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K (K) Competition E Economics
Ecology (2nd E)
It is best to assign a team to each letter. It also helps if a senior management member sponsors each team, using the natural roles the various functional executives play; for example, S (socio-demographics) sponsored by the VP of human resources, E (economics) by the CFO, and so forth.
Build each team by asking for volunteers. Middle managers are a crucial part of successful environmental scanning, but they should volunteer based on their expertise and interests (it is a great developmental tool as well).
The key point to remember in conducting this future environmental scan is to be able to understand the potential impact of these changes on your business. Will they be helpful? Will they create a problem for you? Is the impact neutral?
Change consultants can assist the organization in setting up an environmental scanning process by doing the following:
1. Identify the environmental scanning framework (SKEPTIC).
2. Form teams around each SKEPTIC letter and assign scanning tasks to each team.
3. Identify people who will participate in the environmental scanning process (not just members of the senior management team).
4. Help the team generate a list of information sources (trade shows, publications, technical meetings, customers, and the Internet).
5. Have teams collect data on a regular basis.
6. Disseminate information in a large EWC group meeting on a quarterly basis.
Questions to Ponder
• What sources might you scan to get a better view of the changing environment?
• A longer-term view—five years or more?
• A medium-term view—one to three years?
• What Internet sources are best for your industry or business sector? (Government is a business too.)
Clarity of Purpose: Working On the Enterprise
Where do we want our positioning in the marketplace to be?
Missing Element #2: Phase A
Backwards Thinking from Your Positioning
You may have heard marketing gurus use the word positioning. It is usually used with respect to positioning the organization or strategic positioning or your value proposition.
Positioning, simply put, is the act of carving out a unique and better reputation in the marketplace, in the eyes of the customer, that sets you apart from the competition and that motivates customers to do business with you.
It is also called the driving force, strategic thrust, grand strategy, strategic intent, reputation, image, Strategy [capital S], brand, competitive edge or advantage, customer value, provider of choice, or providing value. The proliferation of words is a problem because executives and change consultants often don't share a common language to discuss the issue. We prefer the term positioning because it is the most common, and most descriptive, in the field.
"What's your positioning?" is the final "Who Wants to Be a Millionaire?" question for an enterprise. Finding the answer is far more difficult, and the potential payoff, in economic consequences, is far greater than a million dollars. Unfortunately, there are many different options for the right answer for each organization.
Positioning is also the single most important guidepost for an enterprise's vision, strategic direction, and Enterprise-Wide Change. It is the one decision around which your organization should be uncompromising in building everything else to support it.
Positioning is the essence of your vision. Vision is your view and image of an "ideal future." It is aspirational and idealistic, a guiding star with dreamlike qualities. A shared vision is a prerequisite to successful Enterprise-Wide Change.
Positioning is also called "the mother of all core strategies," as it defines "how we are driven" as an organization.
Clear and unique positioning
• Is the central issue to which all other functions, directions, decisions, and criteria must be subordinated
• Is your organization's core (or distinctive) competency—the thing that makes an enterprise unique and better than all the competition
• Will sustain a competitive edge over a period of years
• Cannot be easily duplicated
• Is either a current reality, or can become a reality within the period of time for which the EWC is planned
Consumers, Costs, and Positioning
Thanks in part to the Internet, consumers today are more demanding, more aware of products and services available, and more able and willing to compare products and prices. Product and service loyalty is at an all-time low. Fierce price competition is becoming the norm as once high-end products and services become increasingly perceived as commodities.
You lower your price and I'll do the same. What kind of positioning is that? Who wins?
No one in the industry wins—just the customer.
In The Discipline of Market Leaders, Michael Treacy and Fred Wiersema (1997) discuss how yesterday's stars often turn into today's has-beens. Praiseworthy companies fall into decline if they fail to maintain their positioning. They let it erode, day after day. Remember when GM had 50 percent market share? 40 percent share? 30 percent share? What is it today?