Harvard Classics: Seven Questions Assess Your Strategy

　　 economic downturn During the period, the company's strategic weaknesses are easy to be exposed. But in the economic boom, do you have the means to identify weaknesses in your strategy? Can you also focus your attention on those weaknesses that really have significant impact?

In fact, no matter how cold and warm the economic climate is, to find the most important questions, you can use the stress test to assess the operation of a system under extreme pressure or sudden pressure. Sharp questions for enterprises will help you find out what kinds of confusion and inefficiency exist in the strategy and its implementation, and what are the weak links.

Peter Drucker (Peter Drucker) once warned: "the most serious mistake is not that the answer is wrong, but that it is asking the wrong question." Over the past 25 years, I have done extensive research on the strategic implementation drivers of various companies and industries, and found that seven problems should be raised by all executives and should be able to be answered. Master these seven questions. Implementation strategy Then you can not deviate from the right track.

These problems may be obvious, but the alternatives they represent may be difficult to choose, and their effects may not be fully apparent soon. The top two of these seven questions require you to set priorities strictly; the next two questions relate to setting key performance indicators and constraints, thereby assessing your ability to focus on priorities; fifth and sixth questions to see if you are using some methods to strengthen the creative tension and employee involvement in the organization; the last issue concerns your ability to adjust your strategy in time.

The following are detailed explanations of these questions, so that you can figure out how to evaluate your strategy.

Question 1: who is the main customer?

The choice of key customers is related to the success or failure of the company. Why do you say so? Because it will decide how you are. Allocate resources 。 The reason is simple: after identifying key customers, you need to mobilize all possible resources to meet and exceed their needs.

Let's look at the example of McDonald's (McDonald's). McDonald's has a total of 32000 stores, with more than 58 million customers per day. Its growth over the past 50 years has been hailed as the greatest retail expansion in history.

What is the secret of McDonald's success? The answer is to clearly select a major customer and understand when the choice needs to be changed. In 80s and 90s of twentieth Century, McDonald's believed that its main customers were not the customers who came to the restaurant, but the property developers and franchisee owners everywhere. It takes the functions of centralized management of real estate development, franchising and procurement, and concentrates most of its resources on these customers, with an average of 1700 new stores a year.

In 2003, McDonald's single store sales began to decline. The global fast food market is becoming saturated, and customers are tired of the standardized food provided in the store. Faced with this crisis, the new CEO Jim (Jim Cantalupo) made a difficult choice. He announced: "the new boss of McDonald's is now a customer."

The company's subsequent adjustments to the allocation of resources fully reflect the far-reaching impact of this decision. McDonald's business in many countries and regions, customers taste different. To meet these different tastes, McDonald's has transferred resources from the unified management department of the head office to the regional managers, encouraging them to develop menu and restaurant layout suitable for local consumers. For example, the British McDonald's breakfast serves porridge, Portugal's McDonald's has soup sales, and French McDonald's has a layer of French cheese on hamburger. McDonald's design center in Paris has nine restaurant templates for franchisees to choose from, allowing them to choose suitable restaurant decorations for their customers.

As of January 2010, McDonald's single store sales in the world have been rising for 81 consecutive months. From 2005 to 2009, its customer satisfaction increased every year (at the beginning of 2010) it declined slightly because more high-end customers gave up more expensive restaurants to visit McDonald's. In 2008, only two stocks of the Dow Jones Industrial Average were at the year-end price higher than the beginning of the year, and McDonald's is one of them. It is no coincidence that McDonald's has achieved such a success.

Many companies do not like McDonald's to choose only one main customer, but claim that we have many different customers to avoid using the "main" adjective. This will inevitably lead to poor performance. Using resources to more than one type of customers will lead to chaos and poor services.

Home Depot tried to curry favor with many types of customers and got bogged down. After Bob Nardelli became home depot's CEO in 2000, Bob proposed that the consumer's home decoration business has been saturated, so she transferred a lot of resources from this field to cater for the needs of professional decoration companies. In other words, consumers are no longer the main customers of home depot, but whether professional decoration companies can replace them as major customers is still unknown. In this case, home depot dismissal some customer service personnel (in 1900 stores wearing orange aprons shuttle across the aisle shop clerk), the savings of $8 billion for a big takeover, bought 30 home decoration wholesale business.

A series of acquisitions has made Home Depot's revenue nearly double. Even so, it does not have enough resources (and never will have enough resources) to meet the needs of these two kinds of customers. During neldey's tenure, Home Depot's customer satisfaction dropped by more than any other retailer in American history. At the same time, the company's low profit wholesale business has not received enough support, and its operating efficiency has always been unsatisfactory.

It was not until Frank Black (Frank Blake) became CEO that home depot was able to redefine its business priorities. In 2007, Black announced that he would once again take many homeowners as key customers. Home Depot has sold its wholesale business and increased the number of employees wearing orange aprons. Please return some senior industry experts to provide specific guidance for customers. Customer satisfaction, single store sales and profits begin to rebound.

Of course, your choice of key customers may change over time - think about the example of McDonald's before. However, you must realize that such a change may require a large-scale reorganization of enterprises.

The use of as much resources as possible for key customers means that you must minimize the resources available for other purposes, including all external stakeholders and all departments within the company that do not create value for key customers. The resources they get should be enough, not too much.

Question two: who should be the core value of a company -- shareholders, employees or customers?

The core values of a company with excellent strategy execution clearly reflect the relative importance of shareholders, employees and customers. It is not enough to formulate core values and merely list some behaviors that are eager to be realized. It must be pointed out that when the choice has to be made, whose interests will be given priority.

Some companies place their customers in the first place, some shareholders in the first place, and some companies may place their employees in the first place. There is no right or wrong in putting the right person in the first place, but the value creation concept behind it is different. However, it is extremely important to make clear choices and communicate effectively.

An example of this is an extremely expensive decision taken by Merck Co (Merck) to withdraw the Vioxx, a popular analgesic drug (Cox-2 inhibitor). In September 24th of 2004, Ray Gilmartin Ray Gilmartin, who was CEO of the company, received a telephone call from the head of the research laboratory. The initial findings of clinical research showed that the number of patients suffering from heart disease and stroke exceeded the expectation after taking Vioxx 18 for consecutive months. Gil and Martin have three choices: first, study and continue to collect more data according to the original plan; second, apply a "black box" label to the US Food and Drug Administration (FDA) to warn the doctors and patients about the risk of the new discovery; third, withdraw the drugs from the market and give up the annual sales income of 2 billion 500 million dollars.

In September 30th, 6 days after receiving the call, Gil and Martin held a news conference to announce the withdrawal of Vioxx worldwide. He cites the company's core values to explain why he did this: "Merck takes patient interests."

On the contrary, Pfizer is putting the interests of shareholders first in similar situations. Pfizer also found that its Cox-2 inhibitor Celebrex, acquired through the acquisition of Pharmacia Co (Pharmacia), sometimes causes cardiovascular disease, but the company decided to continue to produce the drug. However, its practice is more responsible. It adds a black box warning to the drug instructions, so that patients and doctors can fully understand the situation. In this way, Pfizer's shareholders avoided billions of dollars in profits losses that could be suffered.

The third option is to place employees in the first place, which is actually a choice that can satisfy customers and shareholders. As Herb Kelech Herb Kelieher of Southwest said, "if we are good to our employees, they will be good to customers." (CEO) If customers get good service, they will come back and shareholders will be happy. " In order to make this concept popular among the people, he regularly appeared in the advertisement of the global newspaper. The headline of the advertisement is "employee first, customer second, shareholder third". Companies like Southwest Airlines make such choices.

The three sorting methods are feasible, because each company has made clear decisions and has continued to perform. But some companies didn't do that. Not long ago, the collapse of Fannie Mae was rooted in unclear core values. According to the politicians' intention, the executives of the company provide 1 trillion dollars of home purchase loans to customers with relatively low solvency, so as to make them more comfortable.