From Strategy to Implementation: Action Plans & P&G Case

Action Plans and the Foundation of Strategic Implementation

The development of action plans is a process of putting the wheels on a strategic plan. Action plan development is crucial to implementation success because it outlines both an overarching and a detailed map for achieving the goals and objectives described in the strategic plan. It is important for action plans to be comprehensive, providing both a macro and a micro approach. For example, action plans should address resource allocation, goal setting, and the performance measures used to determine whether goals and objectives are being met — in both a formative and summative manner — as well as the interlocking functions of operations, finances, marketing, and sales.

Principles for Turning Strategy into Performance

Companies looking for a roadmap to help them achieve strategic performance benchmarks and move their business beyond the quality levels described in their strategic plans would do well to follow seven core rules. A key insight is that companies unable to follow these guidelines tend to fall into the category of firms that deliver financial value at only about 63% of what is possible. The seven rules are: (1) keep it simple, (2) challenge assumptions, (3) speak the same language, (4) discuss resource deployments early, (5) identify priorities, (6) continuously monitor performance, and (7) develop execution ability.

The guidelines for transforming corner-office strategy into frontline action are reminiscent of developing a logline for a screenplay. Strategic direction can be communicated to employees through the oft-repeated, visible use of a pithy and memorable strategic vision. By utilizing this principle, employees are better able to function with flexibility, risk-taking, and empowerment — all attributes of an agile organization. The four primary attributes of this principle are: (1) trade-offs are intentionally forced between competing resources; (2) linking the strategic insights of leaders with the pragmatic sense of line operators enables a test of strategic soundness of business decisions; (3) employees can operate and experiment within set boundaries; and (4) strategy can be communicated simply and effectively.

Bowman's Strategy Clock: Price, Value, and Differentiation

Bowman's Strategy Clock provides a different take on Porter's Five Forces by emphasizing price and perceived value. A key strength of this model is that it graphically illustrates the concept of a value proposition. Differentiation is based in the mind of the customer, which means that the variables influencing consumer purchase decisions reside, at least in part, within the consumer's own perception. To choose one product, service, or brand over a competitor's, the consumer must perceive the benefits and advantages of that choice. Customer-centric intangibles — such as status through association with a brand or fit with a preferred or aspirational lifestyle — play a meaningful role in purchase decisions.

By adding explanations for the eight strategic approaches available to organizations, the model helps a company see more clearly where its business and industry fit. For some businesses, a low-price, low-value strategy can work effectively. However, other businesses would quickly lose market share and fail under those conditions and must plot a course into the upper-left or upper-right quadrants of the clock.

Procter & Gamble's Values-Based and Data-Driven Strategy

Procter & Gamble (P&G) is widely regarded as the largest consumer products company in the world. In the wake of the fiscal crisis of 2008, many companies began emphasizing operational ethics as a strategy to rebuild consumer confidence and trust — P&G is one of those companies. In a significant strategic move, P&G sought to jump-start growth by imparting a sense of purpose and a focus on values throughout the enterprise.

P&G has invested heavily in real-time big data analytics that enable the company to continuously monitor consumer sentiment and a comprehensive dashboard of performance metrics. The command-and-control system relies on a steady stream of consumer activity data and meaningful conversations with customers. For this agile, data-centric strategy to be effective, consumer sentiment must remain central to both strategic and tactical decision-making. P&G's pivot toward positive consumer sentiment has served as its strategy for differentiation without a price premium.

P&G has a strong game plan for turning great strategy into great performance and for translating corner-office strategy into frontline action. Essentially, P&G has transformed the corner office into a type of war room, with cockpit-style metric dashboards on computers and monitors lining the upper walls. Employees are empowered to design their own dashboards and to set the metric tolerances for the business aspects they oversee. In a compelling adaptation, the dashboards sound digital alarms when a tolerance band is exceeded in either direction. Data managers respond immediately to these real-time alerts and quickly drill down to the core of a performance problem, enabling employees to understand its drivers and formulate responses. These real-time operations are viewed as a distinct strategic competitive advantage.

To stay on top of the real-time data flowing in, CEO Bob McDonald himself could see customer comments about the P&G brand. When shifts occur in the marketplace, data managers react in real time. The goal is to maintain sufficient visibility into consumer data to prevent anything from spinning out of control. Beyond this preventative orientation, the consumer pulse data also enables P&G employees to improve the components of programs that are already working well.

P&G outspends its competition in research and development, and these heavy investments in innovation have resulted in increased market share. In addition, P&G has been steadily targeting emerging markets with strong growth potential. The capacity that differentiation promises for increased return on investment is considerable. P&G clearly understands the importance of implementation — of turning great strategy into great performance. With the right products at the right price, P&G could ostensibly increase the average consumer spend from $14 per year to $16 per year over a five-year period for a majority of its approximately 7 billion customers. According to CEO Bob McDonald:

"We will provide branded products of superior quality and value that improve the lives of the world's consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper" (Kanter, 2009).

References

Moss Kanter, R. (2009, September 14). Inside Procter & Gamble's new values-based strategy. HBR Blog Network. Retrieved from http://blogs.hbr.org/2009/09/fall-like-a-lehman-rise-like-a/