Brilliant Manager, 3rd Edition

50 brilliant manager

to remember that your customers are part of your external envi-

ronment. Most of the risks that a strategy should try to manage

will come from changes in the external market.

Your external environment includes at least:

 customers;

 competitors;

 suppliers;

 partners;

 stakeholders;

 the markets you sell into;

 the media;

 PEST – political, economic, social, and technological – factors.

You will also have important links to the external environment:

 product distribution channels, including sales people

employed by your organisation;

 market and media research/analysts;

 PR agencies (inside and outside your organisation);

 advertising channels;

 your personal network of contacts.

I am sure you are very familiar with the concept of a SWOT

analysis – strengths, weaknesses, opportunities and threats. It is

well worth developing a SWOT analysis as you go through these

eight sections of your strategy as it will form an important part

of your written strategy. You will find that your analysis of the

external environment will produce many strengths, weaknesses

and threats. It will also hopefully point the way towards many of

your opportunities.

Expanding now on the questions you need to ask yourself about

the external factors and links mentioned above. Consider the

following.

M03_PEEL3231_03_SE_C03.indd 50 20/09/2010 14:45

Visions, strategies and plans 51

Customers

 How well do you know your customers? Do you understand

your customers well enough to know if you can build more

business with them, or are you defending your current level

of business?

 Are you dependent on your customer relationships with any

key individuals in the customer organisations or your own

organisation?

 Have you applied Pareto’s law and identified the top 20 per

cent of your customers who probably provide 80 per cent of

your revenue? Do you at least know the top 20 per cent of

your customers well?

 Do you have a sufficient spread of customers to survive if

you lose one or more of your best customers.

 Are there any customers who are so important that if you

lost their business the future of your team is threatened? Do

you know any such customers very well?

 Do you personally devote enough of your time to customer

contact?

 Do you know what each of your customers thinks of your

offerings and customer service?

 Are any of your customers more trouble than they are worth?

Competitors

I will deal with competitors in the next section of the strategy,

Market positioning.

Suppliers

 Are there any of your suppliers that cannot be quickly and

cost-effectively replaced?

 Could you make savings by renegotiating an existing supply

contract, or changing suppliers?

 Are any of your team too close to any of your suppliers?

M03_PEEL3231_03_SE_C03.indd 51 20/09/2010 14:45

52 brilliant manager

Partners

Partners are key when your team does not have all the capa-

bilities to provide the solution that a customer buys, and

you share some profit and risk with a partner rather than

just buying in that capability from a supplier (internally or

externally).

 Do you have a clear contract with your partner, which you

are both happy with?

 Do you have a good understanding of your partner?

 Are your organisation and your partner’s interests in good

alignment?

 Is the balance of power between your organisations in

reasonable balance, or is one party much more dependent

on the relationship than the other? (Unbalanced power

relationships are a risk.)

 Do you know what your partner thinks of your organisation

and your team?

 Do you think your partner wishes to expand their business

relationship with you?

 Is your relationship dependent on specific individuals?

Stakeholders

Stakeholders are all the people and organisations outside your

team who feel they should have some control or influence

over you, and who will feel that they should be appropriately

consulted. For example, there will be numerous stakeholders

within your own organisation. If you have invested a non-

trivial amount of the organisation’s money in a venture, then

there are likely to be stakeholders who feel they have the

right to check that you are using that investment wisely. As

another example, if you have an important customer who

relies heavily on your products or services, they will feel they

are a stakeholder.

M03_PEEL3231_03_SE_C03.indd 52 20/09/2010 14:45