The Rare Art Supply Chain of Getting Rapid Results

 This was the exercise where a strategic planning firm which specialised in using the template approach for business strategy had come in and guided the process of creating an operational plan masqueraded as corporate strategy for the next 2 years.

Another half of the time in this corporate retreat was devoted to team building exercises where the top 24 managers in the company got to know each other’s goals, ambitions, strengths, weaknesses and how to work with each other. My friend was extremely happy with the team building exercises, because for the first time since he joined the company five months ago, they had a heart-to heart talk with each other where everyone was really fired up to work as a single team, to create a corporate strategy and implement it.

On the other hand, the strategy by template exercise did not impress him much.

“Strategy By Template” approach rarely gets good results.

He felt they had missed some crucial inputs; the exercise should have been backed by a realistic data analysis; and that it should have challenged some of the common but flawed assumptions within the executive circle.

In fact, my friend showed me on his Kindle a paragraph he had highlighted from a highly acclaimed book – , Richard Rumelt’s Good Strategy/Bad Strategy: The difference and why it matters (pp. 58-59). Since then, I have bought this same book on Kindle, and found it to be of great value.

” Not miscalculation, bad strategy is the active avoidance of the hard work of crafting a good strategy. One common reason for choosing avoidance is the pain or difficulty of choice. When leaders are unwilling or unable to make choices among competing values and parties, bad strategy is the consequence. A second pathway to bad strategy is the siren song of template-style strategy— filling in the blanks with vision, mission, values, and strategies. This path offers a one-size-fits-all substitute for the hard work of analysis and coordinated action. A third pathway to bad strategy is New Thought— the belief that all you need to succeed is a positive mental attitude. There are other pathways to bad strategy, but these three are the most common. Understanding how and why they are taken should help you guide your footsteps elsewhere.

Impressed with my friend’s enthusiasm for the team building exercise, I asked him: how often do they have to do something similar in order to retain the collaborative atmosphere within the company?

He guessed that probably no more than once a year would be necessary to really bring everybody back into a team mode, where they were all enthusiastic participants.

People often have high hopes from team building exercises.

When I caught up with the same executive after a few months, I asked how the team collaboration was going. And he was exasperated.

So I asked him: “Has the enthusiasm waned?”

He said: “No, it hasn’t waned. However, while we are all very enthusiastic about working with each other and we all have extremely good intentions of collaborating and passing on the information to each other and not hoarding knowledge, we don’t quite seem to jell with each other.”

“We are spending a lot of money on getting culture right now. We have had culture surveys within the company, we have had numerous sessions on leadership and cultural adjustments as well as several team building exercises on Friday afternoons. Everyone is fired up, but somehow things don’t seem to jell.”

Hope is not enough…

“We all agree that we will put our people first. Our leadership very enthusiastically endorsed a benevolent culture within the company and our people are putting our customers first, there is no doubt about that either. Yet somehow all these good intentions, collaborative attitudes, leadership attributes and helpful cultural mores are not translating into profits. We don’t know what to do.”

I said: “Perhaps, these things take time to translate into profits or into concrete results.”

And my friend seemed to think that there was probably a missing ingredient here.

He explained to me that good intentions by themselves would not translate into good results simply by trial and error.

Good methods are equally important.

I concurred and we started talking about good methods.

We came up with two by two metrics with intentions on the vertical axis and methods on the horizontal. And four squares which combined to form good intentions and good methods into good results which was the top right square. And bad intentions and bad methods leading to abysmal results which was the bottom left square.

The other two squares were average as elsewhere: good intentions met with bad methods or good methods met with bad intentions. Next, we started putting a variety of methods and intentions into these squares to see what really created the results and came up with a diagram as shown below:

No doubt, the good intentions do not translate into good results automatically. It would be a hugely erroneous assumption that just because people want to collaborate and work with each other, and they have good leadership skills, they have good communication skills, they are willing to share information, they are willing to take on extra tasks, they are willing to help and smile at the customers; all these will automatically translate into good profits.

Similarly, good methods: no matter how good your IT systems are, how good your processes are, how good your supply chain is, how good your collaborative mechanisms are,  if the intentions are bad, they are not going to translate into good results; because at some stage bad intentions will come and kill the effectiveness of the method itself.

From good intentions…

So what are some of the things that create good intentions?

Obviously, the kind of team building exercise that my friend was describing was an extremely powerful tool to create good intentions within the company.

But that is not the only way good intentions can start from top management team. Every good leader instinctively knows how to get his team on the same page working their hardest, putting in their best effort, contributing their best possible effort.

Many companies are now focusing quite deeply on the corporate culture. Corporate psychologists, organizational design specialists and even corporate mindfulness experts have all stepped in and done extensive work on coaching, mentoring and guiding the executives to align their intentions with the corporate strategy.

Yes, I know there is still a lot of hypocrisy and yes, there is still a lot of cynicism lying beneath some of these new age techniques, where a number of executives will go through the exercises with a half-cynical mind-set buried underneath a veneer of smiling face.

Yet, I believe just the motions of going through these exercises change the physiology which eventually does start changing the psychology as a result.

However, I agree with my friend that despite all these good intentions, cultural adjustments, team building exercises, leadership trainings, corporate mindfulness exercises, corporate welfare and other means of fostering good intentions within the company, the results are still mixed.

…To good results

When we did our longitudinal study of more than 1,200 top corporations in the world over the period of six years (2007-2013), we noticed that among the top 50 corporations there were a number of surprises.

Several companies that were not known, either for their good intentions or for their attention to corporate culture, were performing extremely well simply because they married the good intentions with good methods.

So what are the good methods that we are talking about here?

Obviously, good methods keep developing every few years.

At one stage, not too long ago, it was a revelation in marketing when somebody thought: why do we have to market the same way every customer? Why don’t we segment the markets and customise the marketing message to each and every market segment? That was in the late 70s.

Since then, good methods have developed at a very rapid pace.

In the 1980’s Michael Porter wrote his book on competitive advantage and created a stir with three simple strategies of cost leadership, of differentiation and niche strategies.

But since then companies have learned to create a supply chain and then to create a differentiated supply chain for each one of the market segments.

And then further on, to create a supply network or a business network in such a way that companies are now working with other companies to collaboratively create products faster at a more profitable rate, to meet the need of their customers.

I have no doubt that good methods will continue to evolve in future.

If you want to read more about good methods, here are a few articles that you can browse at your leisure.

How to defend against boycott with a strong business network

A Better Method To Outsource And Win

How SUPPLY CHAIN 3.0 Can Lead To Tangible Business Benefits (Part 6 of 6)