In last week’s teleconference, I argued that only fast, agile organisations can grow in turbulent times and shared 15 different ways in which you can improve your company’s speed and agility. Here are seven of them.
1. Strategic clarity. The companies that have performed best since 2008’s financial crisis are those that have made the clearest strategic trade-offs. You can’t be all things to all people; that simply creates compromise, complexity and cost and slows you down. Instead, you must have a clear view of your target customers, your core product and service markets, the channels and geographies in which you will operate, and your key source of competitive advantage, whether that be product leadership, cost leadership, convenience leadership, service leadership or bespoke solutions leadership.
2. A #1 goal. I detest using balanced scorecards as a way of setting strategy (although I find them quite useful in managing operational performance). Balanced scorecards simply give you too many objectives and priorities. I much prefer to identify a single, leading goal and then use other KPI’s as supporting, not competing measures. Back in 2005 Sky TV started to deliver rapid growth when the executive team set a #1 goal of growing its number of subscribers from 6 million to 10 million by 2010. The clarity of the goal gave the organisation the focus and determination to find innovative ways to grow.
3. Zero based budgeting. The world is changing rapidly and you can no longer simply fund last year’s activities (plus or minus a few percent) and expect to thrive. Instead, you must start with a clean sheet of paper each year and determine, given your goal, your strategy and your performance, where you will invest. Use this process as a way to involve your teams to identify where you are wasting time, effort and resources, and critically review the returns you are getting from your investments.
4. A portfolio of options. The more options for growth you have, the more valuable your company will be. What’s more, options help you respond to rapidly changing markets. In the smart phone market, for example, Google’s willingness to partner with other companies has given the company many growth options for its Android operating system. In contrast, up until its recent decision to use Microsoft’s software, Nokia’s determination to develop completely in-house solutions has restricted its ability to build new growth options in this fast-changing market, and, unsurprisingly, its market share is in rapid decline
5. Rapid, low-cost trials and prototypes. There is often a desire to develop the perfect solution before testing it. After all, people don’t like to be associated with failure. However, if you’re trying something new, the chances are it will fail in some way. You are better off trying to fail as quickly and as cheaply as you can than attempting to seek perfection. As WW2 leader, General Patton, once said, “A good solution applied with vigour now is better than a perfect solution applied ten minutes later.”
6. Dynamic strategy management. I once worked with a UK retailer that began its annual planning process nine months before the start of the new financial year. That meant that functional teams had to develop plans for activities that, in some cases, were nearly two years away. In the modern world, you cannot have such rigid planning processes. It is good to have long-term objectives but you need to find ways to develop your high-level plans more quickly (2-3 months at most for larger companies), and then refine and update your plans more regularly. I find that quarterly updates of priorities and resource allocation is suitable for most businesses, but if you operate in highly dynamic markets you may need to manage priorities more frequently.
7. Process improvements focused on speed, not cost. The objective of many process improvement projects is to cut cost. The problem with this approach is that it can mean your activities take longer as you add new controls and more sign-offs to the process. An organisation is only as fast as its processes allow. By focusing your process improvements on speed (time to market, delivery responsiveness, time to build your product) you will, inevitably, focus on reducing the waste and delay in your current processes and end up reducing your costs as well.
For each of these criteria score your company between 0 and 3, where 0 = absent, 1= partially in place, 2 = largely in place and 3 = fully in place. Where you score 0 or 1 identify what specific improvements you can make and identify the actions you will take.
What do your scores tell you about how you can improve the speed and agility of your organisation?
To find out more contact Stuart by clicking here or call +44-(0)1636-526111.