“A focus on the future must take an extra step beyond conventional corporate planning” ….. and “encourage people everywhere in the business, and at all levels to be future – oriented in their outlook to spot trends, and create improvement and opportunity from them.”
In our rapidly changing world the capability to sense necessary changes earlier than your competitors can be the foundation for the nimbleness that can be the source of huge benefits for your stakeholders. In this blog I commend the use of two well-established tools – with the active engagement of a cross section of your staff rather than the traditional approach of the corporate planners. I will conclude by suggesting a way of by involving your staff further by instigating an Excellence Audit TM.
Drawing on Industrial Organisation theory from Economics, Michael Porter of the Harvard Business School developed a 5-force framework to assess the competitive intensity of a market. The underlying assumption being that the more intense the competition, the less profitable the market will be. The Porter 5-force framework considers:
For example the growing impact of social media can have quite profound impacts on enterprises. I recall an enterprise where any form of external communication required clearance by a raft of individuals across the corporate functions – including legal and brand. The time taken to do this would extend to many days if not weeks. Contrast this with the expectations of customers using Twitter. “The moment of value” for an enterprise quoted in a Tweet to engage in dialogue is perhaps one hour at most. What does this mean for delegating, empowering and developing relatively junior people in enterprises to respond to tweets?
The constant innovation facilitated by technological advances is a broad cause of a compression in the time enterprises have to adjust to changes in their environment. In their book “Big Bang Disruption: Business Survival in the Age of Constant Innovation”, Larry Downes and Paul Nunes includes a question from Ernest Hemingway’s book “The Sun Also Rises” – “How did you go bankrupt?” “Two ways. Gradually and then suddenly.” In certain cases, particularly where there is great technological innovation, we need to be alert to the potential for incumbent enterprises to be more prone to rapid destruction by new entrants (for example manufacturers of pin ball machines when computer games became established) and also to be attuned to the potential impact of regulation. All the PESTLE dimensions can be drivers of material change in your competitive potential and the underlying economics of your business. Proactively addressing these by making adjustments to your business will improve the likelihood of continuing to achieve your profit and other stakeholder objectives.
Another well-established framework that is helpful in thinking about both an enterprise “As Is” and business improvement actions is the “McKinsey 7-S” – developed by Tom Peters, Rob Waterman, Julian Phillips and Anthony Athos . The research that spurned the framework included both primary research conducted at a broad spectrum of enterprises and academic institutions across the planet and consideration of established management literature. The following assertion made in the earlier days of management research by Chester Barnard and highlighted when the framework was originally published, resonates ever more powerfully today in our world of social media.”
“The CEO’s role is to harness the social forces in the organisation, to shape and guide values …… good value-shapers are effective managers (in contrast with mere manipulators of formal rewards who deal only with the narrower concept of efficiency)”
The framework was a key component of “In Search of Excellence” – the classic management book subsequently authored by Tom Peters and Rob Waterman.
A programme of actions to improve organisational effectiveness should address both. Tom Peters has emphasised that the “real energy required to re-direct an institution comes when all the variables in the model are aligned.”
“I continue to say, over 30 years later, that the power of the 7-Ss and In Search of Excellence (1982) and my subsequent work can best be captured in six words: “Hard is soft. Soft is hard.” That is, it’s the plans and the numbers that are often “soft” (e.g., the sky-high soundness scores that the ratings agencies gave packages of dubious mortgages). And the people (“staff”) and shared values (“corporate culture”) and skills (“core competencies” these days) which are truly “hard”—that is, the bedrock upon which the adaptive and enduring enterprise is built. To state the obvious, we very much included the “Hard Ss” (Strategy, Structure, Systems) in our framework, then added the “Soft Ss” (Style, Staff, Skills, Shared values—or Superordinate goal); and insisted that there was no precedence among them. Deal with all seven or accept the consequences—likely less than effective implementation of any project or program or increase in overall organization performance.”
Involving a cross section of your people in assessing the implications for your enterprise of your review of the competitive environment using the 7-S framework can be a great tactic for encouraging employee engagement. Moreover, by involving more people in taking this holistic view, the probability of unintended consequences is reduced and the communication of necessary organizational initiatives eased.
Future Shape of the Winner
The current Tom Peters “Future Shape of the WinnerTM” takes the 7-S thinking a stage further by using a Gyroscope as a metaphor that embeds the essential requirement of maintaining alignment as the overall enterprise moves (potentially at high speed in our agile world).
|It recognizes that a combination of dynamic forces in an enterprise interact constantly to find a natural balance as the enterprise strives to achieve its desired outcomes. For example:|
- The experience that customers feel as the talent in the enterprise brings the brand to life
- The architecture of the enterprise evolves to support the execution of the services and products your customers experience
Inherent in the approach is a balance of “systems plus passion” – a foundation of the Tom Peter’s client work over 30 years – with fresh insights, flexibility and practicality to help enterprises address the intense demands of our ever more agile and resource constrained world. It considers excellence in 3 axis:
|How well are the enterprise’s people performing in relation to achieving the enterprise’s ambition?||What do your customers experience when in dialogue with your enterprise?||How can leaders enable their talent to deliver the highest quality work output that they can?|
Linked to the Future Shape of the Winner TM is an internet based “Excellence Audit” TM – a 360-degree assessment instrument that has been developed to capture the thinking of the key workers in an enterprise from the perspective of both current performance and the future. It enables enterprises to assess how they shape up against a “Template” of an Excellent Company and to focus development efforts in the most promising areas. Enterprises in a spectrum of industries from manufacturing to financial services have used the audit to help form improvement agendas. The Enterprises involved have face a variety of situations including relocation of manufacturing, new services businesses and enterprises that have concluded that they cannot cost cut their way to success. Use of the Audit has helped galvanize the leadership teams involved around a new agenda. Moreover, insights from an Excellence Audit TM have helped Leadership Teams understand why some of their change programmes are running well, while others are a source of frustration.
To conclude, I encourage you to engage your people in identifying changes in your competitive environment and the consequent changes that are merited in your enterprise’s strategy, structure, systems, staff, skills, style and potentially shared values. This would serve as a robust foundation for developing your enterprise capability for a more agile future. Moreover, I believe that this will provide a foundation for raising the engagement of your employees and through them your overall operational excellence and enterprise agility. Please contact me if you would like to explore the application of these ideas to your enterprise. I would love to help you raise the level of engagement in your enterprise in 2014.
 Barnard, Chester Irving, “The functions of the executive”, 1938.
 Peters. T, Phillips, J. Watermann. R, “Structure is not Organization”, Business Horizons, June 1980