The strategic planning landscape has shifted. Historically, it was an exercise conducted by senior leadership every 3-5 years. Now more dynamic and intelligent planning is a must-have for every organization, whatever the industry or size, to remain competitive.
A common but significant risk most leaders face is attempting to address too many problems at once. In doing so, you typically end up lumping core objectives with trivial goals, thereby losing focus and diluting critical efforts. As a result, resources, which require greater efficiency now more than ever, are exposed to harmful wastage.
The solution is to identify strategic planning areas that matter most in 2021.
While this would have been a difficult challenge to approach across multiple industries and organization sizes in other years, the pandemic has created universal concerns and opportunities across verticals. Nuances still exist, and they always affect outcomes and levels of success, but all leaders, companies, and regions are grappling with similar issues.
We work with highly talented leaders every day that are looking to make an impact. They frequently turn to us for strategic guidance and advice, and when it comes to strategic planning, the most common questions in recent months have been:
- How do we optimize resource allocation to fend off wastage?
- How do we reach digital-native consumers in an increasingly crowded marketplace?
- How do we digitize quickly and scale to outpace expected cash flow constraints?
- What can we do to leverage our existing data to fortify our business against competitors and gain material market share?
In response, we have identified the following focus areas that must inform strategic planning efforts in 2021.
1. Value-Add Lessons from 2020
2020 was a challenging year and indeed a bruising one for many businesses. It was also an opportunity in equal measure.
Across every industry, leaders wrestled new challenges and innovated or improvised to overcome them. The lessons learned from those efforts are likely to create high-impact opportunities in 2021.
Closure of Offices and Stores
The businesses that bore the brunt of worldwide lockdowns and social distancing measures relied on physical stores and offices to deliver value. One in five small businesses had to shut down temporarily.
The challenge, in this case, was clear: the successful shift to digital.
But the hidden issue—especially for businesses that were caught unprepared and had done little to build an online presence—was that foot traffic would need to be instantly replaced by web traffic to maintain continuity.
Statistics paint a grim picture. Sales at physical stores dropped by 14% over the year, translating to a $4.2 trillion revenue loss.
At the arrival of 2021, most businesses that hurriedly shifted online have devised a system that enabled their survival. While necessary, this reactive posture is not viable in the long run as competitors will continue to evolve and gain market share. A key strategic focus moving forward requires replacing reactionary solutions with a well-thought-out, data-centric strategy.
The good news is that the dust is settling. The main objective is to create a strategy that accounts for digital as the main channel for growth. This progression requires adopting a seamless digital infrastructure and upskilling human capital.
Each experience throughout 2020 will be an essential source for insights on how to move forward.
Working from Home
A recent study revealed that 61% of employers don't expect their workforce to return to the office. Similarly, others anticipate a hybrid work environment, with tasks completed remotely and at the office.
A crucial strategic planning area for 2021 involves how we manage and empower our people.
It has not been easy. 34% of remote employees have become disengaged. Updated policies must reflect remote workforce complexities, and Training is needed to equip leaders with remote management techniques and ensure high productivity levels.
At least 51% of organizations have successfully made this transition. Shifting to a remote workforce for others has led to drastic drops in productive output.
How a company manages its remote workforce is also significantly impacting staff recruitment and retention. An increasing number of workers want to know that companies have robust and efficient remote-worker processes and support mechanisms.
Communication continues to be the linchpin of success for leaders. The digital world requires more than video conferencing tools and increased use of email/chat applications. To keep teams synchronized, enable cross-team collaboration, and avoid data silos, organizations need to improve information flow and automation.
Project management, workflow tracking, and product/service delivery systems are fundamental and must keep information flowing on mission-critical plans in real-time.
2. Investment: Brick and Mortar or Digital and Tech
Leaders have long debated where best to invest their effort and resources. Do you improve physical assets or enable new digital capabilities? The events of 2020 have given this topic greater relevance.
From our experience, it is best to approach this tension with a focus on uncovering differentiating opportunities. Value can be where the two intersect and complement each other. Our most successful clients have treated both as co-functional—not competing—elements of achieving their strategic objectives.
Brick and Mortar Development
For businesses that rely on maintaining their physical stores or capitalizing on their physical locations to maximize revenue once market conditions normalize, brick and mortar development is necessarily a top priority.
The reduction in foot traffic presents an opportunity to reimagine the customer's physical journey. Investments have increased in modernizing physical space to be more customer-centric and to meet new standards.
Historically, digital has been aspirational for established companies and therefore neglected sufficient investment. As a result, digital efforts require more attention, effort, and investment moving forward.
Proactive buy-in and forward pushes of leaders are essential for digital transformation to take place. The CEO plays a critical role. They must broker misalignment between departments, empower innovation, and drive new capabilities to remain competitive in the digital evolution.
To stay relevant, CIOs and CTOs are moving to digitize at scale. These activities require ample oversight and leadership to mitigate risk and ensure continual alignment with core business objectives.
The new capabilities are worth it. Once the foundational elements for digital transformation are in place, companies can roll-out new digital experiences in days, not years. For many organizations, this can be an essential part of engaging customers and widening their digital footprint.
Digital transformation also provides avenues to add value at different points of the customer journey. More than merely optional upgrades, digital capabilities have become a must-have for many businesses. 88% of consumers expect companies to accelerate their digital offerings and meet their evolving needs.
With any new initiative, instituting sufficient support structures (e.g., operating model, processes, systems) remains a hot topic. Leaders need to ask whether their existing support models align with their future goals and allow them to stay competitive.
Though the disruption of the pandemic continues to subside, the dust has not yet entirely settled. Technology supports remain a significant piece of the puzzle for organizations to ensure viability and sustainability. Traditional supports (e.g., legacy systems) usually cannot keep pace with the required business changes.
Cloud computing will be a crucial part of the conversation in 2021. Any company impacted by last year's adversities can leverage the cloud to scale, reducing resource dependency, improving agility, and enable opportunities to deliver pre-pandemic levels of service.
Organizations need a migration strategy that embraces change management and harmonizes key elements between technology and business. It is equally crucial to ensure that the company can maintain continuity throughout the process. As downtime is inevitable, a monitoring and communication campaign will need to be put in place to avoid customer dissatisfaction.
3. Mapping Out the Customer Journey
Whether leaders decide that brick and mortar or digital transformation takes precedence, they still need to ensure that their investment pays off for customers in real, measurable ways.
The first and most crucial step is mapping out the customer journey. This step involves following the psychological and emotional process a customer experiences as they move from the first interaction with the brand to eventually purchasing.
Leaders need to dig deep and identify specific moments causing customers to engage or disengage. Uncovering these key moments also informs your competitive strategy by identifying opportunities where competitors commonly fail to maintain engagement. Recent events have shown that this is a profitable use of time, energy, and resources. 27% of top-performing brands have invested in smoothing customer journeys and are achieving positive outcomes.
Be mindful that while visualizing the customer journey is about finding opportunities to increase engagement, it is also about discovering points at which the customer is going through needless strain. These friction points must be identified and mitigated.
There are many approaches that companies can take to smooth out friction points. A common practice is to split the customer journey into four stages—Awareness, Consideration, Intent, Purchase—making it easier to spot problems.
For instance, the Awareness Stage may involve a buyer asking whether they need the product or service. A possible solution is to focus on the customer's pain point with greater detail. Meanwhile, the Intent Stage may highlight a competitor offering that includes a similar product or service at a reduced price point. Likewise, the solution may be to emphasize value instead of price and what's at stake if the customer loses sight.
Friction can also manifest if consumers are unable to move to the next stage in their journey. If a consumer wants space and time to self-evaluate and a sales rep continually attempts to contact them, there's immediate friction. Alternatively, if a consumer wants human interaction but the process is automated or over-empowering, tension also occurs.
Combining Tech, Customer Experience, and Core Business Processes
Our work has proven that you will maximize returns wherever there is an investment when stakeholders understand the initiative's relative priorities and inter-dependencies. Digital transformation performs best when viewed in the light of core business objectives.
As 2021 progresses, a holistic view is likely to serve businesses best. To get returns that touch every aspect of the company, leaders in organizations will have to think about knock-on investments. They will have to ask what investment in one area can do for others that surround it.
When using tech to innovate their core business processes, they can optimize their supply chain, leverage the cloud to maximize uptime, or develop communication and data-sharing channels between functions such as marketing, sales, and customer support.
Leaders can find ways to personalize the experience through technology, especially online and offline touch points for the customer experiences. Personalization is not a mere luxury in 2021, given that it proved to boost revenue by 31%. Businesses need to ensure that it's part of their strategic planning framework for the coming years. The latest projections show an increase in consumer demand for personalized experiences as a standard, not a luxury.
4. Driving Decisions with Data
It's no surprise that 81% of the world's top-performing companies report that they base nearly all their decisions on evidence-based insights that are driven by data.
In 2021, more and more companies are mining their data for insights into how best to proceed. Sound decisions and repeatable successes emerge from having quality data and interpreting the information to inform new ideas and diverse opportunities, limited only by the business's imagination and innovative flair.
Understanding Target Audiences
As most companies learned in 2020, selling to digitally empowered consumers—spoiled with unlimited choices both in terms of options and distracting content online—requires taking pains to understand them.
The good news is that organizations now have varied ways of collecting data. And while publicly available data can often prove useful, first-party data puts greater control and insight in the business' hands.
Brands can now see precisely how their audiences are engaging and determine which campaigns are connecting best. More than that, businesses can divide their target audience into various demographics and devise independent but connected ways of engaging each of them. Though this is something organizations have been aware of for years, 2021 presents a particularly potent opportunity to test the data.
With people spending more time online and expecting to manage their relationship with a brand and its offering through apps and online portals, each action by the customer (seen within its context) can present insights.
As part of their strategic planning, brands must develop ways to get more data from customers. You can obtain information in many ways, but a volunteer-centered approach is best. Between 85% and 88% of consumers are concerned about the collection and use of their data. But a business that communicates that its intention for gathering customer data is to improve service in tangible ways—and is transparent at every point—finds a new way to endear itself to customers.
Strategic planning needs to factor in macro-economic and industry trends (i.e., context), which can directly or indirectly affect the business. The only way to spot these trends, and determine the probable future, is through the careful analysis of quality data.
Some trends that businesses can identify using data include supply chain changes, fluctuations in customer spending, and large-scale shifts in consumer habits. If carefully prepared for, all these can present opportunities for a business to expand and strengthen their position or shield themselves from future challenges.
Trends worth identifying tend to be those that can isolate target customers, current customers, and previous customers or those whose average order volume has fallen. Such an approach avoids data contamination, but the organization may still view the data in its entirety to draw overarching insights.
Refining the Competitive Edge
And one of the areas where data is instrumental is in identifying and sharpening an organization's competitive edge. For some businesses, adversity and changing priorities in the previous year might have eroded their ability to stay competitive.
The most immediate priority for a business is implementing a differentiating strategy early into 2021. Through this, a business can define a new competitive edge. An edge that proves empirically how the company can outperform competitors in hard numbers. Optimally, it is difficult for competitors to imitate and leverages historical data and intellectual property.
One of the assessment tools we use is Porter's Five Forces, providing a clear idea of the position different competitors occupy within the market.
The assessment follows five verticals:
- Competitive rivalry. An in-depth portrait of the intensity of competition within the industry and across different segments.
- Supplier bargaining power. The extent to which suppliers can raise prices, in turn lowering the business' profitability. And the number of viable suppliers available, indicating the leverage each one has.
- Customer bargaining power. The power consumers across different segments have to influence an organization's decisions on product pricing and quality and catalog/portfolio expansion.
- New player threat assessment. The ease or difficulty with which new players, whether start-ups or established companies, can break into the market.
- The threat of substitutes. The extent to which current customers or the broader target market experience difficulties if they decide to switch to an alternative product or service.
Similarly, businesses can use a value chain analysis or the BCG Matrix to review their overall position versus competitors' strengths, identify growth prospects, and uncover optimization opportunities.
Internal Data for Productivity-Hacking
For organizations that have shifted to a remote workforce, employee productivity is critical. The overall strategic game plan as businesses head into 2021 must include establishing ways to boost employee productivity.
Through analyzing data from projects and individual employees, companies can find productivity gaps. These gaps are a more immediate concern for companies that have fallen behind critical multi-year plans and are rapidly losing solvency. Their top priority is to get above board as soon as possible.
Identified gaps commonly ignite initiative restructuring and the revising of tactical plays, unleashing more employee bandwidth and career growth opportunities. Down the line, it helps organizations meet goals faster and expand with minimal hiring sprees. For now, however, it's an essential part of maintaining a competitive edge.
5. Brand Alignment
The modern consumer is no longer merely buying from any organization that can meet their needs. 62% of customers now buy from or boycott a company because of its stance on an issue. In the US, 56% of consumers fall under the category of belief-driven buyers.
Consumers are looking beyond the immediate exterior of the business. They wanted to know its approach to them, both individually and collectively. Ultimately, branding is a business' promise to customers, which is later delivered by employees. Brands are organic. They must evolve as the organization grows and consumer tastes change.
The most informed people in any organization are those on the frontlines–the people who interact with customers every day. Leaders must learn from them, especially to appreciate how customers perceive their business. Afterward, they must ask themselves: is the view our target audience has of us consistent with the brand mission we set out to communicate?
Notably, in 2021, most organizations can benefit from a 360-Degree Customer View to monitor the consistency of their brand identity and further inform strategic planning. Like other strategic planning focus areas, this often has critical implications for the organization at large. In this case, that impact hits marketing and sales channels the hardest—the two elements vital for an organization's continuity.
The most significant negative impact of inconsistent brand usage is the creation of confusion in the market. 56% of employees report being embarrassed by their company when it fails to maintain a consistent identity. In an age where businesses can tap into numerous customer engagement and revenue expansion opportunities through an omnichannel presence, brand alignment is crucial.
Keeping the Brand Aligned During Growth Periods
63% of organizations say the most difficult periods to maintain brand consistency involve high growth. If not adequately planned for, these phases can result in departments of the company giving consumers disjointed experiences. In effect, adding more risk to the company than value.
High-growth periods tend to result in mass hiring. Recruits aren't always fully briefed on the subtleties of representing the company, especially in customer-facing roles. If organizations hope to avoid this in 2021, they must methodically manage each potential growth opportunity over the year. Map out new customer experiences and align new staff with sufficient Training.
For new customer experiences, companies must stay on-brand in tone and overall experience. If they expand into a different segment, that presents a slightly different challenge that requires strategic foresight, especially as digital consumption continues to grow exponentially. Each variation of the customer experience that a company crafts must also account for the new demographics and segments that make up its broader customer base while ensuring that they receive a singular brand experience.
Brand Alignment Throughout the Web and Digital Experience
41% of companies delayed revenue-generating activities during the pandemic lockdowns. This action, while appearing practical and fiscally responsible, presents a grave problem. The ability to form a digital presence is essential to survive at this stage, and there is little room to stumble. Additional delays will cause many companies to become irrelevant.
The first step for organizations in this position is to define their intended digital presence and achieve consensus across critical departments. After realizing a desired and compelling brand identity, with rigorous subtle iterations to identify potential problem areas, the business can rapidly increase its digital presence.
An established, evolving style guide, which has benefited from being tested under real-world circumstances, creates a uniform approach that fosters brand parity across different web channels.
Strategic planning must incorporate digital sustainability and nurture its digital presence, including evolving and keeping pace with consumer expectations.
Ensuring Brand Consistency Across Teams
Mapping out the customer journey plays heavily into ensuring brand consistency across teams. For many organizations, the customer interacts with different groups throughout their relationship with the company. Usually, that's from marketing to sales and then potentially to customer support if they run into any issues.
Maintaining brand alignment ensures that each team handles the customer in a way that seamlessly communicates and reinforces a single brand experience. A jerky, disconnected customer experience can erode trust and create friction. Additionally, it makes it challenging to overcome buyer objections further down the conversion cycle.
Lessons learned from 2020 reinforce strategic planning themes and priorities for 2021, including determining the right channels for investment, leveraging data and information strategically, and maintaining a consistent brand identity. Each of them presents unique challenges for every business but also unbound opportunities.
With effective strategic planning with deft tactical maneuvering to navigate the focus areas detailed above, organizations can achieve material growth even in a seemingly dire market.