This week was set up perfectly for our team to engage in analytical information. Although I must admit I have not engaged to the extent that I should in order to streamline the process; our situation with no bikes being released and with no stock for any bike made it imperative that we look at our capacity and market and see where we need to spend the money (as we had some). The lack of new bikes or modifications due to a tumultous few weeks basically meant that we must look at how many bikes 'can' we produce and outsell the competitors with existing specs. So, the situation we were in was begging for us to pin down the exact numbers for quality/preventative maintenance and most importantly advertising. After completely shell shocking the company with my advertising budget 2 weeks ago, I engaged in some depth (by maximizing the strengths of each market for each bike and cutting the losses) and reigned in the spending for advertising and support services. This tied into quality systems and alarmingly we saw improvement. So, looking at it from a step back, I think the voracity in which one must plan ahead with advertising/branding was completely underestimated by me and due to my lack of due diligence with rising costs and decreasing revenue and smaller gross margins for the newer bikes, advertising was blown out of proportion. I thought of the process as almost reactionary where I would respond to the market desires and we would eventually shift into a low quality/high production market or vice versa. This reactionary mode has led to making some decisions which we could have done without. The basic problem is to move from reactionary to proactive and seek a niche in the market and control your costs to match that niche. This would something that I am looking at this week and the double rollover. I am looking forward to seeing how I control the costs of my bikes and see how many I can sell in the market using appropriate modifications and instead of reacting to the other teams, make a move of sorts for the last 2 rollovers. We have a good pie of the market, which I want to grow and not let go off.
So, after experiencing advertising wars once before and losing badly, I think this time around with most of the teams in my world with some cash and ascending revenue streams, the tactics will be very important. Also, I think the marketing and advertising heavily depends on the relationship with operations and human resources. If you are not capable of making the bikes your advertising budget is set out to do, then you are wasting money. I learnt this the hard way. In the readings for this week (Davenport, 2002), the relationship that is explained between numbers and business strategy is stronger than any other empirical method of examining business scenarios. I think Peters summaries are so entertaining because the numbers don't lie and by manipulating the numbers further one can gain even more insight. This idea of placing the raw data at the helm of decision making is important and somewhat de-stressing. To specifically tie it into the problem I was having, I think my reliance on fuzziness and 'bigger picture' stuff was limiting my ability to match my costing strategies to the bikes. This ability to sit down and look at the small numbers and see where you can eliminate the fat and decrease the costs helped us get on the front foot again. We still have a lot of fixing to do with our idle time and costs but instead of saving for a rainy day and being reactive to what is happening, I think this week we are gonna go ahead and plan our moves for the last 3 years. This will give us time to modify depending on the result of the last rollover.
So, In summary, the bigger picture is good for strategy but from year to year, it is the numbers that better dictate the actions. The overall picture is useful but limiting in your ability to be proactive as you are always worried about the target of the overall picture. I have to let go of this tendency and continue on the reliance of numbers and cut down the costs.
Daudelin, M. W. (1996). Learning from experience through reflection. Organizational Dynamics, 24(3), 36--48
Davenport, T. H. (2006). Competing on analytics. Harvard Business Review, 84(1), 98--107.