5 Reasons Good Deals Get Rejected

5 Reasons Good Deals Get Rejected

By Deepak Malhotra

It’s one thing to lose a deal because you were playing hardball. It’s an entirely different — and more frustrating — situation when the other side is rejecting even your reasonable offers. When genuine attempts at negotiating in good faith are failing, you need a new approach — but it doesn’t mean you have to get aggressive. The key to success is understanding why people will sometimes reject even fair or generous offers.

You didn’t justify it

It’s not enough that you tell them what you want; you have to explain to them why it is a legitimate request. No matter how reasonable your proposal may seem to you, if you fail to justify it, there is a good chance it will be ignored or rejected. I always remind my students and clients: Don’t let your offer speak for itself; tell the story that goes with it. If you want an exclusive negotiating period, why is that appropriate in this case? If you need more time to consider an offer, why should they agree to change the deadline?

You didn’t help them sell it internally

The person on the other side of the table might agree that your offer is reasonable, but they will still reject it if they can’t sell it to others in their organization. You might deserve a higher salary, but how will they explain this exception to others who are not getting one? Your job is not simply to convince the person you’re negotiating with, but to help them be an effective ambassador for you when they are speaking to their boss, their board, their partners, or others who have a say in what happens. Keep an eye on all of the people who can influence the negotiation on their side, and help craft a narrative that will allow them to get the buy-in they need.

You didn’t respect their constraints

They agree that your demands are reasonable. They can convince everyone on their side that you deserve it.  But the answer is still no. Why? Sometimes the problem is that their hands are truly tied on key issues. They would be willing to give you more time to make a decision, but they are facing their own hard deadline. They would be willing to give you more money up front to seal the deal, but they have budget constraints. The key is flexibility: If you give the other side more than one way of improving the offer, it is possible that they will be able to find a way to do it. This is why I remind my students and clients: the more currencies you allow someone to pay you in, the more likely you are to get paid.

You didn’t help them save face

People will often reject even fair and generous offers if accepting them will make them look bad. If the other side has promised their audience (e.g., a boss, the media, their constituents) that they will be able to get a great outcome, and now the best they can deliver is considerably less, they might walk away from the deal even though doing so is costly. The key is to never force people to choose between making smart decisions and saving face. For example, even a symbolic concession on your part that gives them something they would not have otherwise expected can help them declare victory to their side — or at least help them show that all sides had to give in.

You didn’t offer closure

Why should they agree to one of your requests if this will just embolden you to make more? Why improve their offer if you will just shop it around to get other competitive offers? One concern people can have is that even agreeing to your demands will not seal the deal — and this can make them unwilling to expend the time and political capital to make the changes or improvements you are proposing. If it is genuinely the case, it can help you to let them know that “this gets the deal done.” Or, if you still need time, you might be able to at least assuage some concerns by letting them know that “we would accept that as your final offer.” The thing to remember is that you don’t always need to make a substantive concession in exchange for the concession you are asking. If they are worried that you are still shopping around, or that you will continue to pick apart the deal, even an assurance of closure can be traded for substantive concessions.

Performing a Project Premortem

Performing a Project Premortem

Premortem by Gary Klein

Projects fail at a spectacular rate. One reason is that too many people are reluctant to speak up about their reservations during the all-important planning phase. By making it safe for dissenters who are knowledgeable about the undertaking and worried about its weaknesses to speak up, you can improve a project’s chances of success.

Research conducted in 1989 by Deborah J. Mitchell, of the Wharton School; Jay Russo, of Cornell; and Nancy Pennington, of the University of Colorado, found that prospective hindsight—imagining that an event has already occurred—increases the ability to correctly identify reasons for future outcomes by 30%. We have used prospective hindsight to devise a method called a premortem, which helps project teams identify risks at the outset.

A premortem is the hypothetical opposite of a postmortem. A postmortem in a medical setting allows health professionals and the family to learn what caused a patient’s death. Everyone benefits except, of course, the patient. A premortem in a business setting comes at the beginning of a project rather than the end, so that the project can be improved rather than autopsied. Unlike a typical critiquing session, in which project team members are asked what might go wrong, the premortem operates on the assumption that the “patient” has died, and so asks what did go wrong. The team members’ task is to generate plausible reasons for the project’s failure.

A typical premortem begins after the team has been briefed on the plan. The leader starts the exercise by informing everyone that the project has failed spectacularly. Over the next few minutes those in the room independently write down every reason they can think of for the failure—especially the kinds of things they ordinarily wouldn’t mention as potential problems, for fear of being impolitic. For example, in a session held at one Fortune 50–size company, an executive suggested that a billion-dollar environmental sustainability project had “failed” because interest waned when the CEO retired. Another pinned the failure on a dilution of the business case after a government agency revised its policies.

Next the leader asks each team member, starting with the project manager, to read one reason from his or her list; everyone states a different reason until all have been recorded. After the session is over, the project manager reviews the list, looking for ways to strengthen the plan.

In a session regarding a project to make state-of-the-art computer algorithms available to military air-campaign planners, a team member who had been silent during the previous lengthy kickoff meeting volunteered that one of the algorithms wouldn’t easily fit on certain laptop computers being used in the field. Accordingly, the software would take hours to run when users needed quick results. Unless the team could find a workaround, he argued, the project was impractical. It turned out that the algorithm developers had already created a powerful shortcut, which they had been reluctant to mention. Their shortcut was substituted, and the project went on to be highly successful.

In a session assessing a research project in a different organization, a senior executive suggested that the project’s “failure” occurred because there had been insufficient time to prepare a business case prior to an upcoming corporate review of product initiatives. During the entire 90-minute kickoff meeting, no one had even mentioned any time constraints. The project manager quickly revised the plan to take the corporate decision cycle into account.

Although many project teams engage in prelaunch risk analysis, the premortem’s prospective hindsight approach offers benefits that other methods don’t. Indeed, the premortem doesn’t just help teams to identify potential problems early on. It also reduces the kind of damn-the-torpedoes attitude often assumed by people who are overinvested in a project. Moreover, in describing weaknesses that no one else has mentioned, team members feel valued for their intelligence and experience, and others learn from them. The exercise also sensitizes the team to pick up early signs of trouble once the project gets under way. In the end, a premortem may be the best way to circumvent any need for a painful postmortem.

A version of this article appeared in the September 2007 issue of Harvard Business Review.

Gary Klein (gary@decisionmaking.com) is the chief scientist of Klein Associates, a division of Applied Research Associates, in Fairborn, Ohio. He is the author of Sources of Power: How People Make Decisions (MIT Press, 1998) and The Power of Intuition (Doubleday, 2004).


Giving Up Is the Enemy of Creativity

by Brian J. Lucas / HBR.org

What determines whether the ideas we generate are truly creative? Recent research of ours finds that one common factor often gets in the way: we tend to undervalue the benefits of persistence.

In a series of experiments we observed that people consistently underestimated the number of ideas they could generate while solving a creative challenge. In one, we brought 24 university students into the laboratory during the week leading up to Thanksgiving and asked them to spend ten minutes coming up with as many ideas of dishes to serve at Thanksgiving dinner as they could. Then we had them predict how many more ideas they could generate if they persisted on the task for an additional ten minutes. After that, they actually persisted for ten minutes.

On average, the students predicted they would be able to generate around 10 new ideas if they persisted. But we found that they were actually able to generate around 15 new ideas.

Several similar follow-up studies we conducted produced the same result. We asked professional comedians to generate punch lines for a sketch comedy scene; adults to generate advertisement slogans for a product; and people to come up with tactics a charity organization could use to increase donations. In each of these experiments, participants significantly underestimated how many ideas they could generate while persisting with the challenge.

mportantly, after each study we asked a separate group of people to rate the creativity of the participants’ ideas. Across the majority of our studies we found that ideas generated while persisting were, on average, rated to be more creative than ideas generated initially. Not only did participants underestimate their ability to generate ideas while persisting, they underestimated their ability to generate their most creative ideas.

Why do we underestimate the benefits of persistence? It’s because creative challenges feel difficult. People often have the experience of feeling “stuck,” being unsure of how to find a solution, or hitting a wall with one idea and having to start over again.

Trying hard and failing to make progress on a non-creative task, like an advanced physics problem, may appropriately signal that it’s time to stop working. But creative ideas take time. They are often generated after an initial period of thinking deeply about the problem, considering different ways to frame the problem, and exploring different possible solution paths. Consider that Sir James Dyson developed over 5,000 prototypes before he patented his best-selling Dyson vacuum cleaner. Or that Walt Disney animated cartoons for nearly two decades before his first big hit, Snow White and the Seven Dwarves.

But our work shows that when creative challenges start to feel difficult, most people lower their expectations about the performance benefits of perseverance, and consequently, underestimate their own ability to generate ideas.

It’s important to accurately value persistence because our beliefs powerfully regulate our behavior. If you do not recognize that persistence is valuable for creativity, you will be less likely to persist when you face your own creative challenges.

In another study, we asked participants to work on a creative challenge, and we paid them a small sum of money for each idea they generated. Then we told them they could continue generating ideas (and make more money) if they first paid a small fee to go on. We included the fee to simulate how the decision to persist always has an opportunity cost: persisting on one task means having fewer resources to invest in other tasks. Even though nearly all participants were expected to profit from persisting (based on the results of pretesting), only 54% of participants chose to continue, and as we expected, those who chose not to generated fewer creative ideas and made less money.

Our research suggests that workers typically underestimate the benefits of persistence when it comes to being creative. In other words, some workers may have creative potential that goes untapped when they decide not to persevere with a challenge. Based on our research, we offer two recommendations to avoid this:

  1. Ignore your first instinct to stop. When working on a tough creative challenge, you will likely face a moment when you feel stuck and can’t come up with any more ideas. You’ll first want to quit and spend your time doing something else. Temporarily ignore this instinct, especially if you’re still in the early stages of the work. Try to generate just a few more ideas, or consider just a few more alternatives. You may find that your next creative idea was closer than you imagined.
  1. Remember that creative problems are supposed to feel difficult. Most involve setbacks, failures, and that “stuck” feeling. It’s part of the process. Suppress your instinct to interpret these feelings as a signal that you just aren’t creative or that you’ve run out of good ideas. Reaching your creative potential often takes time, and persistence is critical for seeing a challenge through to the end.
Your Company Culture Shouldn’t Just Be Great—It Should Be Distinctive

Your Company Culture Shouldn’t Just Be Great—It Should Be Distinctive

by Denise Lee Yohn, hbr.org

Just as brand differentiation helps attract customers, culture differentiation helps attract the right employees. But while it’s popular to focus on corporate culture, not many companies have a truly distinctive culture. This is the equivalent to a marketing department saying, “We need to have a strong brand”—without articulating what that strength will rest on.

So many corporate values statements include the same words: respect, trust, fun, integrity. Maybe also diversity, work-life balance, and community service. Free snacks and pick-up games are expected at every technology company; nursing mother’s rooms and on-site gyms are increasingly common perks on corporate campuses. This is all great, but if every company seems the same, how are prospective employees to know which companies are really the best fit for them?

Leaders and HR managers can borrow the principles of good marketing to create a culture that’s more distinctive—one that will attract and retain the right people. Leaders should start by identifying the specific cultural dynamics that will produce the results they desire, and then clearly articulate and actively cultivate them. By doing so, they create a powerful edge in the war for talent—one that’s often more powerful than pay, and one that directly drives performance. People thrive in a culture that fits them, creating a self-reinforcing upward cycle.

Companies with clearly defined cultures are also good for customers, because they allow employees to create distinctive customer experiences. For instance, the number one “Family Core Value” at Zappos is “Deliver WOW Through Service.” The company says “We seek to WOW our customers, our co-workers, our vendors, our partners, and in the long run, our investors.” In pursuit of this goal, Zappos recognizes the need to be “a little unconventional and innovative.” Its unique internal practices, including publishing an annual culture book that employees write and allowing employees to decorate their offices however they like, produce a differentiated culture. This culture has, in turn, informed its unique customer experience design—examples include providing surprise shipping upgrades and not tracking the call times of its customer service reps so they can spend as much as needed with customers.

Vanguard has taken a very different approach. The company was able to produce consistent results for its clients through the Internet bubble and the Great Recession because its culture preaches caution. Vanguard operates from a belief and loyalty to the small investor and trains its advisors to forsake short-term gains if they sacrifice long-term stability.

Or consider Amazon, whose culture has been raked over the coals in the media in recent weeks. The culture at Amazon may be ruthless and exacting—even “callous,” despite CEO Jeff Bezos’s denial. But the company’s hard-driving performance culture may be one reasonit has consistently produced breakthrough innovations and consistent growth and continues to attract brilliant, mission-oriented employees.

The disciplines that inform brand differentiation in marketing can apply to culture differentiation as well:

  • Conduct competitive analysis to determine potential advantages and differentiating attributes—or better yet, identify white space where no one is playing.
  • Use segmentation to identify the types of people who share the company’s values and their distinguishing characteristics that can be used to target them.
  • Clearly articulate the value proposition—explain not just what the company does, but why it matters.
  • Don’t be afraid to use personality and take risks to stand out.

An unusual culture—even one that outsiders might criticize— is nothing to apologize for. In fact, it’s an advantage in attracting the right people.

How to Get the Most Out of a Conference

How to Get the Most Out of a Conference
By Rebecca Knight, hbr.org

“The fact that technology has made it easier to interact with people across great distances and time zones actually makes face-to-face interaction even more valuable.”

Conferences are an overwhelming rush of presentations, conversations, and potential meet-ups, and it can be tough to know where to focus your time. How do you figure out which sessions to attend? Should you skip the keynote to meet an important contact? How many coffee dates are too many? And what should you do if you’re an introvert who hates small talk?

What the Experts Say

Professional conferences are an unavoidable fact of working life. And even if you’re an introvert who dreads the multi-day extravaganza of breakout talks and cocktail-infused networking sessions, you must resist your impulse to stay home, says Francesca Gino, a professor at Harvard Business School. “Skipping conferences is problematic because you’re missing out on the benefits of networking,” she says. “Today, probably even more than ever before, networks are a key form of social capital for achieving goals in both your professional and personal lives.” And meeting people at conferences “who likely have the same interests as you and are highly relevant to your work” is a good way to nurture and expand your network, says Dorie Clark, author of Stand Out Networking. “The fact that technology has made it easier to interact with people across great distances and time zones actually makes face-to-face interaction even more valuable.” Here’s how to get the most from the conferences you attend.

Change your mindset

Despite the known benefits of having an extensive and diverse network, many people “shy away from the opportunity to create new connections because networking makes them feel inauthentic and physically dirty,” says Gino. To reduce these feelings, she suggests changing your mindset and motives. You’re not just networking because you should; you’re doing it because it’s good for your career. She says that people who focus on their professional aspirations “network more frequently and experience decreased feelings of dirtiness” compared to those who are focused on merely meeting professional duties and responsibilities. As you’re getting ready for a conference, “try to stay motivated to network professionally for the growth, advancement, and accomplishment” that it will bring.

Pre-introduce yourself

Weeks before the conference starts, “think about the people you would really like to get to know and then carve out time to accomplish that goal,” says Gino. Clark recommends creating a “priority wish list” of people you’d like to meet. Send those people an email introducing yourself; if possible, get an introduction from a mutual friend or colleague. If the person is presenting, tell her that “you’re going to make it a point to come to her session,” says Clark. “There’s a lot of fear when presenting that no one will come to your session so the fact that you’re making the effort will be appreciated.” If the person is not presenting, invite him for coffee. Or inquire “if there’s any session he’s excited about going to, then ask: Can we sit together?”

Be strategic with your time

Consider two things when choosing which sessions to attend. “A session should fulfill either a content goal, meaning the talk will be educational, or it should fulfill an interpersonal goal, meaning you want to meet or support the person who is presenting,” Clark says. The keynote speech is usually skip-able, but because someone famous often delivers it, “it’s fun to go,” she adds. “It’s likely to be entertaining and will give you bragging rights as in: ‘Hey, I heard Elon Musk speak.’” That said, “The keynote doesn’t have much networking value beyond being a conversation starter.”

Network on your terms

If plunging into a crowd makes you uneasy, you’ve got to “take initiative to create a situation where you feel comfortable,” says Clark. Perhaps one-on-one meetings are better for you or small group settings. If so, Clark suggests making a reservation at a local restaurant for about eight people before the conference. Then invite people from your wish list. “You want it to be a mix of people you know and people you would like to get to know better,” says Clark. “Tell them you’re bringing together a group of interesting people and you’d like them to join.” And be sure to tell them why the dinner is of interest. “If she’s a tech entrepreneur, tell her that you’re also inviting venture capitalists,” for example.

Listen more; talk less

When you’re attending a semi-professional, semi-social networking situation — such as a group dinner or conference cocktail reception — your goal is to “allow enough space for others to shine,” says Clark. Harness quiet power by asking thoughtful questions and listening carefully to how others respond. Having conversation starters at the ready can make small talk more palatable. For example, you might ask: “Which work project are you most excited about right now?” or “Which session are you most excited to attend?” If you’ve invited people together, it’s also important that you “exert sufficient control” of the situation. “Make sure people are interacting with and getting to know each other,” she says. Ask people to introduce themselves. Think of commonalities among group members and highlight those when you’re making introductions. “Try to bolster group cohesion rather than letting it be a fragmented experience,” says Clark.

Manage your existing connections

Conferences can be useful venues to solidify your current professional relationships. After all, says Gino, “good networking not only means creating new connections. It also means maintaining and strengthening existing ones.” But don’t spend all of your time with people you already know. That defeats the purpose of going to the conference in the first place. “If you know beforehand that certain colleagues are likely to glom on to you, draw clear boundaries — for both of your sakes,” says Clark. Having existing dinner or lunch plans can be handy. “Say to your colleague: ‘I need to meet new people tonight, but tomorrow I’m going to a session that I think we’ll both find interesting. Would you like to go together?’”

Make time for yourself

Conferences are exhausting, and can be especially so if you’re not an extrovert. “The fundamental truth about being an introvert is that you need to manage your energy differently from other people,” says Clark. “You need to know when you’re on the brink.” And so if you spend five days pushing yourself to attend every luncheon, cocktail party, and networking reception, “you’re going to be worn out and frayed, and you will not be at your best.” Put simply: Skip happy hour. In its place, do something restful or restorative. This is sound advice for both introverts and extroverts. “It’s easy for any professional to lose sight of self-care” because he or she is busy, adds Clark. Eating well, exercising, and getting enough sleep are important to our health. Don’t neglect your own wellbeing. One of the most important ways to do this, says Gino, is to try not to be someone else when you’re in social situations. “Focus on being yourself,” she says. “This will help ensure that you don’t stress out too much or get too tired.”

Principles to Remember
Shift your mindset by focusing on how networking is good for your career
When choosing which sessions to attend, consider whether you’ll learn something or meet someone new
Take the initiative to create networking situations where you feel comfortable
Spend all of your time with coworkers you see every day — draw clear boundaries
Burn out — give yourself time to rest and rejuvenate during the conference
Try to be someone you’re not — putting on a false persona is stressful and tiring
Case Study #1: Organize small group gatherings and take time to recharge
Parisa Parsa, the Executive Director of the Public Conversations Project — a Boston-based group that helps workers and organizations create constructive dialog in their professional, civic, and personal lives — attends several conferences a year. “I don’t know if I will ever figure out how to make conferences not exhausting,” says Parisa, a natural introvert, “but I know what I need to do to make them productive.”

Earlier this year, Parisa, who is also a minister, attended the annual Unitarian Universalist Association conference in Portland, Oregon. Before she arrived, Parisa reached out to several people with whom she wanted to connect at the conference and invited them for coffee or a meal. “I do terribly when it comes to chatting with people on the spot, so I tried to set up one-on-one meetings so I could focus my attention and not have to fight for airtime,” she says. “Reaching out to people in advance made sure I was on their radar. They knew they were a priority to me.”

In the past, she has also arranged small group dinners around specific topics. Since most people know her but don’t necessarily know each other, Parisa gets the conversation flowing by asking everyone to introduce themselves and to provide an initial take on the topic at hand. “I like bringing people together for a smaller, structured gathering. Big groups can be overwhelming.”

Parisa also makes sure to not wear herself out by giving herself time to rest and recharge. “I used to feel that I had to be at each and every session, but now I’m more strategic about choosing sessions based on the content.”

During her most recent conference, she went for frequent walks around Portland and nipped into coffee shops to reflect on and write about the presentations she’d seen. “I tried to see little bit of the city,” says Parisa. “It’s really sad when the only part of the city you remember is the inside of convention centers.”

Case Study #2: Offer your assistance in order to be seen as a potential resource
Ron D’Vari, CEO of New York-based advisory firm NewOak Capital, is a self-described “conference junkie” who attends dozens of conferences each year. Conferences, he says, “expose me to new ideas and perspectives and give me a sense of the marketplace and where things are going.”

Earlier this year, after he learned about the upcoming Professional Risk Managers’ International Association (PRMIA) conference in New York, the first thing he did — and what he always does — was call the conference organizer. “I asked if I could help with content — I volunteered to speak or to moderate a panel, and I let them know I could help introduce them to other speakers,” says Ron. “Offering to be a part of the conference provides many more networking opportunities than merely attending the conference.”

Ron won a spot on a panel. Before the conference started, he examined the agenda and looked at the list of speakers and presenters. Whenever he came across a person he wanted to meet, he sent them an introductory email and a request to connect on LinkedIn. “That way, they know who you are,” he says.

Ron attended the conference with several colleagues but he made sure to go to different sessions and networking events. “You can’t stay in a clique with colleagues,” he says. “It’s time to get to know other people.” After all, “conferences are expensive. You’ve got to be able to get your two grand’s worth of connectivity.”

When networking, Ron also makes an effort to do more listening than talking. “My objective is be seen as a resource for people. I want to engage them in a way so that when they have a technical question down the road, they think to pick up the phone and call me.”

At the PRMIA conference Ron made many connections, including a Fed official with whom he is currently writing a paper.

A List of Goals Is Not a Strategy (HBR) by Graham Kenny

A List of Goals Is Not a Strategy (HBR) by Graham Kenny

Let’s say you’re getting together with other managers and employees to develop your organization’s or unit’s strategy. No matter how much discussion and enthusiasm you bring to the task, you’re likely to emerge with a list that looks like this:

  • Growth
  • Superior operational outcomes through efficient work practices
  • Becoming competitive in an existing market
  • Increasing product sales to take market leadership
  • Expanding into other regions
  • Optimizing ROI
  • Developing a service delivery model that incorporates tactical projects

When you’re done, you might scratch your head and reflect: I think this looks OK. It doesn’t. It contains what might be called goals, objectives, actions, and vague statements of intent — but alas, no strategies.

So how do you really create strategy, rather than end up with a hodgepodge list like this? By following these steps:

Identify which stakeholders you depend on for success. It might seem obvious that you’d need to start here. But most managers, even at the world’s largest companies, don’t take this basic step. Instead, they focus on a narrow set of key performance indicators and wade right into developing solutions that feed those metrics, burrowing deeper and deeper into the details. Very quickly they lose their “helicopter view” and get stuck in fix-it mode. Suggestions come one after another: Engage sales outlets. Devise an advertising program. Attract, retain, and develop capable people. Good stuff, perhaps, but how would you know if you haven’t defined a context for success?

Your organization or unit is completely dependent on others outside it for its good fortune. Without the support of stakeholders such as customers, suppliers, employees, and shareholders, for example, you have no organization. But you have to identify those who are key to the long-term survival and prosperity of your organization — and then satisfy them.

Here, we should take a lesson from John Mackey, co-founder and co-CEO of Whole Foods Market. His company has annual sales of $9 billion and more than 300 stores. It dominates U.S. natural-foods retailing and has become an iconic brand.  In a Harvard Business Review interview, Mackey describes what has brought success to Whole Foods. “Customers, employees, investors, suppliers, larger communities, and the environment are all interdependent,” he explains. “Management’s job at Whole Foods is to make sure that we hire good people, that they are well trained, and that they flourish in the workplace, because we found that when people are really happy in their jobs, they provide much higher degrees of service to the customers.  Happy team members result in happy customers.  Happy customers do more business with you.  They become advocates for your enterprise, which results in happy investors.  That is a win, win, win, win strategy.”

Recognize what you want from your stakeholders. Because most management teams don’t identify key stakeholders, they don’t even get to this point. And those that do often launch right into what they need to do for customers, for employees, and so on, without thinking first about what they want from them.

Why is sorting out the from so important? What an organization wants from each group of key stakeholders translates neatly into its objectives. For instance, sales and revenue growth will come from customers, productivity and innovation from employees, and quality goods and services at the right price from suppliers. What’s more, company law requires that boards, CEOs, and senior executives act in the best interests of the company. All decision making should stem from that mandate.  Of course, this doesn’t preclude looking after customers’ and other stakeholders’ interests en route.

Although objectives and clear targets aren’t a substitute for strategy, you do need to design them, stakeholder group by stakeholder group, before you can develop a smart strategy for each group. Otherwise, any old strategy will do. Unfortunately, strategies are often created in a vacuum. They won’t be meaningful if you haven’t decided what you want them to achieve.

Recognize what your stakeholders want from you. When management teams delve too quickly into problem-solving, they make assumptions. They think they already know what’s good for their stakeholders. As a result, their companies end up with products and services that don’t sell.

When you articulate what key stakeholders want, you’re defining what I call “strategic factors.” (They’re not the same as “critical success factors” — a term you might already use. Those are generated by your management team, whereas strategic factors come from your stakeholders.) Strategic factors bring an external perspective. They are those few things that you must excel at if you are to achieve a competitive advantage and, simultaneously, meet your corporate objectives.

Here’s a list of strategic factors from a company that manages a port and aims to attract as many ship operators as possible:
  • Port capability (suitability for a ship’s size and freight)
  • Freight availability (to pick up on the return leg)
  • Congestion (speed of unloading and turnaround time in the port)
  • Location (which affects “steaming time,” or time between destinations)
  • Price (port charges for docking and remaining moored)

Note how these are defined from a stakeholder’s point of view, not from management’s. If you’re not sure of them (that’s the norm), interview your stakeholders to better understand their stories and needs.

If you’ve been struggling to develop strategy and write your strategic plan, what you may have been missing up till now is a method. These steps will help. Toyota doesn’t produce defect-free cars day after day without a system. Surgeons don’t operate on hearts and brains without clear procedures. You shouldn’t expect to design effective strategy without a process, either.

Original article