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Archive for February, 2010

Can Strategy Really be a Fad?

Friday, February 19th, 2010

- by Brian Cusick

Recently I read an article in The Wall Street Journal entitled “Strategic Plans Lose Favor,” which suggests that in our recessionary economy having a “strategy” is actually a hindrance towards making good decisions. Furthermore, strategy as we once knew it is a thing of the past. I think this idea warrants a blog post because my interpretation of the evidence presented by the WSJ leads to a rather different conclusion. I can see that strategy consulting, as we once knew it, may very well be losing favor. But if strategic thinking is on its way out then we are all in for a much slower recovery than anyone had imagined.

The gist of the article is as follows (at least per my interpretation): Business leaders found in 2009 that they can’t rely on long-term strategic plans because turbulent times create a need for more frequent course correction. Furthermore, they can’t stick to rigid forecasts when trends change drastically. This situation is characterized with the phrase, “…strategy is dead…” In its place will be fast decision-making and on-the-fly thinking. The days of “rigid forecasting” are over. What’s wrong with that? The problem that I have is as follows: the clash between quick thinking and strategy isn’t really a clash but an indication of bad strategic planning. Bad strategies are those grounded in aspiration, generalization and theory—they produce inadequate forecasts that are no more than disguised corporate growth targets. As a result, they do not adjust along with market changes (remember, a target is a goal, a forecast is what’s actually likely to happen).

When strategic planning is based on objective, quantifiable relationships between market forces and business results and when forecasts are used to produce what is likely to happen and not what is desired, strategy and planning enable quicker thinking—they don’t prevent it. Market based strategy that combines business knowledge, available data, analytical techniques, and user expertise provides the guardrails and framework to make the right decision quickly. These strategies free leadership to take smarter risks and allow teams to focus on new ideas.

I am not suggesting that the referenced companies did or did not have “good” strategies. In no way is there enough information contained in the article to make that judgment. I am, however, suggesting that the proposed link between flexible thinking and strategic planning is shortsighted at best and most likely destructive.

I would urge business leaders, regardless of industry, not to dismiss the evidence put forth by the WSJ but to think honestly about how important objective and realistic strategic planning really is. In the end, strategy based on quantitative holistic analysis will be strategic, practical, and self-correcting.

Technical Update-

Thursday, February 11th, 2010

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Market Fusion Analytics Introduces Traffic Growth Drivers™ (Press!)

Tuesday, February 2nd, 2010

Market Fusion Analytics announced today the introduction of Traffic Growth Drivers™ (TGD™), an analytical suite of solutions that quantifies the impact of a variety of factors on in-store traffic. TGD™ has already helped retail clients across a variety of industries better understand their business drivers, measure their brand health, and improve business planning.

TGD™’s value is based on its ability to analyze both store-level factors (e.g. customer satisfaction/loyalty, employee counts/tenure, and store attributes) and market-level factors (e.g. marketing, macroeconomics, and competition), along with tactical level price changes and promotions/offers in order to provide actionable strategies for sustainable growth.

“Although the concept of traffic growth drivers is relatively new to the retail industry, our TGD™ service is already being used effectively by retailers, as well as several major restaurant chains. TGDTM has a holistic approach that is appealing to our clients because it captures the impact of a multitude of factors on customer traffic. Retailers and service providers are increasingly interested in strategic insights into what specifically drives customers to their stores. Traffic is a better indication of brand health than sales,” said Gloria Rosenberg, MFA Founder and President.

“The power of TGD™ lies in its ability to quantify the impact of specific products, events, or operational factors at a granular level and understand the impact to the total store, across consumer segments, and/or consumer trip types. In this way, the analysis is used to create customized strategies for both marketing and merchandising,” said MFA Director Mike Bregman.