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The Four Pillars of Effective Demand Generation

12/18/2017

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Note: This is the second of a five-part series of articles examining the discipline of Demand Generation.  Follow this link to read the first article in the series: Why Nearly 60% of Enterprise Demand Generation Programs Underperform. 
4 Pillars of Effective Demand Generation
"Success doesn't necessarily come from breakthrough innovation but from flawless execution. A great strategy alone won't win a game or a battle; the win comes from basic blocking and tackling."
---Naveen Jain (Entrepreneur and Philanthropist)


In a game of American football, two competing teams vie for control of a ball, which can be kicked through a set of goalposts or run into the opponent's goal area to score points.  If you're a fan of the sport, you probably know that the game has evolved dramatically over the years.  In fact, nearly every aspect of football has changed to some degree since the game's inception over a century ago: the rules, the equipment, the venues and even the on field tactics.  The game constantly evolves, innovates and modernizes.   

Despite, the game's ongoing evolution, the end objectives of the contests have always remained consistent.  Score more points than your opponent and you win the match.  Win the most important matches and and you're crowned champion.  Consistently win championships and you solidify your team as a dynasty.  

I doubt that any dynastic football coach would dispute Naveen Jain's quote we cited above.  Having played the game myself, I can tell you that the best teams on paper don't always win the contests on the field. The bottom line is that ongoing success on the gridiron typically requires consistent and near-flawless execution of basic fundamentals in every facet of the game. 

Suffice it to say, the end objectives of nearly every business enterprise are parallel to the game of football: you play to win.  In our first article of this series, we discussed why a high percentage of companies that have adopted Demand Generation practices and principles are ineffective.  In this article, we'll address the four strategic pillars of successful enterprise Demand Generation programs and examine some of the fundamental tactics that distinguish the champions from the also ran's.   


​The First Pillar: Your Process
As we discussed in the first article, Demand Generation defines your organization’s personal relationship with your leads, prospects and customers.  Needless to say, every customer touch-point offers an opportunity to strengthen your relationship with your customer. Consequently, your organization needs to be structured around your customer rather than your products or services to fully optimize your Demand Generation efforts.

Unlike traditional Lead Generation programs where interested (warm) prospects were turned over to a sales professional to close deals, Demand Generation programs nurture the relationship through the entirety of the Revenue Funnel.  In other words, you're not just looking to close a deal.  Instead, you're seeking to 
establish long-term relationships with your buyers; where satisfied customers become loyalists and loyalists become vocal brand advocates.  
Demand Generation Revenue Funnel
​So why is having a dynamic, ongoing relationship with your buyers so important these days?  First and foremost, the digital revolution has dramatically altered buying processes and decision making over the last few years. In effect, buyers are more knowledgeable and better informed than ever before.  They're turning to friends, colleagues and other key influencers to research their purchases long before they ever engage with your sales team.

Recent studies by Forrester Research, DemandGen and CSO Insights all reveal some startling figures that support this claim. For instance:
  • 74% of business buyers conduct more than half of their research online before making an offline purchase.  – Forrester
  • 72% of buyers turn to peers for relevant content when researching purchasing decisions. – DemandGen
  • Companies with superior Demand Gen platforms generate 50% more sales-qualified leads and a 33% lower cost per lead – CSO Insights

​These figures indicate that your customers' needs and buying patterns must be at the center of your Demand Generation strategy.  The stats also suggest that you need to actively engage with customers at every point in the revenue funnel principally on their terms. 

An effective demand generation process does just that.  It more closely aligns your Marketing and Sales functions, and it creates a seamless buying process that eliminates the gap between Interest and Desire:
Lead Generation vs Demand Generation 5 Stages of Revenue Funnel
​The Second Pillar: Your People
​Traditional business models typically view Marketing as a cost silo and Sales as a revenue silo. Effective Demand Generation generally requires a blended model approach. In our experiences, we've found that a combined marketing/sales organizational model, built around the touch-points in the revenue funnel, typically works best.   

For startup companies, adopting a blended organizational model is usually a relatively easy task.  Conversely, established businesses with traditional lead generation models seem to experience difficulties.  To be successful, you will most likely need to change the skill-set of your personnel, the reward structure based on changes in goals and performance metrics and the organizational structure to align to the buyers' purchase path.  This requires a shift away from the traditional way of thinking of both marketing and sales.

It's important to remember that organizational change Is difficult and that people sometimes resist the efforts. Your marketing personnel and your sales team need both support and leadership in order to make the strategic shift pay off.  Consequently, clear communication of your overall mission, vision and objectives from the top on down are critical for transition. 

As we mentioned earlier, effective Demand Generation processes bridge the gap between marketing and sales.   Over the years, we've found organizations that appoint a C-Level leader to oversee the whole process are generally more successful than their peers who draw territorial lines between marketing and sales functions.  Therefore, we strongly urge our clients to appoint a "Chief Demand Officer" (or a Chief Revenue Officer if you prefer), who owns the he entire Customer Life Cycle.

The CDO / CRO leads a team that is responsible for meeting the revenue objectives for your products or services,  Their functional org chart generally looks something like this:
Demand Generation Functional Org Chart
The CDO / CRO's functional teams exist to create awareness, nurture prospects, close sales, up sell, cross sell and strengthen relationships.  Support staff (Marketing Ops) support the entire organization.  Along with traditional sales and conversion metrics, two critical financial  measurements tie the teams' activities together:
  • $CPC ($ Cost per Customer - The total amount spent to establish, build and maintain a customer relationship)
  • $LTV ($ Lifetime Value - Total revenue generated from an individual customer relationship)
Again, we stress that effective Demand Generation is built around customer-centric strategies rather than product-centric strategies.  Customer needs, preferences and behavior should drive activities.  Organizing your people around the customer generally improves your ability to execute and typically streamlines your operating costs in the long run. 

 ​
​The Third Pillar: Your Content
Once you've fully committed to a customer-centric business model, it's time to turn your attention to your content strategy.  Like every marketing program, success is a matter of being in the right place at the right time with the right solution. An ideal Demand Generation program establishes your organization as the expert in your particular line of business. Therefore, each and every interaction with your prospects and customers should affirm and strengthen the perception that you are the leading solution in your category.

First and foremost, you need to find and target the best touch points to engage customers.  This isn't an exact science. Tactics vary by industry and product type. Additionally, every business has varying strengths and deficiencies. Therefore, we strongly suggest you begin with category best practices that seem to fit your model. Test them out for yourself and quickly adapt and expand the ones that seem most promising.  Here are some basic tactics to consider through the various stages of the revenue funnel:
Demand Generation Touch Point Tactics
With this model in mind, here are our five fundamental recommendations for developing an effective content strategy:​ ​
1.  Ensure That Your Branding Is Consistent!
​Brand consistency is crucial for success! Consistency is the key to building awareness, and it also builds momentum through the other four stages of the revenue funnel. Effective branding delivers economic, experiential and emotional value to your customers.  It encourages repeat purchases and drives advocacy.
Keep in mind that your company or product logo alone does not equal your brand! Branding is a blend of art and science and includes a number of very important factors.  Among the most important:
  • Pitch (what you tell the world about you)
  • Voice (purposeful and consistent word / prose styles)
  • Visualization (consistency and differentiation)
  • Expertise (leadership)
  • Execution (quality of your product or service) 
Logo Alone Doesn't Equal Brand
Your brand should resonate through each and every touch point with clarity.  This includes your advertising, your direct marketing materials, your content programs as well as your presentations, product demos and one-on-one interactions with prospects and customers.  

2.  Emphasize Digital Content / Digital Distribution!
The traditional purchase decision journey is losing its relevance. Most customers no longer follow a linear path to purchase. In fact, Google Mobile Insights recently revealed that 76% of people who conduct a product search on their smartphone visit a business within 24 hrs & 28% of those searches result in a purchase!  ​
It's obvious that technology is influencing each stage of the journey.  Furthermore, the rise of social media coupled with mobile and targeted messaging has created new and very influential touch points. The decision journey is now a cyclical loop with customer brand advocates playing a substantial role in the buying process.

​The bottom line: d
igital largely influences and drives decision making these days!
Demand Generation Non Linear Purchase Path
3.  Target Messaging To EACH Member of The Buyer Team!
Take a step back and examine your company's definition of a customer. If you're focusing your full attention on the Decision Maker, you're likely costing yourself business.
A recent DemandGen survey reveals that nurturing the full Buyer Team relationship produces a 20% increase in overall sales conversions! This means that the person who signs the deal with your company generally pays attention to the thoughts and opinions of their peers, direct reports and outside influences before making their purchase decision. 

In effect, customer behavior is the aggregate of all buyer team interactions.  Audience segmentation and tailored messaging strengthen the overall buyer team relationship and generally improve conversion rates..  
Buyer Team Roles
4.  Don’t Underestimate The importance of Influencers!
As TapInfluence notes, Influencer Marketing is a strategy that "focuses on using key leaders to drive your brand's message to the larger market." Rather than marketing directly to prospects, you instead inspire, hire, and/or pay key Influencers to advocate on your behalf.

Influencer marketing generally pays substantial dividends on a relatively modest investment.  A recent Nielson / TapInfluence study indicates that Influencer marketing content delivers a Return on Investment (ROI) 11 times higher than traditional forms of digital marketing.  Additionally, Influencers generally create their own content and/or integrate your talking points into their delivery feeds.  This means that Influencers expand your organization's digital content capabilities and, to help with SEO (search engine optimization)  to a certain degree.

5.  Ensure That Campaign Tracking / Performance Measurement Is a Top Priority!
Demand Generation is an outcome-driven discipline. It’s about pipeline contribution, customer lifetime value and increasing your company's market share. If you're spending time or money to create content, we presume you want to spend both wisely. Therefore, be certain that you track and measure all of your related marketing and sales activities to a granular level.

An additional note on the subject of performance measurement: it's a myth that content programs cannot be quantified or effectively analyzed. Frankly, digital content offers a wealth of data when the programs are executed properly.  As a result, Demand Generation is an ideal pairing for predictive analytics. 

Remember that we now live in an era where Big Data is now accessible and actionable to a great degree.  That said, it takes the right tools and the right skill sets to organize, access and analyze the wealth of information that content programs create. 
​​The Fourth Pillar: Analytics
Although it doesn't directly appear on your balance sheet, your company's structured data is an extremely important and valuable business asset. To a large degree, your ability to access, analyze and interpret the data generated through all of your customer interactions drives the effectiveness of your Demand Generation campaigns.  As a recent report by DemandMetric / Radius demonstrates:
  • Over 50% of companies with an ineffective Demand Generation process indicate their customer data richness is lacking.
  • 47% of ineffective companies reported severe data accuracy issues.
  • Marketers who have adopted predictive analytics are much more likely to also have an effective Demand Generation process.
  • Over 90% percent of companies with effective Demand Generation processes are able to use their customer and prospect data to execute various marketing campaigns.
Effectiveness of Demand Generation With and Without Predictive Analytics
We recommend that you take stock of your data as early as possible! Missing, inaccurate or poor quality data impedes effective Demand Generation as well as the successful application of predictive analytics. You may wish to consider a full audit of your CRM applications, gathering and storage systems, personnel, as well as the depth, accuracy and quality of your structured data.   That way, you can quickly begin to harness your assets and pull together an action plan to address your deficiencies. 

A real opportunity exists in most industries to develop a sizable competitive advantage through structured data.  Believe it or not, the DemandMetric / Radius report suggests that only 44% of CMO’s understand predictive analytics well; and only 11% of those that do understand are actually implementing or using predictive analytics for Demand Generation activities.  Even more surprising, only 55% of companies that employ predictive modeling are using their data to find new revenue opportunities!

We'll state once again: Demand Generation programs are an ideal pairing for predictive analytics.  Even if you're a very lean organization, commercial solutions do exist to help integrate predictive analytics into the process.  If your current Demand Generation campaigns are yielding less than desired results, chances are there's room for improvement if you unlock the full power stored within your enterprise data systems. 


Conclusions
Effective Demand Generation is an enterprise-wide endeavor. It requires a firm foundation built upon each of the four strategic pillars we described above. Whether your company is new to the discipline or you're a seasoned player, you need to ensure that you're executing the fundamentals efficiently and effectively. Otherwise, you're likely to be steamrolled by your competition.

You may be wondering why we haven't listed technology (e.g. automation systems, adaptive control technology, CRM systems, etc.) as a fifth pillar. While the right technology certainly speeds delivery, improves effectiveness and can also lower costs, we'd argue that technology systems are complementary tools to each of the four pillars we've described above.  In our next article in this series, 12 Things to Consider Before You Automate Your Demand Generation Processes, we'll discuss the benefits of several Demand Generation technologies as well as  some serious technological pitfalls you'll want to avoid.       


​Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
 
Note:  This is the second of a five-part series of Jumpstart Strategies articles examining the discipline of Demand Generation. Here are links to the other live articles in the series: 
  • PART 1: Why Nearly 60% of Enterprise Demand Generation Programs Underperform
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Why Nearly 60 Percent Of Enterprise Demand Generation Programs Underperform

11/28/2017

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Demand Generation Man Holding Slide
“Leaders of the future will have to be visionary and be able to bring people in - real communicators… it's going to be incredibly valuable and incredibly in demand.”
--- Anita Borg (1999)

When American computer scientist Anita Borg spoke these words, the World Wide Web was still in its nascency.  At the time, there were roughly 280 million internet users.  Today, there are over 3.4 billion users.  In parallel, the number of active websites has grown 10-fold since 1999.  Today, there are over 311 MM active websites worldwide.
​
While the ascension of the Web has largely been a boon for marketers, it has also presented clear challenges in recent years.  Specifically, how do you differentiate yourself from your competitors, stand out from the crowd and identify your business as a leader in a competitive marketplace? For a growing number of companies, particularly those with a long sales cycle, the answer to the puzzle has been Demand Generation.

​
What Is Demand Generation?
In theory, Demand Generation is “the focus of targeted marketing programs to drive awareness and interest in a company's products and/or services.”  The scope of the discipline includes:
  • Brand building campaigns
  • Specialized outbound marketing
  • Content rich inbound marketing (Social Media, Blogs, eBooks, Podcasts, Videos etc.)

Demand Generation defines your organization’s personal relationship with your leads, prospects and customers. However, unlike traditional lead generation and customer acquisition programs, the objective of Demand Generation is to build and nurture key prospect and customer relationships for the long term.

An ideal Demand Generation platform establishes your organization as the expert in your line of business. Your customers turn (and return) to you for solutions to their most difficult challenges and purchase decisions. They also trumpet your products and services within their peer circles. From a P&L standpoint: the net effects of an effective Demand Generation program are two-fold: 1) it increases the lifetime value (LTV) of your customers AND 2) it decreases the cost to acquire new customers (CAC). In addition, an effective Demand Generation also increases market share over time.  
​Several early adopters and innovators have been very successful with their Demand Generation efforts. For example, companies like Five9 and HubSpot have firmly established themselves as leaders in their respective B2B marketing service categories largely due to their well-​​executed
Five 9 and HubSpot Logos
Demand Generation programs. Consequently, many other companies (across a vast ray of industries) have jumped on the Demand Generation bandwagon in recent years.

​
Is Demand Generation Producing Positive Results?
The answer to this question really depends on whom you talk to. For example, a recent Annuitas benchmarking survey of 100 B2B enterprise marketers indicates that only 2.8% of the respondents believe that their Demand Generation programs are very effective. Conversely, a whopping 58.5% of the respondents said that their programs are largely ineffective:
Picture
​In contrast, a recent survey by Demand Metric reveals another side to the story. While only 30% of study participants report having a B2B demand generation process that meets their objectives, respondents with advanced business analytics capabilities report significantly better results.  Indeed, “when predictive analytics are applied, process performance soars, effectively meeting the objectives set for it over half of the time.”
Picture
To us, the Demand Metric survey results suggest that many marketers aren’t completely engaged in the full discipline of Demand Generation. While the Effectiveness Rate for companies that apply analytics is significantly better than their peers who don’t (55% vs 18%), even that figure seems disappointing. Obviously, for most of the marketers polled in both surveys, something seems to be lacking or missing in their Demand Generation formulas. In our experience, there seems to be two critical factors that many organizations overlook or completely ignore when they decide to adopt demand generation methods: organizational structure and process management.
​

The Essential Building Blocks For Effective Demand Generation
Industry analysts predict that Demand Generation budgets will continue their upward trend. According to the 2017 Demand Generation Benchmark Report, two-thirds (67%) of marketers expected to increase their budgets this year. Furthermore, one-third (33%) of marketers anticipated a rise of 20% or more. Similar budgetary increases are also expected for 2018. Consequently, it’s a near certainty that CEOs and CFOs will soon begin to demand better results from their Demand Generation investments. If marketers continue to under-perform, you can bet that heads will start to roll.

That said, blame for ineffective Demand Generation programs shouldn’t be solely directed at Marketing and Sales executives.  We’d argue that many organizations have attached themselves to the DG buzzword without understanding the full nature of the discipline. Consequently, it seems that many companies focus on tactics while missing the big picture.

For example, when C-Level professionals are asked, "What exactly does Demand Generation entail?" Many of them will point to content creation or marketing automation (or a combination of the two). Better yet, scour job boards and you’ll find several Manager / Director level positions entailed with the responsibility of "Leading" Demand Generation efforts within companies large and medium and small alike.

We believe that tactically reliant Demand Generation recipes are almost certainly destined for failure. In our experience, we’ve found that tactical proficiency is only one factor in becoming an effective Demand Generation marketer. You must realize that Demand Generation is a complete business discipline. Ergo, for a company to be truly effective in the discipline it must embrace Demand Generation as an overall business strategy.  For the strategy to succeed, your company must first become a customer-centric organization.  As we've learned over the years, this often requires a measurable degree of organizational restructuring, realignment of departmental duties and a commitment to enterprise analytics.
​
Conclusions
For your Demand Generation program to be truly effective, your organization needs to be structured around your customer rather than your products or services. As Erin Kelley of Annuatas noted a couple years back, “If you don’t know your buyers inside and out, there is little guarantee that your demand generation programs will work in the way you expected.”
Picture
It's our belief that many companies that experience failing or below expectation results from their Demand Generation efforts haven't fully embraced the DG concept as an over-arching business strategy.  Like any key strategic initiative,  your Demand Generation strategy requires a clear commitment from C-Level leaders and buy-in from every layer of subordinate management in order to truly be successful.  

​
​Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
 
Note:  This is the first in a series of Jumpstart Strategies articles that will address Demand Generation. Please check back soon for our second article: The 4 Strategic Pillars of an Effective Demand Generation Platform.
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The Single Biggest Challenge Entrepreneurs Face Today

9/29/2017

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Scalability Revenue Growth Curve on Whiteboard

"Companies that grow for the sake of growth or that expand into areas outside their core business strategy often stumble. On the other hand, companies that build scale for the benefit of their customers and shareholders more often succeed over time."

---Jamie Dimon (Chairman, JPMorgan Chase)

​
If you Google "biggest problems facing entrepreneurs today," you'll find 100's of different answers on the subject. There are dozens of laundry lists to choose from and most offer some very good suggestions on the pitfalls you should avoid.  That said, you'll find little commentary regarding the impact or importance of each problem in these articles. Therefore, I thought we would add our opinions on the matter into the discussion.  We'll start with what we believe the top challenge every entrepreneur will face at one point in their journey is, if they hope to gain traction. As you'll soon learn, it's a challenge that entrepreneurs have faced in free market economies for eons.


If We Knew Then What We Know Now
There's a good chance that you're a foundling entrepreneur or that you work for a startup if you're reading this. If that's the case, I'm sure you have big dreams for your products or services. At least, that was the case with me when I founded my first business back in 2008. It was a real-time valuation service catering to antiques / collectibles merchants and avid hobbyists. My vision was that CollectCentric would quickly become an invaluable resource within the industry. I dreamed we'd one day be the 800 lb. gorilla within the category.    

We built a working prototype and began searching for suitable investors so we could bring our concept to market. To make a long story short, CollectCentric was beaten out by another Atlanta-based startup: WorthPoint. Their business plan was more agile than ours and they also had deeper pockets.  It turned out that they were also better negotiators too. They locked the principal data supplier (eBay) into a long-term, exclusive agreement.  Needless to say, we were no longer able to compete in the category once the deal was announced.

The truth of the matter was that we were blind to factors that our team hadn't ever worked through before.  In retrospect, we should have taken time during our development cycle to brief analysts and industry press. They could've been used as eyes and ears to let us know how the competitive landscape was shaping up. If we had done this, we might have altered our strategy and avoided the mistake of launching an also-ran product.


The Universal Challenge: How To Scale?
CollectCentic's tale mirrors similar stories dating back through the centuries (e.g. Nicola Tesla).  Like Tesla and countless others, our principal challenge was scalability. A scalable company is one that can maintain or improve profit margins while sales volume increases. In other words, a startup cannot afford to lose revenue traction in order to produce more goods or services unless it has a well thought out strategy to secure a second round of funding (or your first round if you're bootstrapping).
We had a working prototype and we were actively engaged with potential angel investors. However, we were generating little revenue off of our prototype. CollectCentric was also constrained by a lean operating model due to our modest, bootstrapped budget. Both factors proved to be fatal competitive disadvantages for our startup.

​I'm not ashamed to admit that WorthPoint pulled together a faster, more efficient startup team. They had deeper pockets and could afford to invest in bodies to handle their workload. Working with a talented but skeletal crew, it took us much longer to churn out all the work that''s required to successfully launch a startup. Marketing, business development, operations, and investor relations all require focused attention in order to move forward. As they say,  t
here are only so many hours in a day.  
Competing Artists Drawing Wall Murals
Our revenue forecast was a different matter entirely. We didn't have deep supplier relationships, so we anticipated a rather lengthy ramp up time.  This was a barrier for some potential investors and it put us in a difficult negotiating position with others. You have to understand that angel investors take a huge risk when they invest in a startup. Consequently, they generally seek a return of 10x or more on every investment they make. They also generally want to recoup their investment in a relatively short time period. To receive serious consideration from angel Investors your ROI should be 30-40% minimum. Additionally, the payback and dividend period should be no more than five to seven years out.  As we found out, it's difficult to come to quick agreement on terms if your revenue streams don't meet these requirements. 


What We Learned Along The Way
In hindsight, we made the mistake of underestimating the competition in an emerging market. WorthPoint had the more sustainable business strategy. They went after the suppliers aggressively while we concentrated on both branding and the development of our end user interface. We never saw Worthpoint's agreement with Terapeak (eBay's data aggregator) coming. Naturally, it was a hard pill for all of us to swallow when we learned of the agreement.
The fundamental lesson learned here: if you're think your business idea is revolutionary you better think again!  There are no patents on business ideas, and new ideas spread like wildfire. This is especially true in emerging markets. Chances are good that someone, somewhere is working on a concept similar to yours right now while you're kicking back and reading this article. As we said earlier, history is littered with inventors and patent holders who couldn't figure out how to scale their ideas and turn them into profitable business ventures. Time and time again, they've been
Thomas Edison the Businessman vs Nikola Tesla the Genius
beaten into oblivion by experienced entrepreneurs and wiser businessmen just like we were. As an old adage goes, your only two choices as an entrepreneur are "get better or get beaten." In other words, you need to solve your company's scalability equation early or you'll probably be outflanked by your competition.  ​
Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
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Five Reasons Why Most Strategic Plans Fail and Tips For Success

9/27/2017

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Strategic Planning Cloud Drawing

​"All men can see these tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved."
---Sun Tzu



Effective strategic planning is essential for any entrepreneur who envisions profit and growth for their company. It’s the key to looking toward the future and forging a deliberate path for your organization.  In today's competitive marketplaces, effective strategic plans helps executives build their companies based on the values that matter most of them while maintaining their focus and sanity. The alternative is to simply react to the market whenever the wind shifts. In other words, effective strategic planning distinguishes the leaders from the followers.

Traditionally, strategic planning meant going offsite for a few days once a year. Businesses would conduct team building exercises and map out their company's direction and goals for the next 12 to 18 months. Most businesses, particularly large enterprises, felt obliged to engage in this exercise to get their management teams on the same page.

While this traditional goal setting method still holds some value, most companies really aren’t satisfied with the outcome.  This is particularly true for startups and other companies with agile business models.  A recent survey by The Alternative Board, shows that many entrepreneurs are dissatisfied with the end results of their strategic planning efforts.  Indeed, more than 27% of entrepreneurs said that they wished that they had invested more time and effort into strategic planning!  Besides more time, 15% of the respondents indicated that they should have spent more money on the their strategic planning processes. "Operations, technology investments and product development were all ranked lower" on the wish list, and only 1% of the entrepreneurs surveyed indicated that would have spent more time seeking venture capital and pursuing investors. 

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The Consequences of Poor Strategic Planning
It's clear that most of the leaders who were surveyed think strategic planning is essential. The consensus from the respondents who expressed regret is that they did not realize a return on investment for the time and effort spent. Ineffective strategic planning sessions often produce lofty objectives. However, they rarely produce quantifiable long-term results.  Unfortunately, we've found  that ineffective strategic planning often produces negative outcomes and breeds cynicism throughout the organization. 
When review time comes, employees often bemoan a “lack of clarity” regarding the strategic end goals set in the year-end meetings.  They also complain about “lack of accountability” when strategic objectives are missed. Consequently, what should be an energetic exercise (strategy sessions) becomes something that's dreaded and simply endured by the participants.  It doesn’t take a genius to realize that it’s difficult or impossible to keep employees engaged if they believe the results of the planning efforts are fruitless.
Poor Strategic Planning
Startups should pay serious attention to the pitfalls of poor strategic planning. It’s a given that investors are going to expect you to deliver on your mission and end goals. Consequently, you can expect a great deal of scrutiny from qualified investors on exactly how you intend to deliver. You’ll also likely  be asked about your backup plan if market forces change or you face unforeseen adversity.  Therefore, be certain to avoid these five mistakes when you pull together your team for strategic planning sessions:
 
 
1.  Lack of Focus​
During early-stage strategic planning sessions, companies often get lost in the semantics of defining their mission, vision, and values. They spend a lot of time and effort trying to understand what these terms mean and how they fit together.  It becomes mentally exhausting and unproductive.  As a result, there’s little creative energy left once they get on to strategic opportunities, implementation and execution.

Tip:  Concentrate on activities that are likely to produce long-term results during your initial strategic planning efforts. Ideation sessions and and contingency planning discussions are more likely to produce meaningful results for your company vs consensus building on value and mission statements. These types of activities will also help to create organizational culture where outside-the-box thinking is encouraged and rewarded.  
 

2.  Little or No Accountability
In some cases, a company’s strategic planning process becomes a political battle. When innovative strategies threaten established managerial duties, turf wars can ensue.  Also, people will point fingers and the blame game will start if things don’t go according to plan, When, divisiveness occurs, key processes are likely to break down and the strategy is likely doomed to failure.
 
Tips:  Set realistic and quantifiable benchmarks for each and every strategic objective. Identify process owners within your executive ranks and tie their compensation to to the benchmark goals. Filter the goals down throughout the organization to key management stakeholders. Produce benchmark metric reports and communicate performance throughout organization on a regular basis.


3.  Lack of Flexibility
Many strategic plans become obsolete if market conditions fluctuate or when the competitive landscape changes dramatically. If regular status updates and strategic review sessions aren’t incorporated into your process, the results could be catastrophic to your company. 

Tip:  In the information age, the ability to adapt quickly to changing conditions is necessary for survival. Goals need to be revisited regularly if you're to stay on point and meet your financial objectives. It's best to adopt strategic best practices that allow you to change direction quickly. Consider incorporating agile planning processes, scenario planning approaches and Baysesian methods into your strategic planning toolkit.
4. Poor Execution
Even good strategic plans are destined to fail if the strategic objectives are never communicated through the organization. You might be surprised at how many times a strategic plan is delivered through PowerPoint presentation and then placed in a file cabinet where it collects dust for the rest of the year. While a detailed plan may comfort your board members and investors, it is NOT a strategy. ​
Strategic Planning Process Solving the Puzzle to Reach Goals
Tip:  By definition, a strategy is an action plan designed to achieve a major or end objective. Like a winning sports coach, a good business leader must understand that tactical goals shift while the game is being played. As a result, strategic plans need to be evaluated routinely. Additionally, your tactical goals often need to be reformulated to achieve desired results.
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5.  Insufficient Resources
To achieve your desired end goals, you must balance delivery time with the implementation / execution costs.   For example, our firm worked with one company that had previously formulated an aggressive strategic marketing plan for a new product.  Half way through the launch cycle, they had to abandon their plan completely. When asked why they replied that they had blown through their advertising budget because of the short time frame they were given to generate pre-orders. ​
Tip:  When it comes to time, cost and quality: you can only pick two,  Consider incorporating quality management tools into your strategic planning processes. A basic understanding of  Lean Planning and Six Sigma methods is extremely beneficial for entrepreneurs, startups and other businesses with tight budget constraints.
Pick Two: Time, Cost and Quality Triangle
Author: Erik Gagnon - Managing Partner, Chi Rho Consulting
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