Capabilities-Strategy

Strategy Capabilities

Organizational success begins with a well-defined strategy.  Intelligent and highly competent leaders seek outside counsel to expand their thinking and validate their assumptions.  Clients turn to Actionable Strategies for our ability to develop strategies based on broad experience across industries, geographies and global challenges.  We collaborate with our clients to pragmatically implement the organizational changes required to realize the potential of these strategies.

Applying Lean and Agile approaches enables our clients to transform their organizations while pursuing their strategic objectives.  Whether entering new markets, monetizing new products or repositioning in evolving markets, our clients benefit from our success in making strategies actionable.  These strategies are durable and consider the evolution of customer, market, technology and regulatory conditions.

Strategy Formulation Methodology

Executives drive organizational success beginning with a well-defined strategy.  Intelligent and highly competent leaders seek outside counsel to expand their thinking and validate their assumptions.

Actionable Strategies has extensive credentials and practical experience in helping organizations create and execute successful and sustainable strategies.  These strategies can be put into action even as market and regulatory conditions evolve.

Utilizing proven frameworks enables our clients to realize results more rapidly with lower costs and reduced risks.

Strategy Formulation: Benefits

Executives drive organizational success beginning with a well-defined strategy.  Intelligent and highly competent leaders seek outside counsel to expand their thinking and validate their assumptions.

Actionable Strategies has extensive credentials and practical experience in helping organizations create and execute successful and sustainable strategies.  These strategies can be put into action even as market and regulatory conditions evolve.

Engagement Structure

Actionable Strategies uses a proven and structured approach to formulate a strategic roadmap and drive successful execution.  The basic process is outlined in the accompanying illustration. 

Collaborative Approach

Actionable Strategies collaborates with clients to formulate a strategy that is realizable and not academic.  By working with executives and front-line leaders, acceptance and alignment are fostered while objections are unearthed early in the process. 

The roadmap consists of a series of deliverables including a target state model.  Stakeholders across the organization as well as external parties to the value chain are included in the planning and roadmapping process.

Actionable Strategies’ Value

Actionable Strategies applies proven strategies and techniques so clients can maximize opportunities while minimizing investment, cost and risk.  Our consultants have proven experience in strategic planning and development in the U.S. and other global markets. 

Relevant past experience includes the following:

  • Market entry strategies in high growth industries and in emerging markets
  • Growth strategies and profit optimization in mature industries
  • Competitive analysis in rapidly changing global industries
  • Marketing strategies in complex solutions involving both product and services
  • Product strategies differentiating offerings to achieve higher margins and market share
  • Sales and distribution channel modeling to ensure sell through and benefits realization against revenue plans
  • Strategic business development to achieve initial market penetration 

Competitive Product Strategy in Financial Services

This global investment bank advises, originates, trades, manages and distributes capital for governments, institutions and individuals.  The client offers global electronic trading across cash equities, options, and futures. 

The client is competing with other prominent firms for dramatically lower trading volumes.  To compete effectively and win, the client needed to attain a better understanding of key client needs and wants, articulate a roadmap to meet client requirements, and execute against this roadmap.

Actionable Strategies used a structured solution framework to assess competitors and target market.

    • Segment client base in alignment with strategy
    • Determine current and future demand drivers:  Basic needs (commoditized) or Wants (differentiators)
    • Design and apply competitive analysis to extract vital information

After conducting competitive and market analysis, Actionable Strategies then provided specific product strategy recommendations to re-align product development work.  The roadmap presented by Actionable Strategies guided the long-term vision for the product including mobile and tablet platforms.  Actionable Strategies was subsequently engaged for further work with the client.

Client Profile

This global investment bank and financial services firm advises, originates, trades, manages and distributes capital for governments, institutions and individuals.  The client offers global electronic trading across cash equities, options, and futures.  The high touch sales, trading and market-making services are available around the world.  Electronic trading tools include a broad suite of algorithms, smart order routing and direct market access. 

Business Objective

The client is competing with other prominent firms for trading volumes that are dramatically lower than in previous years.  To compete effectively and win vis-à-vis these other firms, the client needed to attain a better understanding of key client needs and wants, articulate a roadmap to meet client requirements, and execute against this roadmap.

Project Overview

Actionable Strategies used a structured solution framework to assess competitors and target market.

  1. Segment client base in alignment with strategy
  2. Determine current and future demand drivers
    • Basic needs (commoditized)
    • Wants (differentiators)
  3. Design and apply competitive analysis to extract the vital information
    • Gap in our ability to meet needs
    • Competitors gaps that we can exploit
    • Opportunities to provide value add / differentiators
    • Most critical areas to emphasize and invest resources

The client engaged Actionable Strategies for a number of reasons.

    • Unbiased strategic expertise
    • Knowledge of the global markets and participants
    • Connections with buy-side clients
    • Product and technology knowledge
    • Process and financial experience

Project Structure

The project was executed in a number of phases.

Baseline

To drive research design, a market baseline was developed.

  1. Clients are first divided into segments with analysis focused on individual segments
    • Certain segments will be more important
    • Segments may not be targets and should be ignored (e.g., individual investors)
  2. Strategic focus should be supported by market characteristics (e.g., trading volume relative to AUM)
  3. Overlay segmentation is also a consideration (e.g., cash, operating region); client-oriented views such as long-only trading strategies vs. long-short should also play a role in understanding client needs and wants
  4. Internal SWOT analysis forms the baseline for each segment (or group of segments if we decide their behavior is similar)

The sample shows the segmentation approach but is not the exact models used with the client. Segmentation led to a SWOT analysis (strengths, weaknesses, opportunities and threats).  In reality, the model was more complex and included overlay segmentation.

Design

The design phase created a plan for focused research.  The objective was to provide concrete and actionable competitive intelligence.  This enabled us to develop the most effective roadmap to win in the market.  The following overall approach was applied to design.

  1. Consolidate internal and analysts views on the broader market
    • Provides general trends and direction
  2. Narrow based on customer and competitors’ clients
    • Identify specific needs and opportunities by segment
    • Determine comparative competitive landscape
    • Use targeted research to prove or disprove hypotheses about reaching clients and taking aware share
  3. Focus based on specific competitive objectives
    • Align to strategy in terms of segment, approach and direction
    • Distill to the vital few and prioritize

The following specific approach was used in research design.  It was critical to apply multiple hypotheses per goal state as the research also disproved certain hypotheses.

  1. Based on goal states that align to strategy
    • In this example below, take 5% net market share from Competitor S in the Hedge Fund segment for funds between $1B and $5B in AUM
  2. Create hypotheses that drive actionable plans
    • In this example, if we supported a better algo than Sniper, we could convert Y% of the base while sustaining historical losses of Z% leading to A% takeaway
  3. Generate research approaches that prove or disprove the hypotheses

By developing hypotheses and a focused research approach, meaningful results are attained.

Competitive Research

Actionable Strategies conducted competitive research by directly contacting clients and prospects.  The following were the key elements of this approach.

  1. Identify current and longer term needs and wants
  2. Negative cases are sought and are highly valuable
    • Reasons for rejecting competitors / client
    • Constraints in selecting client
  3. Utilize consulting firm strengths
    • Experience from other projects
    • Relationships at other institutions
    • Ability to conduct independent research

Independent research used the following proven approach.

    • Proven bespoke research methods
    • Contact clients and prospects to conduct research
    • Quid pro quo is anonymous results
    • Client receives specific information
    • Efficient and ethical

By leveraging the strengths of Actionable Strategies, the client realized tremendous value in a compressed timeframe and efficient cost structure.

The following were sources for research which provided a broad market footprint.

    • Draw from first level contacts
    • Use second level network to create a larger footprint
    • Option of using academic contacts to execute broad based research
    • Ability to engage client contacts that client staff might not be able converse with directly

Research Analysis

The analysis phase produced the end product for the heads of the business and their executive team.

  1. Distill raw research into salient findings aligned to hypotheses
  2. Package into a concise summary
    • Crisp encapsulation
    • Graphical elements
    • Drill downs follow
  3. Retain basic research for appendices

Key Takeaways

Takeaways from the project need to be non-specific due to the confidential nature of the work.  However, the reader can benefit from the value derived by the client.

    • Certain hypotheses about client wants were not substantiated by direct conversations – this enabled the client to preserve investment in product development related to requirements that had no value in the market
    • Competitive positioning and perceived valued may have differed from reality, but clients and prospects did believe competitive messaging and the opinions of peer institutions – this enabled the client to focus marketing and sales efforts in demonstrating their superior value in those areas
    • Segmentation of the market revealed needs specific to given targets – this enabled the client to make informed investment decisions as well as tailor marketing messages by segment
    • Product gaps, both real and perceived, were clearly identified – this enabled the client to prioritize product development and enable product support to address perceived gaps
    • Executives were highly focused on the executive summary and the detailed information was used for drill-down discussions only; front-line leaders went through all of the detailed research and findings

Business Results

The client used the competitive product strategy recommendations to re-align product development work.  The roadmap presented by Actionable Strategies guided the long-term vision for the product including mobile and tablet platforms.  Actionable Strategies was engaged for further work with the client.

Smart City Strategy 

Smart City - Targu Mures, RomaniaThe Government of Romania sought to turn Targu Mures into a SmartCity.  In Romania, the city has a prominent history.  Târgu Mureș is the seat of Mureș County in Transylvania whose history is still acknowledged today.

The “Digital Mures” SmartCity strategy had two major objectives:

    1. Develop a modern infrastructure of private-public services
    2. Envision and develop a medical IT technology park specializing in research and medical information including telemedicine

The Smart City was expected to generate monetary savings, enhance the lifestyles of citizens and improve the private business environment.  Incorporating experience from Telemedicine and Smart Grid projects in Romania, Actionable Strategies concluded that the technologies could support all of the strategic objectives.

Analysis of the structure, capabilities and preparedness of the city, we concluded that a number of constraints needed to be removed prior to implementing the strategic plan.  The major issues were human capital, grid interoperability, the regulatory framework, culture, and real estate obstacles including buildings, property rights and energy data.  The Government of Romania embraced our strategy and proceeded.  By 2019, Romania had 330 Smart City projects covering over 6 million citizens.

Client Profile

The Government of Romania sought to turn Targu Mures, the capital of Mures County, into a SmartCity.  The city is 19 square miles and located in the Mures River Valley, the center of the historical region of Transylvania. 

With a population of 142,000, Targu Mures has over 8,500 private and several state-owned companies.  There are 3 leading universities with over 10,000 students.

Business Objective

Targu Mures wanted to create the “Digital Mures” SmartCity strategy with two major objectives:

  1. Develop a modern infrastructure of private-public services
  2. Envision and develop a medical IT technology park specializing in research and medical information including telemedicine

Smart City Benefits

The Digital Mures SmartCity strategy is expected to generate monetary savings, enhance the lifestyles of citizens and improve the private business environment.  Actionable Strategies has worked with other government entities in Romania on similar digital transformation initiatives.

Telemedicine Objectives

An objective of the strategy is to create the “Scientific  City for Medical IT” to contribute to the development of telemedicine and the IT industry.  Thousands of employment opportunities will be created in Targu Mures.  Actionable Strategies has successfully completed a telemedicine project in Romania which proved the economic and technical viability of the model in Romania. 

Smart Grid Technologies

From a technology perspective, Actionable Strategies was engaged to assess the viability of powering the SmartCity via SmartGrid technology deployment.  Our experience with SmartGrids in Romania and emerging markets was applied throughout the project.

The Government of Romania sought to create a model for a Smart City which it could replicate across Romania, and throughout South Eastern Europe.

Strategic Analysis

The strategic study considered strategy, management, technology, human capital, regulatory, cost and risk aspects of the SmartCity objectives.  The major focus was on establishing a Micro Grid to deliver the power required for a Smart City.

The energy strategy addressed the high cost and inefficient use of electrical and heating energy, both identified as major problems of the city. The city spends a significant amount of its budget on energy while relying on a limited number of energy suppliers, creating risk and cost issues. 

Targu Mures planned for the development of an integrated system of energy production and use.  Renewable resources were a major part of energy mix.  Non-traditional power generation schemes included:

  • Biogas
  • Geothermal
  • Cogeneration

Smart Grid Technologies

Powering the SmartCity considered many advanced technologies.  These modern technologies were targeted for energy savings, enhanced energy efficiency and reduced greenhouse gases.

Generation

Clean generation and resilience were key technology choices.

  • Distributed Generation
  • Photovoltaic Solar systems
  • Waste-to-energy generation

Infrastructure

Infrastructure investments were required to enable end-to-end grid management and operation.

  • Advanced Telecommunications Platform
  • Supervisory and Management technologies

Distribution

Advanced distribution was planned to maximize efficiency and minimize service disruptions. 

  • Energy Distribution Management
  • Smart Metering
  • Asset Management

Consumption

Technology was planned for the endpoints to optimize grid operations and maximize energy savings.

  • Energy Efficient Buildings
  • Public lighting technologies

Key Findings

Smart City technologies were found to be mature enough to support the digital agenda of Targu Mures.  Other key constraints were identified that needed to be addressed to succeed in implementing the Smart City strategy.

Human Capital Shortage

Implementation and operation of Micros Grid technologies necessitated improved Human Capital capabilities.  This required over 12 months of lead time for extensive hiring and intensive training and hiring.

  • Management – Experienced program and project managers are required for implementation and skilled managers will then need to run operations
  • Skilled resources – Deployment and operations of the Micro Grid and Smart City technologies require a significant number of skilled engineering and scientific resources, which are not currently available in Targu Mures.

Grid Interoperability

The incumbent power distribution company was not prepared to connect a Micro Grid to the distribution network.  In addition to issues with operating over existing wiring, a number of operational issues had to be resolved.

  1. Negotiation of the interconnect agreement
  2. Agreement on protection settings for bi-directional energy flow
  3. Net Metering for bi-directional energy flow payments and other compensation
  4. Time of Use pricing

Regulatory Framework

The Romanian Energy Regulatory Authority had not defined the framework for Micro Grids and interconnection to the distribution network.  Based on Actionable Strategies experience in other projects in Romania, significant delays were anticipated.

Real Estate

Municipal buildings are old, not thermally insulated, fitted with old windows, and register very large energy losses.  Significant effort outside the scope of a Micro Grid would be required to make these buildings energy efficient. 

Electrical wiring, panels, heatsinks and other electrical equipment are also old and would require upgrades to attain energy savings projected from the Micro Grid. 

Energy audits had not been performed to develop a phased plan to upgrade buildings based on impact and implementation cost. 

Culture and Communication

The plan lacked a strategy to address cultural issues related to energy-saving.  Repeated communication over time to change behaviors that led to wasteful energy practices was not built into the plan.

In Romania, there is no culture of energy saving.  For example, interior lights are turned on everywhere throughout the day when it is not necessary.  Excessive temperature in rooms is addressed by opening windows.

This culture is found at a larger level.  Buildings do not provide the ability for tenants to control indoor temperatures, leading to tremendous waste.  Sub-metering is not available leading tenants to be indifferent to energy savings.  At the municipal level, individual building do not have metering leading to complete disregard for energy consumption.

Recommendation

Actionable Strategies recommended that the Government of Romania halt the impending start of the initiative until further analysis and planning was conducted.  In addition, further risk management in planning was required.  While disappointing, this advice was in the best interests of the client and the detailed analysis and honest assessment were appreciated.

Business Results

The Government of Romania was better enabled to successfully embark on Smart City Strategies, including Targu Mures.  Smart City initiatives have subsequently spread across Romania.  By 2019, Romania had 330 Smart City projects covering over 6 million citizens.

In-flight Strategic Alignment

World-class organizations use repeatable and effective strategic planning processes to drive future success.  However, even the best companies encounter dramatic change during the course of the year which causes execution to drift away from strategic goals. 

Working with clients to realign strategies, Actionable Strategies applies a framework for rapid strategic planning outside of the normal cycle.  

In-flight Drivers

World-class organizations use repeatable and effective strategic planning processes to drive future success.  However, even the best companies encounter dramatic change during the course of the year which causes execution to drift away from strategic goals.  Examples of such changes include:

    • Mergers and acquisitions
    • Reorganizations
    • Market-driven initiatives requiring focus
    • Tactical emergencies diverting resources
    • Initiative re-prioritization
    • Missed program or project milestones
    • Changes in leadership

Re-alignment

Re-alignment involves evaluation of current and planned activities against strategic drivers.  Often activities can fit into larger business objectives but require re-definition.  Once re-defined, clear communication and linkage of plans can ensure that groups and individuals have a coherent sense of their fit into overall organizational objectives.

Approach and Deliverables

Rather than following a prescriptive approach, Actionable Strategies leverages in-flight efforts and executes collaboratively.  The following techniques are used to establish and maintain momentum and buy-in at all levels of the organization.

    • Workshops with front-line leaders
    • Interviews with staff and leadership
    • Collaborative strategy sessions
    • Planning and budgeting exercises

These activities yield the following deliverables.

    • Categorized initiatives mapped to stakeholders
    • Pragmatic project portfolio with stratified approaches including lights-on/BAU
    • Strategy aligned to business objectives
    • Communication materials

Enablement

Completion of In-flight Strategic Alignment will enable business management capabilities such as:

    • Metrics-based reporting and tracking
    • Dashboards and predictive modeling
    • Performance based compensation
    • Future incremental strategic planning

Engagement Structure

Actionable Strategies will define a pragmatic approach for each client.  A sample end-to-end engagement roadmap is depicted below.  

Real Estate and Energy – IT Strategy 

Click here to view the case study on technology strategy.  The real estate client provides financing for green projects.  Actionable Strategies developed the business-aligned technology strategy and collaborated to drive the organizational changes required.  The strategy allowed executives and front-line leaders to work from anywhere, added Cloud capabilities, deployed mobile computing, increased service levels and decreased the cost profile.

Exploring the Inefficient Frontier

Motivated to expand quickly, firms in growth industries are faced with a number of challenges as well as opportunities.  The challenges are amplified for firms in emerging markets but the commensurate rewards are greater.  This paper discusses one element that is fundamental to success: core strategy during initial ramp up.  The driver for strategic focus is the economic principle of the production possibility frontier.