Note from the WLA team: There are few leaders in business today who better understand the principles of Outside-In than Stacey Weber. With a decade in software followed by a decade with Pragmatic Marketing, Stacey has honed a perspective on business planning that is as refreshing as it is insightful. We are honoured that Stacey has agreed to let us repost this piece, originally found on LinkedIn. Enjoy!
Sure, You’re Going Into Business Planning — But Where to Start?
Planning where to go next with your organization and strategy can be a bit like unwinding the proverbial ball of yarn – every opportunity or issue you see leads to more information, more data, more insights — more context. It becomes important, then, to understand which activities will best help guide the next steps. Given that we all have limited resources, what will best light the way for us as we navigate the road to identifying and achieving our strategy? Let’s have a look at this together.
Plan, Yes — But Stay Flexible
Let’s get this out of the way. The best laid plan is logical and easily understood but also open to change. Plans evolve, not prescribe. They are informed by progress, market changes and modifications of your approach. Keeping it real here, rigid plans rarely get executed. When you instead approach planning in flexible and adaptable ways, the path to success becomes straighter – we experiment a bit, adjust the plan, and experiment some more.
Framing Your Business Plan In Two Important Ways
At the highest level, you must examine the organization and ask yourselves – are you trying to impact adoption, thereby increasing revenue? Are you acquiring new customers to drive revenue? New Products? New Markets? Or, are we at a different phase, where cost-savings is the higher focus? You have to decide, in order to drive focused action and set appropriate priorities.
When You Want to Focus On Reducing Costs
If your number one focus is to reduce costs, then the thread to pull is inside your organization.
The first step is to diagnose where the problems exist, so that you can dive deeper and make decisions. You don’t want to make any cost-cutting decisions yet, as you are just beginning to figure out how that might happen. I believe in trusting the people inside your organization; they are much closer to cost centers than is management. In order to enlist their help, leadership has to articulate the current situation, goals, and constraints.
Articulate what you are trying to achieve. Let them know you’re being open about this decision, nothing is in the works — you are merely investigating. Recognize that talking about cost-cutting makes people nervous; try your best to avoid invoking fear-based responses.
Be open about your goal. Is this just the next evolution of your organization? Or is there a financial problem that you’re trying to address? Are there any goals set, in terms of the level of cost reduction we’re trying to achieve? Be as transparent as you can be; the path will be best guided by calm, informed people.
If you’re trying to diagnose problems on the cost side of the equation, articulate the situation, goals, and constraints for your internal teams. Ask them to provide areas for further research, to figure out how to meet your goals within the current constraints. When I’ve used this technique, I have been amazed at how each member of the team has knowledge of places where the company is spending more than needed. By merely educating the team, and requesting their help, we can often find ways to reduce costs without fundamentally harming the teams, the product, or our market position.
When You Want to Focus On Increasing Revenue
If, on the other hand, you are more focused on increasing revenue, then you need to start diagnosing performance and potential from the market’s perspective. To find the root cause, start by getting to know your recent buyers. This is where the rubber meets the road, where we find out whether our product, price, promotion, and place have been mixed appropriately to incent the buyer to sign the bottom line…..to open their wallet and share some of their hard-earned cash with us.
The best way to begin diagnosing the market perspective is by conducting market interviews, such as Win-Loss Interviews and Analysis.
These interviews explore all aspects of the products, from buying process to customer cancellation. How did the buyer decide they needed to go shopping? What options did they explore? How did they do their research, and eventually add you to their list of solution options? What steps did they take to compare and research alternative approaches? And ultimately, how did they make their final purchase decision? That’s powerful stuff, right there.
One individual interview is enlightening – I’ve had these interactions change the very way we approached the market. What’s even more powerful, and more likely to be right, is a series of interviews targeting both wins and losses. Following these interviews, we need to do some analysis to find the trends. These trends, then, shed light on the next section of our path forward.
Bad news, and then good news! These interviews are actually very difficult to do when you’re openly associated with the seller. Sales tries to figure out why they won or lost, but buyers aren’t likely to be open with the individual who was selling to them. We get better results when someone from Product Management or Product Marketing does the interview, but they are also associated with the seller and sometimes run into difficulty getting the best information. Additionally, many Product Managers and Marketers just don’t have the time or budget to consistently explore their buyers’ purchase decisions.
Good news! Over the last ten years or so, more and more organizations have mastered the art of doing Win/Loss interviewing on behalf of companies. Look for companies with interviewers who have deep experience in both interviewing and software, to ensure that you get valuable insights from the activity.
Whether you in-source or out-source, Win-Loss Interviews and Analysis will bring powerful insights to your planning process.
Figuring Out Where To Start Is Difficult, But Now You’re On Your Way
At the highest level, decide whether it’s more important to increase revenue or reduce costs. If increasing revenue is most important, start by conducting a handful of Win-Loss interviews. If, on the other hand, cost-savings is more important to you right now, enlist the help of your internal team. Educate them, and ask for their ideas. These activities will light the way on your path to a successful execution of strategy.