This week we experienced another disappointing rollover. Our shareholder value dropped for the second week in a row from $10 to $6. This is still the result of actions we took 2 rollovers ago, which was caused by a combination of high product development costs and spending far too much cash, which we now have under control. Although our SHV is down, our profits have risen drastically, and I think for the following rollover we may possibly be back on track and competitive once again, or at least I am hoping so.
Davenport (2006) spoke about the power of analytics and emphasised the importance of analytics in influencing and creating accurate and powerful strategies. Through thorough analysis, we pinned down what we thought our issues may be leading to our negative turnouts, and we decided as a group our failure may be caused by straying from our original strategy. Baghai, Smit and Viguerie, (2009) stress the long-term consequences of having a weak growth strategy and by losing sight of our original strategy, which was extremely successful in the practice round, and not making all of our decisions cohesive with it, our SHV declined further and further and our team had what Baghai et al, (2009) would describe as an inadequate growth strategy. To fix this, our team decided to re-align our decisions with our original long-term growth strategy of focusing on generating good profits off a select few products and marketing them drastically, which proved to be very successful in the practice rounds ranking us 2nd best in the class, rather in the past few weeks we have diverted our attention to producing more and more products, resulting in less marketing spend for each product, leading to a cash deficit and quality issues. We shifted our focus from quality to quantity, and not having enough resources; time and money, to fully benefit from all our product development as this simulation will come to an end in 2 more rollovers. With our analysed information, we have realigned our strategy with our objectives, with the hope of this bringing us back to success.
Another aspect I have noticed is that our team members have established really great and somewhat close relationships, and I believe it is because of this that we work so well together. Last week when things took a turn for the worst, we all came together to actively find a solution to rectify the issue. There was no arguing, no debates, just genuine input from each individual team member. In the practice rounds, this is how we functioned and I think because we were so successful, coming 2nd in the class, we became over-confident and did not focus as much in these rollovers, but our failure opened our eyes and has brought us back together.
Baghai, M., Smit, S., & Viguerie, P. (2009). Is your growth strategy flying blind? Harvard Business Review, 87(5), 86---96.
Davenport, T. H. (2006). Competing on analytics. Harvard Business Review, 84(1), 98--107.