Food Forum: Planning from the top down

Strategy is too important to leave to strategists. Leaders must take the reins. By Mark Lang Leaders need to agree on what strategy is. In the military, sports, or business, strategies are pursued to gain the advantage over an opponent and achieve a desired result. Successful strategies have a clear end result and are explicit about how they will be achieved. In the food business, the desired end result is the sale of your products to consumers in your stores. Your opponent is an alternative store or substitute product, and your environment is the competitive marketplace. Business strategy has two primary components, one supporting the other. The first component is the market strategy, which determines how your company will go to market, what your company sells, to whom, when, where and how. The second component is the operating strategy: how your company will execute and support the market strategy. Operating strategy addresses the details of producing, distributing and financing what your company sells. Strategies need a strong consumer focus. In the first article in this series, Dr. John Stanton stated that “leaders need a better approach to consumer insights and where the consumer is headed; they must be able to completely understand what consumers want and figure out a way to give to them.” Unfortunately, many strategic reviews spend little time on formal customer review and definition. Insufficient effort is put into understanding who the customer is, what their context and needs are and how these needs can be best satisfied. Planners get caught up in the internal processes of setting sales goals and recreating “the plan” for next year. As a result, market strategies have generic and historic definitions of the customer as the “shopper,” often limited to demographic dimensions from media planning: women 18 to 54 who buy our products. Some strategies are focused on sales only as a line item at the top of a spreadsheet and some marketing plans are focused only on achieving a certain market share. In my recent book with Dr. Stanton, Precision Target Marketing, we discuss these issues and their solutions at length. Leaders need to ensure the execution of strategies. A leading business magazine did a survey to learn why businesses fail; the No. 1 reason was “failure to execute.”  I’ve heard top executives lament, “I’ll take an A execution of a B plan over a B execution of an A plan any day.” Not only do leaders need to establish and participate in a process for creating strategy, they also need to foster an environment that supports its execution. As management, leaders need to do the following:

Leaders need to stick with a strategy once developed and use it to keep the organization on track. Leaders need to constantly and consistently communicate and explain the strategy: where are we going, why, how are we going to get there, how we are doing? This is needed months or years after the program is launched and the hoopla has dissipated: people get busy, energy and focus wane, other tasks pop up. This is especially true in the food retailing business where the companies are large, geographically dispersed, comprise multiple businesses and must respond to constant competitive threats. Success is achievable. Over the years, we have seen the business press showcase companies that have turned around their businesses by focusing on their core competencies. Their executives talk about how reduced distractions, simplified operations and clarified direction led to financial success. The story behind many of these turnarounds is how companies focused on their core customer, and the stores and products the company needed to provide to that customer. These success stories also involve leaders of companies who stepped up to the plate, asked smart questions, did their homework, and made some tough decisions. They took responsibility for developing the strategy, ensuring its execution and rallying their organizations. Mark Lang is a professor of Food Marketing at Philadelphia-based Saint Joseph’s University. He previously worked in food marketing, research, and retailing for 20 years, including 10 years as director of marketing at Publix Super Markets. He can be reached at [email protected].