TACTICS VERSUS STRATEGIES

In the United States, there is a great deal of pressure placed upon the CEO of a publicly traded company to meet analysts’ expectations on quarterly earnings reports. The Securities and Exchange Commission (SEC) require publicly traded companies to report all activity four times a year, with certain expectations with each filing. This requirement encourages executives to employ short-term tactics as opposed to long-term strategies. It also sometimes encourages executives to manage the stock instead of leading the company.

This is the wrong approach. Concentrating on the intended or expected outcome is the wrong focus of an organization. Concentrating on long-term strategies, which when successfully implemented will produce the long-term expected financial outcome, should be the focus of the Executive Committee. However, we are likely to see more short-term actions instead of long-term planning of our largest companies.

Because U.S. publicly traded companies are constantly focusing on the short-term results, they are often ill-prepared for cyclical changes in the economy, as clearly evidenced each day in the business section of the news.

YAHOO AND INTEL TV

Yahoo and Intel have announced a program to bring TV to the Internet. THE STRATEGY EXPERT™ has posted comments regarding this proposed launch on the BusinessWeek website. Click the link associated with this post to read the comments.

Strategic Marketing

During a recent discussion with a Doctor of Optometry, the doctor indicated that he would like to increase the number of patients without dramatically increasing his marketing budget. It seems the economic downturn has caused an approximate 40% attrition rate to his practice.

I asked the doctor if he accepted insurance from patients and he stated that he did, but the paperwork and coding for each one was a nightmare. {My impression was that he couldn’t live without the insurance companies and was having trouble living with them.} I then asked if his office tracked the number of people who called asking if the practice accepted their insurance. He indicated that it did not. I suggested that he have his office staff track the number of requests for insurance coverage for a period of time and then concentrate on learning those systems while decreasing the amount of patients from the smaller insurance companies that were so time consuming.

I told the doctor that this study would not cost his office anything in terms of the market study and he would be able to maximum his learning of the coding system and group similar paperwork together while serving potential customers that he is currently turning away. Surprisingly, the office staff for the practice had not thought about tracking the prospective calls that come in to the office.

Lessons Learned: Sometimes, increasing your customer base does not have to cost that much more money. Think about what you are not offering, in relation to what you are offering. Track and measure everything.

WOLGANG PUCK

I recently had the opportunity to spend some time observing one of the locations of world-renown restaurateur, Wolfgang Puck. I wanted to see firsthand how the restaurant operates.

First, some, but not all of the activity of the cooking staff took place out in the open where guests could view the activities. The pizza dough maker threw it in the air to the delight of the guests. He then handed the pizza to the baker who placed the pizza in a wood-burning oven. Others were busy frying food and of course the servers and managers were busy making sure things move as smoothly as possible.

There were several observations that were immediately apparent. First, this was a busy night at the restaurant and all tables were full and the wait-time was 45 minutes. Second, everyone had a job to do and worked at diligently at completing the tasks. Third, some mistakes were allowed. At one point the chef baking the pizzas accidently dropped one while trying to slide the pizza onto a plate. The head chef saw it, immediately moved the pizza off the counter and asked how long for a replacement so he could schedule the other orders for that table. They quickly moved forward past the incident.

There was one chef who was the lead chef and demanded the respect of the others. He would often inquire about an order and the person working on that portion would promptly respond with a, “90 seconds chef” or “coming up next, chef”. At one point there were several orders for pizza and the pizza chef was behind schedule. The lead chef came over and for about eight minutes he too helped make out the pizza dough before moving back to his final preparation and observation station. Management was not afraid to step in when necessary and help get the work done.

I could not help but think that this is a young person’s game as the activity was very fast-paced – particularly at the stove top section where those chefs were frantically busy cooking the many items that would shortly appear at the tables of the guests. Their level of concentration was and focus was evident.

I carefully watched the employees to see if they were having fun. I noticed that the pizza maker and the oven chef and the two of them regularly talked and laughed, even though they was working at a fast and steady pace.

Lessons Learned: Although the wait was long – most waited 45 minutes to get seated and then another 45 minutes before the dinner was served, one could clearly see the workings of a well-oiled machine taking place. Communication seemed to be the key to the success. The servers would communicate with either the chef or the person assigned to the station of finalizing the preparation and these individuals would inquire about certain dishes with each cook or chef who would immediately respond. Serving several hundred guests an hour requires a smooth operating organization, centered around mutual respect and communication and the Wolfgang Puck restaurant seems to have mastered this approach. Finally, management worked side-by-side to help ensure quality food was being provided. Providing a good, quality meal seemed to have priority over delivery time. Apparently, guests at Wolfgang Puck’s restaurant are willing to wait a little longer to receive a good, quality meal.