All Posts Tagged With: "agility"
When Innovation and Planning Collide
Are a systematic strategic planning process and a formal strategic plan detrimental to innovation and agility?
I’ve recently worked with an entrepreneurial company that has more than two thousand employees worldwide and annual revenues approaching a half-billion dollars—and it has no strategic planning process. Its “strategic plan” is whatever the founder and CEO decides to pursue, which means the plan has many consistent elements year to year plus a stream of new ventures that aren’t even on the radar screen when the year begins. It’s a highly innovative, flexible, and agile company that has grown by 15% or more a year for nearly three decades. Such results suggest that its “strategy” is working.
From a Baldrige perspective, however, I can see how a more systematic approach could be beneficial, especially in the areas of:
- Involvement by more participants. More voices in the discussion would help clarify the issues and the opportunities and engage more people in owning the plans they help design.
- Inputs to the process. A more formal approach to gathering and analyzing critical information upon which any plans are based would minimize the risk of missing something important.
- Alignment. A company aligns its people with what it is trying to accomplish through a strategic plan…
Think Like Your Buyers
In the 1980s, four out of five American car buyers were loyal to the company that manufactured their brand. I remember growing up in a Chevy family and we had friends who were Ford people and we were as loyal to our car brand as we were to our religion.
In 2009, only one in five Americans was loyal to the same car brand.
In “The Manufacturer’s World Has Changed Forever” (IndustryWeek, July 14, 2010), Robert Bloom provides this contrast in customer loyalty to point out that the purchasing behavior of customers has changed, which is old news to any company that’s managed to keep its head above water the last two years, but his case study is interesting. Italy’s Fiat Auto reported a net loss of nearly two billion euros in 2002 and experts thought it would not survive. In 2008, it reported a trading profit of more than 1.1 billion euros—a three billion euro turnaround in six years.
How did Fiat Auto do it? Bloom lists several key actions:
- Terminated a failing venture with General Motors to gain full decision-making autonomy
- Eliminated an entire floor of executives to reduce costs and bureaucracy
- Cut Fiat’s product development time in half to get products to market quickly
- Reorganized…
Be Prepared
I haven’t referred to a Rosabeth Moss Kanter blog for a couple of months so it’s time for a Kanter fix. She’s a professor at Harvard Business School and the author of several popular business books, which is an accomplishment in itself. This week she reflects on the volcano in Iceland in “Surprise! Four Strategies for Coping with Disruptions” (HBR, April 19, 2010).
Her four strategies are:
- Backup. Even in a recession, it’s a good idea to build some overlap and redundancy into your organization to make it easier to respond to disruptions. “Great companies stress efficiency but build in slack and cross-train their people,” she writes.
- Communication. If you’ve developed systems to spread information virally, such as through social networks, you can keep the communication lines open and fast when disruption occurs.
- Collaboration. “Human relationships, commitment, and resiliency help companies recover quickly,” writes Kanter. She points to the efforts of Continental Airlines employees during the power outage that closed airports in the Northeast in 2003 and the creative solutions they came up with to keep their planes flying while other airlines were grounded.
- Values and Principles. I’ve talked about this a lot on Baldrige.com because it’s a common characteristic of Baldrige organizations. Guided by a…
Undercover and Out of Touch
I haven’t watched much of the new TV show, Undercover Boss, because it sounds manipulative and because any boss who has to go undercover to find out how his company really works is not the kind of role model we should learn from.
Visionary leadership is a Baldrige core value. It emphasizes senior leaders’ personal involvement in communicating, coaching the workforce, developing future leaders, and recognizing employees. Visionary leaders do this every day, not just when a TV camera is turned on, and they do it without a disguise. They interact with their people daily, in every imaginable venue, nurturing an environment in which employees feel valued and engaged.
In “Management Lessons from Undercover Boss” (HBR, March 23, 2010), Michelle Buck, director of leadership initiatives at the Kellogg School of Management, points out that “leadership is a relationship, a partnership, and employee engagement isn’t just a soft and fuzzy topic but has bottom-line implications.” Senior leaders who spend their days holed up in their offices or surrounded by other executives cannot build the relationships or strengthen the partnerships that sustain great companies.
I spent much of last week traveling to sales offices in Europe with the president of a company with a half-billion dollars…
30Mar2010 | Steve George | 0 comments | ContinuedThe Baldrige Formula for Success
If you’re looking for a repeatable formula for success, integrate the Baldrige model. The fact that it’s been repeated by dozens of organizations of all types, each with impressive results, affirms that the management model defined by the Baldrige Criteria is a formula for success.
Bain & Co. decided that integrating Baldrige was too obvious, so it spent ten years studying more than 2,000 companies to find the formula for success. Jill Jusko lists the five principles Bain came up with in “A Repeatable Formula for Success” (IndustryWeek, March 16, 2010):
1. Know what the core of your organization is and how you’ve made it work for you. This may include four to seven assets such as brand and talent. In Baldrige terms, it means identifying your core competencies and building on them.
2. Have up to ten non-negotiable principles upon which your organization is built. Baldrige calls these your mission, vision, and values.
3. Prefer distributed leadership, which means fewer layers of management. Baldrige doesn’t prescribe distributed leadership, but it does promote empowerment and agility, which are often associated with fewer layers of management.
4. Keep information coming in from customers through a strong, closed feedback loop system. The Baldrige Criteria ask a number of questions about…
17Mar2010 | Steve George | 0 comments | ContinuedDeveloping Agility on 3 Fronts
Agility is a Baldrige core value, described in the Criteria booklet as “a capacity for rapid change and flexibility.” In “Competing through organizational agility” (McKinsey Quarterly, December 2009), Don Sull, professor of management practices at the London Business School, identifies three types of agility: strategic, portfolio, and operational. He found these types in the companies he studied in the world’s most turbulent geographical and product markets including China, Brazil, European fast fashion, and financial services. “In turbulent markets,” he writes, “overreliance on a single type of agility can be dangerous.”
Strategic agility means spotting and seizing game-changing opportunities. It requires an effective combination of patience (waiting for the right time to strike) and boldness (acting when that time arises). From a Baldrige perspective, it also requires a focus on the future to anticipate changes that require a new direction and a strategic planning process that makes rapid change possible.
Portfolio agility is the capacity to shift resources quickly and effectively out of less promising areas and into more attractive ones. It requires processes to reallocate management talent and cash across units to take advantage of emerging opportunities. From a Baldrige perspective, the ability to shift resources begins with performance review processes that help leaders identify changing needs and…
11Feb2010 | Steve George | 0 comments | ContinuedMaking Your Organization Adaptable
Last week, Alan Alda spent an hour on “The Human Spark” on PBS exploring why modern man survived and Neanderthals did not. The likely answer? Adaptablity—and it’s still the key to survival.
“There’s probably no organizational attribute that’s more important today than adaptability,” writes Gary Hamel, author and the world’s leading expert on business strategy, according to Fortune magazine. “In our topsy turvy world, every organization is teetering on the brink of irrelevance, and unless it can change as fast as change itself, it will soon tumble off the ledge.”
Baldrige organizations promote adaptability by valuing agility, a focus on the future, and a systems perspective. They constantly and systematically renew themselves by questioning what markets to serve and what the customers in their markets require, how to make their processes more efficient, and how to engage their employees in change and innovation. Rather than reacting to change, they deploy processes that help them adapt and grow.
In “Outrunning Change—the CliffsNotes Version” on WSJ Blogs (October 21, 2009, click on Part 1 here and Part 2 here), Hamel shares his thoughts on how to build a highly adaptable company:
Anticipation
- Face up to strategy decay.
- Learn from the fringe. “The future will sneak up on you unless you…
