Balancing Resources & Priorities 
Mike Devereux 
President & CEO Nature‘s Way Brands 
Lunch ‘n Learn 
Green Bay, August 26...
About Me 
Me 
Cat 
“Bark the 
Wonder Cat” 
• Grew up in the western suburbs of Chicago in a 3-bedroom, 1- 
bathroom bungal...
Nature‘s Way Group
Balancing Resources and Priorities in the context of … 
• Why? 
• How! 
• Does it matter? 
Strategic Planning
Why? 
“If you don’t know where you are going, any road will take you there.” 
R. Rose – My Predecessor
How to Start? 
• Diagnostic on today’s business 
– E.g. SWOT analysis 
• Aspiration for the future 
• Capabilities to deli...
a. Outline of Strategic Plans 
• Industry / Business unit / Market context and dynamics 
– Industry/Business unit/Market o...
b. Example from Pitman Moore 
• Aspiration 
• Focus 
• Filters also 
“what not to do” 
Aspiration 
Mission 
(medium term) ...
Profit from the Core
Profit from the Core – Key Points that 
lead to Profitable Revenue Growth 
• Focus scarce resources on the core of your bu...
Profit from the Core 
Keys to Success: 
• Reaching the full potential of the core business. 
• Expanding into logical adja...
Natures Way Example 
• Consumer Business 
• Professional Business 
• Canada 
• Export 
Specialty 
Mass 
Internet 
Naturopa...
The Alchemy of Growth
Planning the future over 3 time horizons 
Performance / 
Profit / 
Growth 
Time 
Horizon 1 
Defend and extend 
core busine...
Nature’s Way Accountabilities and Time Horizons 
Performance / 
Profit / 
Growth 
Time 
Horizon 1 
Horizon 2 
Horizon 3 
D...
Digital Competency 
• 50% of population is < 30. 
• 53% of Twitter is recommending products via Tweets. 
• 93% of buyer de...
Digital Examples 
Pre-emptively redefining the core business 
in response to market turbulence.
Digital Examples 
Pre-emptively redefining the core business 
in response to market turbulence.
Digital Examples 
Pre-emptively redefining the core business 
in response to market turbulence.
Digital Examples
Digital Examples – Output Measurement
Key Learnings from Mentors (1) 
3 simple rules: 
• Focus on your output 
• Know your resources 
• Be analytical 
L. Bernic...
Key Learnings from Mentors (2) 
“Mike, your biggest strength is also your biggest weakness . . . 
… Idealism” 
A. Chawla –...
Key Learnings from Mentors (3) 
“When you move into the CEO role, first reset your relationship with all 
your former peer...
Key Learnings from Mentors (4) 
“As CEO, you must be able to “create a vision and articulate it verbally 
with substantive...
Summary of the Key Learnings that have shaped my thinking 
Inputs 
1. Bernicky – The Fundamentals 
2. Chawla – Pick and ch...
Does it Matter? 
CAGR 2010-2013: 17% CAGR 2010-2013: 44%
Summary 
Balancing Resources and Priorities in the context of 
Strategic Planning 
Why? 
Good luck 
How! 
Does it matter? ...
Post Mortem 
• Quote from C. Jennings – Nature’s Way gummy vitamin supplier: 
“The most impressive thing about your facili...
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Balancing Resources and Priorities

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One of the challenges of leadership is allocating resources amongst competing ideas and projects. In this presentation, Mike Devereux, president and CEO of Nature’s Way Brands, will describe the strategic planning process that takes place at Nature’s Way. This includes how they evaluate their business strategy over multiple horizons, short term/medium term/long term, in order to build a growing and sustaining business over the long term. Mike will share his experiences with this process including the tough decisions that can sometimes be controversial when balancing the dilutive impact of investments on short-term performance.

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Balancing Resources and Priorities

  1. 1. Balancing Resources & Priorities Mike Devereux President & CEO Nature‘s Way Brands Lunch ‘n Learn Green Bay, August 26, 2014
  2. 2. About Me Me Cat “Bark the Wonder Cat” • Grew up in the western suburbs of Chicago in a 3-bedroom, 1- bathroom bungalow. • Learned how to balance resources and priorities at an early age, while competing with four sisters for the bathroom before school.
  3. 3. Nature‘s Way Group
  4. 4. Balancing Resources and Priorities in the context of … • Why? • How! • Does it matter? Strategic Planning
  5. 5. Why? “If you don’t know where you are going, any road will take you there.” R. Rose – My Predecessor
  6. 6. How to Start? • Diagnostic on today’s business – E.g. SWOT analysis • Aspiration for the future • Capabilities to deliver People • Manage the competing agendas $ Management Team Shareholders
  7. 7. a. Outline of Strategic Plans • Industry / Business unit / Market context and dynamics – Industry/Business unit/Market overview – Industry/Business unit/Market profitability – Industry/Business unit/Market dynamics – Customer needs • Competitive assessment – Performance review (Brands, Categories, SKUs (topline, bottom line) – Achievements since last year – Product line assessment (Brands, Categories, SKUs (topline, bottom line) – Competitive assessment (Sales operations/ Channels, Marketing, Etc.) • Strategic issues (Resulting from Market environment and Competitive assessment) – Where are opportunities and threats? – Where are our competitive strengths and weaknesses? – What are the strategic success factors and with regards to that, where are the strategic gaps? • Key strategic initiatives (5-10 year) strategic initiatives in detail that describe measures, steps (timeline), investments, structural implications (Resources) and implementation risks – Financial projections (including scenarios if needed) – Detailed financial projections (cash in and cash out) – Capital plan – NPV
  8. 8. b. Example from Pitman Moore • Aspiration • Focus • Filters also “what not to do” Aspiration Mission (medium term) Where to Compete Circa 1990 Make food animals more valuable to producers by providing superior disease prevention and rearing Create Make Sell How to Compete Leading animal health and nutrition company Product categories Species Geographics Key technologies • Biologicals • Implants • Ectoparasiticides • Feed • Antimicrobials • Vet specialties • Cattle • Swine • Poultry • Sheep • Cats and dogs • Base: NA, UK, ANZ, Brazil • Penetration: G, F, SP, I, Mexico • Beachheads: Korea, China, Japan . . . • Deletant/ recombinant vaccines • Controlled release systems productivity solutions • No in-house “R” • Strong links to biologicals science (universities, biotech companies) • Focus on core categories • Develop world-class biologicals manufacturing skills • P-M in-house sales forces • Superior customer service and technical support • Distributor-only in companion animals
  9. 9. Profit from the Core
  10. 10. Profit from the Core – Key Points that lead to Profitable Revenue Growth • Focus scarce resources on the core of your business if attractive growth opportunities remain – if not, the core needs to be extended. • Establish a common set of facts and market insights from which impactful growth initiatives can be found. • Get an “A” on 3 or 4 initiatives rather than a “C” on 10. • Master the science of making change happen within your organization.
  11. 11. Profit from the Core Keys to Success: • Reaching the full potential of the core business. • Expanding into logical adjacent businesses surrounding the core. • Pre-emptively redefining the core business in response to market turbulence. All that . . . “and some luck/good fortune helps.”
  12. 12. Natures Way Example • Consumer Business • Professional Business • Canada • Export Specialty Mass Internet Naturopaths MD’s Chiro Other Specialty Mass Asia Latin America Europe % of Total Product Line 70% 800 sku’s 10% 400 sku’s 10% 200 sku’s 10% 600 sku’s 100% 2,000 sku’s
  13. 13. The Alchemy of Growth
  14. 14. Planning the future over 3 time horizons Performance / Profit / Growth Time Horizon 1 Defend and extend core businesses Horizon 3 Create viable options Horizon 2 Build emerging businesses 3 years Now Beyond
  15. 15. Nature’s Way Accountabilities and Time Horizons Performance / Profit / Growth Time Horizon 1 Horizon 2 Horizon 3 Develop International Markets and enter new categories and technologies U.S. Market Potential focus & Maximize existing Brands Enter New Business models, Mergers & Aquisitions Get an “A” on 3 to 4 initiatives versus a “C” on 10.
  16. 16. Digital Competency • 50% of population is < 30. • 53% of Twitter is recommending products via Tweets. • 93% of buyer decisions are influenced by Social Media. • 90% trust peer review. Nature’s Way Opportunity Becoming much more relevant to the last mile of our customer base. Historically we transact 100% through retailers and practitioners . . . We want to speak directly with the people who buy our supplements. Source: Socialnomics 2014 by Erik Qualman
  17. 17. Digital Examples Pre-emptively redefining the core business in response to market turbulence.
  18. 18. Digital Examples Pre-emptively redefining the core business in response to market turbulence.
  19. 19. Digital Examples Pre-emptively redefining the core business in response to market turbulence.
  20. 20. Digital Examples
  21. 21. Digital Examples – Output Measurement
  22. 22. Key Learnings from Mentors (1) 3 simple rules: • Focus on your output • Know your resources • Be analytical L. Bernicky – First boss at Arthur Young
  23. 23. Key Learnings from Mentors (2) “Mike, your biggest strength is also your biggest weakness . . . … Idealism” A. Chawla – SVP of Strategic Planning and former boss during the McKinsey project “Be okay with me accepting 1 or 2 good ideas from you versus your entire agenda”
  24. 24. Key Learnings from Mentors (3) “When you move into the CEO role, first reset your relationship with all your former peers - … …You are now their Boss. T. Flood – CEO Collier Enterprises – former boss at Beatrice Foods
  25. 25. Key Learnings from Mentors (4) “As CEO, you must be able to “create a vision and articulate it verbally with substantive support … … If you cannot, you don’t belong in the CEO role.” After that . . . “Be yourself” A. Nieto – Former Chairman of Life Fitness, now ALS sufferer http://www.freep.com/article/20140629/COL01/306290088/augie-nieto-als-mitch-albom
  26. 26. Summary of the Key Learnings that have shaped my thinking Inputs 1. Bernicky – The Fundamentals 2. Chawla – Pick and choose based on substance 3. Flood - Lead 4. Nieto – “Be you” The Output ! ! !
  27. 27. Does it Matter? CAGR 2010-2013: 17% CAGR 2010-2013: 44%
  28. 28. Summary Balancing Resources and Priorities in the context of Strategic Planning Why? Good luck How! Does it matter? You know where you are going the strategic map takes you there!
  29. 29. Post Mortem • Quote from C. Jennings – Nature’s Way gummy vitamin supplier: “The most impressive thing about your facility tour is your People.” • Come on, let me give your minds a ride.

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