Wednesday, October 3, 2012

Four Emerging Trends and Two Solutions

During a recent dinner meeting, I was asked what are the emerging trends that I  am paying attention to at this time period. Upon reflection, I shared the following.

First, more and more organization are attempting to grow their business but are experiencing the challenges of how to scale up successfully. The desire is present amongst those in leadership and management positions but the capacity to do this in a thoughtful manner is not. I believe the problem is happening because many companies are designed to only serve their current customers in their current markets. There is no room for scaling up in their business because the daily work is trumping the work related to growing the business. Furthermore, the skills sets to serve new customers in new markets is also not present in the work force. In short, status quo is beating strategic thinking and change.

Second, issues related to being more efficient are not going away. In fact, they are becoming more and more important. Companies are wanting more efficient systems so they can be more successful. However, many are learning that their internal operational infrastructure is not designed for growth. Instead, it is dedicated to preserving the way business is offered to the current customer base. I suspect we will continue to see many companies optimize key systems for efficiency but the best companies during the next three to five years will focus on building an infrastructure engineered for greater efficiency, focus, flexibility and growth.

Third, we all know that customers are changing. Look at how much we are changing as leaders. Yet, few companies are proactively researching their customers. Years ago, we often talked about the VOC, the voice of the customer. The question now is how well do we know our customers and are we taking the time to listen effectively. And how well are we monitoring how fast they are changing. During the coming years, sophisticated market intelligence will become more and more important. We will continue to need to hear their voices. We also will need to know how fast they are changing even when they may not know the answer themselves.

Fourth, recruitment and retention has been the focus of HR for decades. Recently, performance management has become vitally important. However, it is time to look at this subject from a broader perspective. Thomas Friedman in his book, The World is Flat, wrote that you need two things in order to succeed in a globalized world. First, you need an innovative business model. Second, you need access to pools of talent. The challenge during the next two years is not just to find new or better pools of talent but to engage in proactive talent management. While some companies will redesign their entire talent supply chain, others will recognize that they need to embrace a whole new philosophy of talent management. For some, this will be a systems issue. For others, this will be a people issue. The best will realize it is both.  For now, we need to figure out how to manage talented people better, not just manage their performance. 

As we recognize the challenges of scaling up the business and the importance of a flexible infrastructure, plus the need to improve market intelligence and talent management, all of us know that we will need to create more highly effective strategic plans to make this all happen across the entire business. One place to begin the strategic planning process this fall is to read the following article: “Your Strategy Needs A Strategy” by Martin Reeves, Claire Love and Philipp Tillmanns in the September 2012 issue of the Harvard Business Review.  

As the authors explain, “Companies that correctly match their strategy-making processes to their competitive circumstances perform better than those that don’t. But too many use approaches appropriate only to predictable environments - even in highly volatile situations. What executives in these cases need is a strategy for setting strategy.” 

The authors of this article present a framework for choosing the right strategy-making process by asking two questions: How unpredictable is your environment? and How much power do you or others have to change that environment?” Based on the answers to these two questions, the authors explain that there are four broad strategic styles to choose from and each one is particularly suited to a distinct environment. They are as follows:

- Classical Strategy: the one learned in every business school, namely a SWOT analysis, works well for companies operating in predictable and immutable/unchanging environments.

- Shaping Strategy: best in unpredictable environments that you have the power to change.

- Visionary Strategy: the “if you build it and they will come” approach, which is appropriate in predictable environments that you have the power to change.

- Adaptive Strategy: this one works best in unpredictable environments that you can not influence; it focuses on the development of a more flexible and experimental strategic plan. 

This is a good article and for those who are thinking about the future and growth, it will be most helpful. Here is a link for those of you who want to read it on-line:

Once we are clear about key choices related to strategic planning, then I suggest you read “Are You Solving The Right Problem? by Dwayne Spradlin which also is in the September 2012 issue of the Harvard Business Review. As this author explains, “The rigor with which a problem is defined is the most important factor in finding a good solution. Many organizations, however, are not proficient at articulating their problems and identifying which ones are crucial to their strategies. They may even be trying to solve the wrong problems - missing opportunities and wasting resources in the process.” To solve this situation, the author proposes a four step process of asking questions and using the answers to create a problem statement. With a clear problem statement, the solutions are easier to find.  

I found the article particularly thought-provoking because the questions are carefully thought through and most insightful.  While I may not embrace the entire four step process, having a better set of questions to ask when problems surface will be most helpful to people in leadership positions. I would urge leaders to read this article so that they discover new questions and so they can educate others on how to solve problems through asking better questions.  Here is a link for those of you who are interested:

In world which continues to move at the speed of software, and where challenges related to strategic development and problem solving will only get more complex, it is good to know that there are helpful perspectives and articles to guide us through the maze of opportunities and difficulties. Happy reading!

Geery Howe, M.A. Consultant, Executive Coach, Trainer in Leadership, Strategic Planning and Organizational Change Morning Star Associates 319 - 643 - 2257

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