Last week we experienced our most unsettling and disappointing rollover yet. Our shareholder value dropped slightly for the first time, and we had a product development failure among other things which reduced our total profit. Consequently we came into this week feeling quite anxious about whether we could pick ourselves back up to the top 6 in the class. In our first discussion we were quite hesitant to make final decisions, scared of making the same mistakes as the previous rollover. So instead of making decisions about finer product details or marketing figures, we decided to look at the broader picture. The problem we faced was trying to decipher what the underlying causes were of our poor results in the previous rollover.
We all agreed that we could have spent different amounts of money on things, invested more here, and less there. But these were all the obvious things, and weren’t going to help us understand what went wrong, and how to prevent it happening again. After a long discussion, what it boiled down to was that we had lost sight of our original strategy that we had outlined in the first rollover. Baghai, Smit and Viguerie, (2009), question the effectiveness of certain growth strategies of some organisations, and stress the long-term consequences of having a feeble growth strategy. I believe that in the first week of rollovers, my team and I established a good strategy that had a lot of potential for success. However by losing sight of this strategy and not making all of our decisions cohesive with it, we had the equivalent of what Baghai et al, (2009), describe as an inadequate growth strategy (which was evident in our lack of SHV growth).
In order to not make the same mistake this rollover we had to re-align all of our decisions with our original long-term growth strategy. For example in the past 2 rollovers we had been focusing on getting as much sales as possible to grow our market share and capture as much revenue as possible. This went against our original strategy, so we made all of our decisions this week based largely on turning our current sales into profit and creating better margins, where increased sales would just be an added bonus. As the marketing manager I contributed to our restructuring of decision making by looking at where I could cut costs as much as possible without losing our current customers. As Devenport (2006) discussed, the power of analytics must not be underestimated, as they are a good tool to create powerful strategies and make accurate decisions down to a science. My analytical skills are far from this level of competency, however by comparing how much we were spending over the years and the corresponding effects on awareness and PR, I was able to make more informed and accurate decisions about how to allocate our spending accordingly.
This week I learnt that by stepping back and looking at the bigger picture it is sometimes easier to see the underlying causes of what is going wrong. By refocusing on our original strategy that had been successful in the first few rollover and using our analytical skills to make better, more informed decisions we were able to increase our SHV. This made me understand the importance of keeping focused on a powerful long term growth strategy, and not getting lost or distracted by the competition.
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.