This article was originally published in CompanyWeek
Companies use many different methodologies, improvement programs and frameworks to make themselves more effective, and in turn, more profitable. Choosing the best ones to implement at any given time is a daunting task and can mean the difference between profit and loss, and in severe cases, even between continued prosperity and bankruptcy.
How should you choose? How do you avoid creating conflicts by choosing one over the others and, instead, create productive lasting energy for the new program? I suggest getting there by developing a clear business strategy while building on knowledge and energy already existing in the company.
Business strategy clarity for program alignment
Before choosing the specific improvement or transformation program(s) you plan to implement, you must have a clear and concise business strategy in place. Your vision, mission, values and strategy provide focus and priorities for your organization, and must therefore be well developed and effectively communicated. At the end of the day, business and functional strategies need to be very specific so the organization can act on them effectively by launching meaningful programs.
External forces may dictate the choice. If your key customers are telling you they won’t do business with you unless you have an ISO 9001 certification, you will of course become ISO 9001 certified. While meeting regulatory compliance and IT security requirements are also “musts,” you have the freedom to choose your strategic agenda and focus once you get beyond the absolute essentials.
The Discipline of Market Leaders (Michael Treacy, Fred Wiersema) is an excellent book for helping executives with strategy development. The authors suggest a winner excels in one of three domains: operational excellence, customer intimacy or product leadership. We have used this framework extensively in consulting engagements and it has proved helpful to the leadership teams in selecting their focus areas at a high level. With that focus in hand, you can then dive deeper and become specific about such things as where you need to excel, how to overcome your barriers and how to align your core competencies.
With a clear business strategy in place, you can then select which programs and methodologies make the most sense for your organization. It will likely take some research and consultation to identify your options, build business cases and prioritize them, but it is not as difficult a task as some might think. For example, if you believe you are going to win in your market with customer intimacy, programs related to Sales & Operations Planning (S&OP), Total Solution Selling, Customer Relationship Management (CRM) and market-oriented Business Intelligence (BI) might be high on your agenda.
As you begin your journey into improvement program selection, beware of the hype you’ll surely encounter. We’ve been inundated with the potential of the “Cloud” but cloud computing is more about a technology platform choice than a strategic program, that is, unless your business provides software, hardware or data services. There is a similar level of hype concerning “Big Data,” which is more of a mechanism than a strategy. Rather than getting all excited about Big Data, it’s probably better to focus on the all to common product and customer data quality problems, with an eye towards goal-driven Business Intelligence. Keep in mind that many program methodologies and concepts fade away—and usually for good reasons.
Building momentum and maintaining program energy
As company employees, we don’t always get excited across the board about a new program pushed by management. In IT, for example, embracing the “Agile Development” methodology might be seen like a game changer, but it has very little relevance to a regional sales manager struggling with CRM system adoption among his staff. The business organization as a whole needs a mantra that focuses on real business benefits like increased productivity or profitability improvements because technology buzzwords alone have little meaning to them. To create breakthrough energy in your organization, you need to strike a balance between technology-focused and functional methodologies vs. strategic results-centric programs that will lift the organization as a whole.
There are only so many top performers in an organization. For success, these “stars” need to be actively enrolled in a new program and put in a position where they can become the champions of real change. As one person can’t do everything, it is important to choose carefully when allocating these critical resources.
Sometimes, conflict between programs pops up that goes beyond just competing for the same resources. Working on a business process improvement initiative in order fulfillment, for example, might make all the sense in the world, but if a new Warehouse Management System implementation is pending, a potential conflict arises. In this case, there is risk the Kaizen team will work to optimize the process without considering all of the system configuration constraints, cross-application integration complexity and people resource issues that may arise. Such lack of collaboration and foresight need to be identified and proactively addressed so as not to undermine and cripple both efforts.
There are a number of companies that have been very successful in inventing and adopting new methodologies, some of which have led to widespread cultural movements. Well-known examples include: GE (6σ), Toyota (JIT), ABB (T50) and Google (Design Thinking). While the most powerful methodology-driven transformation comes from within, it is not necessary to create your own methodology to achieve breakthroughs. Powerful cultural shifts and energy for change can be achieved by learning from, and copying, the best
The bottom line
There is a dizzying and often conflicting array of business improvement programs from which to choose. Rather than jumping headfirst into the newest and most touted program, management must carefully study the alternatives and fully evaluate them from a cross-functional standpoint. New technology-based methodologies should never be implemented just for the sake of technology itself.
In choosing which improvement programs to implement, the management team must create an effective balance between business strategy, program alignment, resource allocation and overall organizational energy. Achieving this balance is critical for the business improvement initiative to deliver the intended results.
Christer Wadman is the Chief Strategist at Teccelerators; helping businesses grow and become more profitable through effective transformation program adoption and by improving their use of Information Technology. He is primarily focused on the manufacturing and distribution sectors. You can contact him at firstname.lastname@example.org