Strategic implementation for Dendro Environmental, a San Diego arborist startup

Dendro is a start-up arborist business in San Diego County. Founded by Bill and Sue Williams, who both have experience in the industry, Dendro is seeking to carve out a niche as a differentiated provider, delivering the best service to both institutional and retail clients (QuickMBA, 2010). They are planning to build a business that could eventually be expanded to other parts of Southern California, if not beyond. This section of the paper will focus on the implementation of the strategic plan.

The first component of any strategic plan is to develop a mission and vision for the company, something that has already been described earlier. The second part of the process is to set the objectives of the strategic plan (NetMBA, 2010). Objectives are "concrete goals that the organization seeks to reach." These should be specific, measurable, achievable, realistic and timely (ECU, 2010). The objectives should include both outcome measures relating to end performance, and internal measures that relate to the different components that make up that performance.

As a new company, Dendro needs to have objectives set for market share, revenue and profit. It needs to have objectives set for the number of customers as well. To keep these timely, and reflecting the rapid pace of change in new businesses, the objectives will be kept within a one-year timeframe. The first objective is that Dendro needs to build a book of 20 institutional clients and 50 retail clients within a year. The institutional clients are the bread and butter of the business, expected to be worth at least 80% of revenues. These are going to be golf courses, hotels, housing associations and corporate clients seeking regular arbor service. The retail clients are more likely to consist of individuals and small businesses, and their service needs are going to be more irregular. The target for revenue in the first year is going to be $200,000, expanding to around $500,000 in the second year. These figures are based on the normal size of institutional accounts and the fixed costs that Dendro will need to cover. If the owners cannot earn at least $200,000 in revenue in the year, there is no way the business will be profitable enough to continue, so this is a minimum target. Ultimately, Dendro feels that its high-end service offering should be able to capture 20-40% of the local market, with 20% being the target for the first year or two.

There also needs to be a set of measurable objectives for operations that will help to guide the implementation of the strategy. These can include service-related measures such as the time it takes to respond to customer phone calls, the time it takes to book and appointment, the time it takes a service a job, and customer satisfaction measures. While each individual job will vary, there should be measures that guide the average performance times for specific tasks over time. This should definitely be the case for institutional customers that require regular work, like monthly work maintaining the trees along a fairway for example. Financial measures such as ROI, ROA, ROIC and revenue per employee will also be included here. In addition, inventory management measures should be undertaken to ensure the cost structure of the organization does not get out of hand.

Functional Tactics

There are a number of functional tactics that go into a business such as this. Service is the key point of differentiation, so there needs to be a set of tactics that reflect the desire to provide the best service. The first is that the company needs to have somebody available at all times to meet customer needs. This availability needs to be bilingual and it needs to be somebody within the company. Bill and Sue both speak some Spanish, since they have worked in the industry for years, and there are plans for all shift managers to be bilingual. Institutional clients can be serviced in English, but the size of the Spanish-speaking market is too great to ignore. Response time to customer inquiries is a key element of service level perceptions, and it also represents an opportunity to either capture or lose business.

The estimating experience is the second major point of contact. This process needs to be carefully managed. Both Bill and Sue will set out a standard for customer interaction -- using names, cultural sensitivity, asking for feedback, and tactics to ensure the conversion of the estimate into a sale -- and utilize these tactics every time. These tactics, when refined and universally successful, can then be documented and transmitted to other managers to help the company expand.

The performance of the service is another critical function, and direct interaction with the customer. Communication between different people within Dendro is critical here. Customers want to know that the arbor staff is knowledgeable about the history of the interactions between them and the company. If a price was agreed to with Bill or Sue, the field staff need to know about that, and be empowered to manage relations with the customer. The customer needs to see every employee as an important point of contact with the company. To that end, all work teams will need at least one fluent English speaker and if the client is Spanish-speaking then one fluent Spanish-speaker as well. There should be standards set that ensure there are never communication gaps between staff members at Dendro and the customer.

Training is a critical element to the fostering of a differentiated level of customer service (Belrad, 2008). Dendro is going to have the most comprehensive training program in the industry in Southern California. The training program will emphasize not only the fundamental skills of the job, done the Dendro way, but also the customer service aspects of the job. Our employees will understand that their role does not consist only of performing arbor work, but also of providing customer service. The training program is going to be developed formally and implemented by Bill and Sue to ensure consistency.

The final element of the tactical strategy is measurement. The company is going to build its performance objectives into the employee evaluation strategy as a control mechanism. This way, Dendro employees will be evaluated in terms of all of their performance objectives, including customer service objectives and the different things on which they are trained. The entire point of having measurable objectives is so that the company can measure them as a means to ensure performance.

Milestones and Deadlines

One component of the objectives is that they need to be timely. Having goals that never need to be reached is not worth much. Bill and Sue are making a significant financial commitment to building this company and want to ensure that this business is going to be viable. Therefore, they are going to have specific timelines. Most time frames will be based on either six months or one year objectives for most tactical and financial measures. There will also be a set of longer-term objectives for growth. The objectives are going to be based on careful research and the proprietor's experiences in the industry thus far. The next step with respect to milestones and deadlines is that they need to be revised regularly. These updates will reflect the need to move quickly in a changing environment, which most startup companies face. Additional motivation is achieved through moving milestones and deadlines as well. For example, if Dendro realizes after three months that it is within a month of meeting its six-month revenue objective, it will need to rewrite all of its financial objectives to reflect this early success. Doing this keeps the objectives current and discourages complacency when initial objectives are reached.

Key Success Factors

Having a differentiated strategy means emphasizing sales and service and developing a corporate reputation as a leader (QuickMBA, 2010). Dendro must therefore focus on customer service factors as critical to success, with marketing and job performance as secondary KSFs. The company needs to ensure that it benchmarks the competition, because it needs to offer substantially superior service in order to justify higher costs for its service. Dendro must also pay attention to financial management, in order that the company executes this strategy will maintain strict budget control. Access to capital is always a problem for service industry startups, so Bill and Sue will always need to be mindful of their cash flow.

Risk Management

Dendro will utilize insurance as its most significant form of risk management. There are physical hazards involved in working with trees, and these must be guarded against. Training is also an essential risk management tool, to ensure that best practices are followed in the field. In addition, there is risk associated with human resources, from the risk of hiring illegals to the variety of laws governing equality in the workplace. Dendro must take the time to familiarize itself with the details of all of the applicable federal, state and county laws in order to ensure full compliance.

Conclusion

Dendro needs to ensure that its strategies align with its objectives. This process begins with the setting of a generic strategy and tangible objectives for the company to reach. The tactics, milestones and task ownership all need to be closely aligned with the organization's objectives and the key success factors in the industry.

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