We thought the “perfect storm” was over, and we had just begun to roll out our growth strategies, and inspire market confidence. Mid 2010 finds the Euro is in free-fall, and the roller coaster ride appears to have begun again. Once more, our investors are nervous, and our workforces anxious. More uncertainty, more cautious investors, and less confidence in our future survival? How do we, in these conditions position ourselves to thrive in 2011?
Q3 – No time for Caution!
This article argues that this is a not a time for timidity, and one that requires truly creative vision and strategy, and truly aggressive action.
Strategic Planning Time – Consider these suggestions – some may be painful and may not work for you – BUT……
Get Blue Ocean
Have revenues grow in 2010? – or have you been content to ‘hold your ground’? Did you plan for new acquisitions? or major product innovations, or the potential to enter new markets?
Dunkirk this is not – Survival is not Success. BLUE OCEAN Strategy – there is no better time than now:
* locate un-served market segments;
* locate innovative technologies;
* break the value-cost trade off in your supply chain;
* Create uncontested market space, by challenging market boundaries.
Example
In building the NANO, TATA created a vehicle targeted at a previously un-served segment of the Indian car market; namely potential buyers who could only afford $2500. In so doing, they build modest unit level profits, but created enormous market presence. This was an example of Blue Ocean thinking applied to the supply chain. This involved building partnerships with a very limited number of supplies, and putting everyone in a ’sand box’ to hammer out solutions to problems. The result was a truly unique selling proposition, which makes the NANO a viable and highly attractive value proposition.
Re-Align
How did you react to the recession? Did you simply belt-tighten, or did you merge business units, re-align departments and teams, or divest non-essential management?
In this turbulent environment, how will you maintain your competitiveness? How will you meet your earnings targets, while retaining the same structure? Winning companies see the challenges as an opportunity to consolidate, merge entities, and invest now in differentiation
To position for success in 2010, companies need to take portfolio decisions which:
1. Exploit their core and ideally, unique competencies;
2. Build on core competencies through acquisition of complimentary businesses, and
3. Divest complex, or ill-fitting businesses which require additional management resources, and drive up costs in times of uncertainty.
As has been demonstrated in 2010, there has been significant disruption or discontinuous change in the structure of most global industries. Winning businesses in 2011 will need to immediately and continually adapt themselves to structural change which is continuous, and to see these as strategic opportunities. Undoubtedly, some of these same opportunities are in front of you right now.
Leadership must ask:
* Is this business critical for the future of our company?
* Is the line of business likely to generate continuous potential for growth?
* Will investors see the potential of this business to offer returns greater that in other areas of their investment portfolios?
Divestment of an line of business in a portfolio often sends shivers up the spine of a CEO, in fear that the loss of a revenue stream may be irrecoverable. However, the more likely outcome of divesting a non-performing asset or line of business, will be the freeing up of capital and time to growth more promising lines of business.
Re-Align your Organization Culture
The post recession period has been one of fear and anxiety across workforces worldwide. It continues today in 2010. Fear is the nemesis of growth, stifling motivation, and risk taking. Unfortunately, it is in such times that innovation an creativity are most in demand. By nurturing the creative spirit in an organization, we are creating the energy to pull organizations out of the economic stagnation they may face.
Conventional organizational therapy wisdom will suggest we need to apply techniques of engagement, and engender “discretionary effrort” in order to get more out our detached and demotivated workforces.
The truth on the ground will be more stark. In entering into any discussions of more assets realignment or divestment (human or other), senior leaders will need to work very hard to build confidence and trust.
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.
Conducting a Culture Survey will help you to quickly learn what norms and value prevails now, and what areas you need to focus on to prepare the organization for the uncertain future ahead. This will enable you to plan for organizational development programs which support your strategic agenda.
Invest in your Leadership
Many companies adopt fairly simplistic attempts at cultural re-engineering, with multiple statements of “shared values’ and ’shared futures’. Most high performers will find these to be platitudes, and will be highly skeptical of such noises. Most importantly, a lack of visible and capable leadership will significantly undermine all your attempts at culture change.
The cost of poor leadership is often considered hard to quantify, although we know if can be very costly. Just how costly can be seen with the litter of what were once giants alongside the economic highway today. Much of the blame must lie with the poorly trained, and often short-sighted leadership of many of these organizations.
We often consider the role of the leader to provide certainty in what are uncertain times. Certainty is, as has been seen, an illusion. The truly great leaders will instill the ability to ‘adapt’ and cope with the constantly changing environment which our economies face in the coming years.
Adaptability, managing change, thinking strategically are learned competencies – they are not simple attributes. Invest in DEVELOPING your leaders as a matter of priority.
Web 2 – Why you must embrace it
Are you aware of the potential of Web 2 technologies today. Do you know how much your legacy systems are costing you, your ERP, your CRM system – what is the true total cost of ownership of these systems? Have you spent the typical 5 times the original price of the software cost in operating and maintaining the systems (the normal TCO)? Do you know there are alternatives?
Software as a Service is the largest growing sector of the IT market today – delivering much, if not all of the functionality of conventional server based software, at a fraction of the total cost of ownership. (Salesforce.com etc.)
Do you use Web2 communications? How often do you use wen-conferences for Quarterly Performance Reviews, or do you fly managers in from remote locations? Does the organization enable collaboration on projects through virtual networks? Do you create channels for employees to collaborate across time zones, and physical locations with having to leave their offices?
Web2 can save you a lot of money – enabling the potential to outsource, or offshore a lot of the tasks previously considered impossible to manage 5 years ago. Have you considered off-shoring your drawing office for example?
We must not forget Web2 Marketing – Facebook, Twitter, Squidoo are only the beginning.
Make 2011 your Year!
To find out more aboutBusiness Coaching, visit Global Consulting to learnExecutive coaching how we can assist your business to position for future growth.
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business planning,
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executives,
Leadership,
leadership development,
leadership strategy,
Organization culture,
planning,
Strategic Planning,
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