Growth Strategy Series: Strategy Assessment

Growth Strategy Series Introduction

Welcome to Denneen & Company’s growth strategy series! For more than 29 years, Denneen & Company has helped leading companies devise pragmatic, actionable strategies to achieve their growth objectives. We provide value for clients across numerous B2B and B2C industries in a variety of ways including comprehensive end-to-end strategy projects, market or competitive assessments, brand & marketing strategy, and M&A advisory. It is our belief that every company’s path to growth is unique and some may be at a different stage than others, so in every engagement we adapt the manner and level of support we provide to best suit that client’s journey.

At its core, strategy is about making choices. A good strategy sets a vision, quantified financial objectives, and outlines what a company will and will not do to realize the vision and goals. Properly implemented, the strategy aligns the organization and drives focus on the most impactful activities and initiatives, while providing guidance on what the organization should forego and deprioritize. And in our experience, there are always considerably more ideas, opportunities, and possible activities than can possibly be resourced.

At Denneen & Company, we focus on partnering with clients to identify clear paths to growth, and define growth strategy, our main area of focus, as a practical, data and insight-driven plan to deliver a company’s growth objectives, consisting of critical choices and decisions, that reflects the vision, purpose and values of the organization. The purpose of this series is to share the multi-step process and approach we have designed to help our clients develop and execute growth strategies that adhere to this definition. Our Growth Strategy Series consists of 6 chapters:

1. Strategy Assessment: Is my current strategy sufficient, or do I need a new or evolved one?
2. Strategy Readiness: If I need a new or revised strategy, how do I get started?
3. Insights Generation: What data and insights will inform my strategy, and how do I reach those insights?
4. Strategy Development & Articulation: How are insights translated into an actionable and purpose-driven strategy?
5. Strategy Quantification: What underlying initiatives will deliver the strategy, and what are they worth?
6. Strategy Execution: How do I ensure my strategy is properly executed and sustainable?

The series will seek to identify the right questions to answer and people to involve, while offering helpful tools and frameworks to leverage along the way.  If any questions arise or you’d like to discuss your own strategy, please don’t hesitate to contact us!

Chapter 1: Strategy Assessment

When and why should I revisit my strategy?

We often use the start of a new year as a time for personal reflection. We reflect on successes and failures, and consider changes to our diets, exercise regimen, time spent on personal development, and much more. Operating a business should follow a similar approach. No matter the timing that it falls in the calendar or fiscal year, all companies should dedicate time in their standard operating cycle to evaluating the strength and performance of their strategy, asking question such as the following:

• Did you follow and adhere to the strategy in place?
• Did you accomplish the objectives you set for last year? What enabled these accomplishments?
• Are you well positioned in the market relative to your competitors?
• Are you prepared to weather potential industry headwinds and threats?
• What new growth opportunities exist? Are you effectively identifying and capitalizing on growth opportunities?
• Are you set up for success in the coming year with clearly articulated strategies and goals, and an organization aligned to deliver?

Sometimes, there are clear red flags indicating you should revisit your strategy, whether it be, for example, unexpected share loss, changing competitive dynamics, declining profitability, or diminishing customer satisfaction. There can also be subtle symptoms including a disengaged culture, lack of clarity in roles and responsibilities, or excessive time spent on fire drills that take away from focusing on the more meaningful and impactful strategic work. Even if your business performs well on paper, you may sense an undercurrent of stagnancy and failure to recognize and capitalize on key opportunities to reach your full potential.

At Denneen & Company, we stress the importance of working towards a strategy tailored to each company’s unique conditions. For some, a strategy assessment uncovers minor tweaks in the strategy to ensure continued success, while for others it leads to wholesale changes to the long-term strategy, internal structures, and processes. No matter the outcome, periodic assessments build confidence in your company’s trajectory by ensuring the go-forward strategy is sound and built for long-term success.

A well-articulated, data-driven strategy can drive considerable impact on financial, operational, and brand performance, including (Denneen & Company client examples):

• A new product offering with qualified potential to double the size of the business
• A clear path to increase revenue by 80% while growing EBITDA 5x over the same timeframe
• Customer engagement initiatives to drive double-digit share gains
• 30%+ increases in brand approval ratings

Qualitatively, a strong strategy results in a better aligned, more focused organization that is set up for better overall success with greater employee engagement and satisfaction.

How do I assess my current strategy?

Denneen & Company has developed a strategy assessment framework with the purpose of establishing a baseline understanding of the existing strategic direction, a sense of whether the existing plan is both feasible and achievable, and a view of historical performance versus the current strategy’s objectives. The strategy assessment is outlined below, with details for each component.

The first step is ensuring appropriate strategy articulation: A company with a sound strategy has a purpose statement that communicates the company’s overall reason to exist, a strategic vision for what the company aspires to be, and clear, quantified financial goals. The purpose, vision, and financial goals should be backed by key strategic choices and imperatives that support the strategy and align to your organization’s source of competitive advantage, and tactical initiatives or projects that ladder up to those imperatives. Finally, the core values of the organization act as the foundation on which the entire strategy is built on.

See below for Denneen’s “Strategy on a Page” framework. We will revisit this framework during our Strategy Development & Articulation chapter.

Assuming all elements of the strategy articulation are in place, the strategy should be further evaluated to determine whether it is…

Choiceful: Do the “where to play” choices clearly communicate what the organization will do and not do? Does the strategy articulation drive clear direction and enable decision-making?

Supportable: Is the current business, market, competitive, customer, and consumer landscape well defined and understood? Is the strategy supported by market, customer, and consumer dynamics? Does the organization have proprietary insights that create competitive advantage? Is “what has to be true” for the strategy to succeed feasible?

Achievable: Are resources and organizational capabilities adequate to deliver against the strategy? Is the timeline clearly defined and sufficient? Are incentives in place to drive focus on the strategy and reward results?

Understood: Is the strategic vision well understood throughout the organization? Does every function know what is required of them to achieve qualitatively and quantitatively to deliver against the initiatives?

Measurable: Are there dashboards with KPIs at the right levels of the organization that accurately reflect the progress against the strategy? Is there a process by which progress is periodically assessed and the strategy is course-corrected? What progress has been made thus far?

For a more comprehensive overview of our strategy assessment framework, click here.

Strategy assessment outcomes may vary from minor tweaks and updates to the existing strategy, to improvements in internal processes such as KPI tracking and measurement to ensure the existing strategy is well supported, and even  a complete strategy overhaul. Aligning on a clear outcome and next steps based on the findings of the strategy assessment is critical, as it dictates the ensuing level of effort required to either make minor tweaks and updates, or commit to a complete strategy overhaul.

Takeaways and what’s next

• All companies should dedicate part of their standard operating cycle to strategy assessment and evaluation at least annually if not more often
• Sometimes there are clear and visible signs, but subtle cultural and organizational cues can also point to the need for a revised strategy
• A good strategy should be concisely articulated, choiceful, supportable, achievable, and measurable – as well as backed by deep market understanding
• A strategy assessment may lead to minor tweaks to the existing strategy, but could also lead to wholesale changes in strategic choices, internal structures, and go-to-market approaches
• A new or improved strategy can have considerable impacts on financial, operational, and brand performance, but also leads to a better-aligned organization and healthy culture

Beginning in chapter 2, we will discuss the mobilization phase for a complete strategy rebuild– what to expect, who to include, and how to keep people motivated and on-track. For questions about this piece, coming installments, or how we can help at any stage of a strategy development, contact Mike Gill and Pieter Rhynhart, Senior Consultant and Associate Consultant at Denneen & Company, respectively.

Denneen & Company is a growth strategy consulting firm that has been helping companies find and follow their unique paths to growth for over 29 years. With experience across 20+ industries, 40+ consumer categories, and 40+ countries, Denneen & Company consultants leverage their former backgrounds as industry practitioners and past engagements to develop practical and achievable strategies based on rigorous analysis, breakthrough insights, and a collaborative approach. To learn more, please visit denneen.com.