Given the pace of global competition, it’s not surprising that most business executives are worried that their companies are moving too slowly to keep a competitive edge. In a recent global survey of senior business leaders, The Forum Corp. found that 90 percent of respondents considered speed critical to their business success, but only 42 percent thought they were much faster than others in their industry.
Speed for speed’s sake is not the point. The goal is “strategic speed” — speed that contributes value both in the short and long term. The objective of strategic speed is to decrease time to value and increase value over time.
The speed-value crossover may occur in a number of ways. For example, consider the case of SunGard Availability Services, a software company that had grown by acquiring a number of other technology companies, each with its own distinct culture and approach to selling. Some sales teams had focused more on promoting the benefits of the technology and selling in a more transactional way, while others had aimed to serve as business consultants to their clients.
SunGard determined it could shorten its sales cycle and enhance customer service quality by taking a more unified approach. Improvement came from investing in training salespeople and managers and in using a common sales model and a set of consultative and planning skills so everyone spoke the same language. The result was not only an uptick in sales during the first year — which translated into decreased time to value — but increased collaboration and teamwork across the sales organization. This, in turn, enabled SunGard to meet ambitious sales goals year after year.
To better understand emerging speed scenarios and how companies across industries derive value from speed, Forum conducted case study reviews of companies that had successful strategy execution track records, including the software firm above, in addition to the global survey cited earlier.
All of these companies aimed to achieve strategic speed, but did so in different ways. Their strategic initiatives included acquiring and integrating other companies; developing a consistent customer service approach; reinvigorating their brands; expanding into different geographies; and creating corporate learning universities. Regardless of the business strategy, there were common elements that enabled them to achieve strategic speed.
Additionally, when we interviewed and surveyed managers who had implemented with speed, we found that their most effective actions often involved slowing down the pace, rather than admonishing people to go faster. That is, senior managers from “faster” companies paid more attention to creating a uniform understanding of the initiative and its importance; helped people prepare for their respective roles; ensured leadership alignment; and took time to share ideas and capture learned knowledge. “Slower” companies, in contrast, were more focused on getting projects staffed and launched quickly, abided by conventional roles, avoided raising issues, and immediately moved on to other activities when the project was completed.
The People Factors
Forum identified three critical factors for success in creating strategic speed: clarity, unity and agility. These three factors can be measured using a nine-item assessment to determine both strengths and weaknesses in a strategic initiative, as well as identify what learning executives can do to accelerate execution.
Clarity. Clarity is a shared, clear understanding of the situation and the direction the organization is heading. Effective leaders spend relatively little time seeking clarity on their own and a lot of time working with their employees to develop a clear picture together. To that end, clarity is achieved when an organization’s workforce can confidently answer the question, “Where are we going and why?” People understand the factors that form the basis of the strategy, such as external conditions and internal capabilities. And, more importantly, they understand what the strategy means for them — how they should act.
Too often, strategies are left vague. For example, it’s fine to say, “We’re going to be customer-focused,” but the strategy must translate this into action for the people in customer-facing roles. What should they actually do differently?
Unity. Unity is perhaps the least-appreciated factor of speed. When listing factors that deter speed, executives might cite a lack of clear direction, not enough urgency or excessive bureaucracy. But it’s often a lack of unity that undermines efforts to move quickly. Unity within an organization, and especially within teams, is critical to speed. Equally as important, however, is unity between the organization and its external stakeholders.
In business, collaboration is the main driver of unity. Collaboration occurs when people understand a common cause and are equipped with the necessary skills to make their contributions, projects and strategies successful. When, instead, the culture is one of internal competition, mistrust and turf wars — or simply an unawareness of what other groups are doing — projects and strategies fall apart.
Agility. Conventional wisdom might define agility as the quick response to opportunities that arise. Responding to opportunities is important, but Forum’s case studies suggest that agility is less a matter of continuously adapting one’s direction and more a matter of being open to different ways to achieve that direction. According to the research, people at faster companies were clear on their direction but did not stick rigidly to a plan for meeting their objectives. They maintained a bias for action rather than “analysis paralysis,” and they also detected when they were off course and made corrections rapidly. Their counterparts at slower companies tended to be less flexible in how they carried out the work, rarely broke from conventional roles and were less likely to challenge the plan.
Strategic Speed During Acquisition: A Case Study
In 2005, Informa, a U.K.-based company that provides publishing, conference and performance improvement services, had the opportunity to bid on IIR, another U.K.-based media company.
The acquisition was not part of a strategic plan, but rather arose unexpectedly when the privately held IIR was put up for sale by its owner. Informa saw great potential in the acquisition but needed to act quickly to make it work. The company was given five days to mull over the acquisition before other bids would be considered.
It would be a challenge, to say the least. Informa had only heard a basic presentation, had done no due diligence and had no access to IIR management. So the company moved quickly to create an acquisition team that included senior leaders, due diligence experts, financial analysts and legal advisors. The team set up a virtual “data room,” where they worked tirelessly to analyze and incorporate IIR data. The data room served as an information hub as they fanned out across the IIR offices to gather information. By the following Friday, the team had completed the initial work and the agreement was signed.
While crafting the acquisition deal in such a short time frame was challenging, the greater challenge was making the deal work — that is, ensuring that the combined company achieved value quickly. The Informa team created a 90-day integration plan that addressed a range of issues, from systems integration to marketing, and identified how businesses would be consolidated by region.
Peter Rigby, CEO of Informa, said the acquisition “felt like a merger rather than an acquisition, because we retained most of the managers as they were the best people for the job. We didn’t lose one good person.”
Rigby said he decided to allow the presidents of many of IIR’s business units to continue to run their businesses as they saw fit, which made the acquisition much less stressful and disruptive.
However, the IIR conference businesses had been assured by their former CEO that they would not be sold to Informa, their main competitor — and that is ultimately what happened. Rigby had to tread carefully to incorporate these groups into Informa. For the first 30 days, he visited every office worldwide to reassure people that jobs would be retained, convey the vision of the firm and persuade them to stay onboard and engaged.
Thanks to all these efforts, not only was there no significant decline in performance, but the former IIR units grew at a rate of more than 10 percent per year, reduced costs and met targets for return on capital invested.
Informa management identified the following teps as important in facilitating the acquisition:
- Making leadership accessible: The Informa senior leadership team traveled to the offices of the acquired business units to provide ample opportunity for people to meet and get comfortable with the new executive leaders, to understand the company’s direction, to raise questions or concerns, and to understand the implications and the benefits of the acquisition to them.
- Building a strong integration team: The integration team consisted of people who were expert in their roles and had solid track records. They followed a reliable process for the acquisition and used a planning framework and tools to help them stay organized and focused as a team and to communicate the plan throughout the company.
- Implementing the plan quickly: As Rigby put it, “In a people business, the less unsettled people are, the better.” The implementation team met with IIR business units soon after the acquisition and provided a clear plan for the integration — clarifying what would change, such as adopting common IT platforms, and what would remain the same, such as business units retaining their own brand identities.
- Focusing on people: The leadership team emphasized that the purpose of the acquisition was revenue growth, not cost cutting, and that each person played a critical role in the company’s success. They created an environment in which people felt they were treated with fairness and respect and where their contributions were valued.
Business leaders know the increasing importance of strategic speed to the success of their business, but have been frustrated in their ability to achieve it. CLOs can now use this latest research on the people factors behind speed to help them gain traction.
Tom Atkinson and Steve Barry are researchers at The Forum Corp., a global professional services firm. They are the authors of the white paper “Achieving Strategic Speed.” They can be reached at email@example.com.