Objectives, Strategies, and Tactics: Conflation and Obfuscation

Can a company embark on a cost-cutting strategy?  Is saving $10 million a proper objective?  In the trade press and in conversation with business associates, references are often made regarding things going on in these businesses.  In the strictest English usage sense, objectives, strategies, and tactics are very different things.  Some may argue that conflating these terms isn't really that big of an issue, so don't worry about it.  Perhaps the biggest offenders are those who sell services and are making their offerings sound more important.  A search on Google search for "Strategic cost-cutting" yielded 1,590,000 hits, offering such things as "A strategic approach to cost management can help you weather short-term economic hardship..."

Not that this kind of approach is bad, nor is it without value.  A strategic approach to cost management can mean that cost cuts will be done so the objective of the business is sustained.  If the board of directors is looking for 10% in cost savings, then the hope is that those savings will be achieved with the least impact to the organization's business objectives.  One would be a poor business manager if they took a different approach.

There's Objectives, and Then There's Objectives
So the first observation is that objectives can take on any form, but a cost-cutting objective is different than a market share objective.  Companies necessarily establish cost-cutting objectives, but they re more of a reaction to some external condition rather than something that will grow the business.  The CEO and Board of Directors may mandate cost-cutting objectives, but they in no way should be conflated with more important objectives related to business growth, product strategy, and similar areas.

Strategies are the plans that help achieve objectives.  A cost-cutting objective may be achieved by a diagnostic and re-design of certain business processes, and then driving decisions based on that redesign.  Tactics may include commissioning the diagnostic, evaluating the results, identifying the areas for redundancies, and re-evaluating the effects once fully implemented.

Why Not Skip the Strategy?
One thing that has become prevalent recently is mass layoffs - cutting hundreds or thousands of employees across the enterprise.  Is this the result of a well-thought out strategy, or is it a reactive approach to changes in the business?  Companies tend to obfuscate their strategy if it exists, so it is difficult to determine.  Given the recurring nature and the seemingly haphazard way these things are done, it is difficult to discern a strategy.

Strategy is the linchpin among these three phases of achieving the strategic intent of the business.  If a company has a 10% cost reduction objective, but once the strategy is formulated management determines that the objective cannot be achieved without damage to the business, then either the objective changes or the constraints on the strategy are removed.

Right Terms, Right Thinking, Right Execution
If you've made it to this point in the posting, perhaps you've run across the same situation regarding objectives, strategies, and tactics.  Businesses must be crystal clear about what they're doing, their plans, and how they will achieve those plans if the business is to prosper.  Executing tactics in absence of a strategy will lead to poor overall execution as measured by achievement of the business' strategic intent.  Going through the each of these phases will lead to superior business results.

CRM: Building the Business Case

Customer Relationship Management (CRM) seems to have a somewhat checkered history of delivering the expected value.  Sometimes, the reasons for failure are the same as those for other IT projects – project management, budget issues, etc…  The issue I’d like to address here is expectations as it relates to the results of a CRM initiative. 

Early in the project, the sales or internal support team will begin to formulate a selling proposition (internal teams need to be good sales people too), which will include a business case for the project.  Often, either the business case is weak (“You will experience 5-10% improvement in operations”), or it is overly-optimistic (“You will have a 15% increase in passenger traffic on your airline”).  Both lack credibility.  Being credible requires a clear line between the expected benefits and project-linked improvements.

So, here are some suggestions that will help create stronger business cases that are compelling and set the foundation for success.

• Numbers.  The most believable aspects of a business case are always the numbers.  “Improving” and “improving by 7%” are very different.  Anyone can put a number on a PowerPoint slide, but fewer can back those numbers up with a detailed analysis. 


• Story.  The story associated with the numbers are probably more important than the numbers themselves.  Mark Twain said, "Figures don't lie, but liars figure."  That truth is not lost on clients, so the story must be credible.  What makes a story credible?  Read on.


• Integrity.  At some point, you’ve gotten good data to create a credible set of numbers, and you’ve put together a story about those numbers.  It now comes down to you – are you credible?  You must believe your own story, and you must be fluent with its presentation.  That flows from your own integrity.

These steps are not linear but rather occur simultaneously.  Your story will guide your search for relevant statistics, and those same statistic will guide the development of your story.  The project itself will put you in a box (e.g. project constraints), which in turn influences the set of numbers required.

For example, in a given customer engagement, I needed to put together a cost-savings business case based on an application change.  The first choice was deciding how to explain the business case.  Do you try doing a comparative analysis between the incumbent and new software solutions?  The problem with that approach is fans of either package start to compete with each other and it blunts focus.  Thus, the first rule is: keep the story simple.  I chose to focus on the relative development and operational costs.

Next, gather as much relevant data as possible.  Especially early in the cycle, getting reliable data is often difficult.  Clean data is great but often hard to produce.  Get as much clean data as possible. 

How many points of value should you create in your narrative?  The answer brings us to the second rule: compelling is better than exhaustive.  Demonstrating 80% of the value create is not 100%, but if telling the story with 80% only requires five value points, versus 25 for 100%, I’ll take the five every time.  The story becomes compelling when it becomes easily comprehensible. 

Finally, sequence the story as a series of reveals and get to your point quickly.  While you still have to step through the story, don’t take a long time to get there.  If you’re using PowerPoint, a few slides should be sufficient. 

There are a lot of “it depends” factors in this analysis: size of the investment required, audience, criticality of the benefits, etc…  Getting the numbers, crafting and presenting the story, and then acting with integrity are key to being believable and setting a realistic expectation early in the project.  If the project starts well, it will end well.  By the way, in case you were wondering, the story I told earlier resulted in the proposed solution displacing a good incumbent provider.  That outcome was achieved because the client believed the business case.

Value of Integration and the Complex Sale

How can you sustain an integrated, unique value proposition during a complex sale, especially when the RFP process by design is commoditized?  For example, suppose you are selling call center services.  Call centers are often viewed as commoditized services, where basic capabilities are assumed and customers evaluate vendors primarily on cost.  So, you receive an RFP that asks for 100 seats of English language for customer care and that there is no restriction on where you can source the labor.  Well, what do you do?

In a sense, it’s a trick question.  At this stage in the process, you should get ready to accept a commodity-type deal.  Creating an integrated value proposition on a complex sale happens before the RFP has been issued.  After all, an RFP is the embodiment of manifest demand.  Somebody has already decided on the “complete” solution and approach, and all they need now is to procure specific capabilities to realize the overall vision.  While most RFPs include a “Value Add” section, that at best gives your proposal a few points in the evaluation criteria but is not decisive. 

Let’s assume you did not make that mistake, you’ve engaged early, and have established an integrated value proposition.  To return to our earlier example, let’s assume that the 100 seat customer care call center is part of an ordering business process which includes e-commerce as well as order fulfillment.  You have clearly established the value of integration.  You have crafted a compelling top-level value proposition.  What’s next?

At this stage, the procurement team will get involved.  They will work with a department who has a budget who does not care about an integrated value proposition (which by definition extends across multiple departments).  There may a master budget, but getting involved with that process could make a complex sale even more complex.  How can you sustain the top-level value proposition while you sell at the department level?

First of all, someone within the organization needs to own the top-level value proposition.  There is added complexity for this type of sale, where you must sell at two levels: the upper part of the organization that owns the top-level value proposition and the department that owns the budget for the current procurement activity (such as the call center).  The scoring criteria should be adjusted to reflect that integrated value is a key evaluation criteria.  

Selling in this way isn’t easy, but it is a trend in the market and it does help you create stronger value propositions and create higher-margin deals.  Plus, it raises the likelihood that you will win.