So you survived it all..... you emerged with your business intact, but your balance sheet has been savaged, and your workforce traumatized?? You battled through this "perfect storm", and consider yourself amongst the fortunate ones. Did your executives pat themselves on the back "if we can survive that, we can survive anything"?
Q4 - TIME TO RE-THINK
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In this brief article we argue however; that this is not a time for navel gazing and vivisection of our how we survived and what we learned. We argue instead that; if any time in the economic cycle is perfect for aggressive planning, and even more aggressive action, it is now.
Q4 2009 - strategic planning time... and time to get really creative! Consider these suggestions - they may be painful, and they may not be for you.... BUT.....
GET BLUE OCEAN
In 2009, did Revenue growth take a back seat.....why? Were you in 'survival mode"? Were there no opportunities for acquisitions, or new product lines, no openings in emerging markets?
Survival strategies are not success strategies.
Now is the perfect time to get BLUE OCEAN in your thinking:
· seek out the un-served market segments,
· search for pioneering technologies,
· challenge your supply line model and break the value - cost trade-off;
· challenge existing market boundaries, and create uncontested market space.
Example
Tata built the NANO, focusing on an un-served market segment in India of potential car owners who can only afford 00 - building modest unit level profits, but enormous market presence. Tata applied Blue Ocean thinking to its supply line.; building partnerships with a limited number of suppliers and putting everyone in the same room to work through problems and innovate- thereby delivering a unique value proposition, which makes the NANO viable.
RE-ALIGN
Did the recession require you to combine business units, realign teams, and divest layers of management? Or did you simply tighten your belt?
How do you ensure that you remain competitive? How do you structure your organization so it is most effective and manage resources so the company' most profitable? Winning companies will take this planning opportunity to realign their structures by consolidating, merging, acquiring and investing now in capabilities that will best differentiate them from their competitors.
Successful companies in every industry need to make portfolio decisions that:
a. Build on the distinctive competencies they already have;
b. Acquire businesses that complement or extend those competencies, and
c. Divest businesses that require inconsistent competencies, driving down costs in the process.
DIVEST
What's has been clear from our experiences in 2009, is that there is the potential for discontinuous change in the structure of most industries. Rapid growth experienced up to mid 2008 provides no assurance of future survival. Your, success hinges on your ability to adapt immediately and continually to structural changes, and seize strategic opportunities. These opportunities are likely to be present in front of you now.
Senior Executives need to ask:
· Is this business core to your company's future value?
· Can you envision it as the basis for a sustaining stream of growth opportunities?
· Does it offer a path to building financial performance that is greater than what investors can earn elsewhere in their equity portfolios?
Instinctively, we react cautiously to any surgery in the portfolio fearing the loss of a revenue stream now, which cannot ever be recovered. More likely however, the disappearance of poorly performing assets, will mean an opportunity to focus on growing more promising lines of business, or facilities at a faster rate.
GET NEW BLOOD
Did you have contingencies ready in 2008? Did you respond quickly enough to market decline? Did you divest uncompetitive activities? Did you right size effectively? or did you opt for the 15% across the board slash and burn strategy?
If you answer to most of these in 'no', then who was responsible? Who was in charge? Who had failed to recession proof the portfolio (are we dreaming here?), Who failed to dump the underperforming lines of business? Who failed to cut the high costing underperforming managers, while cutting the hard working front-line staff (sound familiar?)?
· Anyone willing to put their hands up? "Global melt down' is a humdinger of an excuse for failure!
· So... time for new blood... the talent pool is rich, the time is now.
TWEAK YOUR CULTURE
Fear permeated all workforces in 2009. Fear crushes motivation and energy. Creativity and innovation are inextricably linked to energy, and motivation. The creative spirit is essential to drive your organization out of the current economic and emotional malaise.
The conventional focus of organizational behavior therapists argue we need to extract more value from de-motivated and detached workers through the latest fashionable techniques of "motivation", "engagement", engendering "discretionary effort" etc.
Reality however is often painful: you will need to rebuild goodwill in your workforce, particularly if engaging in any aggressive re-alignment, and asset divestment (human or other).
First - understand your culture....is it cohesive, is it participative? Does you workforce feel aligned with your values and your vision? (Affiliation). Or is it overtly performance focused? Failure to deliver bites hard in times of downturn. Performance - focused cultures feel this pain the most.
We suggest you SURVEY your CULTURE to learn what you have, and know what you need. Then align organizational development initiatives with your strategic growth priorities.
Invest in your Leadership
Your talented high performers will probably be very skeptical of simplistic approaches to "cultural engineering". Indeed, it is our contention that high performers are often turned off by bureaucratic process, by internal politics, by smoothing over the 'crack's with statements of "shared cultural values", and - above all -, they will be disenchanted by inadequate leadership.
Ineffective leadership is immensely costly - we only have to look around the global business landscape today to see the remnants of companies which were once dominant. Much of the blame for their demise lies squarely in complacent, short-termist and poorly educated and trained leadership.
The conventional wisdom has it, that in uncertain times the role of the leader is to provide certainty. But smart people know that certainly in business is illusory - it is in the ability to adapt, and to cope with constant change that true leadership emerges.
Adaptability, managing change, thinking strategically are learned competencies - they are not simple attributes. Invest in DEVELOPING your LEADERS as a matter of priority.
EMBRACE WEB 2 - REALLY!
Web2 - not just having a web site. or an intranet. How much is your ERP costing you? How much is your CRM system costing?... what is the real ROI? what is the true cost of ownership - did it cost 5 times the original price of the software (the normal projected Total Cost of Ownership)?
Today, SaaS (Software as a Service) offers vastly lower Total cost of ownership, and delivers much, if not all the functionally of conventional locally hosted software - at a fraction of the price. (Salesforce.com etc).
How web 2 are your communications systems? Do you still fly managers from field operations, or offshore locations in for QPRs - why... how much does it cost? Does your organization embrace interconnectivity? Do your employees collaborate virtually? Are there forums for them to do so? How much value can be generated through enhanced collaboration?
Web 2 also enables you to offshore numerous tasks which would have been unmanageable 5 years ago... where is your drawing office or your design facility located?
Not to mention - Marketing with twitter, facebook, squidoo to name a few.
Make 2010 your Year - Live Long and Prosper!
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