Shifting focus to strategic solutions

Com­pe­ti­tion dri­ves busi­ness­es to improve qual­i­ty and speed to mar­ket, while reduc­ing costs. Recent years of aus­ter­i­ty have seen two evo­lu­tions of focus, the first-gen­er­a­tion approach being get­ting fit­ter through cost reduc­tion, large­ly through head­count reduc­tion and tack­ling expens­es. Once envi­sioned sav­ings had been large­ly realised, many busi­ness­es moved to  the sec­ond-gen­er­a­tion approach of get­ting smarter, becom­ing more agile, doing more with less, and improve­ments through staff and indus­try engage­ment.

The ben­e­fits obtain­able by get­ting fit­ter and get­ting smarter have now been large­ly realised albeit, in some cas­es, not to the extent expect­ed.

Busi­ness A cut their inno­va­tion R&D pro­grammes, then lost mar­ket share to com­peti­tors with stronger prod­ucts. Com­pa­ny B made staff use annu­al leave, reduc­ing morale and per­for­mance. Busi­ness C stopped colour print­ing for deal books, and deal-clos­ing din­ners, impact­ing client rela­tion­ships and return busi­ness.

Fur­ther­more, first and sec­ond-gen­er­a­tion efforts can leave busi­ness­es poor­ly pre­pared to return to growth. Recruit­ment firms are report­ing a grow­ing lev­el of demand, but many firms have frozen or reduced salaries. In a recov­er­ing mar­ket, many staff will look to move else­where, result­ing in recruit­ment costs, and the loss of knowl­edge and client rela­tion­ships.

SHIFTING THE CONVERSATION

It’s time to recog­nise the lim­i­ta­tions of the first and sec­ond-gen­er­a­tion approach, and expand to how the busi­ness oper­ates, its cul­ture and pur­pose.  A third-gen­er­a­tion approach, becom­ing strate­gic, shifts the focus to dri­ving val­ue, get­ting to root caus­es of inef­fi­cien­cy and pro­vid­ing inte­grat­ed, busi­ness-wide solu­tions.

The dif­fer­ence is marked – for exam­ple, for many, work­place agili­ty has result­ed in a reduc­tion in real-estate costs and improved col­lab­o­ra­tive work­ing. How­ev­er, focus­ing on only real estate and work­ing styles can neglect wider changes need­ed to gain full val­ue.

Becom­ing strate­gic involves whole-sys­tem think­ing, under­pinned by robust diag­nos­tics to find the true prob­lem

Com­pa­ny D had not seen the pro­duc­tiv­i­ty gains promised by greater col­lab­o­ra­tion. But their objec­tives includ­ed reward­ing high-per­form­ing staff, man­i­fest­ing in a blame cul­ture as indi­vid­u­als sought to pro­tect their posi­tion, with com­mu­ni­ca­tion occur­ring via e‑mail to cre­ate an audit trail – lim­it­ing the impact of reduc­ing phys­i­cal bar­ri­ers in the work­place. Busi­ness E pro­vid­ed new tablets to staff to encour­age inno­va­tion, but con­flict­ing objec­tives cre­at­ed con­fused mes­sages – pos­i­tive com­mu­ni­ca­tion on the new tools along­side month­ly “shame” reports on bills and strin­gent rules. Accord­ing­ly, tablet usage was mixed and ben­e­fits lim­it­ed.

INCREASING VALUE

Third-gen­er­a­tion com­pa­nies cre­ate a route to senior lead­ers to present the case for a more strate­gic approach – linked to busi­ness goals and backed by diag­no­sis to under­stand root caus­es.  Solu­tions are deliv­ered by inte­grat­ed teams with a thor­ough under­stand­ing of the busi­ness and a range of tech­ni­cal exper­tise, includ­ing process­es and behav­iours.

Busi­ness F start­ed with a pilot, trig­gered by the chal­lenge of deliv­er­ing a step-change in a par­tic­u­lar prod­uct. The trans­for­ma­tion team, led by the own­er busi­ness and staffed with sec­on­dees from HR and ICT, deliv­ered a mod­el span­ning organ­i­sa­tion­al design, ways of work­ing and process­es, work­place, and IT. The new prod­uct was deliv­ered faster and cheap­er, through increased infor­mal col­lab­o­ra­tion, quick­er infor­ma­tion-shar­ing and deci­sion-mak­ing, and fail­ing smarter and faster.

Becom­ing strate­gic involves whole-sys­tem think­ing, under­pinned by robust diag­nos­tics to find the true prob­lem, deliv­ered through inte­grat­ed teams that address peo­ple, process­es, space and tech­nol­o­gy. First and sec­ond-gen­er­a­tion efforts can improve the per­for­mance of a business’s com­po­nent parts, but only third-gen­er­a­tion efforts can address the sum of the parts.