Sovereign Insurance - Strategic Planning for RESULTS - SovNet

1. Strategic Planning for RESULTS Best practices based on the direct observations of thousands of RESULTS.com client firms Presenter: Stephen Lynch Role: Head of Strategy & Consulting at RESULTS.com Email: Stephen.Lynch@Results.com Linkedin: linkedin.com/in/stephengeoffreylynch Slides: results.com/slides Software Demo: results.com/insurance

2. 18,446,744,073,709,551,615

3. “We’re in the second half of the chessboard”

4. “In short, software is eating the world.”

5. “The digital era will dwarf what occurred in the information era. It’ll be a brutal disruption, the majority of companies today will not exist in a meaningful way 10 to 15 years from now.”

6. “Business is going to change more in the next 10 years than it has in the last 50”

7. “It is not the strongest who survive, nor the most intelligent, but the ones most responsive to change”

8. “You need to operate with one eye focused on the short-term, and one eye focused on the long-term. Short-term planning is about improving your current business, & meeting the needs of today’s customers.”

9. Often, this demands bold, disruptive strategic moves” “Long-term planning is not performance improvement. It is about forgetting the past and reshaping your business to compete more effectively in the future.

10. 3 to 5 Year Strategic Moves

11. "If you’re planning over a 3 year time horizon, you're competing against a lot of people. But if you're willing to invest on a 7 year time horizon, you're competing against a fraction of those people, because very few companies are willing to do that. We can't realize our potential as people or as companies unless we plan for the long term."

12. “You need to clearly explain the top 3 things the company is working on. If you can't, then you're not leading well”

13. Industry Analysis

14. Questions / Answers: #RealStrategy || @RESULTSdotcom

15. “The questions remain the same. It’s the answers that keep changing”

18. Rivalry between existing competitors

19. Who are your Key Competitors now? (the “players”) What moves are they likely to make? Any Threats? Opportunities? ( Industry life cycle: introduction > growth > maturity > decline / Industry growth rate / Industry profitability / Number of competitors / Market share / Capital requirements / Globalization / Commoditization / Cost advantages / Economies of scale / Friendly vs. Aggressive competition) List your answers below:

20. New Entrants

21. What New Entrants could disrupt you? Any Threats? Opportunities? ( Industry barriers / Capital requirements / Learning requirements / Access to supplies / Access to distribution / Performance vs. incumbents / Perceived differentiation in customers’ mind / Loyalty to incumbents / Switching costs / Retaliation by incumbents / “Innovator’s dilemma”) List your answers below:

22. Substitutes

23. What Substitute products / services could disrupt you? Any Threats? Opportunities? ( Technology changes / Industry structure changes / Availability of substitutes / Performance of substitutes / Perceived differentiation in customers’ mind / Switching costs / Customer desire to seek out alternative solutions to satisfy their need) List your answers below:

24. Suppliers

25. “Who” or “What” do you need to pay to run your business?

26. Who are your Key Suppliers? What moves are they likely to make? Any Threats? Opportunities? ( Cost of supplies / Negotiating power of suppliers / Access to alternative sources of supply / Switching costs / Forward integration – supplier becomes competitor) List your answers below:

27. Customers

28. “An excessive customer focus prevents firms from creating new markets and finding new customers for the products of the future. They unwittingly bypass opportunities.”

29. “Asking customers what they want is a systemic flaw. Customers can’t say what new product would be desirable three years from today. New ideas are generated by imagination, risk, trial & error by the producer.”

30. Strategic Focus What do your target customers value most? Value Discipline (Generic Strategy) Company examples Low cost Consistency Speed No hassles Operational Excellence Southwest Airlines, Walmart, Fedex State of the art Products and Services Product Leadership Apple, Gillette, BMW Customized products Personalized solutions Customer Intimacy Zappos, Nordstrom, Ritz Carlton

31. Who are your Key Customers? What moves are they likely to make? Any Threats? Opportunities? ( Customer demographic and psychographic description / Power to dictate prices or terms / Ability to influence other customers / Customer reviews / Perception of differentiation between vendors / Loyalty / Switching costs / Backward integration – customer becomes competitor) List your answers below:

32. Political and Regulatory Factors

33. What political factors / laws / regulations are likely to impact you? Any Threats? Opportunities? ( Industry specific regulations / political spectrum left vs. right / political stability / laws / taxes / trade policy / wars / environmental issues / health / safety / consumer laws / employment laws) List your answers below:

34. Economic Factors

35. What economic factors / changes in buying behaviors are likely to impact you? Any Threats? Opportunities? ( Economic growth / interest rates / exchange rates / inflation / availability of credit / investor interest in your industry / discretionary spending changes in customer purchasing habits / use of debt and leverage vs. more frugal spending / new forms of payment) List your answers below:

36. Social Factors

37. “We live in a culture that discourages empathy. A culture that too often tells us our principle goal in life is to be rich, thin, young, famous, safe and entertained”

38. STANDARDIZED Industrial age work CUSTOMIZED Network age work LABOUR: obedience systems processes productivity TALENT: initiative innovation creativity passion Management 1.0 Management 2.0

39. “We are going to have to reinvent management; the way we lead, we plan, we organise, we hire, we motivate...because today, organisations are facing a set of challenges that are truly unprecedented"

40. Baby Boomer 1946 -1964 Generation X 1965 - 1980 Millennial / Gen Y 1981 - 2000 Key life influences Cold War nuclear threat, NASA moon landing, Vietnam, Civil rights, Hippie culture AIDS, Divorce, MTV, Cold War ending, Personal computer, Microsoft Internet, Always connected, Share everything online, Facebook, Apple and Google Work environment Long hours, Office only Formerly Office, Increasingly working from home Office, Home, Wherever, Desires flexible work hours Work ethic Workaholic, Quality focus, Team player Clear direction, Get tasks done, Self reliant, Free agent Entrepreneurial, Variety, Multitasking, What’s next? Management style Hierarchy, Chain of command Everyone should manage themselves, Challenge people Collaboration, Consensus Personal Motivators Salary, Job title, Feeling valued and respected Money, Freedom, Break the rules and do it your own way Meaningful work,Maintain personal life, Training, Mentoring Mentoring Does not like feedback. Does not take negative feedback very well Does not think feedback is necessary. Will ask for it they want it Wants frequent management feedback, Feedback on demand at the push of a button Internal communication Face to face meetings focused on process, Memos Face to face meetings focused on results, Emails Face to face participative discussions, Emails, Collaboration software Client communication Face to face, Phone Face to face, Phone, Email Email, Social Media, Instant messaging Career Goals Climb the ladder at one company, Job security Build transferable career with variety of skills & experiences, Build a business. Build several parallel careers or businesses simultaneously

41. What social factors / trends / attitudes / behaviors are likely to impact you? Any Threats? Opportunities? ( Demographic trends / career attitudes / health issues / environmental concerns / communication styles / social behaviors / online behaviors / media consumption / cultural differences / generational differences / income equality / society’s evolving attitudes, values & beliefs) List your answers below:

42. Technology Factors

43. What technological factors / trends / are likely to impact you? Any Threats? Opportunities? (New technologies / Rate of technology adoption / Impact of internet and mobile / Social media / New devices & interfaces / Jobs replaced by technology / Business models disrupted by technology) List your answers below:

44. “Many managers do not understand the importance of having a clear strategy. Strategy is about making trade-offs. The essence of strategy is choosing what NOT to do.”

45. “You need to clearly explain the top 3 things the company is working on. If you can't, then you're not leading well”

46. What are the top 3 long-term strategic moves to position your firm for future industry success? (will be implemented within the next 3-5 years) 3-5 Year Strategic Move Person Accountable 1. 2. 3.

47. RESULTS.com - One Page Strategic Plan

48. ★ Research your early adopter customers ★ Subscribe to thought leaders who comment on industry trends ★ Attend industry conferences ★ Learn from other industries - peer networks ★ Conduct thorough industry analysis at least every 12 months ○ Porter’s 5 Forces + PEST ○ Survey your staff to get their input ★ The questions remain the same. The answers keep changing ★ Strategy requires tradeoffs. What are you NOT going to do? ★ Sniff Test - Would doing the opposite also be a valid strategy? ★ Review strategy every quarter - does it still make sense? 3 to 5 yr Strategic Moves - best practices

49. “However beautiful the strategy, you should occasionally look at the results” “However beautiful the strategy, you should occasionally look at the results”

50. Thank you for your time!

51. Strategic Planning for RESULTS Best practices based on the direct observations of thousands of RESULTS.com client firms Presenter: Stephen Lynch Role: Head of Strategy & Consulting at RESULTS.com Email: Stephen.Lynch@Results.com Linkedin: linkedin.com/in/stephengeoffreylynch Slides: results.com/slides Software Demo: results.com/insurance