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Saturday August 7, 2010
By ANDREW LEE email@example.com
The early bird catches the worm” is probably one of the more popular idioms, and one that is often applied to business. It is well accepted that success in business favours the swift – companies that are able to create the most value are smarter and faster than the competition.
However, it might come as a surprise to many that despite ample resources, fancy graphs and streamlined processes in place, often the biggest problem is implementing a strategic initiative on time. Why is this the case?
President and CEO of Forum Corp, Edwin H. Boswell, has a theory. He argues that many companies focus exclusively on pace and processes, a strategy that only leads to superficial speed: lots of activity but little forward motion, short-term gain but eventual stagnation.
The more successful companies are able to achieve strategic speed – implementing strategies both quickly, and well, by shying away from fool’s gold and making the people in their company the key ingredient in their success formula.
Speaking to StarBizWeek via video link from Boston recently, he discussed the theories of his new book, Strategic Speed: Mobilize People, Accelerate Execution (Publisher: Harvard Business Press), a subject that he believes in passionately.
Boswell is one of three authors of the book. His co-authors are Jocelyn R.Davis and Henry M.Frechette, Jr.
What was the catalyst behind this book?
We started work on this book two years ago. Our company’s specialty has always been advising clients on how to execute strategies through people. And we wanted to write a book for leaders on how to get things done quickly and effectively, and the execution of those strategies.
The global financial crisis came soon after we started work on the book. This affected businesses around the world. This prompted us to dedicate a large part of the book on the speed of execution, because this unfortunate turn of events drew our attention on speed.
Can you tell us a bit about your research for this book?
We read over 500 books and articles, basically every bit of research done on execution over the past 20 years. Another important part of the work that went into this book was the survey we did with more than 350 leaders in the corporate sector, in government and those heading charity organisations around the world. We did this together with the research arm of The Economist magazine, their Economist Intelligence Unit.
We also studied 18 companies in-depth. This led to case studies on organisations such as Vodafone, Morgan Stanley and Fender Guitars. Finally, we drew on Forum Corp’s 20 years of experience managing clients to complete this book.
What were some of the key findings of your research?
There was truly a distinction between companies that executed strategies with strategic speed and those that did not. For instance, the faster companies in our sample were able to generate superior business results. On average, over a three-year period, these companies generated faster revenue growth, 40% faster than the slower ones. They made profits 50% faster as well.
What were these companies doing that made them quicker than the others?
The faster companies did not make the mistake of mistaking speed for pace. They proceeded with strategic speed and took the people factor into account. There was a high level of clarity among the people in the business about what the strategy was and the leaders made sure they took time to make sure everyone understood the company’s direction and his own individual role.
The second difference was unity. The faster companies had a stronger commitment to their strategies as well as towards working together. Lastly, these companies had a high level of agility. They had the ability to adapt to changes in the external environment, to new information in the market, as well as new opportunities or risk that came their way.
How did these companies keep their high levels of clarity, unity and agility?
That’s what most of this book is dedicated to – the leadership practices that the faster companies engaged in.
There are four main practices: the first is the affirmation of strategies. Leaders of fast companies made sure that everyone not only understands the strategy, but also buys into it.
The second is driving these initiatives. Successful leaders do not just delegate strategies, they are pretty involved in the execution of it.
Thirdly, there has to be a positive environment. This sounds cliched but if leaders are able to pay attention to the changes taking place around them,they will be able to bring out the best in their workers.
The last is cultivating experience. For example, leaders in the faster companies encourage people to step back from their day-to-day activities to share their experiences with colleagues.
The faster companies would implement these four leadership practices two to three times more frequently than the slower ones, leading to higher levels of clarity, unity and agility, which subsequently bring about strategic speed.
Will strategic speed affect quality of the final product? Is it possible to have both speed and quality?
We had a chance to interview Vodafone (one of the world’s largest mobile phone providers) chief executive officer Vitorio Collao in London recently. He did not accept the notion that speed and quality were enemies.
Vitorio wanted to create a global plan so that their clients could get the same level of service. The only problem was that Vodafone was a decentralised company, resulting in their clients receiving more invoices than they needed every month.
He knew any attempt to provide better service to his top clients would take a few years as the company was so large and complex, while team leaders would tend to proceed slowly and cautiously when executing strategies for fear of jeopardising an important plan.
Therefore, he created small teams of five or six persons and implemented a system of acountability. The team leaders would be given 12 months to execute the plan. They would also be allowed to make mistakes. He wouldn’t fire the leaders for making mistakes, he would only resort to the sack if the leaders repeated the mistakes. His belief was that smaller teams wouldn’t be as liable as bigger teams to making critical mistakes, rather, they tend to be mistakes that the company can recover and learn from.
This project was wildly succesful and Vodafone managed to generate US$3bil in incremental revenue.
Do you think culture plays a part in implementing this strategy?
One of the things we looked at is the cultural differences around strategic speed. In the West, speed is valued often just for its own sake. In other parts of the world, perhaps speed may not be as important as relationship or quality, as stated earlier.
Different cultures put different values on speed and this is a dilemma that managers have to navigate. Now that more companies around the world are becoming global, we all have to adapt to these different cultural values, even a small company like Forum due to our operations across four different continents.
I think managers all around the world are on a steep learning curve at the moment trying to identify and appreciate these different values. We do accept that there are cultural differences around speed and this will present us with new opportunities as well as challenges.
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