During tough times some organisations are tightening their expenditure, and either starving themselves or going into hibernation waiting for the season to pass, but smart organisations are getting leaner, fitter and ready to perform better, by investing in initiatives to detox their processes and use better technologies to get smarter not just work harder.
Whilst conventional wisdom tends to lend itself to reduce expenditure and to cut all costs during a slow economy, Harvard business studies have shown that not all cost cuts are beneficial to an organisation during a down turn and could in fact worsen their competitiveness in the future. This is similar to an over indulgent individual committing to lose weight at any cost and reducing their overall weight but not gaining any muscle, effectively become a weaker, smaller, thinner version of their former self.
Instead, organisation that do better during a slow economy and are more prepared to take advantage of stronger economies are the ones that focused on investing in smarter projects to improve their operational processes and systems. This is because by doing so, the reduction in waste buffers them during the slow economy without impacting their ability to compete with their less conditioned competitors when the economy improves. Effectively, shredding fat whilst putting on muscle, so to speak.
This article looks at some of our tips to help condition your organisation during an off season in order to perform better against your competition.
SM Business Coach Tip #1: Make sure you know your Organisation before starting an improvement program
Like our physical bodies, no organisation is exactly the same. For this reason, just because one of your competitors engages in an improvement program, doing the exact same program may not be what your organisation needs to stay competitive.
For example, say your competitor decided to improve their warehousing and managed to increase their margins, this does not necessarily mean that if you do the exact same thing it will lead to the same benefit to your organisation. Especially, if your warehousing is already better than theirs and the real issue with your organisation is your supplier contracts.
This is the same as working on cardio when you’re trying to improve your weight lifting strength.
Therefore, understanding your unique position, your business, your processes and the opportunities, weaknesses and threats relative to your organisation is key. A business process analysis and review project is perfect for this, because it means that you can prioritise your improvement efforts to tackle the issues that are holding you back the most.
SM Business Coach Tip #2: Have a goal that you want your organisation to obtain
A common mantra screamed by Personal trainers is “Visualise the fat burning and the muscle growing.” All the Arnold jokes aside, there is truth to this statement. For organisations looking to improve their efficiencies during slow economies, organisation need to have an idea or a vision of what this actually looks like for them.
What is the end goal of the improvement initiative? Reduced costs? Cool, in which area? By how much? Due to what processes? Compare it to want the persuit of the ellusive 6 pack of abs. Understanding that you do not have abs is not good enough, you need to set a plan of attack to achieve your goal. Simply saying “I want six pack abs” is not enough, what you need is a plan and the commit to reducing your fat percentage by 5% over the next 3 months by reducing your caloric intake to 2000 calories and maintaining consistent weight bearing exercises. That is the level of visualisation that organisations need to take when embarking on an improvement opportunity.
A good way of planning out such goals is by mapping out how you want future processes to look and asking questions like how should your organisation operate in the future? How many wasteful steps will be reduced in order to meet your organisation goal? As with all goals though, make sure that the improvements are realistic and obtainable given your organisation and the resources available to it.
SM Business Coach Tip #3: Take advantage of smarter technologies
Another common fitness cliché’ that can be used by businesses is “work smarter not harder.” A couple of years ago David Esptein spoke at a TED conference about how athletes are getting faster and stronger and attributed this not only to biomechanical changes to the body compisition of athletes but to an increase in performance enhancing technology, not only are athletes now better suited to their sport physically but they are training smarter and using better designed equipment. David states that in 1954, Sir Roger Bannister became the first man to run a 4-minute mile, these days most college athletes can run a 4-minute mile easily. The difference though, is that in 1954 Sir Bannister ran on burnt cider tracks that absorbed the energy of his stride slowing him down more than the synthetic grass used by athletes today. Today’s tracks are instead designed to help accelerate the individual. According to studies this resulted in a 1.5% increase in performance. While this does not seem like much according to the study since 1954, 1314 men have been officially recorded to run faster than a 4-minute mile, if their times are reduced by 1.5% this number decreases to 530. So a modest 1.5% difference in performance resulted in more than 50% of all men recorded since then to not have been able to make the time. And this is just looking at changing surface area, let alone the changes in nutrition and training and equipment since then.
For organisation technology can serve as a way to improve competition, the modern computer is capable of calculating and interpreting data much faster than the manual paper systems of the past and they are still improving. The efficiency of computer systems and innovation is at a much faster rate than in sports. For example, within only the last 10 years we have seen the following changes to Enterprise and ERP Software: A greater focus on mobile technology on multiple platforms, a greater focus on cloud computing, that is the ability to utilise a system without the need to have your own servers or powerful devices because the system is available via an online connection to the “cloud”, GPS technology to better locate and track inventory, assets and workers, big data analytics to better draw on large data sets to make smarter decisions and the list goes on. These smarter systems are shaping the competitive landscape of the future and you do not want to be held back.
For this reason, when looking at how to improve or reach your goal state you should not discount the possibility of achieving these with the assistance of newer smarter technology. That stated as with sports, technology alone will not guarantee success but along with commitment, team work and some grit will get you further than if you try to make do without it.
SM Business Coach Tip #4: Be-careful of the Snake-oil supplement sales guys
Ever turned on the late night TV to find every commercial trying to sell a supplement or piece of exercise equipment that will make you stronger, thinner, younger, taller and more attractive in the comfort of your own home for the price of one of your limbs on the black market?
No, don’t lie, you know the price of limbs on the black market…
Anyway, what I’m saying is that after you begin looking at improvement opportunities and identify that there may be a need for a new system then you will be flooded with sales people.
These individuals understand that systems are not things that many organisations change often at all. For this reason, many organisations are less likely to know the market, the options they have and what realistic systems expectations are. Whilst it would be wrong to paint all system salesmen with a broad brush, it would seem very optimistic to believe that all vendors will not use this to their advantage when selling a system to a potential buyer.
To mitigate against falling for their copy is to get educated and fast. This however, is more difficult than it seems as reliable sources of information on a systems capability are hard to come by. More often than not the people providing the information are the people pushing for a sale. There are however, some independent sources of information available such as Solution Minds, who have had first-hand experience with many vendors and clients, who know the strengths and weaknesses of their offerings.
Remember to focus on your requirements and hold salesmen into account if they say they meet them using stringently worded contracts and following an industry proven methodology.
SM Business Coach Tip #5: Get expert assistance
A good sports coach will empower athletes to take responsibility for their own performances. Sports coaches often coach athletes who already have a great deal of knowledge, and it’s their job to implement strategies to further build on that knowledge.
Good consultants will help you do this for your organisation. They are adept in their field but understand that your organisation is unique and has been successfully competing in your industry, that your employees are knowledgeable and capable people, however that your organisation is also capable of improving. As such, expert consultants can guide your organisation in understanding the areas of improvement, how best to improve, if there are new technologies that can help you on this journey and if so how to select and implement the right one for your needs.
Director – Solution Minds
Mob: +61 400 729 559