COVID-19 Time To Review Your Strategic Plan
Sometimes the unexpected happens and it has a material impact on the strategic plan your Company is operating against. Failure to do so can be disastrous.
When Netflix entered the market they upended the existing pricing model for watching movies. Netflix introduced the monthly price with unlimited access to their portfolio of titles. Blockbuster, the market leader at the time, was operating against a strategic plan that included charging late fees for rentals. Late fees represented significant annual income to Blockbuster. Blockbuster didn’t adjust their strategic plan until years later at a point when their market exit was cast in stone. Blockbuster failed to critically assess their strategic plan and make appropriate changes.
In contrast, NutraSweet was the dominant share brand when Holland Sweetener entered the market following the expiration of NutraSweet’s patent protection. The team at Holland Sweetner had a launch plan they worked hard on and were committed to. As soon as Holland Sweetener launched, NutraSweet dropped its price relying on an aggressive cost reduction initiative in manufacturing to hold margin. NutraSweet reacted and changed strategies, but Holland Sweetener failed to adjust its strategic plan to respond to the new world reality. As a consequence they were toast.
Bottom line? Leaders who don’t reassess their strategic plans when the sands shift under their feet put their Company as risk.
If you were are one of the extremely rare individuals who prescient enough to anticipate the onset of the global COVID-19 pandemic and built your strategic plan in anticipation of its economic impact, this post is not for you. If you are part of the roughly 100% who were surprised by the onset and/or reaching impact, then read on.
It is time to get your team together and seriously reassess your strategic choices. There are five questions you need to ask about each of your strategic plan.
- Do our objectives and goals still make sense to pursue given today’s reality?
- Are our objectives and goals still achievable given the changes in market dynamics and competition?
- Are the strategies we selected originally still sufficient to deliver our objectives, or do we need to make changes?
- Is it clear what we will do and resource, and equally important are deciding not to do even though some may want to?
- Are we being too ambitious?
One general question I always recommend asking is: What must be true for our strategic plan to work? Are we counting on getting a break or for some high risk event to materialize (e.g. new upgrade on a fast schedule despite the slowness in reopening)? My counsel is that if you can’t get your plan to arithmetically work on the back of an envelope, you will never get it to work in the real world.
Now is the time to regroup and do a good job of double checking your strategic plan. It gets harder and harder to do when you are in the middle of trying to reopen and get back to running speed.
Love to hear your thoughts on my five questions and any others you might suggest.
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