Does focused improvement really work? In short, the answer is ‘no’ but it is one of the most adopted practices by executives in business today. Focused improvement is a skill and practices applied for business turnarounds and not for successful businesses.
Focused improvement is where a company focuses its effort on improving one singular area of their business whilst leaving other areas to continue operating the status quo. There may be some minor adjustments being made by sectional managers in those other areas, but the total focus of the company is on the improvement of one singular area. That is the lead project and most often it is related to financial management or sales to regenerate cash flow-growth.
The practice of focused improvement works in conflict with a company’s overall performance and can be described as reactionary management. If it is occurring outside of a turnaround, then the executive is not stepping back far enough from the business to see the full landscape of requirements; they are being dragged down to a level that focuses on one singular area. This practice unbalances the overall value chain and momentum within a company shifting it into a rocking motion. A rocking motion whereas one area improves, another crumbles, and the focus then moves to that area. The rocking motion is replicated and then people focus on the next crumbling area. Focused improvement is about taking giant leaps in one area whilst accepting others to stay in the status quo.
As a turnaround expert for sales organisations, I have seen this many times over where a company has major issues in their sales area and seek immediate resolutions to remedy cash flow and optimally growth. All-time and effort are applied to the sales area and in just a few short months, the cash flow problem is solved only to find their operations or other areas have now crumbled with the new dynamics created from the sales improvement. I also see the other issue where the focus has been elsewhere in the business and the cash flow has crumbled through the lack of focus.
Discussing this topic with some business segment recovery specialists last week, it was interesting that we all had similar experiences; just coming from our own specialist area. Each of us was called in to remedy issues that were related to major shifts for focused improvements being required in the business. Production had failed, finance had failed, sales had failed, or logistics had failed. Each area a catalyst in its own right. We discussed the underlying issues behind this and the catalysts to those problems.
Most companies had a mantra of improvement and looked to their management team to make those improvements. Some management had the skill to make changes and do very well, others make no changes and others set about establishing the company to their own personal comfort of skills and ability rather than the business needs. Most operated to their personal interpretation of requirements based on personal experience, and very few stopped and looked at best practice. Only a very number even studied current best practice. Again, they were not stepping back far enough from the business unit to see the full landscape of requirements; they are being dragged down to a level that focuses on some points within it.
Those managers are working on their projects are typically flying under the radar of a CEO as they are deemed as ‘doing their job’. The subtle differences between the changes and capability of the managers start to filter to other areas of the business and the rocking starts to happen. Over a period of time, you have a consistent rocking motion in the business as the executive focus shifts from one problem to the next. That momentum increases and you are faced with a turnaround. Whichever stands out the most gets the attention first. It’s a type of fire-fighting at the CEO level.
Successful companies are led by CEOs that step back far enough to see the full landscape of what is required in the business and then work to best practice standards within companywide continuous improvement. They ensure each and every part of the business is locked into a continuous improvement programme to best practice standards and is moving forward in all areas. The status quo in an area is not an option. The movement forward is in rhythm or at a pace greater than the market to ensure they stay ahead. They seek independent reviews to create road maps forward and avoid individual experience only dictating the company’s progression.
Successful CEOs understand that growth and profit are managed with equal value. Profit through cost-cutting or process improvement without growth is pointless. The company is going backward through the status quo in the sales area. Growth without process improvement and cost management is pointless as growth can be destructive or expensive to the business if not managed correctly across the business.
If your company does have a continuous improvement plan to best practice standards that engage all areas of the business simultaneously, including sales, your competitors could be outstripping you in revenue and profitability by 50-80% according to research conducted by McKinsey & Company.
If your company believes in continuous improvement and sales excellence as part of that process, we can review your company for best practice and develop your improvement plan. Contact us today to discuss your specific business goals.
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© 2013 Adele Crane. All rights reserved.