The problem this poses for many organizations is related to the fact that, as a company grows it tends to become slower and more resistant to change. With growth comes more people, more formalized policies and systems, and additional layers of management that all contribute to a slowdown in decision-making and interfere with the ability to do much of anything quickly.
Begin by Recognizing the Need
The problem for many companies is that they don't realize how slow they've become or that the lack of speed is affecting the ability to compete. Listed below are a number of activities where moving quicker can greatly improve competitiveness. When looking at these activities from strictly a financial perspective, it becomes clear that they actually cost the company when not addressed. Once an investment is made in a particular process - whether related to new product development, manufacturing, etc. - the company loses money everyday that the investment does not produce income.
- New product development
- Shipping products to customers
- Building construction
- Servicing customers
- Integrating an acquisition
- Expansion into new markets
- Implementing a new ERP system
It is important to keep in mind that success in business requires more than speed. Quality of product or service must be continually improved along with improving cycle times. There are very few markets where customers will accept substandard quality even when the product or service is delivered quickly.
In order to become more flexible and adaptive, companies must study their processes, systems, and cultures continually to identify where the delays and breakdowns occur.
On the process side of the equation, reducing cycle time requires mapping the value stream and identifying where the delays, breakdowns, and quality problems occur. This assumes, of course, that there is, in fact, a standard process. It is not uncommon for companies to have a variety of ways to perform similar tasks. Sometimes referred to as the "it depends" rule, improving the process first requires defining a standard approach for how the work is to be done - and making sure everyone follows the standard - before attempting to make improvements.
Working on the process issues to reduce cycle time tends to be the easy part of improvement. The culture must also be addressed to determine how open people are to changing processes, how effective communication is within the company, and basically why people do the things they do.
Removing the barriers that interfere with a company's ability to react quickly to changing market conditions will create a more flexible and adaptive - and profitable - company. The key is to keep speed and flexibility in the forefront of people's minds until it makes its way into the company's operating philosophy.
Success in this endeavor can put you in an elite group of companies that manage to remain fast and flexible regardless of how large they become.