This articles focuses on implementing four major changes to your organisation in order to enjoy long term growth.
Improve Accountability by Setting Proper Reporting Lines
An important element in a company when it begins to see growth prospects is transitioning the decision making from the founder to the relevant function heads. With this transition, comes an element of delegation and trust. It also allows people to take accountability of the decisions they make. In order to do this, an organisation must structure itself with the correct reporting lines.
In successful organisations, structure is given by dividing the organisations into different functions i.e. marketing, operations, sales, human resources, R&D etc. Depending on the size of the company the greater the number of different functions. Each function needs to be driven by a capable person. He/She will be accountable for the performance both within the function and the company as an entity. This is usually done by setting the right key performance indicators against a set of possible results.
For example, KPI: Profitability and the result is PBDIT of $100,000 after Year 1.
Driving the Strategy within the Organisation
An organisation’s strategy is realised by setting strategic goals and targets to ensure sustainable competitive advantage over the long term. Many companies which are beginning to see high growth patterns need to analyse both micro and macro business environment trends. Micro-environment being factors that you can influence: production, distribution, operations etc. Macro-environment being the factors that you cannot influence i.e. demographics, competition, social factors etc. By aligning the two environment trends, an organisation can create it’s strategy.
Driving the strategic goals in each business process allows them to be attained effectively. It also allows the company staff to align their daily work to these goals. A good lean tool that uses strategic business objectives to drive improvement is lean routines or KATA. These improvement routines can be implemented by:
- Identifying the Current Situation
- Determining the future state and
- Carrying out a series of experiments to reach the future state.
Below is an example of Coaching Cycle Demonstration
Restructuring Processes to be Lean and Efficient
Lean implementation allows you to view and improve processes by breaking them down into smaller steps. It allows a real change in mindset using a few very simple tools like quality in station, gold standard, KANBAN production, work levelling etc, to really drive continuous improvement.
A great example of Lean Implementation is given below:
Setting Priorities and End-to-end Thinking
This is one of the most important aspects to consider when encountering growth in the organisation. End-to-end thinking means that all decisions are based on a collective benefit to the company. For instance, if a company defines the priority to be profitability, then profitability must be viewed across the value chain from the supplier to customer.
In many organisation with an annual threshold turnover of $1 million, tend to have different functions with profit and loss accountability. Each function will compete to have the highest profitability. But this would end up over-pricing the product effectively becoming less competitive.
Setting priorities is also key to growth. Defining the priority and making sure every decision/task is aligned to this will ensure growth. A great example is the return of Steve Jobs to Apple in 1997 to save the company. At the time, Apple was creating a large range of computers. The priorities in the company were not defined or focused. By drawing a two by two matrix, he labelled the columns ‘consumer’ and ‘pro.’ And the rows he labelled ‘desktop’ and ‘portable.’ His aim was to focus the team on creating a great product for each quadrant. You can read more about it here.
Implementing these simple points in your business are valuable growth enablers. Define your growth strategy: restructure, redefine and prioritise your organisation and be set for long term growth.
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