The first part of this series discussed the tools and guidelines which hopefully helped you determine your Decisive Competitive Edge (DCE). Now all you need to do is get there!
Step 3: How do I achieve my DCE?
You are now at the point where you will develop the strategy and tactics to actually make the necessary changes. In his presentation1, Eli Schragenheim stresses the importance of defining Strategy (capital S: the overall direction of the business) as a future state the organization strives to be.
It is not “how things are currently done”, as the business should continually be improving itself and thus always have a higher goal it is striving towards. But neither should Strategy be an abstract, lofty “vision” as they can often be seen in shareholder brochures or on the walls of HQ lobbies. A Strategy is a concrete, achievable goal that you will methodically work towards.
It is important not to rush on the way. Your first step when developing the S&T consists of checking whether your organization in its current state is ready to develop the DCE. Here are some of the questions you should be asking yourself:
- Is your business stable and does it have the necessary capacities to implement the changes?
- What is its financial status? Some level of uncertainty is inevitable with big initiatives: will your business be able to weather this?
- Does the development of your DCE have full management support? Does your business have the right people on board for every stage of the implementation?
If any one of these are not in place, decide what is missing and the steps you need to take to close the gaps. Even the best improvement initiative can fail if the starting circumstances aren’t right.
The risk of the management constraint
Overloading management is an all too frequent mistake that will not only cause the initiative to fail, but also erode support for further improvement initiatives. It puts undue stress on your management force and teaches them that “change never works”. So it is very important not to take on more than you can manage. Never try to achieve several DCE at the same time – this loss of focus will have only negative consequences.
Ensure, too, that you have the right people on board for the planned changes. This is a vital part of careful preparation: will you need new skills to achieve the DCE? Does your current management have these skills or can they acquire them? Will you need to expand capacities further down the line? Make sure to begin this process on time to avoid getting held up at a crucial time!
Measuring progress, recognizing threats
It is essential for every major initiative that there are solid, continuous monitoring mechanisms in place, both to measure progress (or lack of!) and to identify potential threats in the environment (internal and external) and take timely counter-measures. This requires a robust procedure:
- Determine the cause
- Draw your conclusion(s)
- Take appropriate measures
Ensure that these mechanisms form an integral part of your operations from the beginning. This article explains how software can be used for simple and effective monitoring of your S&T.
Defining risk and including buffers
It is inevitable that some risk remains even with the most thoroughly prepared change initiative: complete certainty is impossible. It is therefore important that you define from the start where “uncertainty” ends and “risk” begins. Eli Schragenheim defines risk as “a reasonable probability for disaster”, with a disaster being damage the business cannot (or will not) withstand.
Bear in mind that while uncertainty cannot be fully eliminated, it can turn to your advantage as well as to your disadvantage. Nevertheless, you need to prepare for it, which you do with built in safeties:
- Careful planning and test runs or pilot projects reduce any risk to a minimum.
- Make sure you always have a “plan B” in your pocket: a less impressive, but safer idea that will still provide some growth.
- Include safety buffers (extra time, money, capacities etc.) in your planning: these give you some leeway to achieve your goals even when the unexpected happens.
Step 4: I’m ready, can I get started?
Once you are sure that your business is ready to take on the challenge, it is time to turn an ambitious (but still achievable!) goal into a concrete change initiative which can be implemented step by step. The TOC Strategy and Tactic Tree provides you with the necessary framework, and this article explains in detail how to develop and use it. Each goal is sub-divided into increasingly concrete steps going down the branches of the tree, which you can then systematically work through during implementation to make your way back up towards the overarching goal.
Make sure to always keep a vigilant eye on your progress so that you can change course if it becomes necessary. Strategies and tactics are not set in stone and can be adapted if the circumstances require it – and they likely will. You’ll find that even with the most thorough and careful market analysis and preparation, something unexpected will come up and try to throw you off course. Luckily this will not faze you if your business was stable to begin with and you have built sufficient safety buffers into your plan.
No end in sightOnce you have worked your way through each step of your S&T and reached your goal, you can pat yourself on the back: you have now given your business the decisive competitive edge it needs for sustained growth.
“How do you mean, growth? I thought I had reached my DCE, isn’t that enough?” Hopefully this won’t be your reaction – as it would be a fatal mistake. If your business wants stability and long term success, it must never stand still. Do not wait for your competition to catch up with you, as eventually it will. Use your position to develop further and become an even better, even stronger business. Improvement is a never-ending cycle – but with a robust, well-conceived business strategy, you will always be a few steps ahead of your competition.
1:Introduction to Strategy – Much more than the S&T, Eli Schragenheim 2015 TOCICO Webinar