STEPS TO DEVELOPING A WORLD-CLASS BUSINESS
Becoming a world-class business is not a simple process, and requires effort and commitment from the entire organization. Developing a strategy is essential if world-class status is to be achieved.
World-class is a concept difficult to define. However, an acceptable working definition is that a world-class company should be able to compete with any other organization in its chosen markets and aspire to world-beating standards in every department or division. World-class also embraces the practice of, and excellence in techniques such as Total Quality Management, continuous improvement, customer service, international benchmarking, flexible working, and training. World-class organizations also accept the necessity for continuous change.
Things to Do
- Consider Outside Influence
Identify the factors in the external environment that call for a strategic response from your business. These can be grouped under main headings such as economic factors, demographic trends, environmental factors, technology, suppliers, and competition.
- Establish the World-class Vision
Determine the core business of your organization – that at which it should excel. Top management should make a vision of excellence clear in a brief statement that is impossible to misinterpret. Besides helping form this vision, the chief executive’s role is to clarify the message, push forward change, and champion ideas and capabilities that will beat competitors.
- Analyze Your Current Position
Benchmark your organization against your competitors as far as you can. This can be very difficult, as much of the necessary information may not be available. However, organizations exist that can help in this process.
Consider the following areas:
- Your product
- Its price
- Its availability
- Your customer service
- Your policy for continuous improvement
- Your costs
- Your market share
Do you match your competitors in these areas, or is your organization well below or well above them? Don’t limit this measure to competitors in your own country: compare yourself against world-wide competition. Identify which organizations are excellent within these areas and what makes them the best – in order to beat them. Assess where you stand in customers’ eyes. What is their perception of your status compared with the reputation of your competitors?
- Focus on Core Capabilities
From the analysis of the external environment, the core business of the organization, and the standing of competitors, draw up a list of the core capabilities of your organization that will enable you to compete in world markets. Core capabilities include:
- Product knowledge/service skills
- Market skills
- Innovation/research capacity
- Financial planning and control
- Human resource capabilities (motivation as well as skills). Determine which of these core capabilities need extra focus and resource their development.
- 5. Build a Corporate Strategy
Focus on achieving better products or services, better factories or service operations, better organization, better management, and better information and communication.
Ask yourself questions such as:
- Have the key business processes been defined and understood?
- Has a quality or customer focus ethic been established throughout the organization?
- Are quality and reliability of products and services measured?
- Are the key performance measures reviewed? Are they improving?
- Are everyone in the organization informed of results and developments?
- Is customer satisfaction monitored on a regular basis?
- Are employees multi-skilled? Are they flexible and willing to adapt?
- Do your employees have continuing personal development plans in place?
- How are creativity and innovation nurtured?
- Does it flow in all directions?
- Set High Targets for the Organization
Set imaginative and ambitious targets by identifying where you intend to be in one, three, and five years. If targets are easily achievable there is a danger that you will rest on your laurels. Being satisfied with these improvements means never becoming world-class.
- Make certain that the organizational targets are translated into divisional and departmental goals that are incorporated into individual objectives.
- Get staff into the habit of setting their targets – they will usually be higher than those you would set them yourself.
- Develop Simple Performance Measures
Measurement processes, as simple and as straightforward as possible, allow you to monitor what is happening and report on progress continuously. Performance measures should be relevant to your aims: concentrate on customer service, time reduction, and quality, and remember that within a world-class company, financial measures are not the most important performance measure for achieving your objectives.
- Adopt Straightforward Reporting Procedures
Complex reports need a lot of preparation and take time to understand: they tend to be produced monthly at best. World-class companies need to be able to act immediately on the results of performance measurements; if a report takes three weeks to generate, then this three-week lead time will impact on continuous improvement. Adopt the one-page measurement reporting rule.
- Communicate Your Progress
Nothing inspires and motivates like success. Keep the employees fully informed of the organization’s progress (get your staff to produce their own progress charts if possible). By adopting simple measurement techniques, results can be given to employees on a daily basis, preferably in a graphic or pictorial form. Progress reports can be an inspirational form of communication: poor communication is responsible for many corporate failures and shortcomings.
- Revise Your Performance Targets
As your organization raises its performance in the areas you have defined, identify new areas to be improved. As areas improve, their reports should reduce to exception reporting (reports showing only those items that deviate from plan or the established norm), allowing the organization to focus on new needs.
- Assess Effectiveness
Becoming world-class, though an achievement, is not the end of the process. To be a world-class company, you must continue to benchmark yourself against your competitors regularly. If you fail to do this, your organization will slip from the position it has achieved and be replaced by another. Staying world-class is just as hard as becoming world-class, if not harder.
DOS AND DON’TS
- Continue to set challenging targets for your company.
- Remain flexible and adaptable – within limits.
- Have a bias toward action and controlled risk.
- Focus on continuous improvement.
- Keep a constant eye on major competitors.
- Be sensitive to the conditions, context, and methods of local cultures.
- Respect the importance of measures and reports.
- Don’t become complacent once you achieve world-class status.
- Don’t attempt to impose your usual corporate practices across borders.
- Do you know the key performers in your industry?
- What approaches toward guaranteeing and measuring customer satisfaction do you have in place?
- Do you have the means of measuring the quality of your organization’s performance?