What's the Right Initiative for Your Organization?

In this new [business] environment, with its ever intensifying battles for razor-thin advantages, almost any edge you can gain looks attractive. And the list of tools and methodologies an organization can use to improve is endless. These days the most popular initiatives are moving operations to low-cost regions, streamlining the supply chain and Six Sigma. These initiatives are being widely adopted because they aim squarely at the challenges so many companies face: reducing cost, and improving productivity and quality.

Other initiatives range from a variety of process improvements to analytical tools such as the Balanced Scorecard, which augments traditional financial measures with criteria for things such as customer satisfaction and business process effectiveness. Companies continue to devote considerable time to integrating information technology functions through . . . ERP [systems] and the acquisition of facilitating software.

Keeping in mind that you're as interested in conditioning your organization for dealing with change as you are in achieving specific improvements, we see a number of additional noteworthy initiatives coming down the road.

One is achieving uniform IT [systems] and software. Far too much money is being lost as companies try to cobble together different systems. Unifying them leads to enormous savings and productivity improvements. You might think this is strictly an IT issue rather than a driver of broad cultural adaptation, but it isn't. It takes enormous cooperation across the business for people to give up their familiar software and adapt to new systems. The same is true for adapting to outsourced computing power versus owning your own machines - something more companies are doing in order to increase flexibility and lower capital needs.

Another is keeping talent within the organization. Anything you can do to create more job freedom will yield real gains in morale and performance. The workplace keeps getting more demanding as companies ratchet up productivity, and leaders need to give more time and attention to mitigating the burdens. For example, managers need to be more creative in helping people find ways to divide work between office and home. This is particularly important for those with young children . . .

What's important is to pick the initiative that's right for your business. A lot of corporate energy is expended on initiatives and "improvements" because they're the formula du jour - the latest fad or buzz - concept. We're talking not just about the obvious misfires (remember quality circles and zero defects?), but about anything that's suddenly popular that may not necessarily be a top priority given your circumstances at the moment. "I saw a company with a great supply chain," a leader will say. "Let's put that in." Or, "We have to do Six Sigma because everybody else is." Often as not, the organizational energy and resources end up being wasted. When the next initiative comes along, people groan and say: "Here we go again."

The improvements you choose must be guided by the priorities in your business model. The critical areas are the operating strengths and weaknesses that affect the business's ability to generate cash earnings over time - things such as cost, productivity, profitable revenue growth, differentiation, speed and quality. For example, if you need to raise cash flow, look to things such as improving inventory turns or a process improvement that speeds the collection of receivables.

Whatever the choice, always be sure the initiative is something your people can handle. Remember that you're not only aiming for a specific improvement, but also training the organization for adaptation, and trying to build unity and alignment. If it takes an easy or uncomplicated task to get people ready, suppress your impatience and make sure you lay the groundwork.