Adopting a lean strategy can seem intimidating, but you can easily create a successful company using lean methodology. Initially developed by Eric Ries, the three-step lean method for startups uses iterative product testing plus integrates early adopter feedback to choose product features and functions with the goal of reaching a larger market. Using lean tools can help eliminate constraints, roadblocks, and waste that may impede progress.
Creating a business that succeeds involves fostering a decision-making process that enables the organization to make solution-centric decisions. It’s a move away from a hierarchal process to one that places decision-making in the trenches of the day-to-day work, creates an organizational structure that eliminates information silos and shares decision-making with the most experienced, informed employees. How do you do this?
As organizations grow to critical mass it is often hard to derive and sustain the types of changes that are necessary to remain competitive. The larger and more structured the organization, typically the less entrepreneurial, nimble and adaptable they are to necessary change. Inability to design, develop and/or launch new initiatives; resistance to new technology, ideas or innovations regardless of the benefit; and radical resistance to reforming past practices no matter how obsolete are clear signs that your organization may be in this state.
I know you’ve had the nightmare. You know, that one! You are driving along at some unlawful speed down a dark windy road. Typically, there is an urgency to either escape some pursuing peril or there is the overwhelming desire to reach a nebulous destination to accomplish some life or death feat. It doesn’t really matter whether the latter or former is the case. What is constant is the incremental loss of control of the vehicle as you progress down that winding road. You lose control more and more until that final moment in which you are completely at the mercy of the speeding vehicle, which may I add, always seems to occur at the most treacherous stretch of the road. I have come to understand that this nightmare is not unique to me as it is one of the most popular recurring nightmares among Americans.
Depending upon which pundits you may listen to, there has been significant discussion around an impending economic downturn. Regardless as to whether you believe this to be the case, we can all agree that the cyclic nature of the global economy guarantees that we will be faced with tough economic conditions at some point within our working years. A significant risk of economic downturn alone is enough to change consumer behaviors, which could then impact our broader business ecosystem. This then will impact how organizations communicate with and meet the needs of their respective customers.
It’s difficult enough for companies to stand out in performance and product during times of economic expansion. Those that have figured out how to navigate the competitive landscape well enough to be considered an “established brand” often struggle to maintain that relevance in favorable economic environments. The task becomes many-fold more difficult as the macroeconomic conditions of large markets (global, national, or regional) deteriorate toward stagnation or full-blown contraction. Corporate managers will be challenged to focus their decision making around the attributes that have created success for their respective organizations from inception and to ensure that their brands continue to resonate with their targeted customer base, while continuing to aggressively compete for additional market share.
The last two major US economic downturns: the late 1970s and more recently the Great Recession of 2008 – 2012 provided an opportunity to observe the successful strategies and tactics of well-managed brands that not only survived the downturn but in some instances thrived. Brands like ITT, Lehman Brothers, and General Motors can be counted among the casualties of consumer economic hardship from both periods. While on the other hand, companies like Microsoft, Southwest Airlines and Amazon saw unparalleled growth and expansion. What are the attributes that separated the latter group of brands from the former? What decisions, advantages, commonalities, and approaches were used to expand in such tough economic conditions?
While there are several well-thought-out strategies that I could point to, my primary focus is to highlight key principles that are easily relatable to your particular enterprise (no matter what it may be). I, by no means, want to oversimplify what it takes to navigate the “choppy waters” of recessions, depressions and/or market contractions but in an attempt not to “boil the ocean” it is critical to hone in on what appears to be most important. Below are the four focal principles:
My subsequent four blogs will focus on each respective point above. The thought is to expound upon how each tenet can help your organization thrive in times of turbulence. Each will be explored in a non-prescriptive way, to shed light on its particular impact on your likelihood of continued success.
Let Starr & Associates help you navigate economic downturns before they happen.
Reverse logistics occurs after the sale. It includes an array of potential activities that recapture value and extend the lifecycle of the item. For example, consumers in many states participate in bottle return of glass soda pop bottles. Returning the bottles nets them a few cents and enables the manufacturer to cut costs by recycling the bottles. That small discount adds up to customer loyalty.
Modern businesses need to adapt to the speed at which technology changes. The past decade has seen a multitude of entrenched industries fall by the wayside in the wake of digital disruption. Businesses need to be proactive about following technological trends if they want to avoid potential disaster.
In our current society, technology doesn’t evolve slowly. True innovation appears on the scene and then suddenly explodes, completely supplanting whatever came before it. Big Bang Disruption is driven by new technologies; with advancements on all spectrums of technology, it’s easier for new technology to gain purchase.
Technology is consequently able to suddenly and thoroughly impact the economic market. With more affordable experimentation and information, companies are able to better innovate and to race towards technologies that are more likely to be lasting and helpful.
Organizations need to invest in change management to remain agile and active in this new, technologically explosive era. Change management has to be developed as a company-wide, multi-phase process. At all levels, employees have to be committed to change.
Traditionally, employees and upper management alike are reluctant to commit to change because they fear that this change will have a negative impact on operations. By promoting constant change and providing a positive reward system, employees can get past this negative perception.
To improve change management, it’s important that organizations be transparent about their change management processes and that they be clear about the value proposition for employees. It must be clear that a business will fail if the business does not continually change. The goals of each change must be thoroughly outlined.
Different industries have different rates of disruption. Much like other areas of risk management, it’s critical that you understand your industry’s likelihood of disruption before you begin making changes. If your business is in a low impact area, you may not need to invest as much into your change management processes. If you’re in a high-risk area, it’s absolutely critical that you do so.
When it comes to disruption, there are four important aspects: viability, volatility, durability, and vulnerability. Diversified chemicals, tires and rubber, and alcoholic beverages are all considered to be durable industries. On the other hand, the consumer technology, banking, and investment banking industries are experiencing volatility, as regulations and changing markets have shifted their operations.
Ultimately, disruption and change management may not be a process that can originate from within. Instead, businesses may need third-party help to develop the processes that their organization needs to continue to thrive. Contact us today at Starr & Associates to learn more about how we can help your business manage its change.
As new products are continually emerging in the marketplace, businesses are starting to shed many of their older, more cumbersome processes and procedures, focusing instead on lightweight product exploration and development.
No matter how well researched and well written your strategic plan, it can fail in the implementation stage.
