Special Edition - How to Weather the Economic Storm
Bailouts, downsizing, the credit crunch, declining profits - headlines and short-term business challenges that can easily distract a company and its employees. This edition of The Voice offers ideas to maintain a growth focus during the current economic storm.
- Capturing Value through Customer Visits
- Improving Organization Capability in a Down Economy
- Immunizing Your Organization
- Think in Different Ways to Find a Better Way
For additional ideas on weathering the storm visit www.mcassociatesinc.com.
Watch for my article Strategy-Driven Organization Development: "HR's Opportunity to Shine" in the February Edition of The Linkage Leader
Capturing Value through Customer Visits
The present economic climate creates an opportunity to reconnect to your customer base. It is an opportune time to reassure customers and to reaffirm why they should stick with you through thick and thin.
Customer visits are in order.
However, the customer visits should not be typical greet, meet and eat confabs involving only Sales and Purchasing where the typical question is "What can I do for you?" The most productive visits I've experienced are carefully designed, completed, and analyzed processes, with a laser focus on capturing, delivering, and getting paid for the value created by existing (or potential) products or services.
How do you develop this kind of customer visit process? Some suggestions:
- Create executive level ownership for and involvement in the process.
- Establish specific objectives and success measures.
- Segment customers and visit those that buy on value, are lean, or have growth potential.
- Plan and complete visits with cross-functional teams that can follow your product/service and associated paperwork through the customer's processes.
- Involve functions that may not normally visit customers - executives to talk to customer executives, cost accountants to analyze value-in-use, engineers to identify process and product improvements, supply chain folks to look at delivery and inventory, etc.
- Train teams in creating process flows and asking questions that uncover value.
- Formally debrief each visit. Create immediate follow-up plans to capture and communicate value.
The benefits of this approach to customer visits?
- Clearly understand what your customers really need and expect.
- Identify needs that customers don't even know they have.
- Link customers tightly with your business so they can't walk away on price alone.
- Counter the perception that your product or service is a commodity, forcing you to compete only on price.
- Create a greater understanding of and commitment to customers within your company.
- Assure that Voice of the Customer efforts are really paying off.
Turn the business slow down threat into a growth opportunity.
Improving Organization Capability in a Down Economy
There's no reason why a business should weaken during a down economic cycle. Experience from past recessions shows that companies are able to come out of challenging economic conditions stronger and more agile. I looked back on my own experience and reviewed research to come up with some suggestions to build organization capability, even when the economy fights against it.
- Focus on Strategy
Now's a great time to refresh strategy. How and where will we grow? How do we compete? The process will benefit by involving folks that may have not been previously consulted. A 2006 study of innovation by IBM showed that outperforming, high revenue growth companies' most significant source of innovative ideas were (in order) employees, business partners, customers (see Customer Visits above), consultants, and competitors. Involving others will also improve commitment and goal clarity. The plan would also benefit by reviewing assumptions and determining what impact those changes have on priorities and capabilities.
- Protect the Plan
The changing market and economic conditions have probably threatened some portion of your strategy or annual plan. Now would be an excellent time to complete a "Protect the Plan" process. (I view this like a Failure Modes and Effects Analysis tool used in Six Sigma, applied to strategic planning.) Generate and quantify potential threats and their impact. Then generate action plans to prevent or lessen the projected impact. Focus on those threats that are most likely and have the biggest potential impact.
- Build Stronger Links to the Strategy
I spent 30 years in manufacturing, through a wide range of economic challenges. The leaders I respected the most during those years did an outstanding job of keeping short term threats in perspective. They provided employees with a broader view so that they didn't get pulled down by each day's headlines. For today's challenges make sure that you have a process to build the line of sight to the strategy for each function and employee. Aligned and linked goals should be the primary purpose of your Performance Management process. To be effective, goals and objectives must be relevant - relevant being defined by each employee having the ability to see a link to a boss's, team's, or the overall company objectives. This is also a good time to redouble strategy communications.
- Increase Capability during a Downsizing
I'm convinced that organizations can immunize themselves against the need to resort to significant force reductions. (See Musings below) If you must cut, cut with precision and purpose. Across-the-board, one-size-fits-all reductions destroy capability and drive unplanned voluntary turnover. Identify mission critical positions and functions - those few roles that are directly linked to wealth creation and value delivery. Protect these functions and assure that you've got agile, high potential "game changers" in these positions and as back-ups. Identify those employees that fight change and pull down productivity. Compassionately move these folks out of the company. Identify the pivotal roles and assess your talent through robust, objective reviews at the top of the organization so that everyone's on the same page.
Immunizing Your Organization
Two completely unrelated news stories caught my eye this week. One summarized recent research on the flu. The other highlighted the stock market performance of Pittsburgh firms for 2008.
The cold and flu article mentioned that almost everyone acquires the virus that causes the flu. But many do not exhibit any symptoms because their immune systems are healthy and can deal with the pathogen. The symptoms people experience are the result of an inefficient immune system trying to manage the bug.
The Pittsburgh Business Times reported that Wilmerding-based Wabtec was the only local, nonbank public company traded on the major exchanges that had stock price growth during 2008. Wabtec's CEO attributed the performance to the capability of their people and to their lean business process.
See where I'm headed with this? Like people with healthy lifestyles, companies can inoculate themselves against the vagaries of the marketplace if they have effective immune systems. In my mind, the business immune system consists of lean business processes and a robust, agile organization. How would you assess GM's immune system compared to Honda's or Toyota's or Wabtec's?
Lean businesses are characterized by a well defined understanding of customer requirements and value propositions, efficient value streams that deliver on those requirements, and a passion for continuous improvement. In bad times, lean businesses have the capacity to weather the storm. In good times, they capitalize on opportunities.
Agile organizations with a high level of change capacity are purpose-built and maintained. The demands placed on the organization by the company's strategy are clearly defined. The organization and its talent are regularly assessed (I avoided saying "have regular check-ups") to assure it has the capability to respond to the demand. They have a full and flowing pipeline of talent, promoted from within. The systems to acquire, connect, deploy, develop, reward, and retain talent are continuously improved.
What are you doing to build your organization's immune system?
Think in Different Ways to Find a Better Way
Founder - COMPIO
We all have our favorite ways to think through challenges. They work well for us, so we use them easily and often. Sherlock Holmes searched for telling clues, da Vinci studied patterns in nature, and Richard Branson finds conventions to break.
There's nothing wrong with this approach when you want more of what you have. But when your challenge requires fresh thinking, you can purposefully engage different forms intelligence. For example: engage your
- Deductive intelligence, by identifying the challenge within the challenge. State your challenge in the form of a question (How can we…?). Then ask yourself why you need to address that challenge. Write down your response, creating a new challenge statement (How can we….?). Ask yourself why solving this challenge is important. Repeat several times, until you've found a root issue.
- Visual/Spatial intelligence, by diagramming or drawing the challenge. Highlight areas of interaction. Consider ways to adapt or re-sequence them. Or find an interesting image and note your reactions to any aspect of it. Force connections between these reactions and solving your challenge. See Shift Gears , a free tool, to practice this approach.
- Numerical intelligence, by developing equations that capture relationships between key factors. List important variables impacting your challenge and play with different math functions (add, subtract, multiply, divide, take it to the power of…) until you've represented how they interrelate. Consider what would happen if you reversed one of the functions, or substituted a variable.
- Physical intelligence, by literally walking away from the challenge. Write it down and set it aside. Go for a walk, a run, a swim, a dance; whatever depletes your stress, uses your biggest muscles and brings you to a state of relaxation. Note how your body and mind feel and make connections to your challenge.
- Musical intelligence, to approach the challenge from different emotional states. Select three very different types of music, preferably without lyrics. Listen to each in turn, noting words and concepts that come to mind. Develop a response to your challenge that uses each prompt you noted. For example, if you noted "upbeat," what would be a very optimistic response? If you noted "quiet," what would be a subtle improvement?
- Verbal intelligence, by creating a metaphor or simile. Complete this phrase ten different ways: this (insert challenge) is as _______ as a __________.
- Social intelligence: by asking a dozen people with significantly different types of life experience (age, career, country of origin…) how they would solve your type of challenge. As you listen to their ideas, assume that they understand something you need to know.
- Naturalistic intelligence, by applying lessons from nature. Get outside, in an environment you haven't encountered often. Quietly observe how things work and what results, identifying natural systems and processes. Link this wisdom to your approach to your challenge.
Return often to the less comfortable approaches, tapping into underutilized intelligences.
Note each and every idea, using an easily accessible file, journal or tool like Notable. After you have many more ideas than you need, go back and highlight the most unique and interesting ones… and find ways to combine and improve them. If you get stuck, you know how to tap into a different form of intelligence.
Tracy Fuller is an executive coach who helps business executives lead more creatively and effectively. You can learn more about Tracy and her work at www.compio.net.