United States: Achieving Long-Term Results In An Impatient Market

Autumn is a time many business leaders begin to set next year’s objectives and budgets.

Planning this year will be more critical than ever. The market’s downturn means investors are impatient for innovation, growth and profitability. How do you plan for strategic growth amid the cry for immediate results? In The Art of the Long View, Peter Schwartz warned in 1991 that, "instability is the inevitable reality for every business in the near future." He believes "strategic conversations" should become "effective ways of framing the planning efforts that already take place, to further illuminate the decisions that are already being made."

Based on our work with leaders wrestling with change, we offer four thoughts that may prove helpful as you balance the need for fast results against the strategic interests of your business.

First, you must decide how good you want to be. In Customers for Life, Dallas businessman Carl Sewell says that, "if we’re really interested in having a first-rate business, then we have to drive ourselves to excellence. Once we decide that, it clarifies a lot of things, it eliminates a lot of compromises, and it simplifies a lot of decisions. Are we willing to sell mediocre merchandise and provide mediocre service? No. So anything less than excellence is not worth thinking about." Here’s another way to think about it. J.R. Thomas, chief executive of MedSynergies, challenges his employees to ask themselves what they’ve done today that wows them. He believes that when you ask that question daily, you’re on the road to achieving your full potential.

Resist the quick fix. The tactical world of price cuts, flashy technology or a new sales promotion can create a false sense of security. "We’re making things happen," some may say. True. But are they the right things? In The Seven Habits of Highly Effective People, Stephen Covey advises us to "begin with the end in mind." He writes that, "if you want to have a successful enterprise, you clearly define what you’re trying to accomplish. You carefully think through the product or service you want to provide in terms of your market target, then you organize all the elements – financial, R&D, operations, marketing, personnel, physical facilities, and so on – to meet that objective. The extent to which you begin with the end in mind often determines whether or not you are able to create a successful enterprise." So before you act, think critically about your destination.

Rising tides not only lift all boats, they cover up debris. Embrace the downturn and make this year’s planning process a time to recalibrate from a new perspective. Re-examine priorities. Look for fresh insights. Scrutinize your go-to-market strategy. Ensure that your team is aligned. Take a critical look at your people, processes and programs. Listen to your customers and suppliers. Communicate consistently and regularly – inside and out. Measure outcomes, not activity. Then document and celebrate every step toward your goal. When you take these steps, you can expect your organization to emerge from this economic uncertainty – and this year’s planning process – stronger than ever.

The Chinese say there are two times to plant a tree: Today and 25 years ago. We can’t go back, so we must act on today’s decisions. Here’s the impact. Soon after the 1990-91 recession, PricewaterhouseCoopers and Business Science International questioned CEOs of 212 of America’s fastest growing companies affected by the recession. What were their major actions in marketing and cost-containment? Which were most effective? Companies that marketed aggressively outperformed their peers. They sold to new customers, expanded to new markets, made quality improvements and increased marketing spending. "Businesses that maintain aggressive marketing programs during a recession," concluded the study, "outperform companies that rely more on cost-cutting measures. A strong marketing program enables a firm to solidify its customer base, take business away from less aggressive competitors and position itself for future growth during the recovery." That kind of commitment takes courage. Allen Questrom, chief executive of J. C. Penney, has it. While many retailers are cutting back, Mr. Questrom announced he will commit an additional $100 million in advertising for the fourth quarter.

There are two ways to approach the planning season. We encourage you to embrace uncertainty and use this year’s process as a time of renewal, recalibration and recommitment.