Have You Allowed Empires to Prosper?

In today's climate, I am sure that the instant answer should be an emphatic "NO". None of us would admit to supporting "Empire Builders". So have you looked around your organisation? Really looked? Are there parts of your organisation where team size is a power metric? You may even be fostering this by the way in which you select members of the management team for new initiatives.

Are there departments with a few too many people? Perhaps in operational areas where costs are scrutinised but as long as margins are in line with the annual operating plan (or budget) nobody looks too closely.

If your annual operating plan is based on past years performance with the simple factor of "10% better than last year" applied, you may well have cost inflation creeping in. It is worth-while checking to make sure.

If head-count reduction is an option and you are targeting areas outside those where traditional methods may lead to dodgy decisions being made, how do you go about making sure that your business is as lean as practicable whilst still being capable of delivering to plan?

There are a number of approaches that have been proven to work. There are also a number of pitfalls.

Crude time and motion studies can be extremely damaging to morale and to productivity. I learnt today of a large global organisation who has employed a renowned consulting firm to help with a cost reduction project. Very bright people are being ticked off with cartoon glum faces if a task takes too long. To make matters worse, the renowned consulting firm has deployed people with a tinge of acne to implement the project. Morale is falling. The only good news is that the one-off costs of the project are being reduced by the deserters who are taking matters into their own hands. These are probably the people who are crucial to the next phase of the plan but being the brightest and best are the most employable by others.

So what can you do?

Option 1: Take two people who know the process concerned and to task them with a series of projects (A detached person may be required to act as a catalyst):

1. Document existing processes
2. Re-engineer the processes to remove duplication and waste
3. Re-design the organisation to match the new processes
4. Roll out the new processes and organisational structure
5. Run the mini-project teams which add the detail to the new processes

Option 2: Go looking for a benchmark organisation and then to take the best ideas for processes and apply them to your own firm. Again, some degree of detachment is helpful to minimise the impact of "Not Invented Here".

Option 3: A combination of 1 and 2 has been known to work well in my own experience.

Conclusion

It always pays to take stock - to ensure that your delegation has not been allowed to become abdication. It also pays to do plenty of research. Networking events and sales meetings can be great sources of anecdotes and information which you can then use to stimulate your theoretical research. You could always engage an interim project manager for your change project - there are many people available today with real experience of successful change programmes.

The Plan

I have recently read "Back from the Brink" by Michael Edwardes. It is a fascinating insight into the problems faced by BL in the late 1970's and the turn-round that was achieved. Hindsight is a wonderful thing and reading this knowing that all that work was to end in failure was rather sobering. However, it remains a classic lesson in:

1. Make sure you have the right plan for the right reasons;
2. Make sure that your plan is complete and fully bought into throughout the organisation. Deal with dissent (the chapter on Derek Robinson - "red robbo" is fascinating!);
3. Implement your plan with passion and efficiency.

PS: When was the last time you saw an Austin Montego on the road?

Stay With It

Many of the initiatives that we use in business take time to become effective. This is most often true in Sales and Marketing. It is imperative that we put measures in place and then keep things running. Nothing is more destructive in business than starting two new initiatives each day and then abandoning them.

Remember the post on consistency? A large part of the consistency in our businesses derives from taking an objective approach to planning and then staying with the new initiatives. That does not mean that we ever ignore failure. It does mean that you must establish appropriate measures of success and then be in a position to refine and tune initiatives.

In other words:

• Plan
• Prepare
• Act
• Measure
• Refine
• Persist
• Have a plan to control cost and time - so that you can cut your losses if you need to.

Health warning: If an initiative is costing a lot of time or money, it is vital that all the risks are identified and controls established to ensure that precious resources are not wasted. It pays to test, refine, test and refine and test again.

Refine

In a recent post, I blogged about consistency. One common misconception is that consistency means staying the same or is an excuse for never changing. On the contrary. Consistency is vital. Consistent refinement of your proposition is also vital. Staying true to the messages you have already communicated to the market whilst refining the message and the offer to take account of the changes in your customers and prospects.

Your offer to your market should be constantly reviewed. You must take soundings from customers and prospects as well as from people who choose not to spend money with you. Use the insight that you gain from this process to refine details of your value proposition and to ensure that you stay ahead.

You already have a process to ensure that you gather insight from customers? Take that insight that you already gather and make it work for your proposition. Check that you have updated your offer to take account of the continuous learning that your customers and prospects will be undertaking - just from working with you already. Make a conscious effort to refine your products and services when the time is right.

If you are channelling your sales efforts in a new direction, are you using standard products or have you customised the offer in some way to better meet the needs of your new target customer?

Consistency is all

In your marketing messages and brand values, are you consistent, or do you keep changing details?

To be recognised and valued by your target audience you have to maintain consistency in your marketing messages. The down-sides of inconsistency are:
People have short memories, so they forget things quickly. But they spot inconsistency and hold it against you.
People have short memories and need to be continually reminded of things. If you are constantly changing elements of your proposition, all that communication turns into a blur.

Look at the brands, products and services that you value in your business and your life. How often do the strong and successful change the headlines of their marketing message?

• BMW
• Nike
• HSBC

Now look at your own marketing messages and build your message foundation on something you can live with for some time.

Structure

How structured are you in your approach to business? Do you routinely work through a list of review points to make sure that the basics are being kept on track? Most of us would answer yes to these questions - because we believe that we are structured and disciplined.

Ask yourself the following questions:

• What is my current cash position?
• What is my cash-flow forecast for the next 3 months?
• What was my sales performance in the past month?
• What is my sales forecast for the next 3 months?
• How well did my business perform in meeting its customer promises last month?

If you can easily answer these (and similar) questions with information you have in your head or have readily to hand, then you may have some justification in claiming to have a structured approach to your business. If you cannot answer at least four from five easily, you may be in danger of losing control of the key metrics in your business.

If all this is just too much to worry about, then engaging a business performance manager for one day per month could be a sound investment.