| "Thank you Dr. Richard Rumelt." | | | | the need being expressed in the marketplace and |
| I always knew I was good at devising strategies for | | | | how the technology Apple was already employing he |
| the business opportunities that came my way, but I | | | | leaped at the opportunity he saw. |
| never gave much thought to what a business | | | | The strategic plan is what should be used whenever |
| strategy really was. In Dr. Rumelt's interview with | | | | anyone recognizes the situation Dr. Rumelt labels, |
| Dan P. Lovallo and Lenny T. Mendonca as presented | | | | "value denial." Simply described this situation is when |
| in The McKinsey Quarterly, he nailed it! | | | | there is an unfulfilled need that buyers will pay for |
| Unlike a business plan which is usually done on a | | | | which no one is offering to fill. His example is the high |
| repetitive time frequency, a business strategy plan is | | | | rate of lost baggage occurrences now happening in |
| done when an opportunity or a crisis occurs. Some | | | | the airline industry. |
| businesses may go for quite some time without ever | | | | Would the consumer pay for a baggage delivery |
| having the need to do a strategy plan. Others may | | | | guarantee? Yes. Is such a service being offered? No. |
| do them frequently. | | | | Why not? Certainly the airlines could figure out how |
| At the heart of a strategy plan is the recognition of | | | | much they would have to charge for this service |
| the opportunity (or the crisis) when it occurs and the | | | | which, in a totally ridiculous solution, could be provided |
| understanding of whether the resources available | | | | by having employees hand place the insured pieces |
| (capital, talent and time) can be deployed to take | | | | of luggage in a special compartment on the plane and |
| advantage of the opportunity. Once satisfied that the | | | | hand retrieve same upon arrival. But this service is |
| right resources are available and that the opportunity | | | | not available, the consumer is denied this service. |
| passes the test of being worthwhile, the business | | | | This is a revenue generator the airlines are missing. |
| leader has to devise the strategy to create a | | | | That's what true strategic planning is all about; how |
| successful outcome. | | | | to maximize the opportunity and minimize the crisis. |
| Dr. Rumelt uses Steve Jobs success with the iPod as | | | | Such a plan is not done annually; it is done when the |
| the result a strategic plan can produce. In fact Jobs | | | | opportunity or the need arises. |
| was so good at understanding the real meaning of | | | | In a well run business (defined here as one with few |
| business strategy; what it was, that it occurred | | | | if any crisis) where the leader has encouraged |
| without respect to dates on a calendar and that it | | | | actively seeking out opportunities, strategic planning |
| depended on recognizing that something was | | | | should be going on all the time. Besides creating new |
| happening, that when he was asked, "What are you | | | | profit centers this practice will create a much |
| doing? What's the long term strategy (for Apple)?" | | | | stronger management team and an abundance of |
| Jobs replied, "I am going to wait for the next big | | | | mentoring situations which will bring out the best of |
| thing." | | | | all involved. |
| And when he understood what was happening with | | | | |