voice of customer" in key decisions about resource

prioritizations and organizational/product changes

~ Forecasting market size so you can decide on a fair "stretch"

goal for sales

~ Evaluating your market share: what is it and why is it what it is

~ Measuring customer satisfaction and assessing changes

~ Identifying unmet customer needs (existing, new and lost customers)

~ Understanding customers' strategic issues for next 3-5 years

(existing, new and lost customers)

Who Holds Is it Done (Yes or No)

Who's Doing Marketing's Job in Your Company


• Which items did I prioritize to

handle today?

• What did I hand off to other people?

• What will I do with what remains

this week? this month?

• What insights have I gained?

It’s the task we all dread -- sorting through our in-basket after being away

from the office for a full week. But it has to be done, and, following your

relaxing vacation, you’re up to the challenge. As the sales director of a

PC-PS company with three sales reps reporting to you, you’re under a lot

of pressure from your general manager to make sure the numbers come in

this year. But you’ll be well compensated for your efforts, through both

salary and generous sales commissions.

Your Assignment: Working individually, sort through your

in-basket and decide what to do. (Assume that no

regional association exists to help you.)

Then record your answers to the

following questions:

Appendix Five: The In-Basket Exercise


17

Note from Boss:

Revised FY 96 and

FY 97 sales forecast

due Friday

18

Need to complete

first draft of revised

sales territories by

end of the month

19

Industry trade magazine

needs final artwork

for your advertisement

by end of day

20

Customer is refusing to

make progress payments

on completed product

inventoried at the plant

25

Reps report companies not

in your geography are now

bidding on precast jobs

you’re going after

13

Feature article trade

magazine, “The Use of

Design-Build Concept to

Increase by 50% in

Next Five Years”

14

Need mailing list

for company program

and plant tour for

architects by Friday

15

Identify two sales

people to attend PCI

sales training

school

16

Memo from a sales

rep: The job we didn’t

bid that was going

masonry has just gone

tilt-up

24

Three reps report work looks

great for ‘97 but ‘98

looks bleak from what they

can ascertain

9

We lost the frame part

of another order to a

steel frame company

10

A new contractor is in

town. Sounds like the name

you told me who does

tilt-up.

11

ABC project bid date

has been moved

forward and is due

one week earlier

12

3-Day National Strategic

Marketing Seminar for

general contractors; $1500.

Deadline today. Owners,

contractors, D/B on agenda.

23

Report in newspaper:

residential construction

continues to grow. Labor

shortages are driving prices

dangerously high.

5

Missed delivery date

on Johnson project

due to lack of approved

shop drawings

6

New sales rep starts

next week; need to

finalize his orientation

7

Perceived partnership

XYZ Contractor is degrading

to a low-bid situation

due to new project manager

8

Another architect has

questions on how to

use panels for

school building

22

Note from your friend, the

company’s engineering VP:

“I keep getting job offers

from DB firms. Is it time

to leave?”

1

New Dodge Data reports

arrived showing regional

market trends

2

New national fire

codes being revised

3

Smith project manager is

rejecting erected product

for quality issues

4

A new company in town

is planning to build its

headquarters and wants

to know your capabilities

21

Old customer calls to complain

About how long lead times

Are for precast this year.

Your In-Basket Messages


What did I learn?

FOLLOW UP LATER THIS

WEEK

FOLLOW UP LATER THIS MONTH

Item To

DO TODAY

HAND OFF TO

In-Basket Worksheet


Appendix Six:

Marketing Manager Job Description

TITLE: MARKETING MANAGER

REPORTS TO: VICE CHAIRMAN

GEOGRAPHIC SCOPE: U.S. MARKET

Position Overview

The marketing department is the "voice of the customer" in an

organization. Absent a strong marketing function, the organization

becomes operationally and financially driven (at the expense of long-term

market position) or sales driven. Effective marketing is critical in any

market in which the buyer, the buying criteria or the competition is

changing.

Within Company XYZ, the Marketing Manager will serve or participate in

a number of crucial roles:

1) Participate in broad-based decision-making regarding where to compete

(target customers, markets, products, technologies, services) and how to

compete (the company's strategic positioning, differentiation and valueadded).

2) Develop strategies to promote the sales of current products in both

existing and new markets.

3) Develop project proposals and business plans for new products, and

participate on new product project teams, serving as the marketing

representative and the voice of the customer.

4) Select a specific positioning strategy for each of the company's products,

consistent with the company's overall strategic positioning.

5) Serve as the spokesperson of the customer within the company,

ensuring that customer needs and views are conveyed and taken into

account as part of all strategic decisions.

6) Identify the marketing resources required to achieve near-term sales

and profit objectives, as well as the long term vision.

7) Oversee and/or conduct marketing activities to enhance the efforts of

the sales force, helping to ensure that the sales forecast is achieved. This

includes the provision of sales support materials and select field support,

for example, visits to key accounts.

8) Conduct forecasting the production planning.

Plantes Company Page 270


Marketing Manager Job Description (continued)

Specific Duties of the Marketing Manager Position

The Marketing Manager for Company XYZ will be responsible for all

tactical marketing activities and be a key participant in strategic

marketing decisions. In the short-term, emphasis will be on tactical

activities to swiftly gear up efforts to promote existing products within

current markets. Also crucial will be near-term market research and

other activities to gather the market information essential to determining

where and how to compete.

Over time, emphasis will include the strategic aspects of marketing,

including identification of new markets and new product development.

Tactical Marketing Functions / Activities

The Marketing Manager will direct and implement the following tactical

marketing functions, at times directing the activities of external resources

such as communications consultants or agencies, market research firms,

etc.

• Conduct market research.

• Define target customers and communications positioning platform.

• Develop and implement marketing programs that support sales

representatives' selling efforts, enabling them to be more effective on

the job.

~ sales support materials, including sales aids and promotional

literature (company positioning and product/service)

~ advertising programs to generate awareness, pique interest

andconvey value-added benefits and company differentiation

~ direct mail campaigns to generate sales leads

~ trade shows, exhibits and seminars

~ new product/service introductions

• Identify ways to increase sales of current products

~ new applications within existing customer base

~ new types of customers

• Define product obsolescence and modification strategies.

• Implement new product introductions.

Plantes Company Page 271


Marketing Manager Job Description (continued)

Strategic Marketing Functions /Activities

The Marketing Manager will participate in the following strategic

marketing functions, bringing to the decision-making process the crucial

market information and customer voice essential for successful strategic

decisions.

• Gather market information to assist the company's efforts to:

~ define the product line

~ define served market segments

~ determine the company's strategic and product positioning

~ establish pricing policies

~ determine the company's target geographic scope

~ select distribution channels

~ define operational priorities

• Play a proactive role in developing and identifying new products

and markets.

The Marketing Manager will not:

• Develop the communications pieces.

Rather, the marketing person sets the objectives and is the "client" of the

communications expert

• Develop the overall geographic strategy.

Rather, the marketing person will help gather information to assist in

decision about geographic scope.

• Define the long-term strategy of the company in terms of products,

technologies and way our company is differentiated from the

competition; the marketing person.

Rather the marketing person will help gather information to assist our

decision making in this area.

• Manage new product development teams.

Rather the marketing person will serve as the "voice of the customer' on

these teams, defining needed specifications. He/she will also help us

create priorities within potential development projects.

• Focus primarily on bridge beams and utility concrete products.

Rather the marketing person will focus on the precast-prestressed building

business.

Plantes Company Page 272


Marketing Manager Job Description (continued)

Position Objectives

Short-Term

To identify opportunities to better capitalize on Company XYZ's existing

products and current markets. Further, to develop a written marketing

plan to accomplish this. This plan will include specific objectives,

strategies, tactics and action plans, as well as both a timetable and budget.

Long-Term

To identify markets for existing products, and profitable new products.

Further, to develop a written business plan to accomplish this. This plan

will include specific objectives, strategies, tactics and action plans, as well

as both a timetable and budget.

Position Interfaces

The Marketing Manager will interface with essentially all functional areas

with the company, always serving as the voice of the customer. In

particular, this position will interface with Sales, Engineering, Customer

Service, Production and Project/Product Managers. Additionally, the

Marketing Manager will be the primary liaison to key opinion leaders and

companies with complementary products lines, serving as the

headquarters representative.

Instructions for the Recruiter

1. Job description attached

2. Type of person we are looking for:

~ Strong willed ~ Persistent

~ Educator, persuasive ~ Team player

~ Enthusiastic ~ Good listener

~ Highly driven

~ Makes things happen, is accountable, takes ownership

~ Aggressive women tend to do well in our company (we have

examples we can share)

~ Good people skills (will have to deal with multiple business units

with strong managers)

Plantes Company Page 273


Marketing Manager Job Description (continued)

3. Skills/knowledge

~ Business analysis

~ Sales force marketing support

~ Competitor analysis

~ New product development

~ Market research-secondary and primary

~ Research capabilities

~ Written, presentation and one-on-one communication skills

3. Background (in order of priority)

~ Experience in turning commodity products into value-added

solutions

~ Business-to-business marketing in industries in which there are

multiple types of customers affecting purchase decision, thus

making the selling and marketing process more complex, e.g.,

° purchasing agent and engineer

° designers and owners (e.g., an office partitions company)

° distributor and distributor's customer

° subcomponent manufacturer and final product manufacturer

~ Evidence of interest in/experience with technical areas

~ Construction experience not required and may be a negative

4. Work history must demonstrate:

~ Development of marketing strategies and execution of effective

marketing programs; has written a marketing plan

~ Research: definition of objectives; how to do it; how to use findings

~ Ability to prioritize

Other Notes

• This position is a research/tactical marketing position. It would be

desirable to move this person into longer-term strategic marketing

analyses and decision-making. A person with the skills to grow into

more of a strategic thinker would be welcomed. But the position

responsibilities initially will be tactical/research focused. Good tactical

marketing skills are essential. We are not looking for a salessupport/research-support

person. We need someone who can identify

and execute marketing strategies to expand sales of our current

products/technologies in existing markets and identify new, related

products to serve existing markets.

Plantes Company Page 274

Hooray! Your file is uploaded and ready to be published.

Saved successfully !

Ooh no, something went wrong !