Category Archives: Business in Vancouver: Boardroom Strategy

My monthly column in Business in Vancouver: Boardroom Strategy.

BIV Boardroom Strategy: Adopt the right behaviours to help execute your strategy

Posted on June 10, 2011 | Leave a comment

[read time: 3 mins]

Your behaviour as a leader has an enormous impact on your team and your organizational culture. Understanding the effect of your leadership behaviours on the execution of your strategy is the first step in guiding your team in the right direction.

As a leader, the best way to harness momentum and motivation around your strategy is by consistently behaving in ways that you want to see others behave, and exhibit the behaviours that you want to ingrain into your culture and ultimately pass down to everyone in your organization.

Here are a few things you can do to sustain momentum and support the execution of your strategy by being intentional with your leadership behaviours:

Be decisive and take action, however small, towards your goal. When temptation to postpone, cancel or move deadlines presents itself, let people see you take one small step toward the goal – when you can’t do it all, something is better than nothing; if you can’t do all of it, do some of it. When you put a visible emphasis on forward motion in the execution of your plan, chances are others will follow your lead. Continue reading →

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BIV Boardroom Strategy: How to build a corporate culture that effectively executes strategic plans

Posted on May 3, 2011 | 4 Comments

[read time: 3-4 mins]

Over the years, I’ve become convinced that the “10/90 rule” is the best guide for dividing your time and energy between strategy and execution: 10% of the value of strategic planning is in the creation of a plan that outlines direction and priorities for the coming year; 90% of the plan’s value comes from an organization’s ability to effectively execute that plan.

If your organization is like many, once the executive team leaves the room after strategic planning, the daily grind takes over, the months start to tick away and before you know it you’re partway through the year and have made virtually no headway in executing on your strategy.

The reality is, there can be a giant gap between what needs to be done to execute a plan successfully and the potential of the organization to make it happen; it’s about more than resources and capabilities. It’s about culture.

The truth is that cultural norms can make execution far more challenging than it needs to be. Execution takes buy-in, emotional commitment to the plan and discipline. But the one element that has the greatest impact on successful implementation is your organizational culture.

Here are a few ways you can begin to shift the culture of your organization toward one that’s focused on execution. Continue reading →

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BIV Boardroom Strategy: Presiding over a happy marriage of strategic plans and company budgets

Posted on March 10, 2011 | Leave a comment

[read time: 3 mins]

Budgeting or strategic planning, which one comes first? The challenge of building an effective budget ahead of the strategic plan for the next year is that in most cases you are relying on the previous year’s operational numbers to carry over into the coming year. What this leaves out is any strategic decisions including asset purchases, long-term research and development and other projects that may require upfront resources with a longer-term return on investment.

Here are three ways to tackle the challenge of aligning your budget with your strategic plan:

1) Prepare your draft operational budget and wait to finalize your numbers until after the strategic plan has been completed and you have a clear idea of the costs of the various strategic initiatives you and your team have decided on.

2) Hold your strategic planning session before you begin the budgeting process and use the results of your strategic plan to help determine the budget. The challenge here is that you could be making decisions in your strategic plan that turn out to be not financially feasible once you get into your budget process. This is far outweighed by the advantage of building a budget that is consistent with the strategic direction of the business and blends in the operational forecasting that occurred during your planning.

3) Institute a rolling budget approach: each month of the year forecast out 12 months in advance. In most fast-changing industries or organizations experiencing greater than normal growth, a rolling budget is more appropriate than an annual budget and can be implemented at any point by adding the 13th month onto your annual budget and updating the actual versus budget monthly or by adding a quarter to your annual budget and updating every quarter.

The quarterly update makes sense for companies that are using the best practice of reviewing, evaluating and revising their strategic plan on that same schedule. CFOs will appreciate this approach as it helps to align with the rolling cash-flow projections.

The goal of aligning your budget to your strategic plan and introducing a rolling budget is not to add complexity to your business.

Quite the contrary; the purpose is to inject as much reality into the decisions and actions you’re making today for the future.

Having a clear connection between your budget, cash flow and the strategic plan means leaders can make decisions around spending cash in the short term to promote success in the longer-term strategic plan.

When you dive into your budgeting process remember that a balance sheet and income statement can hide weak strategies. If revenue is for show, profit is the return on the risk and cash is oxygen.

Cash-flow statements that are as simple as possible and monitored religiously will help identify weaknesses and point you in the right direction around strategies that lead to positive cash-flow outcomes.

Turning back to the strategic plan, the key there is to ensure that the objectives and action plans have clear metrics, measurements and budgets in place for any new expenditures and investments that are outside of the operating budget.

These numbers can now be added into the budget or at the very least put in context against the overall operating budget.

Whatever methodology you choose, the take-home from this discussion is your strategic plan and budget should be designed to complement and support each other, not act as estranged relatives.

BIV Boardroom Strategy – Strategy and Budget Link – March 2011

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BIV Boardroom Strategy: Your company’s strategic plan needs a solid framework

Posted on January 13, 2011 | 4 Comments

[read time: 4 mins]

A successful strategic plan design keeps two things in mind: focus driven by simplicity and clarity and engagement of the people who will be held accountable for the results.

The more complex the plan, the less likely anyone in your organization will read it or, even worse, take action from it.

Here is a framework and process for your strategic plan that will ensure you focus on what’s important, narrowing down the details to the critical pieces around which your team can rally. Using this framework with your team to build a plan will dramatically increase engagement and accountability.

Wildly Courageous Decision (WCD). As CEO, you are the chief dreamer, schemer and long-term thinker. Before engaging your team in a strategic planning experience, carve out some time from your schedule to dream 10 to 25 years ahead from today. What courageous direction can you passionately make a decision to take your organization in? Think of this as the North Star you are navigating toward: a simple statement that sets a long-term perspective that everyone can rally behind.

Mission. If your wildly courageous decision is the “what” then think of your mission as the “how”: what behaviours and actions over time will lead to your organization realizing its WCD?

Strengths, weakness, opportunities, threats and vulnerabilities. Have you, your team members, and their direct reports list out what your organization is truly strong at, weak at, where the market opportunities lie, what external forces can threaten your success and where you are vulnerable to inside and outside forces – your company’s Achilles Heal.

Rhinos, whinos, sacred cows and hidden agendas.Rhinos are the large, dirty, messy issues that are hiding under your boardroom table causing big distraction, wasted resources and energy, and yet everyone is pretending they’re not in the room. Whinos are the issues team members consistently whine about that never seem to get dealt with. Sacred cows are the core tenets in your business that you’re not willing to compromise on or change: they’re part of the secret sauce of your success. Hidden agendas are the plans that people are not disclosing, instead they’re secretly working on building alliances and putting significant energy into something that may or may not be right for your organization. (The Lexus ISF is a good example of a hidden agenda of an engineer at Lexus. It was built in secret in a remote warehouse behind the head office by a skunk-works team and unveiled to Toyota’s CEO after the final prototype was complete.)

Values and core purpose. What core values are forming the concrete foundation upon which your organization is built? These are the values driving key decisions made at a senior level within your business, not values you may aspire to. What is the core purpose for your company existing in the world? Why will the world be a better place as a result of your long-term success?

Objectives. Use the information you uncover in the sections above to craft a series of five to 10 key objectives that your organization will achieve over the next 12 months. The easiest way to know whether you have a well-framed objective is to ask, “How will we know when this objective is complete and would we throw a party to celebrate achieving it?” If the answer is unclear then you’re likely missing a deadline, a clear success measure or the objective is not specific, reasonable or challenging enough.

Owners. “The executive team” is not the answer to effective accountability for strategic objectives. Each objective should have an accountable champion who ensures that the executive team is kept up to speed on progress and the road blocks along the way.

Action steps. Many companies stop at the objective stage and the result is low clarity on the first move and subsequent steps. The result is a sandbagged plan. Create an action-step plan for each objective that answers the statement, “When these steps are complete, the objective will be successful.”

Communication. Without a communication plan that shares the strategic plan, the reality is the same as winking at someone in the dark: you know what you’re doing but they haven’t a clue. Decide as an executive team what consistent, concise and compelling messages you plan to share with the rest of the organization, including reporting on results throughout the year, and what mediums have the best chance of reaching the widest audience. Using the steps

we’ve walked through will provide a solid framework to build your strategic plan, ensure that year after year you have a consistent way of describing the path for your business and engage your team in executing the plan effectively.

As the Cheshire Cat said to Alice, “If you don’t know where you’re going, then any road will take you there.”

BIV Boardroom Strategy – Solid Strategic Plan – Jan 2011

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BIV Boardroom Strategy: Contemplation and reflection are key to strategic corporate planning

Posted on November 19, 2010 | Leave a comment

[read time: 4 mins]

In preparing for your annual strategic planning session your role as CEO is to take some time to contemplate where your organization is today, what challenges and opportunities it is facing, where you see the future of the organization, and roughly what the path forward looks like. A key portion of your time should be spent in what can best be described as day dreaming: scheming and dreaming about the near-term and long term future of your business.

 Now that you have your thoughts in order, let’s think about your team. A great deal of time is usually wasted in strategic planning experiences in drawn-out group discussions simply due to inadequate preparation. By spending time preparing in advance of the session there is considerably more time available for clarification, discussion and active debate in the actual planning.

 Mindstorm. The key to leveraging the collective brainpower of your senior team during the planning experience is to have them mindstorm in advance. Mindstorming is similar to brainstorming except that it’s done on your own. Mindstorming helps reduce the effects of groupthink and allow the participants to truly clarify their own thoughts prior to the experience.

 Gain insight. Here is a list of insightful questions for you and each member of your team to consider before stepping into a strategic planning experience: What changes in competition, the industry, key customers, the market, or the economy have the biggest potential for harm to our organization? What is the likelihood that each will occur?  Considering this past year in general and our last strategic plan: What worked well? What needs improvement? What’s missing? What resources or situations are holding me back from being most effective in my role? What are the critical issues that we’re ignoring that are getting in the way of our success? What issues do we complain the most about in our organization that never seem to get fixed? What am I hoping to accomplish in the strategic planning that no one knows about? What does success look like for me in this business or organization this year? What are our organization’s biggest strengths, weaknesses opportunities, and threats (SWOT)? What will our business or organization will look like in 5-10 years?

 Engage your direct reports. In order to get an even wider and more robust view of the current situation have your team poll their direct reports for their answers to the questions above. This not only prepares your executive team for strategic planning, it also engages their teams in providing critical raw data to the experience, helps illuminate potential blind spots and missed opportunities, and reduces the “black box” effect that teams sometimes feel when their leaders return from strategic sessions.

 Choose one big question. After contemplating these questions, ask your team to help identify the right question overall: the strategic question your organization most needs to be asking at this time. One of the key success factors for strategic planning is identifying the right questions to ask so that strategic planning can be focused and relevant.

 Leverage collective brainpower. You may have noticed that as part of the prep work we have not yet requested people to come forward with solutions to the challenges they see the organization facing today. When executives leap directly to solutions instead of bringing a blend of meaningful raw data and questions, the result can be a discussion focused on comparing myopic solutions, skewed by each executive’s perspective within the organization. The value of bringing together the team in a strategic session is to leverage the collective brainpower in the room on a common set of agreed upon inputs, towards creative well thought out solutions and strategies.

 A thoughtful, consistent approach to your team preparing for a strategic planning experience, combined with quarterly reviews of the plan throughout the year, helps raise the level of accountability, connection to reality, and engagement in the overall strategic direction that you choose to take.

PDF of original column in BIV Nov 2010 

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BIV Boardroom Strategy: Why your strategic plan is stale and what you can do about it

Posted on October 24, 2010 | Leave a comment

[read time: 4 mins]

If the last time you thought about your strategic plan you couldn’t immediately recall what was in it, couldn’t remember where the binder was, and then needed to dust the binder off once you found it…my guess is your strategic plan was stale.

 One of the core challenges to effective strategic planning is building in a frequent review process to ensure that your plan stays relevant, you are tracking progress and accountabilities, and there is a clear line of sight between the ongoing operations of the business and your long-term destination as an organization.

 Now the word frequent means different things at different stages of your business growth. In start-up mode the shear number of shiny objects you have to choose from means a monthly review of the plan is appropriate. In our discussion we’re going to focus on established companies and organizations that are well past the start-up phase, and as a result, quarterly follow-ups to the strategic plan are appropriate. 

About every three to four months changes in people, the economy, competitors, your market, the industry, customers, or technology will put pressure against your strategy to the point that your strategic plan no longer feels relevant and timely. At this point, most organizations will shelve the plan due to lack of relevance to the current situation and, inevitably, all of the hard work, energy, and enthusiasm that went into creating the annual plan falls short with 75% of the year still left to unfold.

 Bringing your team together to go through your strategic plan for a few hours on a quarterly basis is the surest way I know to revitalize your plan and maintain its relevance all year. Here is a four-step process to facilitating your own quarterly strategic planning follow-up session:

 Step 1 – Evaluation. Start your session by evaluating your plan using the following questions: What’s working well? What needs improvement? What’s missing from the plan? How have we been celebrating our success along the way? The answers to these four questions will provide an overarching view of the validity of your plan, where it needs to be changed, and what things need to be added that you didn’t know about when you first built the plan.

Step 2 – Review. For each of the three to seven core objectives you are focused on this year, ask the person responsible to walk the group through their action steps and to update the team on progress, delays, missed targets, unrealistic timelines, and finally, new actions. The rest of the team will provide insight, support, and feedback to help ensure that everyone understands the current status and how they can support their peer moving forward.

 Step 3 – Revise. If an objective needs to be removed or reprioritized or a new objective needs to be formed based on new data, this is the time to engage the team in discussion, frame the objective, choose an owner, and build an action plan with accountabilities and timelines. If you’re not sure whether or not your objectives are properly framed, here’s a quick test: if there’s no way to measure your objective so we can throw a party to celebrate completing it, it’s not an objective. The most common framework used to test an objective is SMART: is the objective Specific, Measureable, Attainable, Relevant, and Timely?

 Step 4 – Next Review. With the team together, now is the best time to select a date for the next quarterly review. It might seem strange to make this a step, yet in my experience without getting a date in the calendar now, the quarterly sessions can end up being semi-annual instead.

 Whenever I’m asked what the number one thing a CEO can do with their team to improve the quality of their annual strategic planning process my answer is always the same: review it more frequently and at a mininum, once a quarter.

PDF of original column in BIV Oct 2010 

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BIV Boardroom Strategy: To find yourself as a leader, you need to start with the right directions

Posted on September 28, 2010 | Leave a comment

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Here’s a question I get asked fairly often: how can I move from being a manager to truly becoming a leader? It turns out that the answer is “it’s a journey, one you can start right now and you needto be strategic about it.”

Like most journeys, the one from manager to leader becomes more focused with a roadmap that guides you in knowing if you’re on track and making progress.

Here’s a step-by-step process for helping you create your own development strategy as a leader:

Step 1 – Understand the perception of followers. One perspective on the difference between managers and leaders is that managers manage tasks and projects while leaders inspire, guide, mentor, and coach their teams. The reality is that the key difference is in the followers. The perception of followers plays a big role in developing you as a leader: if followers aren’t willing to be led then you will have no one to lead. This understanding is the first step.

Step 2 – Clarify your Leadership Vision. Once you understand the role perception management plays in leadership, it’s time to consider what leadership outcome you are striving to achieve. Your Leadership Vision is the “what and where” of your leadership journey: where do you want to end up and what will you do when you get there? As Cheshire Cat said to Alice, “if you don’t know where you’re going then any road will take you there!” Your Leadership Vision can be a role or position within an organization or it can be what you will be able to accomplish as a result of your leadership journey.

Step 3 – Clarify your Leadership Core Purpose. Now that you have your Vision – your “what and where” – it’s time to consider the how. Your Leadership Core Purpose is made up of the underlying values, attitudes, and beliefs that drive your behaviours and actions towards your leadership vision. To help you determine your Leadership Core Purpose, ask yourself, “if I asked my followers how they would describe my strengths as a leader, what would they say?”

Step 4 – Evaluate your Leadership Competencies. Now that you are clear on your destination and have an idea about how you are going to get there, take a step back and understand where you are today. Draw a line down the center of a blank page and on the left side write a list of your leadership strengths, both behavioural and skill/role related. On the right side of the page write a list of the areas you need to get stronger at that are consistent with your vision and core purpose.

Step 5 – Determine the actions that will increase your competency and maximize strengths. Next to each leadership strength and area that requires improvement, write a clear and direct action that you can take this year to improve in these areas and move you towards your Leadership Vision. These actions can vary from reading, to taking courses, attending webinars, joining peer-groups, getting coaching, finding a mentor, signing up for internal leadership development program, finding opportunities to take on leadership roles outside of work (in my experience chairing a volunteer board is an amazing way to grow your leadership abilities), etc.

Step 6 – Build in accountability. Now that you have actions setup it’s time to put some accountability into place. Create “by when” dates and first steps for each of the actions. Then select an Accountability Buddy who can hold you accountable to your Leadership Roadmap and provide feedback and shared experiences when you feel stuck or at a crossroads.

Step 7 – Review, evaluate, and revise. Each quarter setup a review, evaluate, and revise session for yourself to see what progress you’ve made, what’s working, what’s not working, what’s missing, and what you can celebrate.

After reading this you may be thinking that the journey of a leader is more than an outer, visible journey, it’s a blend of the outer and an inner journey. If you have read the autobiographies of great leaders you already know how much of their focus is becoming a great leader was on self-reflection and discovery. This is the inner journey that is woven like a ribbon through your development as a leader. Think of it as your own personal iceberg: so much of the real weight is hidden below the surface and forms the true stability and power behind the iceberg.

PDF of original column in BIV Sept 2010

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BIV Boardroom Strategy: Beliefs and behaviours drive corporate success and failure

Posted on August 23, 2010 | 1 Comment

[read time: 4 mins]

Hidden within the fabric of your organization lies a set of beliefs, behaviours and values that form the basis of your culture. Although values rarely need to be changed, if you are interested in shifting towards a culture where successful execution of your strategic plan is the norm, the beliefs and behaviours that are getting in the way of action and accountability do need to change.

Since behaviours are essentially beliefs turn into action, shifting the culture of your organization starts first with uncovering and challenging the assumptions that drive the beliefs and behaviours that are inconsistent with action and accountability and then ensuring that rewards (and I’m using rewards in the liberal sense of the word to include both intrinsic and extrinsic rewards – praise, raise, bonuses, promotion, etc.) are linked to specific performance.

Here are five questions that senior teams can ask themselves to start to uncover the hidden truths in your business to build a culture of getting things done:

What one behaviour do we, as the senior team, need to start modeling that will dramatically improve the behaviour of everyone else in the company? Few people look down the organizational chart for cues to model their behaviour as a leader; most everyone looks up or side-to-side. Behavioural change within an organization is most successful when it starts at the top. Don’t underestimate the impact that even the smallest change in leadership behaviour can make on your entire organization.

What company-wide assumptions and beliefs have shaped what our organization looks like today? Shared beliefs are a large part of making sure everyone is on the same page, aligned, and moving in the same direction. The trouble comes when we fail to stop every once and a while to examine whether or not these beliefs are still true. Take a long hard look at what you may be doing on a regular basis simply because that’s the way “we’ve always done it”. Challenging assumptions that run so deep that they have become the core beliefs that underpin how you run your business day to day will likely uncover some hidden truths that are actually roadblocks to growth.

What do we need to start believing, in order to guide the desired behaviours going forward? What do you need to start believing about your business in order to keep moving in the right direction? These new beliefs will shape the attitude and behaviours that will be adopted by the senior team, and trickled down through organization, to guide a new culture of getting things done.

How can we link performance to rewards? The foundation of changing behaviour is linking rewards to performance, and making the links transparent. This tells people what’s valued, and what they should focus on. If you reward and promote people for execution, your culture will change.

What kind of people are we looking for? Have ever you noticed that when you have a critical, time sensitive, core objective that you need to delegate, there are a few people in your organization that you turn to every time? Take note of what it is about those few key people – the people that get things done – and make sure you include their core attributes and strengths in your hiring criteria.

There is no better time than right now to take an honest look at what’s really happening in your company. Understanding how unchallenged assumptions and shared beliefs are contributing to the behaviours that are holding your company back from really getting things done is the first step in creating a culture that sees consistent growth and achievement.

BIV Boardroom Strategy – Beliefs and Behaviours – August 2010

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Stop chasing shiny objects and focus on your core business

Posted on July 19, 2010 | 11 Comments

[read time: 4 mins]

Stagnation is the enemy of progress and growth but chasing after every opportunity that comes your way can be just as detrimental to your business. I have a name for these myriad choices that appear like opportunities but in most cases are distracters: shiny objects.

When I ask leaders where they expect their future growth to come from, quite frequently I hear the response, “we have so many opportunities for growth that it’s difficult to stay focused.” Therein lies the rub. Most opportunities are simply mislabeled as such and end up using up valuable time, money, and people resources within organizations. These shiny objects are difficult to choose between because no filter is in place to help evaluate the difference between them and an actual opportunity that the business should go after.

Here are four questions you can ask yourself that will act as a filtering mechanism to differentiate between shiny objects and opportunities:

What are the realities of our business today? We’re taking facts, not opinions here. What is our SWOT+V: break down our strengths, weakness, opportunities, threats, and vulnerabilities? In case you’re wondering, the difference between a threat and vulnerability is that a vulnerability can take your business its knees whereas a weakness is an area where we are not able to compete readily against our competitors. This question can only be answered properly in a culture of candour – a culture where the truth is spoken and can be heard. As difficult as it can be for a senior team to face up to the shortcoming of the business, it’s the only way to truly create a solid plan for the future.

What are the simple, underlying patterns, hidden in the complexity of our business, that make us great at what we do? If we were to capitalize on our greatest strength, what can (not want) we become world class at and as a result we can we not be world class at? What is the single denominator in the key economic equation for our business success, usually stated as “profit per X” [Good to Great, by Jim Collins. New York: Harper Collins Publishers, 2001]. Finally, what does our business stand for that we are truly passionate about?

Do we have access to the resources of money, people, and time? Many a great idea has been stalled by a lack of access to, or an underestimation of, resources. Passion without the ability to execute is daydreaming. For each opportunity before you, review the necessary action steps and time frames that would be required to reach the end goal. Then take stock of the budget required to support these action plans. Finally, determine whether or not you have the right people in your organization to tackle the necessary action steps, or whether you have the ability to hire from outside the business.

If I say yes to this, what am I saying no to? With limited resources available executives need to learn the skill of appropriately, with purpose and clear communication, stopping a project from moving forward, or preventing one from even getting off the ground when it does not fit within the strategic framework. Resources misallocated to objectives that should have died on the vine are being taken away from the core opportunities that will help create a more compelling future for the business.

As a leader, working through the answers to these questions with your team to distill down to the core opportunities you should focus on is far more compelling and inspiring than the alternative – reacting by gut feeling to initiatives that you don’t feel fit the business, without having a clear reason why. The difference in the engagement level of your team will be huge.

BIV Boardroom Strategy – Shiny Objects – July 2010

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BIV Boardroom Strategy: Uncovering your strategic plan’s hidden innovation.

Posted on June 29, 2010 | 1 Comment

[read time: 4 mins]

If you have done a strategic planning session in your organization then you’re familiar with SWOT analysis: uncovering the inherent strengths, weakness, opportunities and threats that form the basis for a situational analysis of where your company is at today both internally and externally.

In many cases the SWOT analysis is simply part of the raw data included in the pre-reading or pre-work for the session and usually ends up in the final document to disclose the background assumptions that underlie the plan.

Standard practice in strategic planning is to discuss the SWOT as part of the context setting for the strategic session, ensuring that everyone is working from the same set of base assumptions.

There is a less commonly known way to leverage this analysis to uncover hidden opportunities for innovation and growth that is grounded in reality instead of hubris: the TOWS matrix.

Originally designed by Heinz Weihrich, professor of management at the University of San Francisco, the TOWS matrix (also referred to as the SWOT matrix), is a simple and effective way to leverage your SWOT analysis as a tool for bridging the gap between your organization’s current state and the opportunities for growth and innovation that leverage your current environment.

Not unlike a SWOT analysis, the TOWS matrix looks at strengths, weaknesses, opportunities and threats, but takes it one step further to create four unique quadrants of analysis: strengths and opportunities, strengths and threats, weaknesses and opportunities and weaknesses and threats.

Here are the four quadrants of the TOWS matrix in detail.

Strengths and opportunities

The SO quadrant examines how we can use our strengths to take advantage of key op- portunities in the market today. If your company has significant experience with outsourcing production and low-cost foreign producers begin to enter your market- place you can move deeper into outsourcing to further re- duce your cost of goods sold.

Strengths and threats

The ST quadrant includes strategies that use our strengths to take advantage of the core threats that we’re facing from outside the company today – from market to industry, economic and competitive forces. If one of your strengths is customer relationships and you have identified a low barrier to entry into your industry, then one approach you can take is to look for opportunities to take your customer experience to a level that is difficult for a new competitor to replicate.

Weaknesses and opportunities

The WO quadrant contributes strategies that allow your company to work around a weakness to take advantage of an opportunity in the market- place. A company that sees the opportunity to use technology to step ahead of the competition but does not have the internal resources to pull it off might use the approach of collaborating with a supplier or technology partner that does have the in-house expertise.

Weaknesses and threats

In terms of strategic leverage, the WT quadrant is the least attractive of the four quadrants. When your or- ganization has a weakness that corresponds to a strong threat it can require drastic action to respond. The Tesla Motors/Toyota partnership is an excellent example of a strategy that leverages weaknesses and threats. Tesla’s weaknesses were a lack of mass production capability and volume price discounts from suppliers. Combine that weakness with the threat of the large automobile manu- facturers launching hybrids and all-electric vehicles like the Chevy Volt and Tesla was struggling to come up with a way to compete. The introduction of Toyota’s manufacturing expertise, volume pur- chasing, kaizen philosophy and quality standards level the playing field for Tesla.

The TOWS matrix looks at strengths, weaknesses, opportunities and threats, but takes it one step further.

To truly take advantage of the power of the TOWS matrix, the key is to carefully compare each of the multiple strengths and weaknesses to each of the opportunities and threats. An easy way to keep track of the matched pairs is to nickname each of the different data points with a number, for example, S1 versus O1 (the first strength we recognize as compared with the first opportunity we have uncovered), W2 versus O1, etc. This will ensure that you have looked at all the different strategic possibilities.

The value behind the TOWS matrix is that it takes a traditional SWOT and makes it actionable. By com- paring internal strengths and weaknesses with external threats and opportunities, you can create specific actions, grounded in reality, that turn challenges into opportunities.

If you would like to learn about more about the complete matrix, I have posted an in-depth article by Weihrich on my blog at www.mikedesjardins.com.

BIV Boardroom Strategy – TOWS Matrix – June 2010

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