4 Key Business Changes You Should Make
In 2017, John Spence, had client engagements in nine countries and led business excellence workshops for more than 400 CEOs across the globe. In this Blog he shares his observations of the trends across all those different organizations and industries
Very, very few of the organizations I worked with were adequately prepared for the huge changes that would occur in their industry within the next 10 years. Banking, medical, accounting, construction, consumer goods, industrial manufacturers, software development… I am hard-pressed to think of a single business I worked with that will not experience some level of turmoil, possibly annihilation. Yet I was dumbfounded to see that the leaders of these organizations were investing very little time, effort or money in trying to stay ahead of technology and prepare their organizations and people for the inevitable wave of change that will roll over their businesses in just the next few years. This is the single most concerning issue I see right now.
As goes the senior leadership team, so goes the entire company
In the last year, I have had the unfortunate job of working in several companies that were headed for bankruptcy. Although I tried mightily to help them, the demise of each was the same: A dysfunctional senior management team. One company, with more than 400 employees, was destroyed by 3 senior managers that did not get along. And it wasn’t just the employees that were hurt – it was their husbands and wives, their families, the community, and all the vendors they dealt with. When you add it all up, 3 people wreaked economic havoc on several thousand simply because they were poor leaders. On the other hand, I also saw many companies that were struggling, turned around by high functioning leadership teams that worked superbly together to save the organization they were running. Leadership – good or bad – has a massive impact on the future of an organization.
Culture = Cash
Most companies I work with could gain a bit more profitability or market share by tweaking a few things here are there. Become more efficient in a process, increase the marketing spend, negotiate better terms with their vendors… But the single greatest place that can drive dramatic increases in revenues and profitability are in creating a high engagement culture of employees who have an ownership mentality. Current research indicates that in the typical company, 24% of employees are engaged, 45% are disengaged, and 26% are actively disengaged – in other words, they are actively attempting to sabotage their company. That means that as much is 71% of employees do not like the company they work for or the work they do. Change those numbers around and you will change your business.
Lack of disciplined execution
In the last 18 months, I have done more strategic planning work than at any other point in my career. Yet I am fearful that little of it will yield the kind of results the companies are hoping for. The reason? Everyone is excited about doing strategic planning, but few are as excited about doing strategic execution. My research shows that the average American business only executes about 10–15% of their strategic plan. If they could get that up to 50%, they would crush the competition. Why are similar companies outside the U.S. a little bit better at execution? Because they the embrace the idea of using coaches and consultants to hold them accountable for delivering the major goals of their strategy. It is also interesting that in countries like New Zealand, Australia, the Netherlands, and Malaysia, even small companies have a paid Board of Directors who work closely with the senior management team and push them relentlessly on strategic execution. It is a mystery to me why American companies don’t focus more on the importance of disciplined execution.
There are a few other trends that I am watching, but these are the major things I see at company after company across the world. I’m going to guess that as you look at this list, you’re going to see some of the same issues inside your business.
I CAN TELL YOU FROM EXPERIENCE THAT IF YOU CAN FIX SOME OF THE THINGS LISTED ABOVE, YOU WILL SEE A DRAMATICALLY POSITIVE IMPACT WITHIN YOUR COMPANY.
This blog was written by John Spence, Strategic Business Partner of Advisory Works.