JOHNSON ON DISTRIBUTION MANAGEMENT: “The End Game” - Exactly What Does That Mean?
The “End Game” is actually a chess terminology used in the context of the end game strategy to win the game. It focuses on centralization of the king, the role of the pawns, the principle of weakness and the bishop's impact. That is as far as I will go with chess talk. I am not a chess player. However, the concept of the “End Game” in business is actually quite the same as in chess, the point being - how do we win the game?
The “End Game” in business is simply defining what winning the game in your business is really about. What does winning mean? If you have seen one end game, you have seen one end game. Every end game is different, unique to the business, unique to its creator. The end game can be as simple as a statement about the character and integrity of the business or as detailed and complex as defining individual business segment growth with specific financial goals outlined with attendant timelines.
Strategy Is What We Are Talking AboutContrary to the definition of “end,” the “End Game” is really the beginning, the beginning of long-term strategic planning. Strategic planning is a management tool. It is used to help an organization clarify its future direction - to focus its energy and to help members of the organization work toward the same goals. The planning process adjusts the organization's direction in response to a changing environment. Strategic planning is a disciplined effort to support fundamental decisions and actions that shape and guide what an organization is, what it does and why it does it, with a focus on where it wants to go and how it is going to get there.
A critical factor and the very first step in developing a strategic plan is looking at the end game. Just exactly what do you want your company to be when it grows up? Ask yourself the following questions from the perspective of looking five to seven years into the future.
- What markets should your company be serving five years from now?
- What products should you be distributing?
- Who are your primary competitors?
- What are your strengths?
- What are your competitors' strengths?
- How has your marketing strategy changed?
- What are your core competencies?
- What is the size of your revenue stream?
- How is your revenue stream segmented?
- Do you have a human resource development plan?
These are just a few sample questions, but don't stop there. After you've tried to visualize your corporate profile five years into the future, the next step is scenario planning. It's the old “What If” analysis. What if you lose your major product line? What if your three biggest competitors become part of a consolidator roll-up? What if you dramatically change your product offering so it doesn't even resemble the industry you represent today? How will e-business impact your strategy? Through the use of brainstorming and scenario planning, Executive Management can create a picture of what the company will be and how it will function five to seven years into the future.
What's Really Involved?Strategic planning involves anticipating the future environment and creating an end game analysis so the decisions are made in the present. This means that over time, the organization must regularly perform trend analysis in order to make the best decisions it can at any given point - it must manage, as well as plan, strategically.
Strategic planning is not a substitute for the exercise of judgment by leadership. Ultimately “the buck stops somewhere.” The strategic planning process does not make the organization work - it can only support the sound judgment and reasoning skills that people bring to the organization.
Strategic planning is a creative process that starts with the visionary creativity of the owner or CEO. The fresh insight it engenders might very well alter past initiatives. Planning also consumes resources, which are precious commodities. It can be an overwhelming and daunting task, but it is a process that eventually defines the direction and activities of the organization. Despite its overwhelming nature, the benefits of planning can far outweigh the hard work and pain involved in the process.
I cannot emphasize enough that the true value of a strategic plan is not in the document itself. It is in the process of creating it, involving many of your employees from the bottom up. This empowers them to be more effective and better-informed leaders, managers and decision makers. The time devoted to the planning process varies from organization to organization and you must decide how much time you will devote to the kick-off planning process meeting. This can take the form of a two-day retreat or it can be an extended process. The organization will begin to realize benefits from the start. Fundamental benefits to the planning process include:
- A framework and a clearly defined direction with unified support.
- A clear vision and purpose that is owned by all employees.
- Commitment to the organization and its goals by the employees.
- Set priorities that match company resources.
- Trend analysis that creates confidence in the ability to take risks.
- Organizational structure and clarity.
How Do We StartThe first priority is to create the end game vision with crystal clear clarity. The end game must communicate the essence of the organization. Articulating the end game indicates your focus and purposefulness. The end game and its clarifying statement should contain:
- Purpose - why the organization exists and what it seeks to accomplish.
- Business - the main method or activity through which the organization tries to fulfill this purpose.
- Values - the principles or beliefs that guide an organization's members as they pursue the organization's purpose.
- Specific long-term objectives.
- What the company's future expectations are.
A core strategy statement summarizes the what, why and how much of an organization's objectives. It presents an image of the character, the culture and the core values of the organization. (E-mail email@example.com to request an end game preparation list and copies of sample end games.)
ConclusionCreating an “End Game” involves looking at a longer time horizon and developing a strategy that can identify future trends and create action plans based on the highest probabilities. A good strategic planning process will enable a business to anticipate changing trends and implement actions that will enable it to gain or maintain competitive advantage. Add scenario planning and they can be ready for just about any consequence the market may throw their way.
Developing a well-thought-out strategy that involves much of the entire organization provides the “Footprints to Success.” It is now up to the executive team to lead the organization along the path these footprints follow. If you would like to train your management team on the strategic planning process, contact firstname.lastname@example.org to discuss a one-day strategic planning training retreat to prepare your team for future challenges.