AGAAS Strategy

Strategy

strat'e-gē: 1. the science and art of using all the forces of a nation to execute approved plans as effectively as possible during peace or war.

What We Do

Risk Management - we will broaden your understanding of what risks you do not know about, because internal personnel can never see them all.

External Factors - we will help you consider the actions and beliefs of competitors, regulators, customer dissatisfaction, and suppliers, particularly regarding their closely-held opinions.

Internal Factors - we will act as your intermediary, to help reveal the true issues between employees, management and executive.

Strategic Planning - we will help you balance strategic planning with accountability, outside opinion, and opportunity.

How We Do It

We are not fans of keeping up with competitors. Rather, your competitors should be trying to keep up with you. Here's some ways we can help do that:

Risk Management: Predicting the Future

No one knows the future. But it's possible to plan for the impact of certain decisions as they unfold in certain environments. In Risk Management, planners might apply "straight-line" logic, where they anticipate that if they make a change to a larger system, their change will only affect what they expect it to.

For example, if a business increases the price of a product to cover higher costs, they hope to make the same number of sales, and simply earn more revenue, proportional to the price increase. If a government authority increases the amount of sales tax, they hope to see a proportional increase in revenue, with overall sales remaining the same.

If both cases, something unexpected (and undesired) can occur: overall sales may drop, lowering overall revenue, possibly to a point lower than before the change was made. This represents a classic trade-off in the supply-demand curve taught in every macroeconomics class, where revenue has only one maximum point of balance between price and demand. So why is it misunderstood?

Of course, this is where things can get complicated. Conditions of the overall economy, the elasticity of demand, competition, and other factors can make it harder to predict changes. The economy of any nation is possibly one of the most complex systems anywhere, with countless factors at play. This is why you need to have broad plans that anticipate different outcomes, so you are not caught scrambling for an unintended consequence.

Anticipation of "oblique" possibilities requires some careful review, considering everything from the likely to unlikely, and the low-risk to the high-risk outcome. Risk Management, in effect, requires you to predict several futures, and to be ready for each one.

External Factors: The Economy

Though it may come as a surprise to anyone who likes to occasionally pull the handle of a slot machine, Las Vegas actually saw slowing visits for years, from the late 1990's and into 2004, despite the crowds up and down The Strip. But as the US economy grew into 2006, with national unemployment dropping into single digits, visitations and the willingness of those visitors to spend saw casino resort revenues soar. This prompted enormous development, with multiple new resorts, hotel rooms, and the requisite gaming facilities to match. In fact, gaming was becoming incredibly popular worldwide with the relaxation of government policies and attitudes. Even in the European Union, or China's Special Administrative Region of Macau, or Russia or the Internet, an explosion of gaming capacity has become a worldwide phenomena.

Some companies, including us here at AG Advice and Support, found the trends unsustainable, and had begun advising clients as early as 2004 when the sustainability of real estate development came into question. In October 2005, it became clear that we were at or near the top of an over-bought real estate market in the United States, and by 2006, we foresaw at least a 5 year correction coming. Even without knowledge of the mechanics (such as Sub-Prime mortgages, and Collateral Debt Swaps or CDS), there were signs of retail buying exhaustion. If this crashed the real-estate market, it would affect spending habits for many consumers, and certainly their travel plans.

There is an old gaming-industry adage that there is "never enough capacity", but this belief suddenly started to show cracks. We had written into our reports that major gaming resorts should start considering alternative ways of generating revenue if the Las Vegas 95% occupancy rate started to drop, such as in the case of an economic slow-down. Advice like review of new-construction, hotel-to-condo conversions, short-term rentals, discounting and comping, opening lock-offs, television ads emphasizing stay-cations and lower-cost local trips, were among some of the ideas presented. These defensive measures were understandably not popular in 2006, but plans to implement these types of ideas should be drawn-up in case they were needed.

As history would show, in just two short years later, real estate values and consumer spending changed dramatically. While many of the above measures would be taken by the hospitality and gaming industries, the plans were not created in advance. Over-builds could not be stopped in time, resulting in capex without immediate hope of return, or write-offs.

By 2012, the real-estate industry had largely healed, and is so often the case, a new cycle of boom and growth began, another outcome which at the time, was hoped for yet seemed unlikely. Those with the foresight to pick-up cheap assets during the slow-down were able to leverage the new growth, gaining market share and fast-growing revenue.

Internal Factors: Workplace Attitudes

It's widely recognized that to attain your goals, everyone within an organization must be working together towards that goal, with each understanding the nature of their own contributions. But how often is this really occurring? Many employees have frustrations, questions, and contradictions. Or, shyness, uncertainty, and fear of being judged can prevent employees from getting the help and answers they need. How many of the above examples have you witnessed? How many have you experienced?

Sometimes, a serious issue may arise out of a perception rather than a reality, and it can be difficult to break the deadlock if one or both sides are not communicating. Indeed, perceptions based on relatively minor or even non-existent problems can have just as serious an effect as real problems.

For this reason, all workforce issues are valid...even if the rationale behind them may not be. What we mean here is, if employees cannot support the overall strategy, for whatever their reason or perception, then you are not going to accomplish objectives effectively, and possibly not at all.

To help heal and even prevent such perceptions, everyone within the organization must communicate, and listen to each other. For example, before finalizing a strategy, the executive can find out what management, workers and staff all know and believe. While executive strategy must necessarily come from leadership, strategy will often work better is there is buy-in from those performing the work. This means seeking their input, even if not all suggestions are possible. Then comes the hard part: letting each and every person with a suggestion know their input was appreciated, and if not used, why is was not.

This is a form of communication, as well as courtesy, and if used over time, helps build trust.

Remember when we asked you above, "how many of the issues have you witnessed?" Well, how many times have you seen buy-in from all levels of talent? It's not as common is it could be.

Here's the other half the story. Several past surveys have revealed that, when asked if employees of their organization understood their company's goals, most executives answer "yes". But when employees themselves are asked this question, typically less than 40% -- and often much less than that -- can even name one goal, objective or any part of the company's mission statement. Engaging in more frequent two-way communication (and one-on-one where possible), plus providing personal recognition, or offering simple but meaningful rewards, are some of the ways to rapidly improve participation, and make all feel valued so that everyone is working towards the same end.

Strategic Planning: Innovation and the Future

Here at AGAAS, we tend to think about the future. If a certain set of decisions are made today, how will their outcomes be perceived in 10 or 20 years? Finding answers is not always easy, and of course is not really possible until some time goes by. But once you set some expectations, you can design a strategy.

Of course, you probably have some competitors, and they are also designing a strategy. They may also be wondering about yours.

This might lead you to think about your competitors' strategies. And they are probably thinking that you are thinking about them.

We are having some fun here, but not entirely so. We haven't even mentioned customer expectations yet, for both your products, and your competitions' products.

This is where it starts to get interesting. You would like to provide customers a surprise offering, or a killer deal they cannot say no to. But so will your competition. They also want to surprise customers, in an attempt to acquire market share. You might also consider new or anticipated customer trends, expectations, the the economy, and even new rules or regulations, to name a few points. When taken together, you might realize that your planned product really may not be much more innovative than others, and this is where strategy comes in again. What can you do better than anyone else? Can you deliver it faster? Is the warranty longer? Are you intending a durable product that is more friendly to the environment, or a single-use?

The more answers you have at the beginning, the more successful you are likely to be.

In a more conventional realm, look at snapshots of today's competitors. Surveys your customers, as well as theirs. Look to the future, and commit resources to resolving their expectations. Then put it all into your master plan. This is what innovators do.

Here's a short article on Strategy: Predicting The Future which shows how proactive strategy was used to anticipate world-changing technologies.