In developing a strategic agenda, the focus will be on five strategies: a market strategy, regulatory strategy and stakeholder strategy (outside-in approach); and a product strategy and a resource strategy (inside-out approach). For each of these strategies, specific strategic thrusts need to be identified that if successfully executed, will lead to achieving your vision and mission. In previous STILE Points, we discussed the key elements of a market strategy, product strategy, resource strategy and regulatory strategy. In this STILE Point, we will discuss the development of a stakeholder strategy.
The stakeholders of your organization consist of everyone who is depending on you to deliver on your business commitments to include owners/shareholders, clients, suppliers, regulatory agencies, and the local communities in which you reside. The strategy for owners/shareholders is embedded in your vision and mission as well as expected financial returns. It is usually the overarching focus of your strategic plan. However, achieving your owner/stakeholder strategy is highly dependent on success of the five strategies in your strategic agenda. We have already discussed the importance of regulatory agencies in a previous STILE Point. I would like to focus the stakeholder strategy on the remaining stakeholders; clients, suppliers, and the community in which you operate.
Client Strategy
In the section on client feedback, we emphasized the importance of gaining intelligence from existing clients on their current problems and future opportunities and the value you bring to their organization. Armed with this intelligence, you can then develop a client strategy to accomplish two important goals: improve the quality and responsiveness of your current products and services and, anticipate your client’s future needs for new products and services. The first client feedback question should provide you with the intelligence you need to formulate the first goal of your client strategy. “How would you rate the quality, responsiveness and value of the products/services that we have provided over the past year on a scale of 1 to 10? How does this compare to our competition?” The scores on quality will assess your product, scores on responsiveness will assess your processes and scores on value will evaluate the justification for your costs. These measures will tell you how well you are currently serving your clients. A key follow-up question that I have found to be extremely useful is to ask what your organization would specifically have to do to improve your scores. This is a method of extracting valuable information even when the client has given you a high rating and will form the basis of your strategy going forward to improve the quality and responsiveness of your current products and services.
To anticipate your client’s future needs for new products and services, the answer to the following question will help. “Where do you see your market going in the next few years and the products/services you will be needing from us? This is an open-ended question that probes clients about the future and creates a dialog where you can introduce new ideas. This can be very helpful to include your client’s needs in generating your research agenda in the strategic plan.
As previously discussed, your goal should be to become a strategic partner with your clients, involved in their product development strategy and marketing plans. A key question to have answered is “What level of impact is our research having on your organization’s strategy? What more can we be doing to become a strategic partner?” This can be presumptuous with a new client, but in time, as you gain more trust by your actions (driven by your client strategy), several of your key clients will better appreciate the valuable role you can play by being in their inner circle, and begin to trust you well enough to share the more difficult problems that the client is facing or opportunities that he wishes to pursue. This should be the goal of your client strategy.
Supplier Strategy
Once you have internalized the process of client feedback and implemented a client strategy, you will understand the value of developing strategic suppliers. It is simply a role reversal where you are now the client and appreciate the value that accrues from screening and evaluating venders and moving them up the value chain for your organization to preferred providers and ultimately to strategic partners. This is a process that can take many years with a low percentage of success. It is therefore important to have a supplier strategy to get you there. It starts with setting high standards that you expect them to meet and providing feedback on their performance. The same feedback questions that you developed for your clients can be used if the supplier does not have his own.
This approach is especially useful in the biotechnology business where a great deal of start-up companies depends on a virtual business model that rely on contract research organizations to generate their preclinical, manufacturing, and clinical research studies. Evaluating the performance of several suppliers, down selecting a few that are trustworthy, and then sharing your development strategy with them is a valuable way to develop a stronger commitment from suppliers and improve the quality and timeliness of your research. I have experienced numerous examples where my staff developed ownership and a deep commitment to a client’s preclinical research program because they felt a part of the client’s research team. I have also experienced the opposite effect, where clients have taken a hands-off approach to contracting out testing protocols, resulting in just a business transaction and less enthusiasm on both sides. Trust is a two-way street.
Community Strategy
An often-overlooked part of an organization’s strategy is the position and actions it takes to become a good corporate citizen. The community in which you operate can, and often does have a direct impact on your license to operate and the permits require for continued operation. In addition, your local reputation is an important part of your brand which can affect your business wherever you sell.
Rather than taking a passive approach and reacting to community requests from time to time, a good strategy is to decide in advance what your contribution to the community is going to be, and to communicate it widely to the community leaders and the public at large. You can then concentrate your resources (pro-bono contributions and money) in a deliberate way to maximize their impact.
As an example, our laboratory was in a small town with a strong reputation for academic excellence. Being a science based operation, we decided to contribute to the town by establishing a local science fair for K-12 students. We organized and funded the fair and our staff, along with school teachers evaluated the science projects submitted. Awards were given to the top projects in each grade level. While it took a couple of years to gain traction, our laboratory gained positive recognition in contributing to the community. This strategy worked better for us than just responding to the numerous requests for community donations. In establishing a community strategy, strive to focus your attention and resources in an area where you can make a difference.
This concludes our discussion on developing a winning strategy. In our next STILE Point we will turn to the second fundamental of the Performance Trilogy: Managing the Execution.
