Short Term Vs Long Term Results

Now in anybody’s mind the drive for short term results should be aligned with the long term. But why is it we struggle so much to get this balance right, and to add, it’s never been more needed as it is in the current economic way of the world.

One of the more obvious ways I’ve seen it manifest itself is between the overall corporate strategy and the operational behaviour of local teams. Here are just some of the examples I have seen…

First one, Corporate Strategy was to reduce internal costs, based on a Senior Leaders comment regarding a competitor’s costs, an assumption made with some questionable data. Now the local team had done analysis to show profitability in what they were producing and a significant growth improvement too which the corporate focus was fighting against. Which would you have had? Peter Drucker “preparing for tomorrow” springs to mind.

The second, Corporate Strategy to enter new markets with a new service, the local sales teams refusing to follow this as they believe it would be hard to hit their commissions so subsequently paying lip service to it when necessary. Interestingly the price and the margins for the older services were falling drastically, hence the focus on new service.

The third, Private Equity Investors driving the short term results against the Business Leader driving the long term vision, I’ve witnessed on numerous occasions where PE investors introduce a weekly operations call to review KPI’s (key performance indicators) they have introduced (35/week at one business), from Health and Safety, Productivity, On Time In Full, all the good stuff but driven at a behavioural level that can have a negative impact. KPI’s drive behaviour! When managed at a micro level from upon high every week begins to channel the focus on covering the past, we spend most of our time in answering questions that happened last week, not on where are we going, how are we going to achieve, how can I help.

This is one of the more obvious I have witnessed, the pressurised environment of the end of week/month/quarter / year period often creates behaviours that from an outside perspective at least, appear to be utter madness. Of course every business needs to keep the lights on but not to the extent that it sacrifices long-term value.

There has to be a balance between Visionary/Strategic leadership and Managerial Leadership. Managerial leaders are primarily immersed in the day-to-day activities of the organisation and lack an appropriate long-term vision for growth and change. Conversely, visionary leaders are primarily future-oriented, proactive and risk-taking. These leaders base their decisions and actions on their beliefs and values, and try to share their understanding of a desired vision with others in the organisation.

In essence a business needs to have both mind-sets present, a combination of the managerial and visionary styles. Having two leaders like this requires that they trust each other implicitly and are willing to listen to each other, the CEO and COO for example. It is possible to have a singular person with both mind-sets but they are few and far between.

The balance comes in how you “Operationalise that Strategy/Vision” so both styles work hand in hand.

Food for thought as we start to get closer to a new year.

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The new ISO9001:2015 standard has arrived.

It focuses on a process-based approach with the aim to produce a desired outcome. Several changes have occurred from the 9001:2008 version: The process approach strongly emphasises that the Quality Management System has to be woven into and fully aligned with an organisation’s strategic direction.

The PDCA (plan-do-check-act) methodology is overlaid on the system of processes, which apply both to individual processes as well as the Quality Management System as a whole. A strong focus on risk-based thinking is required now! It is aimed at “preventing unfavourable outcomes,” such as non-conforming products and services.

The standard has now been published and there is a transition period of 3 years to make the necessary changes, so do you have a plan on how you will tackle it?

Quoting BSI, with more than a million organisations certified to ISO 9001, it’s the most widely recognised standard in the world. ISO 9001:2015 sets out requirements for quality management systems, and is suitable for all types of organisations.

It….

Enables you to better align and integrate multiple management standards

Takes a risk-based approach, becoming a tool for preventive action

Moves away from prescriptive paperwork

The standard is currently being rolled out, so if you are looking for a competitive edge within Production and Service areas, ISO9001:2015 maybe it.

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Understanding your Competitive Performance

Understanding your Competitive Performance can be used as a differentiator as well as a enabler for growth.

Analysing where our business sits compared with our competitors (order losing, parity, advantage, superior) across the six categories of Quality, Cost, Delivery, Agility, Tech & Innovation and Customer Experience is an excellent way of highlighting where you need to focus.

Competitive Performance Analysis

If you’re sure your competitors are doing something better than you, you need to respond and make some changes. It could be anything from improving customer service, assessing your prices and updating your products, to driving process capability and performance.

Exploit the gaps you’ve identified. These may be in your product range or service, marketing or distribution, even the way you recruit and retain employees.

Customer Experience reputation can often provide the difference between businesses that operate in a very competitive market. Renew your efforts in these areas to exploit the deficiencies you’ve discovered, listen to the Voice of the Customer.

But don’t be complacent about your current strengths. Your current offerings may still need improving and your competitors may also be assessing you. They may adopt and enhance your good ideas.

Don’t stand still!

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