 The Power of Now With the end of the year upon us, now is an ideal time to assess your company's performance and make plans for the future. Here are some areas to consider as part of a year-end review. Despite all of its inevitable holiday- and year-end-related stresses, December is an excellent time to review your company's strategies and practices of the past 12 months. Is your business in step with market trends? Is it as productive as it should be? Are you using technology in the right ways? Do you have a solid plan for the future? As always seems to be the case of late, the past year has been filled with developments that will make a big and lasting impact. The re-election of President George W. Bush, who has voiced the goals of changing health care and Social Security. The emergence of RFID and other wireless technologies. The uncertainties of foreign competition (particularly from China). Advances in Enterprise Resource Planning systems. The rapid-fire evolution of Internet search engine technology. In sum, reviewing your company's efforts and results of the past year in light of such happenings can pay big dividends later on. Strategic Management MTI Business Services Consultant Mary Connor is matter-of-fact
about the need for a year-end review. She notes that companies should evaluate
their performance by asking some pointed questions:
As Connor adds, however, company managers and owners need to be brutally honest
with themselves as they answer those questions. Otherwise, the results probably
won't mean much. "When strategic planning becomes a sterile annual exercise
in completing template forms, it';s no wonder the resulting thick binder sits
on the shelf until it’s replaced with next year's version" she says,
adding that strategic planning is only one element in a larger, ongoing process.
To receive value for the time and money invested in strategic planning, companies
should:
What';s more, Connor reports that she's recently seen some forward-thinking companies stepping beyond conventional to strategic planning to strategic managing, which links strategy to execution and funding. "Strategic managing is more flexible and more rigorous than the typical planning process, allowing organizations to chart a course to seize market opportunities as they unfold,"; she explains. "Effective strategic managing, in which strategy is linked to how the business is run, can create a critical competitive advantage. It also avoids the two traps that companies commonly fall into: blue-sky planning (vague strategizing that doesn't force an organization to make hard choices) and strategy by spreadsheet (focusing primarily on financial data rather than looking at the broader market landscape)." Product Development As any company touched by foreign competition knows, globalization is here to stay—and creating hosts of new competitors in every sector. Innovation is essential to survival, but the cost of project failure has never been higher. How can Minnesota companies negotiate the demands of the global marketplace? According to MTI Business Services Consultant Sam Gould, small companies need built-in strategic criteria to determine which of their proposed projects hold the most market promise. "Often, there is no strategic direction to projects, and they';re not aligned with a business's overall strategy,"; he says. "I'm finding that Minnesota companies are looking for a more effective, efficient, faster process for new product development."; For help, Gould recommends that companies focus first on making new product development an organized, systematic process. By doing so, they can cut down on the risks inherent in creating a new product—and energize and speed up the development process at the same time. He's partial to the StageGate™ process - ;a rigorous and time-proven product-development methodology offered through MTI's Accelerate to Market for Small and Medium Enterprises (ATOM-SME) program. It promises to bring order and purpose to a company's most promising innovation efforts. Lean Operations Given the aggressive pace of foreign competition, now also might be the best time to consider streamlining your operations. The latest generation of nimble and efficient Chinese manufacturing firms are making life challenging for many of their U.S. counterparts, forcing them to cut prices and find new ways to stay competitive. While getting lean can't shield a company from offshore competitors by itself, it can help you cut waste, manage inventory, and improve efficiency - both on the factory floor and in the front office. Essentially, the term "lean" refers to a methodical analysis of a company's processes - ;including work flow and setup, cycle, and lead times - ;to identify waste and other non-valued activities. The goal is to measurably improve lead times, capacity, and quality. Any lean effort begins with a map of a company’s value stream, which determines the work-flow steps that add real value to a product and eliminates the ones that don’t. When done right—i.e., when management and employees both buy into the process—lean can deliver remarkable results. The Fall 2003 issue of Minnesota Technology detailed the case of BTD Manufacturing Inc., a Detroit Lakes-based metal tooling and stamping company that trained its employees in lean practices in November 2001. Since then, the firm has cut its average project setup time by 50 percent, reduced the amount of scrap it produces by 80 percent, and boosted sales by approximately 10 percent. Who can argue with those sorts of numbers? Internet Strategy Development As the long-awaited economic expansion kicked in and out of gear during 2004, many small and mid-sized manufacturers spent the year prepping for growth rather than fighting for survival. One result, according to MTI Business Services Consultant Craig Berdie: Some firms have been more willing to invest in new software and expand their Internet marketing efforts. “Small, technically oriented businesses are ‘getting it,’” Berdie says. “They’ve been more willing to do strategic work than they were a year ago.” Another result is that static, “feel-good” Web sites are becoming a thing of the past. Says Berdie: “Even small businesses are thinking of their site as the primary way of connecting to customers and prospects.” With that in mind, as companies revisit IT and Web improvement plans that were postponed during the downturn, a list of new priorities looms large: enhanced search engine optimization, easier navigation functions, better applications, and a succinct positioning message that can capture industrial buyers and/or consumers. The Growth Factor Finally, another trend to keep in mind. Thanks in part to the results of years of working to boost productivity and do more with less, many companies are finding themselves dealing with business growth. Key economic statistics support the notion—virtually every leading manufacturing indicator (with the possible exception of consumer sentiment) has risen significantly since the summer of 2003. While all that newfound efficiency is extremely positive, it also means that businesses need to deal with the notion of business growth. “The transition to growth is real, it’s happening now,” says MTI President and CEO Wayne Pletcher. “Of course, you never stop working on productivity gains, but the time is now right to work on growth. You can’t save your way to it.” As Pletcher notes, the resources necessary for real business growth—new software, marketing and sales tools, beefed-up production facilities, and the like—can be quite different from those needed to streamline and speed up operations. “Companies are going to need some help to take full advantage of growth possibilities,” he says. “They have to work on innovation and new products—and they have to do them right, based on customer need and market potential.” MTI offers a range of customized business consulting services that can help in these and other areas. For information on them, see www.minnesotatechnology.org/consulting/index.asp, or call 612-373-2900 or 800-325-3073. <<Previous Article | Issue Home | Next Article>> |
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