isual Awakening.
A common mistake people make is to discuss changes to strategy before resolving differences of opinion about the current state of play. Another problem is that executives are often slow to accept the need for change; they may have a vested interest in the status quo, or they may feel that time will eventually vindicate their previous choices. Indeed, when we ask executives what prompts them to introduce change, they usually say that it takes a very determined leader or a real crisis.
Fortunately, we’ve found that asking executives to draw the value curve of their company’s strategy brings forcefully home the need for change. It serves as a wake-up call. That was certainly the experience at EFS, which had been struggling for a long time with an ill-defined and poorly communicated strategy. The company was also deeply divided: The top executives of EFS’s regional subsidiaries bitterly resented what they saw as the arrogance of the corporate executives. That conflict made it all the more difficult for EFS to come to grips with its strategic problems; before executives can chart a new strategy, they must reach a common understanding of the company’s current position.
EFS began the strategy process by bringing together more than 20 senior managers from subsidiaries in Europe, North America, Asia, and Australia and splitting them into two teams. One team was responsible for producing a value curve depicting EFS’s current strategic profile in its traditional corporate foreign exchange business relative to its competitors. The other team was charged with the same task for EFS’s emerging on-line foreign exchange business. They were given just 90 minutes because if EFS had a clear strategy, it would surely emerge quickly.
It turned out to be a painful experience. Both teams had heated debates about what constituted a competitive factor and what the factors were. Different factors were important, it seemed, in different regions and even for different customer segments. For example, Europeans argued that in its traditional business, EFS had to offer consulting services on risk management, given the perceived risk-averse nature of its customers. Americans, however, dismissed that as largely irrelevant; they stressed the value of speed and ease of use. Many people had pet ideas of which they were the sole champions. One person in the on-line team argued, for instance, that customers would be drawn in by the promise of instant confirmations of their transactions—a service no one else thought necessary. Despite these difficulties, the teams completed their assignments and presented their pictures in a general meeting of all participants. Their results are shown in the exhibit “The Strategy Canvas of Corporate Foreign Exchange.”