Lessons from Procter & Gamble – The Next Step

What is your next step to drive profitability as you start 2015?  What worked last year and what will you continue?  What markets and customers will you pursue and what needs to be put in place to be successful?

 

 

What is your next step for the right plan that all in your company know and can follow?

As we have written in earlier articles, Procter & Gamble devotes considerable time and effort to creating the specific strategic plan for their overall business and under that plan for each of their business units and brands.

 

During these early weeks of 2015, P&G has a clear next step.  It is an in-depth review of their plans to insure that they still are on target and will achieve the required results.  This is very important work since it will direct corporate effort and resources.  Once the plan is vetted, they will move quickly to put it into action.  It is understood across the company, the roles and responsibilities of all.  The focus is clear and the next steps known.

 

How will they accomplish this work?  It involves top management and then as it cascades down, directors and managers.  It is facilitated by professionals with the experience to guide the required data collection and the subsequent reviews.  These professionals are required so that the executives can concentrate on developing the right plans.  Most companies do not have these skills on staff but hire experienced consultants to assist the company.  It provides a very positive ROI on the relatively small amount of funding required.

 

What are you doing?  If you need help in either creating the right plan to start or refining an existing plan and committing it to written form so that all can follow, please contact us.  We have a wealth of experience both at Procter & Gamble as well as with companies in a broad range of industries.

 

Thanks 

John Maver
Founder and Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

What’s the issue? Business planning or just doing?

The recession continues and more and more businesses are failing - failing and being forced out of business, failing enough to have significant losses despite large layoffs and a desperate focus on cost cutting or failing through having little idea of how to turn the business around and keep a meaningful cash flow.

What’s the issue? Is it too much planning or too much action?

Are they failing because they have spent so much time creating the mission, vision, objective, goals and measurements for their strategic business plan that the opportunities have passed them by? Or are they locked in to outdated plans, programs and spending? Or is it more a case of having leadership that is unable to cope with the realities of today’s dynamic marketplace?

On the other hand, is it because they do not have a basic business plan that they are following and are just winging it? In this case, everyone is going full speed, but not in the same direction, no matter what you may think and certainly not toward a specific goal.

Or worse still, is it because they are faced with analysis paralysis and actually doing nothing? This cause a company to seize up and the organization grinds to a halt.

Actually, the failing may be the result of some or all of these elements. Business plans are a MUST for every company. However, they need to be actionable. And they need to be acted upon, adjusted and acted upon again. They shouldn’t be binder thick. In fact, we recommend that they be kept to one or two pages. Otherwise, they are not read, used properly or followed.

What are you doing in your company? If your company is struggling, is it due to over-planning for the business with concentration on the theoretical plan and not taking the appropriate action? Or is it all action and no known overall plan. Clearly, it can’t be an either/or if you are going to survive in today’s economy. It is a reasoned combination of both planning and action.

Do you have a written business plan? Is it simple and understandable to all? Has it been communicated to others?

Are they taking action on it? Are you adapting the plan based on the ever new market feedback? Do your customers know what you are trying to do and the benefit in it for them? Are they supporting your direction?

What are the results and what needs to be changed?

So many companies are focused on cost cutting that they are not generating revenue that is desperately required for cash flow and support and also undermining all future efforts. Now, and when the economy turns, it is going to be the company with the successful plans put into action and market honed that will prosper.

Managing in today’s turbulent times isn’t easy so don’t think you can do this on your own. Get some help from experts who have been there before and can help lead you through the problems.

This can be a time for you and your company to actually prosper but you have to do it smartly.

Thanks.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Integrity

 

 

We have written several times about core values of an organization.  Our experience at Procter & Gamble made us believers and we became accustomed to dealing with colleagues with integrity.  Those that didn’t got weeded out quite quickly as they came into the global headquarters.

Here is how integrity was explained at P&G. 

Integrity - We always try to do the right thing.  We are honest and straight-forward with each other.  We operate within the letter and spirit of the law.  We uphold the values and principles of P&G in every action and decision.  We are data-based and intellectually honest in advocating proposals, including recognizing risks.

As we formed Moon & Stars Consulting LLC, all with ex Procter people, we naturally assumed that integrity would be a normal part of our lives together.  Building on it we expected to develop a strong business that would apply that same integrity to our clients for their success too.

One can’t assume integrity in some others no matter what the pedigree.  You have to take the practical steps to confirm it.  You will find that the conclusions are not surprising, but so easy to overlook as you look for the best in people.

1 “Trust everyone but cut the cards.”  This is an old poker message and it means make sure that you keep a personal eye on the finances with regular review.  It isn’t enough to have a summary supplied by one person unchecked.  Go to the source and verify.

2 Never let one person handle the finances alone.  Make certain that there are at least two signatures on the bank accounts.

3 Work together and build together.  If you don’t give lack of integrity a chance to get started you can avoid much trouble later. 

4 If you find lack of integrity, rid the company of it immediately.  It is like a cancer and will spread.

These are simple actions and can avoid a great deal of pain to a company.  Don’t be misled by appearances.

If you need some help on this issue with your company, contact us.  We would be happy to help.

Thanks,

 John

John Maver
Founder and Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Valuing Experience and Expertise

What is the greatest challenge facing executives today?  It isn’t opportunity or drive or brain power.  Today’s executives are faced with more challenges, but less time than ever before.  Most are relatively new to their jobs as the average length of tenure for a CEO is just over two years.  They are being asked to handle issues like the experienced executives of old who have a great deal of expertise. 

      

 

Despite being very smart with boundless energy, the new management can be babes in the senior management ranks.

 

It would seem to make sense that the senior executives and particularly the CEO gets some help, at least in the short term, to do, teach and mentor.  The impact on not just productivity but on the business acceleration can be significant.  This doesn’t have to be a full time hire. Getting an experienced consultant with expertise can be the most cost effective.  Use them to provide the short term boost and then handle the business as before, but with the benefit of the new training.

 

At Procter & Gamble throughout our years, there were many senior managers available to help with a specific need.  They had faced the challenges before and had both the expertise and expertise to guide us.  As a result we didn’t have the struggles learn and understand how to best capitalize on the opportunities.  At Moon & Stars Consulting, we do the same for our clients.

 

Take advantage of the “grey hairs” and benefit from their expertise and expertise.

 

Thanks.

 

John

John Maver
Founder and Managing Director of Moon & Stars Consulting
President Maver Management Group
(925) 648-7561
Maver Management

Lessons from P&G Values in Partnerships

Partnerships or limited companies like Moon & Stars Consulting Group, a company of P&G Alumni, can find itself with significant problems brought on by one or more of the principals who are not in alignment with the values of the partnership. This article is not to dwell on the problems caused, but rather to identify some issues from the Procter & Gamble Values and Principles that are worth highlighting and may be of use to you in your “partnership” endeavors. Here are the P&G elements, many of which you may have adopted for your company: Integrity • We always try to do the right thing. • We are honest and straightforward with each other. • We operate within the letter and spirit of the law. • We uphold the values and principles of the company in every action and decision. • We are data-based and intellectually honest in advocating proposals, including recognizing risks. Trust • We respect our colleagues, customers and consumers, and treat them as we want to be treated. • We have confidence in each other’s capabilities and intentions. • We believe that people work best when there is a foundation of trust. Respect for All Individuals • We believe that all individuals can and want to contribute to their fullest potential. • We value differences. • We inspire and enable people to achieve high expectations, standards and challenging goals. Mutual Interdependency • We work together with confidence and trust across business units, functions, categories and geographies. • We take pride in results from reapplying others’ ideas. • We build superior relationships with all the parties who contribute to fulfilling our Corporate Purpose, including our customers and suppliers. In a partnership that is just starting out and not a large company that has been in existence for several hundred years, it is easy to take these traits for granted. We assume that all members will operate in the same manner in which we personally operate. This is particularly true when we think we know their background. But do not be fooled. Commonality is not always the case, no matter how rosy the initial period might be. In some cases there is not commonality of values and selfish issues can tend to creep in and can become more and more prevalent with some individuals. They start to operate independently and not in the best interests of the company and your stake in it. This has to be weeded out quickly. It is difficult to test for values since most people talk a good game. So stay alert and watch what is happening. Hopefully, you will be able to see the problems before they become crippling and find a means to exit the damaging individual. One suggestion, beyond taking the extra time at the start of the relationship, is to continually make all of the financial transactions totally transparent. Let us know if you have problems or questions. We can help. Thanks, John Maver President Maver Management Group (925) 648-7561 Moon & Stars Consulting Group Founder and Managing Director Maver Management

Lessons from Procter & Gamble – Creating The Vision

Do you have 20/20 vision? How clearly can you see? How clearly can you see into the future?

Does your company have 2020 vision? That is to say, does your company have a clear view of what it wants to accomplish by 2020? You may see this as just a clever play on words. However, it is much more than this. Without a clear vision that is known and understood throughout the company, chances are that your company will not maximize its success. It is like trying to operate without your own 20/20 vision. Things just get blurry. Since it is all about sight and that is best from high up, not surprisingly, it is commonly the responsibility of the CEO to articulate and lead activities toward achievement of the vision.

A well-conceived vision consists of two major components: core ideology and envisioned future. Core ideology defines what the company stands for and why it exists. It is made up of core values and core purpose. We recently wrote about core values, both in general and in specifics, for Procter & Gamble. We also wrote about core purpose, “why do we exist”, the second part of the core ideology. These two elements are unchanging and complement the envisioned future. The envisioned future is what we aspire to become, to achieve, to create.

Vision captures both of these elements and does so in terms of defining a future state. A vision is a picture of what success will be at a particular time in the future. It encompasses answers to an array of questions: What does your organization look like? How big is it? For what are you famous? Why does anyone care about what you do? How do people who work there feel about their jobs? A great vision is inspiring. It gets you and everyone in the organization excited to come to work. This is not mere wishful thinking. A vision must also be strategically sound. You have to have a reasonable shot at getting there. Vision provides guidance about what core to preserve and what future to stimulate progress toward. But vision has become one of the most overused and least understood words in the language, conjuring up different images for different people of deeply held values, outstanding achievement, exhilarating goals, motivating forces, or raisons d’etre.

Companies that enjoy enduring success have core values and a core purpose that remain fixed while their business strategies and practices adapt to a changing world. The dynamic of preserving the core while stimulating progress is the reason that companies such as Procter & Gamble, Hewlett-Packard, 3M, Johnson & Johnson, Merck, Sony, Motorola, and Nordstrom became elite institutions, able to renew themselves and achieve superior long-term performance. In Built to Last: Successful Habits of Visionary Companies, the authors found that these companies have outperformed the general stock market by a factor of 12 since 1925.

The second primary component of the vision framework is envisioned future. At Procter & Gamble in their strategic planning process, this is called the Objective. It is a qualitative statement of what the company targets to accomplish. In some ways Objective is somewhat paradoxical. On the one hand, it conveys concreteness, something visible, vivid, and real. On the other hand, it involves a future time with its dreams, hopes, and aspirations.

Procter & Gamble and other visionary companies use bold mission statements as a powerful way to stimulate progress. These serve as a unifying focal point of effort and act as a catalyst for team spirit. They have a clear finish line, so the organization can know when it has achieved the goal.

supports the envisioned future with an engaging and specific description of what it will be like to achieve the Objective. It translates the vision from words into pictures, of creating an image that people can carry around in their heads. Passion, emotion, and conviction are essential parts of the vivid description. Perhaps the most dramatic statement of a vision was President Kennedy’s announcement that the US would put a man on the moon within ten years. Not only was this a rallying cry but it also guided action and resource allocations. They made it happen!

We have found that many executives struggle with mission statements and vision statements. They overanalyze or underallocate effort to the process. These statements turn out to be an ill-defined mix of values, goals, purposes, philosophies, beliefs, aspirations, strategies and descriptions. They are usually a boring, confusing, stream of words that evoke the response “True, but who cares?” They fail to preserve the core and stimulate progress. A true vision simply provides the context for bringing this dynamic to life.

This may seem like a simple process. It isn’t. As you can see, it combines the analytical with the creative and then necessitates alignment across the organization, if it is going to be successful. We have had experience both at Procter & Gamble and with many other companies in our consulting business. We know the powerful results that can come from the investment of time and energy in creating a sound vision for the company.

How is your foresight? Does your company have 2020 Vision? Do you need help with your 2020 Vision?

Thanks

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble –Focus for Market Leadership

Getting profitable and staying profitable is what it’s all about for companies. Being the market leader, while not an easy task, is certainly one way to help make that happen. P&G has the largest lineup of leading brands in its industry, with 22 brands with over $1 billion in annual sales and another 19 brands generating about $500 million or more in annual sales. In 2000, there were 10 brands over a Billion; today, they have 22. During this period, the company’s revenue has doubled from $40 Billion to $80 Billion.

As you may have read in our last article about Core Values, Procter & Gamble is very clear on their objective to have superior products, not just in performance, but in consumer preference. They have sharpened their focus on how to deliver this. This sharpened focus has meant selling off or discontinuing a number of very successful brands, but brands that did not fit with an opportunity for global market leadership.

The company used to market a stable of brands and achieve market leadership through the combined sales. For example, when I joined P&G in the early seventies, in laundry detergents, the company marketed Tide, Cheer, Bold, Gain, Duz, Dreft, Era, Liquid Tide, Ivory Snow and the first detergent, Oxydol. There were probably several others as well that just don’t come to mind. Combined, this provided market leadership.

However, it resulted in increased costs. The brands competed against one another for sales force time, retailer promotions, shelf space, advertising, media time slots, in-store offers and most importantly, Procter & Gamble management attention. As a Brand Manager, my task was to get a larger share of company effort so that I could increase my brand’s impact with consumers. It was not uncommon for a great idea to be expended on one of the smaller brands and thus dilute its impact. The company realized that it would be far better served to focus its efforts on the lead brands and make them clear market leaders. The billion dollar brands are the result.

Today, Procter & Gamble has a very clear path for its mega brands to achieve market dominance. All of the very best people, ideas, support and processes are given to one brand and not spread across multiple brands. In fact, there has been an increasing tendency to “borrow” from one mega brand in one category to assist another in a separate category.

There are many benefits to being the market leader and we will highlight some in a separate article.

But what is the value of the Procter & Gamble experience for your business if you do not have a stable of billion dollar brands or are not the market leader?

Here are 5 tips I learned from my time at Procter building the smaller brands or opening up new categories and industries for the company.

1. Be choiceful in selecting the market / industry / geography in which you will compete. Make certain that you have an opportunity to be able to gain a leadership position in the arena that you select, perhaps not immediately, but within a reasonable time frame.

2. Focus your resources to build a solid base in one area and become successful before you move to additional areas.

3. Hire and use “A” class people. Your best investment will be in your people. Skimp in other areas if needed since the great people will be able to over compensate.

4. Take good care of your customers. You would be surprised at how many companies we see that overlook their current customers in the drive to get new ones.

5. Take advantage of consulting and contracting help to both capitalize on their expertise and keep your costs down overall. This may sound self-serving, since we are consultants, but there is no substitute for experience.

Market leadership brings with it many benefits that help companies get profitable and stay profitable. Look for our next article that highlights some of those benefits.

Thanks.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – P&G’s Core Values

We recently wrote about the importance of Core Values as an integral part of strategy for companies. A book written by ex-senior Procter & Gamble management, “When Core Values are Strategic” has just been released. Given my 23 years with the company, the values I espouse for Maver Management and for our clients are among those covered in detail in the book. We were all grounded similarly. The book tells personal stories of how the basic values of Procter & Gamble transformed leadership at Fortune 500 companies. The track record for most senior P&G executives, both with P&G or subsequently with other companies, has been outstanding.

Adherence to Core Values, such as the ones below, has been instrumental in that success. Here are the Procter & Gamble Core Values:

People - We attract and recruit the finest people in the world. We build our organization from within, promoting and rewarding people without regard to any difference unrelated to performance. We act on the conviction that the men and women of Procter & Gamble will always be our most important asset.

Leadership - We are all leaders in our area of responsibility, with a deep commitment to deliver leadership results. We have a clear vision of where we are going. We focus our goals to achieve leadership objectives and strategies.

Ownership - We accept personal accountability to meet the business needs, improve our systems, and help others improve their effectiveness. We all act like owners, treating the company's assets as our own and behaving with the company's long-term success in mind.

Integrity - We always try to do the right thing. We are honest and straight-forward with each other. We operate within the letter and spirit of the law. We uphold the values and principles of P&G in every action and decision. We are data-based and intellectually honest in advocating proposals, including recognizing risks.

Trust - We are determined to be the best at doing what matters most. We have a healthy dissatisfaction with the status quo. We have a compelling desire to improve and to win in the marketplace.

Passion for Winning - We respect our P&G colleagues, customers, and consumers and treat them as we want to be treated. We have confidence in each other's capabilities and intentions. We believe that people work best when there is a foundation of trust.

Do Procter & Gamble’s Core Values help you understand the base upon which P&G has built a multi-billion dollar global business? Interestingly, if you review the histories of the company, you will find that these Core Values, stated in some form, have been consistent throughout the 150 years that the company has existed.

Do these values trigger opportunities or ideas for you with your company? If we can help you define your Core Values and make them a sound basis for your strategic planning, contact us. We have had great success with companies from Fortune Top 10 to startups.

Thanks

John


John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Core Values and Their Strategic Nature

Core Values are often overlooked as an important, in fact vital, part of strategic planning for a company. While Core Purpose is the Mission and identifies why the company exists, Core Values fundamentally outline what the company is and how it will operate. Hence, it is a critical base upon which to build the company’s plan.

Core Values are essential and enduring tenets which prescribe the attitude and character of an organization. They are a small set of timeless, guiding principles that require no external justification, but have intrinsic value and importance to those inside the organization. Therefore, there is no universally right set of Core Values. Companies generally have only 3-5, since only a few values will be truly core.

Can you see the critical strategic importance of the Core Values stated below for these four companies? They clearly define and help shape the direction of the company. You will note that only one mentions honesty and integrity. That doesn’t mean that the others do not value it. In most cases, it is a given. Companies just cannot survive in any business without it and so it is generally not stated for inclusion. Look at the values and see the impact that they have on their organizations. I suspect that you will be nodding in agreement with most of them as you reflect on each company.

Merck
 Corporate social responsibility
 Unequivocal excellence in all aspects of the company
 Science based innovation
 Honesty and integrity
 Profit but profit from work that benefits humanity

Nordstrom
 Service to the customer above all else
 Hard work and individual productivity
 Never be satisfied
 Excellence in reputation; being part of something special

Sony
 Elevation of the Japanese culture and national status
 Being a pioneer – not following others; doing the impossible
 Encouraging individual ability and creativity

Walt Disney
 No Cynicism
 Nurturing and promulgation of wholesome American values
 Creativity dreams and imagination
 Fanatical attention to consistency and detail
 Preservation and control of the Disney magic

What are your personal Core Values? What are the Core Values for your company? How closely are they aligned? If they are not well aligned, you had better start looking for a new company because you will ultimately become very unhappy.

If we can help you with not only crystalizing the Core Values, but helping you to build the strategic plans on them, contact us.

Thanks,

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Leaders

John Smale, an ex CEO of Procter & Gamble, passed away last week. He was a remarkable leader and made some very significant contributions to P&G. He also took leadership positions from the Board at General Motors, where he turned the company around and revamped it. He was active in his community, restructuring the City of Cincinnati and then working for youth education among other activities.

During my 23 years at P&G and in the subsequent 18, there have been 8 CEO’s at the company. In addition to John Smale, the most memorable ones for me are John Pepper, Howard Morgans, Ed Harness, Ed Artzt and A.G. Lafley. They all made substantial contributions to the company. While some have written books, the important learnings from each have been captured in internal memos and have been shared broadly across the company. All are different and have varied skills, but there are some commonalities. This is not surprising, given Procter & Gamble’s policy of promotion from within and the fact that all of these men had years of training, learning from each other, as well as from many others who helped shape their careers.

They all exhibited strengths in the following:

Values
They all were committed to trying to do the right thing in all they did. Doing the right thing is much more than a cliché, since who would attempt to do the wrong thing per se. In this case, it is seeking to do what is right instead of what is most profitable or most expedient or most popular. The clearest example of this is the removal of Rely tampons from the market when there was an initial suggestion that extended use of the product might be associated with toxic shock syndrome. The company took the product off the shelves immediately until there could be absolute, conclusive proof that it had no impact. The cost was in the millions of dollars and took P&G out of the feminine protection business for several years, but it was the right thing to do and drove home that message and value to all employees.

Focus on the consumer
P&G has maintained a relentless focus on the consumer throughout its years as the global leader in Consumer Packaged Goods (CPG). A.G. Lafley wrote “Everything begins and ends with the consumer. If you focus on the consumer and what your brand is doing to serve the consumer, you will win most of the time". P&G was the first company to conduct deliberate, database driven,, consumer market research. This forward-thinking approach enables the company to improve consumer understanding, anticipate needs and respond with products that improve their everyday life. P&G also was one of the first companies to formally respond to consumers by establishing a Consumer Relations department. Several years ago, P&G realized that though it talked to a lot of people, it wasn’t really hearing them. It has overcome this barrier by taking one of the industry’s more traditional market research organizations and turning it into a consumer-understanding powerhouse and consumer-insight generator. By investing more than a billion dollars in consumer-understanding research between 2002 and 2007 and conducting research with more than 4 million consumers a year, P&G has moved away from traditional, behind-the-mirror focus groups to more immersive research techniques. This leads to richer consumer insights, which helps identify innovation opportunities that are often missed by traditional research.


Dedication to product superiority and to superior products
The CEO’s are dedicated to leading the company with a product philosophy of “We will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.” It is not enough just to have product superiority. The company must have products that are superior. Hence, the development and sale of the first shortening for baking and cooking. The first detergent. The first workable disposable diaper. The first two in one shampoo/conditioner. Despite the pressures to deliver above average quarterly earnings, the CEOs have consistently over invested in R&D, compared to most companies.

Commitment to people
The “people” philosophy of these men in simple terms is “Recruit the best. Train and develop all. Promote from within. Treat each fairly.” As a result, P&G has had some outstanding long term employees and many others have left the company to lead other significant operations. The company believes in its people, even in departure. Having been part of the first worldwide global initiative of reductions in force, I was treated extremely fairly and with great respect by my Cincinnati management. As a former CEO, Richard R. Dupree said in 1947, "If you leave us our money, our buildings, and our brands, but take away our people, the Company will fail. But if you take away our money, our buildings, and our brands, but leave us our people, we can rebuild the whole thing in a decade."

Worldwide view and globalization
P&G has long had an international business. In fact, I was part of it in the Canadian operation, several times. The company really got serious when it appointed Ed Artzt as President of P&G International and then promoted him to become CEO of the entire company. Today P&G has 24 billion dollar brands, most with a global sales base. As current CEO Bob McDonald says, “Our objective is to touch and improve lives. Why would we stop with operating in only some countries? Our business is driven by demographics and economics--you have to go where the babies are born, where the households form, where the incomes are rising--and they’re growing a lot faster outside of the U.S.” P&G has product usage with 4 Billion customers and the majority of their products are made outside of the USA. They have established a worldwide research and development network, with research hubs in the United States, Europe, Japan and Latin America.

There have been many tributes to John Smale, deservedly. John Pepper, himself a favorite CEO of the employees, said, "John brought together wisdom and courage, concern for people, and commitment to the long term in a manner I've never seen exceeded." "The man's character was defined by all the things character is defined by: his wisdom, his courage, his persistent commitment to doing what's right for the longer term -- absolutely right down the line. Never compromising.”

Procter & Gamble has had superb leaders. The impact that they have had on the company pales by the impact that they have had on the employees.

Thanks,

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – A Marketing Checklist

Procter & Gamble’s marketing plans are often quite sophisticated and extensive. They use research in almost every element of the plan to insure that they get the maximum effect from each. Then they monitor the progress, making adjustments as required. This can be expensive and very labor intensive. But, with billion dollar global brands the cost per package is quite reasonable and the incremental sales make the payout quite profitable. You may not have the billion dollar brands of the extensive research facilities. So here are the key elements that Procter & Gamble reviews and that you can do, as well. It fits with both the sale of products or services.

Plan
• There is a written plan in place and it has been communicated throughout the organization.

Positioning
• The target market has been defined and our potential clients or customers, their usage habits and practices, as well as their buying channels and patterns are known.
• The problems, issues and challenges they are facing have been identified.
• The benefit that they will obtain from the use of my product as the solution to their problem has been clearly articulated. It answers the client/customer question “what’s in it for me, the customer?”
• Some form of research has been conducted to determine if the benefit that I am suggesting is actually seen and understood as a value to my targets and has an inherent unique and meaningful competitive advantage that explains why I am different than my competition.
• The benefits I am claiming can be supported by proof in some form through testing, referrals or in market experience.
• The tone of my positioning will resonate with my target and enable them to accept my offerings in the most positive frame of mind.

Execution
• Everything about my business, including my personal presentation, marketing materials, etc. are presented in a way that truly supports all aspects of the positioning.
• Distribution channels are in place that make your product or service readily available to potential customers.
• Multiple promotional and marketing channels for delivering your message are being used to reach customers most effectively and are appropriate for that channel.
• My products or services, what I do and how I do it, are clearly presented and how they solve clients problems.

Measurement
• There is a clearly identified tracking system in place for each of the FEW key measures so that changes can be made to plans quickly to optimize their impact.
• MY BUSINESS IS RESPONDING TO THE MARKETING PLANS!

These are admittedly, simplistic measures for your plan. We would be remiss if we also did not include the need to have available the expertise required to create and operate a high powered plan. You will note that Procter & Gamble employs, trains and upgrades a very large body of expertise from junior managers through senior executives. This doesn’t mean that you have to duplicate their organization. Most companies can do this with experienced consultants, either on a project basis or retainer. That is the most cost effective.

Let us know if we can be of assistance to you.

Thanks

John


John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Downsizing, Rightsizing, RIFs

Most companies have been faced with the need to cut costs over the past several years and many people and jobs have been eliminated from the workforce. You will note that we have the highest level of unemployment as one of the impacts. The personnel reductions have come under the heading of downsizing, rightsizing or just reductions in force (RIFs). The net result in addition to lower costs is a substantial change in the way that companies have to operate.

At the same time, technology has made tremendous progress and we now have available significant capabilities that never existed before. The idea has been that companies can do much more with much less. Believe it or not, when the first computers were being introduced, there was an expectation that the work week would shrink to less than a day a week. Computers would do the rest. You know personally from your now extended work weeks that this was not the case and was, at best, a wild dream. And yet companies expected that technology could overcome the impact of the lost personnel.

Procter & Gamble is no exception. In 1993, well before this became common practice, P&G undertook a worldwide cut back in personnel under the heading of strengthening global effectiveness. SGE was designed to streamline work processes, drive out non value-added costs, eliminate duplication and speed productivity through a leaner organization. Initially, it was directed at the manufacturing operations but the idea quickly spread to the rest of the company. Up to 10,000 people/jobs were eliminated. The objective, just as it has been the objective of most companies, was same or greater productivity with less cost.

Unfortunately, that hasn’t happened. It didn’t happen at P&G and it isn’t happening with many other companies. Certainly, some aspects worked as expected. But in many cases, the people and jobs were eliminated, yet the work required remained.

This did produce a short term profit bump after the reorganization costs were passed through as a “one time hit” to earnings. However, as Stephen Covey outlined in his book the 7 Habits of Effective People, the golden goose was maimed if not killed outright. The reductions in force often targeted the higher salaried, longer term employees. Companies lost years of very valuable experience and expertise. As a result many companies faced substantial redesign, slower process, business and profit losses.

What made it worse for many companies is that the personnel reductions came on a “chain saw” basis and not a “surgical” basis. This means that cuts were made across the board. The result was reductions in one department greatly affected what was left in other departments or functions, to the detriment of the business. This has led to renewed needs for reorganizations and then further rightsizing. In fact, that is exactly what has happened at Procter. They have had several full company reorganization plans. They have offered several waves of early retirement and outplacement packages to employees around the globe.

What’s the lesson? Clearly it is taking the long view. It is an in depth understanding of what is really required to operate profitably and then providing the technology and human resources required to deliver the objectives. Short term solutions just don’t work. Second, it means focus. It means being choiceful on what activities are really required to operate profitably and to achieve the corporate goals. Other activities that are just nice to do, have to be eliminated. Finally, it is deciding on what data is required to operate. Most companies are buried under an overload of information. Layers of the organization are employed to develop the data, analyze it and interpret it and then try to find meaningful actionable conclusions. The loss of the experience and expertise caused by the cuts has led to much of this wheel spinning over-analysis.

If your company is experiencing “sludge” in your operations and slower speed to market, you might consider relooking at some of the experience that was cut out in the rightsizing. Interestingly, many companies are hiring back ex-employees as consultants at a higher cost to do the same job that they originally did.

Since we have had experience both at Procter & Gamble with SGE and similar programs at other companies, we can help you. Just contact us.

Thanks,

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Value of Branding

Procter & Gamble is one of the premier brand companies in the world. Their branding extends from their many billion dollar brands to the company itself and in many cases to its people. Being a Procter & Gamble brand assures consumers of quality, even though the company generally doesn’t market its brands under the corporate umbrella. Being the Procter & Gamble sales representative opens many doors. Investors have confidence in their investments as they buy stock in the company. Many of these investors are company employees. Having Procter & Gamble on your resume is a major positive. As you can see, the value of branding goes well beyond just the products.

How does one calculate the dollar value of a brand? There are a number of formulas and all work on the basis of capturing the extent that the company can sell its goods and services at a premium price and profit. Brand Sales = (Cost + Margin) * Volume. Your brand gets you one of two measurable outcomes: margin or volume. Comparing your margins to the competition is one way to assess the value of your brand, if you take heed of the caveat about other factors which may change margin. Comparing volume is less likely to yield a good estimate of brand value, because you can in many markets drive higher volumes with no brand value at all by charging lower prices.

For example, Coke despite its secret formula is flavored water just like RC Cola. However, Coca-Cola’s margin is 15.6%, while RC Cola - Cott’s is 5.3%. The typical company has an operating margin of 5-7%, so Coca-Cola’s margin is phenomenal. But there is more. Part of Coke’s value comes from its significantly larger gross volume sales because consumers are loyal to the Coca-Cola brand. That too generates significant value. How much? That depends on what measures you want to use but it is safe to say it is in the billions. According to Aswath Damodaran, professor of finance at New York University’s Stern School of Business, if Coca-Cola suddenly lost its brand name tomorrow, its operating margins could drop to around 5.28%, and it would lose $64.2 billion of value.

Branding is clearly a competitive advantage. It is the reason why larger companies with lots of managerial horsepower tend to spend a lot of time and money on branding. The most important value in a brand is the value that it holds for actual customers. This value is very difficult and expensive to build and fragile and easy to destroy. The difficulty of building and maintaining a brand is one reason why managers the world over tend to avoid spending much time or money on branding, especially in smaller companies. This is a shame, because a well-managed brand is so powerful that it can overcome almost any other competitive advantage.

In previous articles we have outlined many of the competitive advantages that branding can bring to a company. We won’t repeat them now but check the other articles if you are interested.

Since you are a consumer in addition to a brilliant business person, think about some of the brands with which you are familiar. Apple has built a group of very loyal customers and while they may not dominate the computer space, they have used their fan base to launch other products like the iPod, iPhone and iPad where they do dominate. They consistently break records for new product launches before the product is actually available. Valuable brand name for the largest company on paper in the world at one time this past year?

At Procter & Gamble, the Tide brand has now been applied to many types of fabric care, building on its strong base of removing dirt from clothes. Crest has a product for everyone, from first tooth to last and even dentures. Swiffer seems to be cleaning up everywhere (pun intended).

What value have you determined for the brands of your product, company and people? Have you made a conscious effort to create the positive brand and secure the benefits that come with it? If you need assistance, contact us. We can help. We have created and managed some very strong brands and can apply our experience to your business as well.

Thanks.

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble - What is a brand?

Procter & Gamble is well known for its brands. As we have said in earlier articles, many people mistakenly believe that a brand is a product. While that is in part correct, it isn’t the whole story. A brand is an image in the customer’s mind. The thoughts customers have about products are brand impressions. These brand impressions are the major influences on the purchase decision. Customers form impressions of products every time they come in contact with them. Once products or companies are out in the market, you already have a brand, whether you want it or not. The only issue left to consider is what kind of brand you want to have.

Brands are inferred, not implied. Branding isn’t something companies do to customers. After experiencing a product or a company, a customer has an impression of that product and decides how to "brand" that product in their own mind. In other words, a brand isn't what a marketer says it is. It is what a customer thinks it is.

However, companies can do a lot to influence the impression that customer/consumers have about them and their brands. Often we think of brands from big companies like Nike and Coke who use the brute-force of mass marketing to "impress" their message on people. Brute force is becoming a less and less effective method for branding, because it's gotten harder and harder to tell today's discerning customers how to think.

Only a very few companies, like Nike and Coke, can afford to brand with brute force. Now the method of choice seems to be primarily via some form of social media in addition to the traditional advertising/marketing vehicles. Companies like ThoughtLabs specialize in bringing customers closer to their clients.

Branding isn't just something that applies to big, national companies with large advertising budgets. For all types of persuasion, thought is always a prelude to action No matter how the product is marketed; it all must start with positioning. It is in this effort that companies attempt to set their desired image in the minds of the customer. This is key!

People's thoughts and beliefs drive their actions. The goal of the interactions with a customer is to encourage them to create a brand impression in their mind that motivates them to act in a way that helps my product. By focusing on what they think, I am forced to pay attention to everything I do that affects what they think about me and my product. I can't just make an independent decision about what I want my brand to be and create beautiful advertising that "declares" what my brand is -- I have to orchestrate all of the experiences they have with my product in a way that encourages them to create the right brand impression in their mind.

So . . . what do you want your customers to think about your products . . . and you?

If you have not clearly defined the positioning for your company or its products or the results are not meeting expectations, we can help. Contact us.

Thanks

John

This is one of a series of articles that share some of the learnings from twenty three years in marketing at Procter & Gamble.

John Maver
President
Maver Management Group(
925) 648-7561
Maver Management

Lessons from Procter & Gamble – Persuasively Selling Their Brands

There are many different selling formats and yet all of them that have been successful are based on the problem – solution idea. First, crystalize the problem that the buyer is facing and get agreement to the problem and then offer your solution, which is of course based on your brands. At Procter & Gamble this has been honed to a fine art by salespeople. They call it the Persuasive Selling Format. At Clorox, it is called SIERE. At other companies it may be called the 5 Selling Steps. But they all are virtually identical.

All sales people have these 5 steps memorized and I can still recall them now after 30 plus years. In fact I can recall when I skipped a step and lost the sale too. Here is how it works.

Summarize the Situation – After the opening ice breaker chat, identify a problem that either has been identified by the buyer on a previous call or is generic to their situation. You can also share key facts, information or industry trends to set up the discussion. It is important that the problem be easy to agree with and not be controversial. You do not want to spend a lot of time on the problem. You need to sell the solution. This set up gets the buyer nodding in agreement with you and hopefully you can keep that happening as you work down to the order.

State the Idea - Tell them a brief statement of the idea that you are recommending as a solution to their problem in a way that makes it compelling. Keep this brief and get a quick nod that they understand your idea. They may not agree with it YET but they must at least understand it.

Explain How It Works – Once you’ve clearly stated the proposition, provide details of the recommendation. Typically, this includes information about the product, the promotion, the support being provided, the pricing and the execution timing and logistics. Provide the information in “layers”. That means, give them the summarized version of each element of the information and if they require more provide what is necessary. Many, many sales have been lost by clouding the issue in the buyer’s mind at this point or providing so many details that they tune out and you lose them.

Reinforce Key Benefits – What’s in it for them? How does this really solve the problem they are having or the opportunity upon which they want to capitalize? What are the key reasons that they should accept your idea and recommendation and move forward? Experience shows that there are always three solid reasons to offer to the buyer. That provides enough strength and doesn’t cloud the issue with weak support. It causes you and the buyer to focus and be memorable. The buyer should be nodding agreement to each of the benefits as they understand them.

Suggest Easy Next Steps –The Close, the Close!!!! The most effective method to work into the Close is to suggest an easy next step that makes the buyer continue to nod agreement. To some extent this calls for an assumptive close, where you assume the buyer is going to agree with the basic proposal and now you are ironing out some small detail. It can be as simple as asking, “Do you want this Wednesday or Thursday? Do you want this in red or blue?” Once you have agreement to that easy next step just write up the order.

This works. Take it from my personal experience and the experience of tens of thousands of others as well. This doesn’t apply only to selling products to buyers at companies. It applies to all selling situations. I know that the technical folks will say that the B2B sale is different. Yes it is, but the same idea works there as well. I have used this technique in many different situations.
If you want more information on this lesson from Procter & Gamble or on any of the others in this series, contact us. We will be happy to help you.

Thanks,

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – “Stick to your knitting” – Core Competencies

As you might gather from the title, people at P&G didn’t make this statement in so many words. In fact, these words came from my mother when she wanted me to concentrate on what I was doing and not get distracted. But the meaning was clear from my years at Procter & Gamble, as well.

In Procter and business terms, it means to understand your core competencies and stick to them. Don’t get sidetracked and move away from where your true competitive advantage lies. You can quickly recall many companies that strayed and suffered great losses as a result. Gatorade anyone?

Just so that we have a common understanding of the definition of Core Competency it is: A unique ability that a company acquires from its founders or develops and that cannot be easily imitated. Core competencies are what give a company one or more competitive advantages, in creating and delivering value to its customers in its chosen field.

While P&G is clearly known as a marketing/branding/advertising company, it has other core talents as well. The primary core is the people. Great care and effort is expended in identifying and recruiting top candidates in all functions. Then, strong training and development programs are put in place for all, since the company is a promote from within and the future of the company rests heavily on the new hires. They state that people are their most valuable asset and they mean it.

The second core competency is in research and development. The company has “overspent” in this area for decades. In fact, at one time, there were more PhDs per square foot in the R&D labs than at any other place in the world.

The combination of these three elements results in a core competency of bringing superior products to market. Superior is defined as not only breakthrough, but also better meeting customer needs. Breakthrough products include the first shortening (Crisco), the first detergent (Oxydol/Tide), the first workable disposable diaper (Pampers) and many more. The company has been and remains the premier consumer packaged goods company as a result.

This is not meant to be a self-serving article, since I spent more than two decades at P&G. It is meant to help other companies spend the time to clearly define their core competencies and then build strategies and business plans that capitalize on them.

Having been in business for more than 4 decades and as a consultant for more than 12 years, I have seen many companies that have failed to find their core and their efforts achieve less than optimum results, at best. Some do not change and are no longer in business. Resources both human capital and financial are scarce. The dilution of those resources on key projects as well as the lack of focus often causes major damage to companies.

If you need help in identifying your core competencies or creating the plans that will make you successful, contact us. We have a lot of experience as a business acceleration company.

Thanks

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Brand Building

Procter & Gamble has had the reputation as the premier brand builder over the years. Their methods have been copied by many companies, not only in consumer packaged goods, but across a wide variety of industries. The company has a full dedication to providing its consumers with brands and not just products. What does that mean? It means that they are committed to establishing their products and their performance as promising something specific to consumers and then delivering on that promise. Consumers get a product that not only works and works better than most, but also the confidence that the product will do exactly what is claimed.

Here are some thoughts about brand building:

A great brand can be in any industry.
As I said above, it isn’t just consumer packaged goods brands like Tide, Olay, Pampers and Crest that have recognized the value of brand building instead of product selling. Some categories may lend themselves to branding better than others, but almost any product offers an opportunity to create a frame of mind that's unique. Nike, for example, is leveraging the emotional connection that people have with sports and fitness. In the technology industry, most people do not know what Intel processors do or why they are superior to their competition. All they know is that they want to own a computer with "Intel inside." And are willing to pay more for it.

A great brand understands what and who it is.
To build a great brand you have to understand who you are. Go to consumers and find out what they like or dislike about the brand and what they associate as the very core of the brand concept. That gets you started. To keep a brand alive over the long haul, to keep it vital, you've got to do something new and reenergize it. It has to be related to the brand's core position. Many mistakes are made by trying to make the brand something that it is not and more importantly, what customers do not believe it is.

A great brand is relevant.
Knowing oneself leads to establishing relevance. It meets what people want and performs the way people expect. The delivery of the message may change to stay current but the basic promise stays unchanged and relevant. Consumers are looking for something that has lasting value. There's a quest for quality, not quantity.

A great brand changes the game for the entire category.
Procter & Gamble brands have dramatically changed their categories - Tide in fabric care, Crest in dental care, Olay in beauty care, Pampers in baby care. Other brands like Disney, Apple, Nike, and Starbucks have made it an explicit goal to be the protagonists for each of their entire categories. Disney is the protagonist for fun family entertainment and family values. Apple wasn't just a protagonist for the computer revolution but a protagonist for the individual becoming more productive, informed, and contemporary. They have changed information flow with the IPhone and IPad. A great brand raises the bar -- it adds a greater sense of purpose to the experience.

A great brand capitalizes on emotions. The common ground among companies that have built great brands is not just performance. Emotions drive most, if not all, of our decisions. Not many people discuss the benefits of the high performance Mercedes engines. But they do picture themselves sitting behind the wheel of this luxury automobile. A brand reaches out with that kind of powerful connecting experience. It's an emotional connection point that transcends the product. And transcending the product is the brand.

A great brand has design consistency. Fashion brands may be the most obvious example. Ralph Lauren and Calvin Klein, for example. have a consistent look and feel and a high level of design integrity. They refuse to follow any fashion trend that doesn't fit their vision. They're able to pull it off from one season to the next. Strong brands like Levi's, Gap, Disney and Procter & Gamble consumer brands have a design that supports the brand image in the minds of the customer.

A great brand operates for the long term.
Many of Procter & Gamble brands are close to a century old and in the case of Ivory soap, one hundred and fifty years old. These brands are based on solid value propositions. Conversely, in the past two decades, many companies stopped building strong brands. As a result, there were a lot of products with very little differentiation. All the consumers saw was who had the lowest price. Many of these products are off the shelves and many companies are out of business.

There is a key lesson from Procter & Gamble who have a stable of billion, yes billion dollar world wide brands. In an age of accelerating product proliferation, enormous customer choice, and growing clutter and clamor in the marketplace, a great brand is a necessity, not a luxury. If you take a long-term approach, a great brand can travel worldwide, transcend cultural barriers, speak to multiple consumer segments simultaneously, create economies of scale, and earn higher margins over the long term.

If you need assistance in turning your products into great brands, we can help. Contact us.

Thanks

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble – Clear, Concise Communication

Procter & Gamble has long been known for its “one page memo”. There are a number of important reasons why this idea has proven to be so successful for P&G and none of them have to do with saving paper. Actually, while the memo itself is one page there are generally additional pages of supporting documentation that provide additional information in support of the information included on the first page.

The primary purpose has been assumed to be sending forward the information required for a decision to be made by upper management on some business acceleration idea. Procter & Gamble generally operates in a "bottom up" mentality where the people closest to the business and with the most relevant facts are responsible for leading the management thinking and accelerating the business progress. They do that through recommendations, research summaries and competitive analysis that all follow the one page format.

While the first purpose is to lead management and secure approval, there are other important purposes as well. As a new Brand Assistant significant time is dedicated to your training. As it relates to the one page memo, it is training in being able to think. The brevity of the memo forces the writer to be crystal clear in deciding exactly what they are recommending to accelerate the business and the basis upon which that recommendation is made. The training in this area starts early in your career and is extensive. Forty years later, I still have my first P&G memo. It was rewritten 11 times, each time going forward at least one level of management and then coming back with “suggestions” to improve the conciseness, clarity or communication. As I review this memo, I marvel at the time invested in me and know that this was just average for the number of rewrites required. By the way, the recommendation went to the President of the company and received not only approval but a note saying “well written and very clear memo.”

The next purpose is to facilitate review by upper management. The format is identical for all recommendations and all excessive verbiage is eliminated. This may seem to be unimportant. However, in a company with tens of thousands of employees and many, many business acceleration memos being forwarded every day, the only way to insure proper understanding of the communication is to insist on standardization and brevity.

Finally, the clarity of the communication enables all of the departments who are involved to be clear on what is required in their role to execute the business acceleration idea. They are required to have signed off on the recommendation before it is forwarded to management so that when approved, co-ordinated action can commence immediately.

Frankly, the appreciation for the “one page memo” and all that it achieves increases with the time one is at Procter & Gamble. Its usefulness is proven over and over. Having moved on from P&G to run businesses and other companies, I have seen the value of the clear, concise communication and thinking training pay off in those companies too. Many clients have complimented our company on its ability to cut through the mire of information to clearly define the challenges and opportunities and the business acceleration ideas that can capitalize on those opportunities.

For examples of the one page memo format, send us an email. The contact information is below.

Thanks

John


Procter & Gamble prides itself on providing outstanding training for its people. Actually, it is a necessity, since the company has a strong “promote from within” policy. As a result, there are a number of significant lessons that have been learned over the course of a 23 year career at Procter & Gamble like I had. This is part of a series of articles which will share some of those lessons. If you would like the benefit of this expertise applied to the business acceleration opportunities in your business, contact us.


John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Lessons from Procter & Gamble - 10 People Lessons for Leaders

Procter & Gamble prides itself on providing outstanding training for its people. Actually, it is a necessity, since the company has a strong “promote from within” policy. The senior executives have risen from the ranks. Not only does this instill common values by weeding out those who do not share the same values, but it also forces the company to have strong training and development programs. As a result, there are a number of significant lessons that have been learned over the course of a 23 year career at Procter & Gamble like I had. This is part of a series of articles which will share some of those lessons.

10 People Lessons for Leaders

1. P&G leaders get to know people as individuals. The leaders take the time to understand the strengths of their people and how to capitalize on these strengths most effectively to help them to win. Group activities are great for building teams, but one-on-one interactions build trust.

2. P&G leaders take a personal interest in their people’s success and let them know it. When employees understand you genuinely care about their well-being and career advancement, they will give you their best performance.

3. A leader gives credit to others, particularly in team situations. Since in most instances, analysis and creative solutions are sent up the line in recommendation form, starting at the lower levels, the credit for the good idea generally goes to the ones who are closest to the business. It is okay to accept credit for your part but successful P&G leaders make certain that the right people get the credit.

4. The most effective P&G leaders are good listeners. They encourage others to talk about themselves and make them feel important. John Pepper and AG Lafley were particularly good at this. The organization rallied behind them and pushed the company to exceptional performance.

5. P&G leaders are predictable by being constant. While it is acceptable to change one’s mind as new facts are uncovered, the leaders explain the rationale. This not only helps others understand the decision but helps train them so that they too can reach the sound conclusion. It enables others to trust you and your thinking.

6. Decisions are fact based and it is generally not who is right, but what is right. As a result, P&G leaders have their people’s back. They do not let their employees take big risks alone.

7. Make certain expectations are clear. All people want to succeed and they can accomplish this most effectively when the expectations of success are made clear in the beginning and then reinforced throughout. Failure to deliver against fuzzy expectations is not the employee’s fault, it is the manager’s.

8. Feedback is important. Open and honest feedback is essential even if it is uncomfortable for development of employees to occur. Hidden agendas never stay hidden and they breed mistrust. Regular performance reviews on a formal basis are best supplemented by informal reviews at the time of a “training” situation.

9. Listen for cries of help or assistance and respond quickly. When your employees raise a problem to your attention, it is usually viewed as a big issue in their mind. Take action, so it doesn’t end up growing into a big problem in your mind, too. That doesn’t mean taking over the problem. It does mean that your experience has probably handled this type of problem in the past and you can provide the appropriate direction.

10. “Do what is right” is a stated company value. This guides decision making and causes the organization to quickly understand and support even difficult decisions. This is most critical when it comes to the people and the way that they are handled. Employees expect and respond to honest and helpful feedback and criticism. They appreciate development plans that are designed to help them become more effective. They respond positively to reinforcement of their worth. They may not be in the right job and their talents may be suited better in another area. Letting them know this and working productively for them and the good of the business will generate productive winners throughout the organization.

There are going to be other articles in this series so stay tuned. If you would like the benefit of this expertise applied to the business acceleration opportunities in your business, contact us.

Thanks

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management

Four Fatal Flaws of Business Planning

The effective development of business plans is drawing a lot of attention these days. In no way does this mean that companies are becoming more effective in their business planning or business plan creation. Many companies claim to be doing regular business planning but most are not. Executives and managers continue to make fundamental mistakes that undermine otherwise well intentioned strategy formulation efforts.

Here are four fatal flaws that consistently creep into business planning processes that if avoided, can significantly improve both the process and the results.

Skipping Rigorous Analysis Before Starting On The Actual PlanMany executives and managers believe their business experience and knowledge base alone equips them with all the information they need to conduct effective business planning. This belief is almost always untrue and serves only to undermine the kind of critical thinking from which truly creative strategies are born. This becomes complicated, since most planning is done by a team and all participants come with preconceived notions and differing sets of data on which to base the plans. Having an experienced facilitator with success in business planning is critical. A good business planning process takes full advantage of the numerous tools of strategic analysis to gain key insights regarding how the industry is evolving, how competitors are changing positions, and where an individual firm's sources of competitive advantage lie. Don’t ever overlook the critical role of defining the company’s Core Purpose and Core Values before you start.

Believing Strategy Can Be Built in a DayMany executive teams earnestly believe that effective strategies can be identified, explored, and agreed upon during abbreviated offsite meetings where the main driver of the agenda is the timing of snack breaks. While offsite meetings are useful forums in which to share information and address key issues, meetings should be adequately timed over days or weeks if necessary, so that sufficient preparation, review and discussion can occur before and during the event. We have found that breaking the process into multiple sessions, each with assigned pre-work, allow participants to reflect on the work being done in less pressured surroundings and provide clearer input to the plans.

Failing to Link Business Planning with Strategic ExecutionAccording to a recent survey, execution overall and strategy execution in particular hold the first and second positions when it comes to "top issues" in executive's minds. Executing strategy requires the work of the entire organization, whereas business planning only requires the top team. One of the greatest challenges of the planning team is the ability to link their work with ongoing strategy execution. Strategic success demands a simultaneous view of planning and doing. Managers must be thinking about executing even as they are formulating the plan. They also must find a means of effectively cascading the corporate plan down into the various functions and business units so that all of the work is aligned.

Dodging Strategy Review MeetingsBusiness plans quickly become obsolete when there is no activity in place to keep them alive. Worse, managers sometimes feel freed from execution accountability when reviews are continually rescheduled or dropped from the calendar altogether. Successful businesses have made their business process a continuous and dynamic one. This is a more realistic approach than the once-a-year planning meeting that still dominates many corporate business planning efforts. The most direct way to maintain a consistent focus on strategy is to schedule and hold regular strategy review meetings. At the end of the business plan formulation, managers should establish a strategic governance process where business plan review meetings are scheduled a year in advance. In the meetings, with each of the strategies and tactics having an owner responsible for it, there is accountability. The measures that have been developed provide a strong basis for review of the success of the pan and what may need to be modified to keep on track.

Business planning tied to strong execution is a winning combination. Our clients are enjoying this success. How may we assist you?

Thanks

John

John Maver
President
Maver Management Group
(925) 648-7561
Maver Management