The Chemistry of Strategy tm Newsletter February 28, 2018

Are you destroying your company's future?

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GE's earnings under Jack Welch increased so much that he became the very model of a a modern corporate Major-General. But over time, as an insightful BusinessWeek article discusses, " less and less of that income came from technological innovations or manufacturing prowess or even the productivity gains Welch had wrung out early in his tenure. Instead it came from GE’s financial-services arm." The historic bull market of Welch's era didn't care that the earnings were "low quality", rewarding the company with a high stock price.     

It wasn't until after Welch retired in 2001 that GE experienced the long-term consequences of transitioning to "low quality" financial products and the deep cuts Welch had made to research and development.

The value of an organization is based on two elements, elements that compete for resources:

  1. Operational Excellence: The ability to generate competitive earnings from selling existing products to existing customers and markets.
  2. Strategic Excellence: The ability to make investments that will sustain future growth and profitability - future products, customers, and markets.

As an extreme example, one can always maximize current profitability by cutting all expenses that don't contribute to earnings this year. Fire all the sales reps developing new customers and all engineers developing new and improved processes and products. The future may be bleak but you will have a hell of a year.

Alternately, you can put all your resources into developing new, strategic customers, products, and processes and go bankrupt.

You create the greatest value - short, medium, and long-term when your strategic plan balances your focus and investments on sustaining both operational and strategic excellence

Create a strategic plan with your team

Turning vision into reality is every leader's problem. We engage, energize and enthuse your leadership team enriching teamwork, reducing stress and producing sustainable results.

“For the past 13 years, VMS has created an annual Strategic Plan facilitated by Myrna Associates. That process has driven our overall success of 7% ACGR with a continued improved bottom line.”
Dolf Kahle, CEO Visual Marking Systems

Additional Testimonials

John W. Myrna

is co-founder of
Myrna Associates Inc


John Recommends

Building a StoryBrand: Clarify Your Message So Customers Will Listen 
by D
onald Miller

What? Message clarity

Why? You want your marketing to be heard as music not noise..

How? create a compelling story - a "one liner" - covering these 3 elements:

1.Customer's problem.
2.Your solution.
3.Vision of success.

Then, use it in every piece of formal and informal communication


Now available as an eBook!

The Chemistry of Strategy

The best-selling book based on John's 50+ years of business experience.


 

Speaking Gigs

John loves to share his insights. Email him if you'd like to have him speak at your next meeting.
success@myrna.com

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success@myrna.com  https://www.myrna.com
800-207-8192

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