It’s a conversation that transcends industry boundaries. I’ve had it with financial energy companies, services leaders, manufacturing operations teams and consumer food firms.
In fact, it’s one of the most vexing problems that face P&L leaders: with all the potential ways to apply resources to their plans, how do they best balance growth investments with sustaining activities? There is immense pressure to use the budget template from last year with a few nips and tucks.
We know we need to have budgets and traceable metrics for those investments, yet no matter how hard we lean into the plan, there never seems to be certainty. And there’s always that nagging doubt that we’ve somehow missed the mark.
Why? The certainty we stand on in our businesses today is always in the rearview mirror. In that history we find both the seeds of growth as well as decline. If we don’t alter our course we will wind up where we are heading, and to quote Rita McGrath, that is a place of temporary advantage.
When it comes to transformational change that leads to growth, it becomes even more interesting, as we know from Conway’s Law that a firm is destined to produce exactly what it’s organized to deliver. If we don’t change the organization, nothing new will come out. In short, if we don’t change what we invest in and how the team that spends the money is put together, we’ll have a very expensive circle where we arrive back at the same point.
This unintentional journey plays out every day in firms. It’s a big part of the 12 percent success factor that plagues new initiatives (link here).
The Three Areas That Lead to Success
Knowing this, how can we then take definitive action and enjoy a higher success rate?
For the past few weeks we’ve been working through the nine elements that are essential to move the needle. This is the third article in a series of three that have focused on developing the right project, putting the right team in place and (in today’s article) creating the right plan. (You’ll find the other two articles here and here).
The three focus areas for plans that succeed are Acceleration, Orchestration and Segmentation. Let’s unpack these one at a time.
#1 Acceleration
What it is: Every firm has its own cadence, or its “normal” speed. Acceleration means that transformation programs need to move much more quickly, at a speed that is at least twice as fast as the “core processes.” For instance, if the normal cycle is to complete the field research for a product specification in 60 days, a breakout team needs to get it done inside of 30 days ( typically targeting 20).
Why it’s imperative: The window of management’s attention, funding and aircover for growth is remarkably short. One bad quarter or negative event by a key customer and growth funding can dry up overnight. Your growth program’s survival depends on moving quickly.
How to get it: Sponsors need to set the expectation and the team leader needs to be an “outside the box” thinker. Block out the macro and micro timelines and determine precisely what needs to be accomplished to prove that the product or service needs to exist. Use a spiral approach to deliverables – i.e., set tough early completion milestones so that you have time to repeat the activity and still meet deadlines.
#2: Orchestration
What it is: If you’ve ever heard great music that was lead by a skilled conductor, you’ve heard melody lines seamlessly passed back and forth across the orchestra. Great growth programs are set up in the same way – to allow groups that usually don’t work well together to seamlessly hand off.
Why it’s imperative: The single biggest black hole projects drop into is caused by siloed teams that put the brakes on promising work by not taking the baton at the handoff. Once dropped it is very hard to restore momentum around a project or initiative.
How to get it: It takes two tools to provide insight and foundation to make these handoffs occur. First, we need to develop awareness and strategy for the different mindsets, communication styles and expectations of our teammates (see link here). Second, we need to have a process that establishes clarity and pulls insights forward so the team has them before they get to the handoff (see STRIDE approach here).
#3: Segmentation
What it is: We need to provide only enough budget to get to the next milestone. CFO’s will know this as “tranche’ing.” This will be hard to do since most firms run on an annual budget cycle.
Why it’s imperative: The annual budget approach to funding growth projects is not nearly flexible enough. Each program needs to be reviewed frequently, with funding connected to de-risking and learning.
How to get it: Have your financial officer set aside funding specifically to be spent on growth initiatives. Set up governance that reviews programs at least twice annually and adjusts funding appropriately. Work quickly on incremental line item requests brought forward by the team – don’t force them to wait for a quarterly review.
When I get a chance to sit with leaders who are moving their firms on to great new platforms and markets, I’m always struck by the hands-on work they do to assure themselves that they are applying resources at the right point for the highest leverage. Using the three principles above (in concert with the six described in the previous articles) will put your resources on track for big wins.
The principles I’ve outlined here have been applied to firms ranging from regional distributors to global multi-billion dollar giants. In each case we’ve been able to get resources applied in a more differential way that has accelerated results and preserved resources for the best outcomes.
If you’d like to talk about the deeper work of doing new things in larger, more complex firms, we should connect. Send me a note at scott@scottpropp.com and ask to get more articles like this delivered weekly.
I’m also always happy to discuss projects and ideas. Feel free to set an appointment using this link or please give me a call at 847-651-1014.
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