Archive for August, 2009

Creating A “Breaking Point” Competitive Advantage

Tuesday, August 25th, 2009

In my previous post I talked about improving your operation’s ‘breaking point’; the point at which your operations are overwhelmed and you can no longer meet your previously established standards and norms. But the concept can be taken further. Some businesses create competitive advantage by establishing a breaking point that is greater than their rivals’.

There are two ways in this can be achieved:

  1. More capacity. For retailers a key bottleneck can be the checkout process. If there are too few tills open, queues quickly build up and new customers entering the store may simply see the queue, turn on their heels and leave the store. Grocers have overcome this challenge by introducing more and more checkouts. If you want really low prices you go to Aldi or Lidl, but you may need to put up with some queues. If you want pretty low prices and greater speed, you visit Tesco, Asda or Sainsbury’s, which have invested in more checkouts per customer visit. Tesco have gone further than their rivals by introducing the ‘one in front’ promise, whereby they open up a spare checkout if there is more than one shopper in front of you in the queue. By improving their checkout ‘breaking point’ they gained a clear sources of competitive advantage.
  2. Faster processes. Faster processes allow you to deal with more units in a given time period, again increasing your breaking point.  For example, Domino’s have built their business on a customer service promise of delivery within 30 minutes or you get your pizza for free. Underpinning this promise is a set of processes that allow franchisees to consistently meet this target, even in high demand conditions.

Understanding and improving your company’s ‘Breaking Point’ is not an academic exercise; it can create meaningful competitive advantage for many businesses, particularly those focused on a strategy of operational excellence.  What ways could your business gain on your competitors by improving and exploiting your breaking point?

© Stuart Cross 2009. All rights reserved.

Testing Your Operations To Breaking Point

Wednesday, August 19th, 2009

When Boeing and other aeroplane manufacturers are developing new aircraft they test them literally to destruction. This ensures that the planes will still operate effectively in the most extreme situations.

It is a concept that I think should be applied to business operations. Too often the service to customers is designed for average, not peak levels of demand. Consequently, as demand increases from a steady breeze to a Force 8 or 9, never mind a full-blown hurricane, these businesses become unable to cope.

Last year, for example, I did some work with the valet parking service of a US hotel chain. Their approach worked fine in normal conditions but fell apart during their peak trade hours.

Between 12 and 2pm, cars started backing up down the driveway, guests were left waiting in line for their cars to be returned, and both customers and the valet team alike felt frustrated, rushed and hassled.

A few simple process and accountability changes quickly overcame the worst of these problems, but I am currently on holiday in Greece and am seeing similar symptoms.

One of the resort’s key selling points is the availability of dinghies and windsurf boards for use by the guests. The trouble is that, because of “unusually” high demand, too few of them are available when required.

The hotel is geared up for ‘average’ not ‘peak’ demand. But in ‘peak’ season people pay ‘peak’ prices and expect ‘peak’ service. So, unsurprisingly, similar feelings of frustration and general hassle are everywhere.

As the upturn continues to gather pace over the coming months it Is likely that your operations, which may currently enjoy some spare capacity, will be put under increasing pressure.

Take a tip from Boeing. Now is the time to test your operations to breaking point and to find new ways to help your teams and your systems work more effectively and efficiently in high-demand conditions.

© Stuart Cross 2009. All rights reserved.

Why You Should Avoid Quick Wins

Monday, August 17th, 2009

“Most project teams seek to deliver ‘quick wins’ as a way of building momentum on a project. In this podcast Stuart explains why, in the vast majority of cases, this is a flawed approach, and how you should really build pace, momentum and results.”

 

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What Kind Of Change Leader Are You? (Version 2.0)

Monday, August 17th, 2009

change-leader-types-2In this previous post I set out four types of change leaders. I now realise that the definitions were unhelpful

In particular, the post suggested that some leaders don’t lead change. I think this is false. All business leaders will lead change. The differences lie in their approach to change (are they proactive and persistent, or reactive and ad hoc?) and their focus when leading change (is it about removing problems or about raising the bar and driving new growth?).

Of course, we are all a mixture of these generic types, but in my experience most managers have a default both in their approach and their focus. This creates four types of change leader:

  1. Fire Fighter. This change leader responds to problems as they arise. Often they will seek to deal with symptoms, rather than root causes, and do little to put in place corrective, preventative or contingent actions that will eliminate the problem from reoccurring. Working in a team led by a Fire Fighter can be exhausting and demoralising, as team members know that all their time is focused on responding to real time events and not creating the space and time for them to really improve performance.
  2. Process Perfectionist. Unlike the Fire Fighter, this change leader is proactive and systematic, although she is still focused on solving problems, rather than bar. “Get it right first time” is the mantra of the Process Perfectionist, and  she ensures that root causes are attacked, and both preventative and contingent actions are put in place to reduce the likelihood and impact of reoccurrence. This leader can be highly effective in an operational and process role, such as a manufacturing plant or systems manager, but can block momentum and create frustration in more innovation-focused roles and organisations.
  3. Glory Or Bust. This leader is focused on innovation, rather than problem solving. Minor problems are tolerated, and attention is, instead, focused on raising the bar and finding ways to drive new growth. However, as with the Fire Fighter, the Glory Or Bust leader deals with change in an ad hoc, hit and miss manner. If the first version of the new growth project fails, they will give up and turn their attention elsewhere. Their team can become cynical, knowing that nothing is likely to stick and their commitment will also wane in the knowledge that sustained follow-through is unlikely.
  4. Systematic Innovator. This change leader is permanently raising the bar and finding new ways to deliver step changes in performance. Although far less concerned than the Process Perfectionist in ensuring that processes always run smoothly, they can create major leaps forward in developing new products and services, business models and organisational approaches. Ideally suited to marketing and business development, the Systematic Innovator can create frustration and tension in more operational roles, where many team members are focused ensuring effective order and quality of existing systems and processes.

So, which type of change leader are you and which do you wish to be?

© Stuart Cross 2009. All Rights Reserved

What Kind Of Change Leader Are You?

Thursday, August 13th, 2009

change-leader-types1There are many factors that distinguish successful change leaders from including communication style, personal management capabilities, influencing skills and commercial acumen.

Two factors, however, help define the style and likely success rate of change leaders. These are (1) the level of ambition they set for their organisation, and (2) their persistence and perseverance in meeting that ambition.

Using these two factors, there are four types of change leader, (see the chart) that emerge. Which kind  are you?

  1. Status Quo Leaders. These managers lack both ambition and perseverance. They don’t want to rock the boat and put their head above the parapet. They may well implement what others demand, but are highly unlikely to set out and deliver their own agenda. Pros: You know what they’re up to. Cons: It’s not very much.
  2. Glory or Bust Leaders. These managers have high ambition, but lack perseverance. They are after ‘silver bullet’ solutions that can quickly deliver major change. If the relevant change programme fails to deliver impressive results quickly these managers can lose interest, and will look elsewhere for new opportunities. Pros: Possibility of major and rapid improvement. Cons: May confuse and exhaust the organisation in the process of flitting from one strategic initiative to another.
  3. Incremental Leaders. These managers may not raise the bar too high, but they follow through on their promises and will deliver in the end. Pros: Ability to continuously improve existing operations. Cons: May fail to identify breakthrough change opportunities.
  4. Breakthrough Leaders. These managers set the bar high for their teams, but don’t expect to get there straight away. They understand that it may take many versions before the right solution is discovered and will stick with their objective until it is achieved. Pros: Most likely to deliver major performance improvement. Cons: May lose the support of other key stakeholders if results take too long to be delivered.

© Stuart Cross 2009. All rights reserved.

The McSecrets Of McSuccess

Tuesday, August 11th, 2009

Click on the link to read my article, The McSecrets of McSuccess, which has just been posted on BNET.

© Stuart Cross 2009. All rights reserved.

What Is The Point Of Your Business?

Thursday, August 6th, 2009

The Real Performance Curve

Thursday, August 6th, 2009

performance-curveI see it with my coaching clients as they develop new skills, I see it with my eldest son as he avoids practicing the piano, and I see it with myself as I struggle to stick to a reasonable exercise regime.

It’s the disappointment that comes from false expectations of success.

We expect to develop a new skill or capability in the same way that a car accelerates from the traffic lights, gliding away effortlessly and quickly picking up speed.

But personal and organisational development is not like this. In his excellent small book, Mastery, George Leonard explains that the mastery curve is a series of plateaus interjected with small bursts of progress, not a smooth upward-facing slope.

Developing new capabilities is as arduous as it is exciting, and, as Leonard explains, the key to success is to learn to love the plateaus - those long periods of limited performance improvement that pave the way to eventual success.

Persistence and discipline are the real keys to great results, as much as, if not more than, natural talent. As Woody Allen once famously said, 80% of success is showing up.

Are you enjoying the plateaus of capability development or are you being let down by your expectations of instant success?

© Stuart Cross 2009. All rights reserved.

The Poolside Development Review

Tuesday, August 4th, 2009

Click on the link to read my article, The Poolside Development Review, which has just been posted on BNET.

© Stuart Cross 2009. All rights reserved.

The Three Fundamentals of Sustainable Profit Growth

Monday, August 3rd, 2009

When you boil it down, sustainable profit growth is driven by these three factors:

  • Operating Excellence. A proposition only has value for a customer once it can be delivered time and time again. Creating and executing a way to make this happen at an affordable cost is, perhaps, less glamorous than creating the offer in the first place but, in reality, is what will bring in the money.
  • Distinctiveness.  Successful companies are more than operationally focused; they are also distinctive. They have an instantly recognisable brand and target their offer on those customer groups most likely to react positively to their proposition.
  • Agility. As consumer tastes, technology and the external environment changes, successful companies evolve to meet the new needs and realities. Nothing fails like success and the winners find ways to continuously raise the bar, innovate and adapt.

The leader’s job is to create an organisation that excels on all three attributes. The big point, though, is that corporate success requires achievement on all three dimensions. Unlike the Meatloaf song, two out of three is not good enough and only position 4 on the chart leads to sustained success.

the-three-circles-of-success4

  1. Imprisoned by past success. This company may have a distinctive proposition (or at least had one in the past) and can operate effectively, but its lack of agility means that performance declines over time as it fails to evolve its business to new external realities. Recent examples: Kodak, The Gap, Woolworths.
  2. Unable to keep your promises. A business that has a clear and distinctive proposition and has the agility to adapt its offer, but which is insufficiently focused on its operational effectiveness, will lose customers as it fails to live up to its reputation or its desired brand position. Recent examples: Starbucks, Rentokil Initial.
  3. Lost in the crowd. A company that operates effectively and is agile enough to try new things, but which is insufficiently distinctive, will fail to generate clear advantages or deliver superior profits. As a consequence they may simply fade away or be acquired by a competitor. Recent examples: Somerfield, bmibaby, Superdrug.
  4. Success Sweet Spot. These companies manage – for a sustained period – to combine all three attributes and deliver superior returns and profit growth. Recent examples: McDonalds, Ryanair, Apple.

Where is your company on this chart and what steps do you need to take to reach and maintain position #4?

© Stuart Cross 2009. All rights reserved.