We were invited into a public company that was faced with a strategic decision. Being the largest mid-market chain of Japanese restaurants in Singapore and the region, all decisions that the company takes will be carefully scrutinised by the other market players. When we were called in, the company was faced with rising food costs to the extent that they were facing negative margins. They needed to answer the question of whether to raise prices or not. Or course, raising prices has so many attending issues, and the company was anxious not to anger customers and also lose market share should they raise prices and the competitors don't. After applying the strategic thinking methodology, we got the team to realise that all the competitors were in a similar situation, and if they faced decreasing margins, their competitors would also face similar situations, and for many, even more so since they might not have the scale nor buying power that this company had. That the competition was not raising prices was because they - the company - being the dominant market player, was not. Hence, we helped the company see that the downside of raising prices was so much less than the upside. The company agreed, and they raised their prices. No sooner than they had done that, all the competitors raised their prices and the market share remained intact, and the collective margins in the market became healthier.
To build a mega yard?
there was a time when Singapore was toying with the idea of building a mega shipping MRO (maintenance, repair and overhaul) yard in Singapore. One of the key stakeholder companies was considering this project and it was against this backdrop that we were invited into the special strategic session to discuss the merits of this proposal. We began our facilitation with the traditional strategic intent discussion. The management team (and their minus 1s and 2s!) agreed that the intent was to be the world's No. 1 shipping MRO company in the world. We then got to discussing metrics that would define the intent. The meeting focused all their attention on the financials, to the point that many people got lost in the sea of numbers. That was when we had to reframe the discussion and we asked, "If you were the No. 1 shipping MRO company in the world, and you had your mega yard here in Singapore, and if your customer was trading in the Atlantic and suddenly loses its propeller (it has happened!), what would you think would be the most important factor for them to use you as their MRO company? That you have a mega yard in Singapore, when they are in the Atlantic?" This single question we asked made them realise that it would not help any of their clients if they had a mega shipping MRO yard in Singapore. And history is the witness to this decision!
Town planning in a capital city
One ASEAN capital is home to close to 10million residents and due to early town planning, the city's infrastructure is very compactly laid out. Lanes are very narrow, and many right angle turns cause bottlenecks. Due to poor public transport infrastructure, many of the residents rely on private transportation - be it cars or the ubiquitous motorcycles. What this also results in is massive traffic jams in the city. The city planning team invited us to facilitate a planning session to deal with the growing jams. Their intent of course was to minimise the traffic in the city and yet maintain economic activity. (As the capital city, all the country's companies' HQ was located there, as are MNCs'.) Applying the 8-Step Strategic Thinking methodology, the team especially found systems thinking to be most beneficial because they realised that the centres of gravity of the problem were the ease of vehicle ownership, and the congregation of HQs within the city. To address this problem, they realised that they could not stop people from owning vehicles, but they could make parking very expensive. So, in a matter of weeks, they doubled the parking rates in buildings in the capital city. Next, for longer term plans, they agreed that they need to focus on developing the suburbs, and move the HQs further from the city centre, which they also implemented over time. Today, the city is still congested, which made them realise that the systemic nature of the situation is such that when you move people out, more people will rush in. Hence, there is a plan to relocate the whole capital to another site in the country. Hopefully, they learn from their mistakes this time.