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What Will Determine Your Company's Ability to Execute Strategy in 2017?

Steve Patti, CMO and Business Strategist

Image - Strategy 2017 - SoCal BMA Blog - SPatti

Each year executive leaders are under new pressure to deliver financial results for their stakeholders.  The roadmap to deliver those results is typically an annual plan.  As with most annual plans, yours probably contains its fair share of initiatives relating to improving buyer insights, omni-channel customer experience, and deepening customer engagement -- all in the name of increasing revenue. However, an often overlooked aspect of a typical annual plan is how a company's brand strategy and culture align with the many strategic initiatives an organization might undertake.  At the end of the day, it's the people who execute the plans.

I believe the reason brand and culture are repeatedly overlooked in the Q4 annual planning process is due to their exclusion from strategic business unit collaboration throughout the rest of the year.

What often relegates these corporate disciplines to marginalized functions on an organizational chart?  The lack of understanding for what brand and culture do, and how they impact financial performance of the enterprise.

A company’s brand strategy defines its culture and its culture determines its ability to execute strategy. What’s more, the positioning found in the brand strategy determines the degree to which the company will be forced to compete on price, and therefore impact Earnings Before Interest and Tax(es), EBIT.

Are you a well-meaning CEO, CFO, or other executive leader who may dismiss brand and culture as "soft skills" and not critical to the success of the enterprise? Consider this:

  • The  study by Erik Flamholtz at UCLA, Corporate Culture and the Bottom Line concluded that approximately 46% of EBIT is explained by the variable of corporate culture
  • In their book Corporate Culture and Performance, authors Kotter and Hesket reveal that companies with strong cultures outperform those with weak cultures in terms of revenue growth (5X) and stock price growth (12X)

This year could be a breakthrough for your organization to rethink its approach to aligning brand, culture and strategy to deliver greater financial results.

First, consider formalizing a readiness assessment of how or if your brand and cultural alignment supports the execution of your annual plan.

Next, take steps to ensure your brand and culture teams are collaborating with mainstream operating units throughout the year so they are supporting each other’s efforts.

Then consider implementing a formal brand performance monitoring and tracking process that correlates brand/culture alignment to financial performance of the firm.

You’ve invested the time to develop an annual plan to meet your business objectives – but why stop there? Now go back and ask yourself whether your culture is aligned to deliver on the strategy and whether your brand strategy is defining your desired culture.

In an era where we’ve either outsourced or offshored our way into operating efficiency, perhaps the biggest financial upside potential is right under our nose.  Getting this right will separate market leaders from market laggards.

I welcome your comments.

Photo - Steve Patti

Steve Patti, CMO | Business Strategist
Steve Patti CMO

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