This Week in IDEA | November 22, 2006

New IDEA Customer

City Electric Supply, Inc. & Lighting Studio, an electrical wholesale distributor from Iowa City, IA, became an IDEA customer on November 16, 2006. City Electric Supply was established in 1954 and currently has two convenient stores and one Lighting Studio in Iowa City to serve wholesale and retail customers. They will be taking advantage of the cost saving features and reliability of the Industry Data Exchange (IDX2). To learn more about City Electric Supply, Inc. & Lighting Studio, please visit them here.

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New IRD CERICOMX® Customer

IDEA, a 1SYNC Data Pool On-Board Solution (OBS) partner, implements suppliers that subscribe to the 1SYNC data pool using IDEA's IRD CERICOMX application. IDEA was recently assigned the following supplier:

- Genender International Inc.

This company will be trained to use IRD CERICOMX®, an IDEA branded product for supporting and uploading supplier product information into the GS1 Registry® and GDSN via the 1SYNC Data Pool.

If you would like to learn more about the CERICOMX® product, please contact John Etrie, IDEA IRD Product Manager, here or at (703) 562-4624; or Tony Gaffney, IDEA CERICOMX® Implementation Manager, here or at (508) 386-0261.

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Feedback Requested on White Paper from NAED SPA Task Force

NAED's Special Pricing Authorization (SPA) Task Force has released a draft of its new white paper on, "Recommended Best Practices in SPA Set-Up & Updates." The task force requests your feedback on the recommended best practices by Jan. 8, 2007.

NAED members volunteered many hours to help standardize the SPA Set-Up & Updates Process to make it more efficient for all channel partners. NAED would like to thank the efforts of the more than 40 volunteers who gave their time and expertise, participating in hour-long monthly conference calls and a two-day face-to-face meeting at their own expense.

Please email your comments on the best practices by Jan. 8, 2007, to NAED's customer service.

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Improving Strategic Planning

Strategic planning is critical to the continued success of any organization, yet fewer than half of the executives who responded to a survey conducted by The McKinsey Quarterly say that they are satisfied with their company's approach to planning strategy. Further, although more than three-quarters of the respondents report that their company has a formal strategic-planning process, fewer than a quarter say that the process is key to making their most important decisions; senior executives—most important, the CEO—drive decision making. The executives also raise significant concerns about the way their company executes the strategy, communicates it, aligns the organization with it, and measures performance against it.

Who decides?
More than half of all respondents say that at their company the important strategic decisions are made by a small group of senior managers, including the CEO. Perspectives vary on who leads this decision making. Thirty-nine percent of those with a strategic-planning process in place say that the CEO leads their company's process. However, in one of many notable differences between C-level executives and other survey respondents, 46 percent of the C-level respondents say that the CEO (or the person holding an equivalent position) leads the process. Only 34 percent of other executives concur; they are much more likely to attribute leadership to a chief strategy officer or a strategy group that exists at the corporate or business unit level.

Greater satisfaction
No matter who leads the decision making, executives at companies that make good use of a formal process seem to be more satisfied with strategic planning. Among respondents whose companies have a formal process, more than half say it plays a significant role in developing corporate strategy. That percentage is far higher—79 percent—among those who also say they are satisfied with their company's approach to strategy development. There is additional support for the conclusion that using a formal process leads to greater satisfaction: compared with only 16 percent of respondents who report dissatisfaction with their company's approach, 55 percent of those who are satisfied say that their strategic-planning group is among the most influential groups in making strategic decisions.

Failure to launch
A significant number of respondents express concern about executing strategy. Some 28 percent say that their company produces a strategic plan that reflects the company's goals and challenges but is not effective. Another 14 percent say the strategy and plans for executing it are not necessarily aligned with each other. The experiences of executives whose companies have formal planning processes and who are satisfied with the results may explain how their companies have avoided these pitfalls. Among these respondents, 67 percent say aligning management with the strategy is an element of the strategic-planning process; only 40 percent of dissatisfied executives say so. Similarly, 78 percent of those who are satisfied, compared with only 26 percent of those who are dissatisfied, say their process leads to explicit objectives that are communicated well throughout the company.
These concerns are reflected in respondents' suggestions for improving their company's approach to strategy development. Their top two suggestions are improving the company's alignment with the strategic plan and developing a method to monitor progress against the plan.

Room for improvement
Monitoring progress is an area where many executives see room for improvement. Only 56 percent of respondents say that their company currently tracks the execution of its strategic initiatives. Whether or not respondents are in a strategic-planning group, they agree that a top priority for such groups is spending more time developing these metrics.

Executives' concerns about executing and aligning strategy are likely exacerbated by a perceived lack of integration between the company's strategic-planning group and its human-resources group. When asked to consider strategic planning's integration with several major corporate functions, respondents rank HR as second-to-last in terms of degree of integration. Respondents who are dissatisfied with their company's strategic planning see the least integration. Of these, only 14 percent say planning is completely or mostly integrated with HR, and 59 percent say the two groups are integrated slightly or not at all.

Companies don't particularly focus their strategic planning on new opportunities for growth. Fewer than half of all respondents say that their company's approach includes identifying growth opportunities outside the core business. Among those who use a formal planning process, just 57 percent say that this process is substantially integrated with their company's business-development function. In addition, respondents don't see business development as a top priority for strategic decision makers to spend more time on.

With and without a seat at the table
Just as executives of different ranks have different perspectives on the formal process, the survey respondents have remarkably different views on what strategic-planning groups do, depending on whether or not they participate in one themselves. This disparity appears to underline the problems with communication about strategy that executives note elsewhere. The biggest disagreement concerns whether strategy groups perform internal consulting: two-thirds of respondents who are in a strategy group, compared with 29 percent of others, report spending time on this activity.

In addition, C-level respondents are less likely than others are to say their strategy group spends its time on internal consulting and far more likely to say that's what the group should be spending time on. For them, internal consulting is the second-highest priority, while for non-C-level respondents, it falls to number eight.

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Happy Thanksgiving to our Friends and Customers!

At this time of Thanksgiving, we take great pleasure in setting aside our regular work week and sending a heartfelt message to all our friends and customers.

How pleased we are that this time has come to extend to you our sincere gratitude because it is good friends and customers like you that make our business possible and successful.

May your thanksgiving holiday be filled with joy and overflowing with all the good things in life.

Happy Thanksgiving from IDEA,

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