Mission Statements Vs. Business Plans
A hotel conference room, management brainstorming and a new mission statement do not a strategic business plan make.
How do you define an expert? A person who has made all possible mistakes within a narrow field.
With that joke, business consultant Christian Majgaard began his keynote address to the SPE Thermoforming Conference in Schaumburg, Ill., using humor and his years of experience at Lego to walk a technology-inclined crowd through a much softer side of business: strategic planning and branding.
Majgaard, who parlayed years of experience at the global toy giant Lego into a successful consulting career, noted how often times new clients regale him with the story of their company via Powerpoint, often times including an aerial shot of the sprawling business among the slides, hoping to convey growth, and thereby, success.
“Is that growth what we could call true development or is it obesity,” Majgaard asked, noting that expansion is many times conflated with development. In his consulting business, Majgaard often works with companies that have attempted to develop a grand strategy on their own, with mixed results.
More than a mission statement
Deriding the “away day poetry meeting,” where management hole up for a half day in a hotel conference room to reinvent a struggling company, Majgaard discussed how some businesses utilize such time to develop a new mission statement. That statement becomes the “poetry” at the top of a pyramid with a base of “plans and budgets” and a middle consisting of a “success formula.”
“It is the stuff in the middle that's interesting,” Majgaard said. He then laid out the basic model for a “success formula” as a spectrum, running from right to left and consisting of “capability” on the far left, “original idea” in the middle, and then “market preference” on the far right.
“You need to put the idea in the middle and see yourself on the one side and then the customer on the other,” Majgaard explained, adding that success usually means that the original idea you develop is ultimately liked by your company and your customer, but just for different reasons.
When developing that “original idea”, Majgaard said it must answer three questions:
- Who is the customer?
- What are you trying to offer your customer?
- How are you going to make it happen?
In this scenario, the second question becomes what is more commonly known as the value proposition, while the final query is the basis for a business model. Once that is established, a company must determine whether the customer actually “likes” the new idea. In this instance, affection is often determined by three additional questions by the customer of your company.
- Do I know and like you [branding]?
- Are your covering special needs?
- Can we reach each other [sales and marketing]
“It is as banal as that,” Majgaard said. “If you take any startup company, you can use those questions and see if it will be a success or not.”
Brands vs. Logos
Majgaard noted that he had walked the SPE Thermoforming Conference’s show hall prior to his presentation, commenting on impressive machines and detailed displays, but noting an omission by many exhibitors that is common among a great number of businesses.
“What we often miss is the explanation of in what way is this product an advantage to the customer,” Majgaard said. “This is a value proposition.” Once a value proposition is determined and conveyed to the market, a company can reinforce that differentiator via branding.
On his next slide, Majgaard pulled up an array of famous corporate logos, using these readily identified graphics to draw a distinction.
“Are these brands or logos,” Majgaard asked the audience, half rhetorically. “I think we should agree that we see here are logos, because that's the only thing we can see. Logos are painted names. So what are brands than? A brand equals an impression; a logo is an expression. A strong brand equals money, awareness, image, satisfaction, loyalty. A brand can build up loyalty even without comparisons. Brand is power, it makes people choose you again and again.”
As a company works to establish a brand, Majgaard said it must express how its products meetvcustomers needs. “If you can’t figure out those needs, the customer will tell you,” Majgaard said. “And if you're not covering their needs well, one day you will stand face to face with reality.”
Travel with someone who’s been there
Majgaard noted how in the early days of Lego, the founder, who was a woodworker, traveled to Germany to bring back an expert in plastics to the company’s production facility in Denmark, in the process acknowledging his own experience deficit. So too must companies seeking to enter a new area of business hire individuals with prior experience in that new arena.
“The rule is if you're moving from ‘A’ to ‘B’, the team that does that should have more people on it who are from ‘B’ than ‘A’,” Majgaard said. “The team should have more people who've worked with that new area. If you’re in a completely new technology, please hire some people that have already worked with it.”
New to the world or new to you?
In that same vein, business leaders should be ready to accept that their original idea may not be that original. “If your idea is not new to world, go and see it,” Majgaard said, noting that the relevant scale of novel ideas is “new to the company”, “new to the industry” and, most rare, “new to world.”
“Vision is about, ‘What is our next big move?’ Once the management team agrees, then figure out ‘Where do we go and see it?’ because in 99% of cases the new idea already on this earth.”
Majgaard finished with some basic truths about human psychology. “Every manager thinks they are a genius and every person says they're ready to change but they aren’t,” Majgaard said, adding that a company doesn’t need to reinvent and entire corporation. Better to start “in the corner first.” Once you do start, remember something else.
“When you want to redevelop a company,” Majgaard said, “you cannot communicate enough,” adding that true communication entails both participants in a conversation understanding its contents in the same way.