Concentrated Senses Strategy and Balanced Scorecard

72% of the most important companies in the world place “customer orientation” as the number 1 strategic priority.

However, many companies continue to seek "customer orientation" in a classic and standardized way.

This almost always leads to a price war!

A summary of the suggestions of many models of "customer orientation" could be expressed as "the main commandment is to captivate, surprise and serve the customer."

It can be added - according to most prevailing models - that the company must become a "leader of ideas in its field". That sounds really good! We know many SMEs that did it, winning world championships of ideas. However, they went bankrupt or are dealing with survival in front of large consortia!

But not everyone thinks and acts the same. The CEO of an important world leader in machinery believes: “In many companies, standardized“ customer orientation ”only makes the sales force no longer want to sell, since selling is an act that confronts customer resistance. Sellers now expect to "be able to serve" the customer. "

The Director of Sales of the main producer of crystals in Europe believes: "if we had to focus on the wishes of our customers affected by regressive processes, we should make massive price reductions"

"But we are successful" some reader of this presentation will be thinking. It's possible. But have you been strategically serious and in-depth working to increase that success and to persist over time?

Is there a remedy for this "standardized customer orientation"?

As you may have inferred from other of our texts, success today depends substantially on the size of the “Client-Profit”. Because when the "Client-Profit" is correct, customer satisfaction plays a secondary role.

Recommendations for the application of standardized models can always be copied, even by its competitors. Or not? They always lead to equality, to uniformity. In case of a tie… decide only the price. Do we assume that you are also looking for a way out of the price wars?

If you sell Client-Profit, there will be no more draws and no price wars.

Determinant of success is the answer to the following question: How does our client run his business? How does our end-user manage their money? Better yet: how does our Ideal Client do it?

The successful persistence of a business is in the hands of its customers. Whoever leaves their “Ideal Clients” in the hands of the competitors will lose.

With the “Clienting” - ESC © process, it is possible to bring the decisive “Client-Profit” to the correct focus. It is just that, which will allow you to say goodbye to the price wars. For more details, request more information about Top 5 Clienting- Profit-Strategy according to ESC ©?

Example

Low prices = higher volume = more profit?

• Leading Supermarkets have the highest turnover in Chile, even when adding Jumbo sales in Chile and Argentina, the latter exceeds it. Given that it is difficult to accurately separate the Jumbo results in both countries, we keep the example as the figures show.

• Leading Supermarkets have a “marketing” oriented to those who offer the lowest prices and perhaps, it really is so. Jumbo is looking for another type of differentiation.

• In 2003 Jumbo's operating margin was 25.8% and Leader's 3.8%. However, Leader does not directly reflect its administration and sales expenses, which is why, in the comparison, its result is even worse.

• Is the Leader strategy optimal and does it guarantee persistent success?

But beyond the type of "customer orientation" not suitable for the speed of change, many companies have more fundamental problems:

1. The strategy is poorly designed

2. External factors beyond management control

3. The materialization of the strategy takes too long and becomes obsolete

4. The organization is not aligned and the deployment of the strategy does not happen

5. There is no government system that projects a strategic culture

We propose the following steps:

1) Design or redesign the strategy according to the principles of the Concentrated Senses Strategy - ESC ©, a field in which we are specialists and we have extensive experience and tools.

2) Consolidate, focus and carry out the strategy using some elements of the ESC © and the tool called Balanced Scorecard - BSC, in which we are not specialists. Concomitant with the synergistic principle of complementing strengths, we have the best disposition to complement ourselves with experts in BSC.

3) Establish continuous adaptation as a driving principle of leadership

What is the Balanced Scorecard?

The tool that translates the vision and strategy of an organization into a comprehensive cause-effect arrangement of objectives. This tool was designed by Professors Robert Kaplan and David Norton.

In this presentation we will avoid many details about the ESC © methodology, which is detailed in other presentations and under

After the process of re-defining the strategy based on an ESC © process, the Balanced Scorecard uses two elements to communicate it:

• The strategy map

• The control board

The strategy map is the visual representation of the objectives of an organization, using at least four perspectives:

The economic perspective; Quoting Milton Friedman: "the business of the business is the business", the cause of being a business is to be profitable for its investors.

From the ESC © perspective we would add:… to be increasingly profitable, it is necessary to sell “Client Profit” to “Ideal Clients”.

The customer perspective; In order to be financially successful, it is imperative to satisfy the market, the first cause - effect on objectives is a satisfied client to promote a successful financial result.

With the ESC © approach, we are no longer talking about markets, but about clients, that is, Clienting replaces Marketing. But not just any client, but "Ideal Clients" and it is these that must be satisfied.

The perspective of internal processes; that contemplates the processes to satisfy the client. ESC © will assist the Balanced Scorecard processes with “tailored” tools, to focus on the “Client Profit”.

The learning and growth perspective; that is, the capacities and abilities of the workforce, knowledge and information, technology, culture and values that enable internal processes. ESC © does not postulate correcting weaknesses, but rather enhancing HR's strengths, leading to a process of self-organization based on the target groups. To do this, it uses various own tools and / or cooperation partners.

To communicate strategy, it is important to balance strategic objectives by perspective. An example of a BSC map to understand the blocks of the strategy is as follows:

Perspectives group cause and effect objectives to achieve the strategy, the map serves to communicate the strategy in an understandable way.

The Balanced Scorecard dashboard is built on the basis of the 4 perspectives and includes the objectives reported on the strategy map and includes meters, goals and initiatives.

The indicators are the value of success or failure of a goal, the goals, commitments and initiatives, the key action plans to achieve the goals, so the "what" are the goals and the "how" are the initiatives. The premise is that measurement communicates values, priorities, and strategy.

The BSC control board is as follows:

Measurement is discipline, the way the history of the strategy is communicated to the organization. If we measure the organizational climate, customer satisfaction, process excellence and the intrinsic value of the company, it will be understood that the organization is focusing on the short, medium and long terms and that all activities are important cause-effect.

Initiatives of becoming the lowest-cost producer, innovation, customer satisfaction, process excellence, business alliance, are aligned and understood as a whole, not separate and unrelated.

Here you can achieve amazing synergies between ESC © and BSC

In summary , the strategy map and dashboard of the BSC - serve to deploy the strategy in the internal and the extended company - clients, suppliers, shareholders and personnel - which facilitates common themes and shared responsibilities.

The Balanced Scorecard as an Administrative System ESC © as Strategic Methodology and Support of the Administrative System BSC

There are four main elements in this model:

Prepare, Communicate, Control and Implement the Strategy.

To elaborate

Communicate

Balanced Scorecard communication enables the organization to align itself to the strategic destination, which is achieved effectively through ESC ©

Control

The Balanced Scorecard focuses the organization to relate the short-term budgeting process with the long-term strategy, to optimize the investment of resources.

This moves the organization from an administrative control system to a strategic administrative system.

Typical Balanced Scorecard Development Plan

Balanced Scorecard Goals

• Translate the strategy into operational terms.

• Ensure that the components of the strategy (objectives, measures and initiatives) are aligned and related.

• Communicate the strategy in the organization.

• Establish the basis for an integrated strategy management process.

The Benefits of the Scorecard

• It will help clarify the corporate vision in the organization.

• Contribute to gaining consensus and ownership in the executive team.

• Provide a framework to align the organization.

• It will integrate strategic planning and implementation processes.

• Will drive capital and resource allocation process.

• Improve administrative effectiveness.

• Through a methodology effectively proven for more than 30 years, assisting organizations with various tools, with the aim of increasing leadership in one or more target groups (niche markets).

• Permanently determine and update the optimal profile for specific target groups, through the optimal combination of skills, relationships, image and strengths.

• Determine the most burning problems, needs and desires of the target groups, which can be solved with their own optimal profile.

• Generate and increase the attractiveness force for such target groups, through communication processes, potential for cooperation (associativity), innovation and investment in promoting unique HR skills and talents.

The list is long and the answers are in many of our documents. But this time, we want to answer with a question: What brings you the most, the marketing of your products or the marketing of the effect and results?

When marketing the Client Profit, the size of a calculable, measurable and / or emotional Client Profit is decisive. The client does not ask for less, but more money, global benefit or a value of the experience, in short, more "Client-Profit". If you receive more, you are willing to pay for it.