“Difficult economic times notwithstanding, our board of directors charged us with a mission to double the value of our business for shareholders, clients and employees over the next 7 years.  Waypoint’s Strategic Assessment process was instrumental in helping us determine how to achieve this ambitious objective.  It helped us build the foundation for the growth plan we envision.

Waypoint helped us lay out key success factors and pinpoint strategic priorities.  Moreover, they did so in a way that engaged our employees, managers, executives and board members.  The process not only helped sweep away ‘office politics’ but it created excitement across our whole organization for the path ahead.

Waypoint’s process revealed capability gaps but it also highlighted our strengths.  By applying techniques that are proven ‘winners’, we know we can address challenges in other mission-critical areas.  In addition, the process underscored ‘best practices’ in our regions that we have leveraged for the benefit of our business overall.

Waypoint’s deliverables are concise and insightful and presented in an appealing way.  Their process was transformational / game-changing for our firm.  We would gladly serve as a reference for Waypoint to others.”

Chief Executive Officer
Major Construction Company

Whether new to the position in their current firm or new to it in another firm, CEO’s are at risk.  According to Forbes, “The average tenure of global CEO’s is six years and falling; one-third leave against their own will.”

Great genetics, a fine education, and vast experience notwithstanding, CEO’s face four occupational hazards.  First, the organizations they run are much more complex than they themselves.  CEO’s can’t possibly know all the juggernauts lurking in the shadows.  If ever there was an example of this it is found in all the CEO’s who stood flat-footed on growing bubbles that eventually burst resulting in the ‘Great Recession’.

Second, information received by CEO’s is often heavily filtered.  Whether out of defensiveness or opportunism, subordinates spin the boss to work hidden agendas.  They engage in profit center shenanigans to create the illusion of magnificence.  They gloss over things to protect their lifestyle.  They disparage capable colleagues to self-promote.  They keep executives off balance to hide incompetence or to preserve the status quo.  Henry Miles recounts the story of a colleague who opened the conversation with their brand new CEO by saying, “Congratulations, you’ve just been told the truth for the last time.”

Third, even if a new CEO is able to ‘cut through it’, they often fail to excite their team to significant and sustained action.  Poor chemistry need only surround a couple of key relationships within one stakeholder group – the board, the management team, the field, the rank-and-file, a union – to thwart the path forward for a CEO.  Bad blood between Douglas Steenland and his employees was one of the factors that brought down Northwest Airlines.

And finally, CEO’s have an almost impossible time accepting that that they are vulnerable to these hazards.  Mergers and acquisitions offer a case in point.  Fully two-thirds of M&A’s fail and the failure rate has been constant for 100 years.  Most scholars believe that executive hubris is at the heart of these dismal statistics.  Think about it, for every acquirer crowing about their M&A prowess, there is a seller thinking they got the best of the deal.  Two times out of three, the seller is right.

To address these issues, standard management techniques should be supplemented, and a well-conceived strategic assessment process is a good place to start.  Strategic assessment identifies issues that are pivotal to the success or failure of an organization.  Moreover, when strategic assessment involves all stakeholder groups, it reveals hidden agendas and draws people together thereby helping to ensure the success of the organization and its CEO.

Strategic assessment answers the question, “How can we be better than our competition?”  The answer isn’t always obvious nor need it be.  Indeed, firms often find competitive advantage in areas that have little to do with their primary business.

Take Dain Rauscher, for example.  Twelve years ago, the firm had survived a series of setbacks to become an average holding company of independent broker-dealers each having their own organization structure and operations.  Then, in 1997, Dain Rauscher embarked on a ‘shared services’ initiative in which they merged together management, staff, and back-off functions.  The integration of Dain and Rauscher was achieved within a few months.  Then, realizing that they could expand geographically while simultaneously capturing economies of scale through fast and seamless integrations, Dain Rauscher set about to acquire and merge other firms.  A year into the strategy, Dain Rauscher’s stock price had doubled.

In the ensuing 4 years, the firm bought and integrated another firm every year moving Dain Rauscher up 2 places in its ranking among the top full-service broker-dealers in the United States.  Midway through the process, Dain Rauscher itself was acquired by the Royal Bank of Canada for nearly 4 times the price that the stock had traded before ‘shared services’.  Executives commented that Dain Rauscher’s source of competitive advantage had less to do with brokerage than it did the firm’s ability to drive operating leverage through acquisitions and integrations.

All sorts of firms are able to achieve competitive advantage in ways that are offshoots from their core business.  Marshall & Ilsley bank developed and licensed some fine technologies that it eventually spun-off into a successful firm, Metavante.  General Electric leveraged its formidable product / sales capabilities to become a dominant player in equipment finance.  Cordes & Company, a Denver-headquartered receivership boutique, branched out with services to help going-concerns dissolve and sell non-priority business units.

Firms are often better off avoiding head-to-head competition and looking in other places for advantage.  A good strategic assessment process can reveal unexploited areas of internal strength in addition, of course, to identifying weaknesses that must be addressed.

So how now are we going to make our numbers?  Other than hoping or praying that the market recovers or that a competitor goes under before you do, the easiest way to make those numbers is to cut expenses.  Because everyone knows this, corporations have been reporting revenues below estimates and earnings above estimates.  Businesses have been slashing costs faster than they are losing anticipated sales.

However, not long after cost cutting has run its course, business must refocus on growing the top line; revenue.  This is less of a financial challenge than it is a strategic one – being noticeably better that your competitors in a few key areas.

If you want to know how to come out of recession, think about companies that are doing so against the most formidable of competitors.  Think about Schick.  Only a few years ago, it was a dying brand.  Everyone used Gillette beginning with its Trac II and right on through its ATRA, Sensor, Mach 3, and Fusion.  Gillette’s carbon-tungsten steel, multiple-blade, pivoting-head design set the standard for non-electric razors.  But what really differentiated Gillette was the awesome marketing power of its owner, Proctor & Gamble.  Gillette ads ran non-stop and their products commanded more rack space than anyone else.  Indeed, observers believed that P&G / Gillette was driving toward a monopoly in the wet-shaving market.  Around the world, the firm commanded unheard of market-shares ranging up to almost 90%.

Apparently knowing that they could never win the advertising and price war against Proctor & Gamble / Gillette, Schick must have done some strategic soul-searching before deciding to refocus on product development.  With the introduction of their “Quattro Titanium Trimmer”, Schick’s breakthrough came in 2008 as the economy was finding new lows.  For about the same price as Gillette, men could buy shaving cartridges that last 4 times longer.  To add some sizzle, Schick attached little slippery panels on the sides of their razor making it literally glide around one’s nose.  And to top it all off, the company put an AAA, battery-operated trimmer at the opposing end of its razor.  In other words, the company gave consumers a way to stretch their money with a razor that has all the features one can imagine.  When hope appeared lost against an intimidating competitor in a maimed economy, Schick redefined shaving.  The local Walgreen’s now devotes half of its rack space in the shaving section to Schick.

Whether your firm is overwhelmed by an intimidating competitor or the global recession, the way forward begins with strategic assessment.  Strategic assessment prepares a firm for the future by helping it: a) understand how well it is positioned relative to factors that are key to its success, b) prioritize actions against those key success factors, and c) excite its people to move forward against those priorities.  When cost-cutting has run its course, it’s time to take stock strategically.

How can we expect anyone to be excited about our mission when we aren’t? You can’t.

Sadly, the missions of many businesses are blather.  Take General Motors, whose mission was as, “a multinational corporation engaged in socially responsible operations, worldwide.  It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stockholders will receive a sustained superior return on their investment.”

Never mind that G.M. failed to mention cars and trucks in its mission, who could possibly argue that a company should be socially irresponsible, make crappy products, or deliver inferior returns to its investors?  These are ‘table stakes’ in business, not differentiators.  With GM having gone bankrupt, we now know that it couldn’t even keep up with the basics.

Organizations are better off having narrower missions that communicate choice.  Customers choose to buy from you, employees choose to work for you, dealers choose to sell for you, and shareholders choose to invest with you.   If you can’t communicate your choice of direction, then it is unrealistic to believe that your stakeholders will enthusiastically join you in its pursuit.

Why can’t we run our business with the precision that the U.S. ran Operation Desert Storm, the “First Gulf War”?  You can, provided you remain true to three basic principles.

1. You must have a clear motivating mission.  The mission of the First Gulf War was to remove Iraqi forces from Kuwait; period.  Contrast this to the moving target of the Second Gulf War — to destroy Al Qaida, to eliminate weapons of mass destruction, to round up Saddam Hussein and his team, to implant democracy into the Middle East.  No one ever really understood what the Iraq War was all about.
2. You must involve and connect with all your stakeholders.  Recall, well before Operation Desert Storm got underway, the U.S. was working ‘the audience’.  The government’s initial ’sale’ was to the United Nations and key members of Arab League, notably Saudi Arabia.  Only after these bodies became convinced that Iraq’s incursion into Kuwait was a threat to regional stability did the U.S. turn to the American people and Congress for support.
3. You must convert motives into action through focus.  The leaders of Operation Desert Storm did so brilliantly through their orchestration of air, naval and ground operations.  Remember those missiles taking out supply-line bridges right behind motoring Iraqis.  Recall that it took hours — not days, not weeks — for the military to shut down those manifolds that were spilling oil into the Persian Gulf.

If you are concerned that your organization is losing the war, then it’s time to revisit the principles that made Operation Desert Storm so successful.  Waypoint’s strategic assessment model was built from the lessons of the First Gulf War.