Hit strategic goals in three steps

A breakthrough is a large-scale innovation that is far-reaching enough to build a vibrant start-up or change the core structure of an existing enterprise. A breakthrough can originate from the innovation of a product or a business process, but it eventually develops into a completely new business model, delivering extraordinary business performance, renewing the face of the company that achieved the breakthrough and gaining a new market position.

Breakthroughs are the foundation of successful business operations. The success cycle of any business begins with innovation that delivers extraordinary results. All ambitious companies strive to find breakthroughs in order to gather strength to achieve greater success. Progressive Insurance in the United States is one of them.

Advance Insurance: A Breakthrough Strategy Shows Its Power

In the auto insurance industry, claims settlement has been a fairly common reason for customers to express dissatisfaction with a company or ask for a surrender. Many claims agents seem to think their job is to protect insurance companies from customer fraud. Since the entire income of a general insurance company is derived from the investment of insurance funds, claims agents are rarely happy to quickly settle claims for their clients. Clients also often complain about the cold, uncaring attitude of the agent.

Advance Insurance has seized this unique opportunity to provide customers with the fastest and friendliest claims service. They have set up a hotline to help customers resolve loss claims anytime, anywhere. In order to accelerate the settlement of customer loss claims, Qianjin Insurance also invested more than 30 million US dollars to build an "automatic claims management system". Advance Insurance conducts "empathy training" for all claims agents to make quick resolution of customer issues their number one priority. The putting into use of the new system not only greatly shortened the claim settlement cycle of Qianjin Insurance Company (the average claims settlement cycle of the insurance industry was 42 days at that time, and only 6 days after the new system was used by Qianjin Insurance Company), but also the customer satisfaction has been significantly improved, Customer churn fell by two-thirds.

In the process of implementing the above-mentioned measures, the management of Qianjin Insurance Company noticed some very interesting phenomena in the implementation of claims settlement: the claim settlement cycle is shortened, and the claim settlement cost is also reduced. Faster claims processing not only reduces claims processing and administrative costs, but also reduces medical claims, fraud, and customer churn. So speed is benefit. This discovery led Peter Lewis, the CEO of Advance Insurance, to set an ambitious goal: Since fast claim settlement is convenient for the customer and the company, Advance Insurance needs to settle claims quickly!

However, it is impossible to achieve this grand goal only with the current claims settlement method, and a series of reforms and innovations are imperative. Today, calls from customers to the claims center of Qianjin Insurance Company can be transferred to a motorized office car, and the staff in the car can rush to the accident scene immediately. Once there, the first job of the claims agent is to serve the customer. The electronic image of the damaged vehicle will be transmitted directly to the claims center via the wireless data network system, and the evaluation department of the center will use the expertise to estimate the repair cost. They used the multi-layered electronic structure diagrams of more than 1,800 vehicles to determine what repair options to choose and the cost of repairs. Then, transmit the estimated cost of repairs back to the office car. In most cases, compensation checks are signed in the office van and delivered to customers within an hour of the accident.

Advance Insurance's breakthroughs in claims procedures not only significantly improved the company's accident handling speed and customer service level, but also achieved remarkable results in cost reduction. The company can save a lot of money by choosing to let Advance Insurance take care of their repairs. The company's repair network offers significant discounts on every repair link. Because the repair shop uses the management software and communication network of the forward insurance company, the business transaction cost between the company and the repair shop is greatly reduced. Advance Insurance's claims approach not only halved repair costs, but also provided high-quality service to customers.

Advance Insurance's breakthrough in claims settlement has made the company a leader in the auto insurance industry chain. It used to be only a professional company in the insurance market segment, but now it has developed rapidly, breaking through the original niche market and starting to lead the mainstream insurance market. With cost advantages and service advantages in hand, Advance Insurance has now set a new ambitious goal, which is to become the world's largest auto insurance company.

Few companies have been as successful in finding breakthroughs as Advance Insurance, and even if they do, they may not be able to maximize their benefits. For the few lucky companies that can both find a breakthrough and make the most of it, the outlook is very optimistic.

The Three Steps to Hit the Target: Aim, Prepare, Fire

Successful breakthroughs tend to follow a very common pattern. It's quite simple: business leaders need to capture the attention of the entire organization, develop a clear and actionable implementation plan, and then focus the company's resources on the ambitious goals set and their specific implementation.

This mode can be best described as: aim, prepare, fire. Companies that successfully achieve breakthroughs often identify a clear goal and develop a specific action plan that enables members of the organization to work closely together to establish an organizational structure to implement the goal and provide appropriate resources, while centrally and systematically managing the implementation process. Its core elements include:

Aim: Create a vision that encompasses the organization's overall goals; describe the state to be achieved in the future; and develop a well-thought-out plan of action to achieve that vision.

Prepare: Engage organization members closely; communicate widely to keep team members engaged and motivated; enter into agreements with key team members; allocate resources, implement responsibilities, and lay out plans and performance management The basics.

Fire: Focus resources on the implementation of the implementation plan; intervene in barriers to implementation, reward achievements, communicate results, and drive common progress.

The purpose of any breakthrough activity is to initiate a new cycle of success. The three key components of the success cycle are as follows:

● a well-designed and clear strategy that will give the business a strong competitive advantage in the market;

● a team of Organization;

● Implement the breakthrough strategy rigorously, systematically, forcefully, and quickly.

The "Aim, Prepare, Fire" model focuses on implementing these three key components to support the implementation of the breakthrough strategy. Best practices in these three areas can help ambitious businesses achieve their ambitious goals. Most businesses only go through one success cycle, so it's wise to learn from the experiences of other organizations that can help you do this process more effectively and efficiently.

Targeting: Involving top management in strategy development

Getting the top management team to focus on the "targeting" process is not an easy task. They always feel that there are more important things to do. And localized, tactical work arrangements often pose a threat to new strategic cycles.

In addition, it can take some effort to actually engage the entire organization in the strategy cycle. It can be helpful to survey each manager's views and concerns, and collectively address the conclusions, gaps and issues that need to be addressed. In addition, team building and mentoring work is necessary and effective. The most critical point is, along with the CEO, face-to-face with key managers to get him to devote himself fully to the job. In the process of "targeting", an important question must also be answered at the appropriate time: Can the members of the team actually come together to develop, initiate and implement a corporate strategy? The work itself can greatly drive the synergy of the senior team when setting the overall goal.

During the "targeting" phase, it is necessary to temporarily stop some non-recurring actions, especially the recruitment of top management, mergers, alliances and major resource allocation decisions. When an organization is facing an imminent crisis, it is often more effective to stay the same. Soon, the accumulated energy will be released in a concentrated manner, and the new actions taken by the organization will be more precise, unified and powerful.

The "targeting" stage provides a great opportunity to gather and synthesize market knowledge, understand the business itself, and to think, discuss and explore the business environment and ways out. The most critical step in the entire implementation process was finding ways to get the senior team to work around the core transformation plan. If the breakthrough strategy itself is correct, success in the "targeting" phase can overcome many of the obstacles along the way. If senior leaders are deeply involved in the strategy development process, the probability of success in both the strategy and "targeting" phases is greatly improved. There is a company where 10 out of 20 top executives leave all their work for 6 weeks to focus on a complete redesign of the company's vision and strategy. Top executives at many breakthrough companies have made similar investments.

Prepare: Make sure strategic resources are in place

Once the strategy is established and the top team is aligned and collaborative, it's time to mobilize the rest of the organization. Don't start a plan unless it's very well-developed and all the key resources to support it are in place. Initiating a program when conditions are not ripe should be avoided. The message from leadership needs to focus on the nature and logic of the new vision: "We are changing, what is the reason for our strategy? What are we trying to achieve? How do we achieve it? Your responsibilities and our expectations What is it?"

A communication model that is presented to employees in person can be very effective for employees to clearly understand the information, and it is also necessary to use a variety of media to increase publicity. Such communication may require extensive group training and communication activities. At Ford Motor Company, 60,000 employees attended group workshops under the leadership of senior executives to introduce and explain the "Ford 2000" strategy.

The "preparation" phase involves more than just communication and training. Much of the time is spent on releasing resources and capabilities for strategy implementation by cutting out low-yielding, repetitive, and outdated operations and projects. A formal audit of current projects may help determine which projects should be terminated, postponed or merged.

This may also be an opportunity to evaluate and rationalize changes to product lines, production processes, operating systems, reporting systems, and meeting formats. The goal is to free up resources and redeploy them centrally to high-priority projects.

Remember that breakthrough strategies are primarily developed by a relatively small group whose individual activities are minimized. Therefore, any measures that can reduce the burden on team members will have a positive effect on the realization of breakthroughs.

Assignment of work is a key element of the preparation phase. Assign jobs with clear job responsibilities and allocate appropriate resources accordingly. The personnel arrangement of the project team is a focal issue, and the role of the senior management must be clearly defined - whether it is the host or beneficiary of the project.

Fire: Prioritize Projects

Without a successful implementation, all efforts in the "targeting" and preparation phases will be in vain. It's not easy. Transformation is the most difficult job in management. In terms of implementing enterprise-wide measures, there has probably never been a larger corporation in the world that has implemented it better than Jack Welch's General Electric. In the 1990s, after a decade of organizational preparation and adjustment, at the height of Welch's power, GE launched two major initiatives: Workout and Six Sigma. In fact, none of them are truly transformational, and none of them can be called an overarching strategy. Both approaches have been refined elsewhere decades ago. The great thing about GE is that it has successfully driven the full implementation of both strategies.

Therefore, the key is to tap all the resources available to execute the breakthrough enterprise strategy; the breakthrough strategy includes dozens of sub-projects, which must be coordinated and integrated within the overall plan. There's an important way to help you with this dilemma: Prioritize your projects.

Businesses typically have numerous ongoing projects, many of which are largely disconnected from their core strategy—if the business has a core strategy at all. If a business has too many projects to implement, it will stretch its already insufficient resources even further, leading to project stagnation, and some of the best businesses are no exception.

A mid-sized health insurer is trying to cope with fundamental changes in the market. The company's business plan for the next year includes 132 projects. A business management consultant asked the company's leaders to reduce the number of projects and keep only those key projects. The answer was: "You don't know, these projects are already compressed key projects - we have worked hard to reduce the number of projects to 132."

The consultant insisted that the senior executive team put the 132 projects Divided into 3 categories: key items, important items and valuable items. At the end of the classification, they found that none of the items were included in category 3, and only 3 items were included in category 2. The consultant didn't stop there, and asked the five executives to list the top 50 projects in order of priority. He then asked the executive management committee at the next level to rank the same 50 projects. As a result, projects ranked first by the executive team were ranked 47th by the management team, high-priority projects ranked second by the executive team were ranked 44th by the management team, and so on. Two key management teams in the same organization have almost diametrically opposed views on project priorities.

Imagine what it would be like to be a mid-level executive in this company. Hundreds of projects clashed at various stages in the implementation process. In order to complete their tasks, project owners compete to ask for help. There is also no clear project prioritization to coordinate these conflicting demands for time and resources. Critical "bottleneck" functions such as information systems are a case in point. Managers in these departments are under pressure to make the final decisions about which projects to prioritize.

How are these decisions made? Managers often follow these guidelines: Which project is easiest to complete? Which project owner do I like best? Which project owner is the toughest? Which project will get the fastest payback? Which project does my subordinate want to work on? Which project attracts the most attention?

As the overarching strategy is refined into specific implementation projects, the prioritization process will face a key conceptual question: Should we start with small, easy-to-follow projects first, or should we focus our efforts What about the key items in the implementation strategy?

Many companies seeking breakthroughs clearly prefer to focus on big, difficult projects first, and if they succeed, everything will change. This kind of thinking is highly consistent with the core idea of the breakthrough strategy, that is: to enter new fields in one step, rather than gradually and steadily. If the difficult projects are seized first, then companies and the market can be driven into the future at an unmatched speed of incremental development. At this point, breakthrough-seeking businesses are bold and like to make big bets, especially if the targeting and preparatory work is done.

The big breakthroughs that transform businesses and markets successfully are not a combination of intermittent small innovations. Entrepreneurial businesses and breakthrough-seeking companies behave very differently. The former tends to attack frequently and "fire" everywhere, while the latter carefully formulates detailed plans in advance, designs the path for business transformation, and then pools resources to systematically implement strategic planning. Their pattern of success is: aim-ready-fire.

This article is reproduced with permission from Breakthrough: How Great Companies Set Outrageous Goals and Achieve Them by Bill Davidson. The Chinese version of the book "Breakthrough: How Excellent Companies Set and Achieve Goals" was copyrighted by Century Wave Culture Development Co., Ltd./Electronic Industry Press in 2004. The English version was published by J0hn Wileg & Sons, Inc. Chen Ruyan and Liu Haohua translated.

Bill Davidson is the chairman of MESA Research Group, a strategy and leadership consulting firm, and the author of several other management books, including The Amazing Race and 2020 Vision.

Hit strategic goals in three steps

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