In difficult, turbulent times how do you keep a focus on your longer-term objectives? Many of the business leaders I work with find it relatively easy to identify and develop strategic visions for their company. For them, the difficulty comes in translating these ambitions into immediate results.
Last week, for example, I was working with an executive team to create practical strategies to deliver a challenging three-year performance goal. Despite setting the goal a year ago, economic and trading pressures meant they had failed to make any meaningful progress. As with many other businesses, they had become caught in the trap between their long-term aspirations and their need for short-term success.
So how can you make the leap from short-term tactical actions to long-term growth? Here are five practical approaches that can help:
- Establish medium-term themes. As part of their 1990’s turnaround the Asda executive established six areas of focus for ongoing investment: Truly different stores; Offering 5-10% better value; Stunning fresh food from craftsmen; 25% unmatchable mix; A serious clothing offer; and Sold and served with personality. These areas of focus – called the ‘formula for growth’ – remained in place through to Asda’s purchase by Wal-Mart in 1999 and helped managers align their short-term actions with their bigger, longer-term goals
- Focus on your key drivers of value. Amazon’s executive team have agreed three drivers which they believe will not change in the midst of the turmoil of today’s business environment: range choice, low prices and fast delivery. By focusing on these drivers Amazon has developed innovative new services, such as the Marketplace, Amazon Prime and Amazon Fresh.
- Take a stepping-stone approach to growth. Don’t try to do everything at once. Instead, identify one or two practical moves that will take you forward now, and then repeat with further initiatives down the line. At one retail client of mine, the executive team developed an ambitious goal of increasing market share from 25% to 33% over a five year period. The team developed many ideas to help them achieve their goal, but, importantly, didn’t seek to do everything at once. In the first year, they overhauled their product range and improved their on-line offer. Once this was done, the company developed a new loyalty offer before focusing on improving the shopping environment and experience. This stepping-stone approach not only created focus but it helped build the support of their managers and operating teams as they sought to balance involvement in the delivery of the strategy with their daily operational tasks.
- Keep something up your sleeve. According to Jim Collins’ book, Good to Great, Abbot industries delivered short-term results and invested for longer-term growth by establishing internal targets far in excess of publicly stated performance goals. Depending on performance, management then used some of the ‘extra’ profits to fund new growth initiatives.
- Raise the importance of non-financial measures. Financial metrics measure past performance; non-financial KPI’s can act as an indicator of future success. For example, at Reckitt Benckiser innovation is management’s key focus for growth, and so executives pay attention to the percentage of sales from new products.
Which of these five strategies could help your business align your short term actions with your longer term ambitions and ensure that you accelerate growth?
© Stuart Cross 2016. All rights reserved.