How the ever changing business landscape is forcing companies to adopt strategic excellence
James Aherne, Director at Renault-Nissan Consulting uncovers the reasons leading organisations are adopting strategic excellence.
Increased digitisation is rapidly changing the rules and pace of competition, creating many challenges when it comes to deploying a strategic excellence improvement programme.
Today, new technologies and digital innovations are accelerating change at an unprecedented rate, disrupting practically all industries and markets. As entry barriers have been lowered, armies of nimble startups – untethered to fast-outdating legacy systems – are mounting new threats to incumbent companies, forcing them to hasten their digital pace if they are to continue to compete.
For many leaders, what’s happening today will recall those unnerving days at the turn of the century, when the first wave of internet competitors was encountered. Some, though not all incumbents, managed to respond effectively to those initial threats and survive, whilst the dot-com crash soon put pay to many fledgling challengers.
But today’s challenge is different and will almost certainly be much more sustained. As data becomes increasingly accessible to even the smallest of companies, disruptive startups are able to scale-up with almost breath-taking speed, and are inserting themselves between you and your customers as they create and then exploit service and operational gaps that simply weren’t there before.
Let’s take the insurance industry, for instance. Over recent years, there has been a plethora of online entrants armed with new technologies and web-based price-comparison tools that have been able to undercut premiums – without agents – in a number of markets, and lure younger, digitally-savvy customers away from incumbent brands. Many of these established players felt sure this threat would abate. It did not, and instead they then found themselves being forced to adjust. As they have done so, this in turn, has heightened expectations for digitisation and accelerated the rate of customer adoption. What was once radical is now the norm.
It’s a familiar story across many other industries and sectors – and the pace of such change is gathering all the time. But as these threats continue to gain momentum – altering the structure of competition and, ultimately, how business is conducted –leaders must address the strategic challenge posed by the ongoing digital revolution.
In order to stay ahead of unfolding trends and disruptions, it is down to leaders to do more than plan ahead. They must deploy strategic excellence methods and principles for successful change management, as this will ultimately be the differentiator.
Let’s consider some of the most effective strategic excellence techniques that companies can deploy to ensure successful change management for a stable future.
Lean Policy Deployment (Hoshin Kanri)
Lean Policy Deployment – also known as Hoshin Kanri – is a method for ensuring that a company’s strategic excellence goals drive action, progress and continuous improvement at every level within the organisation. This is achieved by taking steps to align top-level strategy with middle-management tactics and the actual work performed by all employees.
All change management initiatives must be led by ecosystems of leaders across the entire organisation. As such, Lean Policy Deployment begins with a strategic excellence plan that is developed by senior management and carefully designed to address a small number of critical issues that are facing the company, or are likely to, in the short- to mid-term future.
Built around a PDCA (Plan, Do, Check and Act) cycle, Lean Policy Deployment is best executed when the company’s finite resources are focused on only the vital few initiatives necessary to accomplish its strategic intent.
It’s important to understand the difference between efficiency and effectiveness when deciding on your short list of strategic goals. Efficiency means doing things right, while effectiveness means doing the right things. Achieving strategic excellence rests on your ability to choose effective goals – i.e. doing the right things that will serve to take your company to the next level. Any goals that do not have this kind of broad-scale impact are not supporting strategic excellence, and in effect, are probably not strategic at all.
With your goals selected, the next steps will be to develop the tactics that will achieve them.
When it comes to reviewing and analysing the impact of your strategic excellence initiatives, V-MOST is one of the very best approaches to turn to. V-MOST will help you organise your activities so that they are in support of one another, ensuring that they are all headed in the same direction.
There are five key elements to the V-MOST process – Vision, Mission, Objectives, Strategies and Tactics.
Strategic excellence is achieved when all of the V-MOST components are aligned. The tool works from the top down, and is used to ensure that all of your organisation’s activities as it goes through change, are contributing to the overall Vision – i.e. working together towards the ideal future state of the company.
By conducting regular V-MOST analyses, you will be able to see whether there is strategic logic in everything the company is doing, and, if not, make the necessary adjustments accordingly.
The purpose of visual management is to improve the effectiveness of communication across the organisation as you implement your strategic excellence programme.
Visual aids and cues convey information quicker, more succinctly, and will invite more interest than if it was written down. Good visual management should give clear messages at a glance, will tell your people what actions need to be taken, and what effects those actions are having.
Since visual cues are more engaging and less likely to be overlooked (or even ignored) than written information, they also expose or highlight defects and problems more rapidly, allowing them to be addressed sooner.
Visual management is a key concept in Lean and continuous improvement methodologies. If something isn’t going as expected or problems are occurring, it’s important to make these shortcomings as apparent as possible – as quickly as possible – so they can be fixed.
While embarking on a change management initiative, systems and processes must be designed to allow for visual management – and the most effective visual management happens in real-time. As your strategy is put into effect, if a problem occurs, it needs to be immediately visible so that an immediate response can be made.
There are a number of visual management tools available – both physical and digital –that will help you make problems more visible so you can react to them quicker, thereby enabling you to achieve the agility required to realise ongoing strategic excellence.
Achieve strategic excellence with Renault-Nissan Consulting
The faster the business environment changes, the more agile your organisation needs to be to change with it. This requires you to develop a strategy for successful change management that will ensure your business is stronger, more stable and continuously improving.
At Renault-Nissan Consulting, we work with your organisation on a long-term basis so that successful change management and planned processes are put into practice. Using Lean Policy Deployment, V-MOST Strategy Deployment and Visual Management principles, we identify the changes required in your organisation to ensure it works more efficiently and effectively from top to bottom, and implement the right tools and methodologies to realise ongoing strategic excellence success.
With 28 years’ experience and 300 consultants working in a range of sectors, become more successful and more profitable with Renault-Nissan Consulting and reap the benefits of world-class strategic excellence. Get in touch today to find out more about our Consulting Services.