Paying close attention to small projects — and stopping them if they are not delivering — can be as ... [+]
In these challenging times, it is understandable that executives might struggle to find solutions to the many issues they face. However, there is encouraging news in a study recently published by Strategy & Business, a publication of the Strategy&, the strategy consulting arm of professional services firm PwC. It indicates that there are three potentially powerful performance levers “hiding in plain sight.”
The first of these is trust. Although often regarded as central to success by management thinkers and consultants, this is often seen as a “soft” factor by those at the sharp end. But PwC reckons that its survey of CEOs shows that it really does improve business performance. And it offers three key factors that are likely to affect performance. Those are CEO perceptions of their customers’ likelihood of switching to a competitor, resisting updates of products or services or providing feedback if the company’s products or services exceed expectations.
The second is “sweating the small stuff.” Again, this tends to be overlooked by senior executives who — much like their equivalents in politics — prefer to focus on the big projects that they believe will help secure their legacies. As the study says, “big deals get the headlines, but our analytics show that starting and stopping small projects can improve performance just as much.” To fully realize the potential of this dynamic capital allocation leaders should pay proper attention to the day-to-day practices around decisions and operations that can enable or inhibit nimble moves, it adds.
The third factor is having a coherent strategy rather than the ambitious wish list of goals that so many executives seek to build their organizations around. Strategic coherence has been a priority for PwC since the publication in 2010 of “The Coherence Premium” in Harvard Business Review. And here they draw on management professor Richard Rumelt’s concept of “the crux,” pointing out that strategic coherence emerges from a quest to conquer the most important challenges facing an organisation. “If those challenges aren’t high-stakes, then they’re not really strategic. If they contradict one another, they’re incoherent.”
The first two levers sound intuitively right and are clearly important. Organizations of all sorts could clearly benefit a great deal from pulling them out of hiding, so to speak, and making them the focus of everyday activities. But the observation that strategy needs to be more coherent seems to be the one that should really strike home for leaders.
Helpfully, PwC’s study sets out some key dos and don’ts for developing a coherent strategy. The dos include having frank discussions about the problems faced, assessing the importance and ease of addressing challenges and — crucially — choosing challenges that can actually be overcome. On the other hand, the don’ts include not relying on first intuitions and not indulging in wishful thinking about the scale of any challenges.
But the really important one is not seeing strategy in terms of ambitions and goals. How many times, say, have we seen a company claim its strategy is to double revenues over the next decade? This is not a strategy so much as an aim and reflects what Rumelt refers to as executives’ over-reliance on tactics, even when facing what can be regarded as major inflection points, such as geopolitical instability, disruptive workforce and technology trends and market fluctuations.
Given that all three of these are occurring now, this is as good a time as any for executives to get a grip of how they can bring key performance drivers out of the shadows and focus their organizations’ efforts on things that might really enhance their ability to succeed in the longer term rather than just respond to crises as they happen.
