Research from consulting firm Accenture shows that high-performance businesses stay ahead of the curve by anticipating needs and new marketplaces. It is, in essence, the quintessential call for forecasting excellence.
Transforming from a position of strength is key for getting and staying on top, ways the group, and successful businesses are catching on quickly. In 2002, Toyota’s president Fujio Cho launched a transformational program called Global Vision 2010 when the automaker was Japan’s largest carmaker and the third largest in the world.
It was a time when many said: “if it’s not broken, don’t fix it.”
“Any company not willing to take the risk of reinventing itself is doomed,” Cho countered. “The world today is changing much too fast.”
Changing ahead of the curve
Cho understood the need to transform from a position of strength. The Global Vision 2010 initiative is credited with making Toyota the world’s number-two automaker today.
Accenture’s High Performance Business research finds high performance businesses are able to change ahead-of-the-curve by embracing a few simple but critical goals.
First, the group says successful businesses increase their capacity for early change by deliberately fostering continuous renewal as part of everyday operations. High performance businesses, the group stresses, sense market changes very early and act upon that knowledge.
Their organizational design and culture, Accenture reports, deliberately fosters a kind of “creative discomfort” or balance between fear and excitement that comes from successfully employing constant change. Introducing a steady stream of capability building and performance improving initiatives, the group says, is one way companies instill readiness for constant change.
It is important to build a culture that expects and rapidly adjusts to new business directions and approaches, Accenture stresses.
But organizational readiness and agility is also important. Splitting product lines off into their own business units when they approach $50 million in revenue, Accenture says allows for closer monitoring of and a swifter reaction to market shifts for Illinois Tool Works, a $15 billion specialty equipment maker.
Fixing what isn’t broken
Second, Accenture says high performance businesses generate confidence in early change by developing comprehensive market sensing and response capabilities.
Market signals and cues for necessary transformation may be more subtle for companies already at the top of their game, the group warns. After all, changing from a position of strength requires altering areas of the business that are currently successful or profitable. This means the likelihood of internal resistance to change may pose a greater hurdle.
Ahead-of-the-curve transformations, Accenture says, require the ability to see new realities, form insights, convert them into effective strategies and catalyze new strategies, while convincing others to act on the vision. To do so, the group stresses, companies must embrace data sources beyond their traditional enterprise systems.
Tapping the knowledge of frontline employees, listening to critics and looking beyond the walls of your own company or industry are critical for success, Accenture says.
Sometimes it’s a simple matter of thinking outside your own box, the group reports. Accenture says Starbucks is a good example.
The company’s chairman, Howard Schulz, says Starbucks is not in the coffee business, serving people. Instead he considers the company to be in the people business, serving coffee. The outlook has led the company to diversify and succeed in seemingly tangential ventures such as music and digital radio.
“Breaking down strict definitions of industry also helps companies extract ideas from other industries to apply to their own for competitive advantage,” Accenture reports.
In a data-rich world however, without the ability to quickly make sense of data, companies risk being swamped by new and traditional sources of information, the group warns. Mitigating this risk requires sophisticated methods of analysis and decision making.
Balancing today’s and tomorrow’s agendas
Although executives may sense new trends and opportunities, getting their organizations to act can be a challenge. According to Accenture, Nokia offers a good example of an exceptional ability to catalyze and accelerate change using a network of “strategy influencers.”
Using a prediction markets-like approach the company asks as many as 400 employees across the company to spend up to two months researching and reporting on questions of key interest to management. By relying on input from all levels of the organization, Accenture says Nokia gains “access to issues, concerns and ideas that allow them to better see the future of market demands and business challenges.”
In addition, the group says the approach provides Nokia with a broadly distributed cohort of employees who understand the need for new activities and can act as early sponsors of change.
Third, Accenture says strategy formation and execution works only if valued and nurtured by top company leadership. Successful companies must have executives who can master the delicate balance between “today’s and tomorrow’s agendas,” the group stresses.
To keep management driving successful early change, high performance businesses prevent the formation of fiefdoms by making continuous top management changes, Accenture says. The best companies perform leadership shake-ups regularly, the group warns.
Perhaps most importantly, however, successful companies use leading-edge tools and techniques for sensing and responding to organizational change barriers and opportunities.
Although traditional methods and tools are helpful and rapidly improving, Accenture says, they presume stable, predictable outcomes. Companies changing ahead-of-the-curve, however, must be able to react to unforeseen elements of transformation.
High performance businesses set their own terms for change, Accenture says, knowing that “their chances for maintaining high performance are significantly lessened if they are rocked back on their heels and forced to change under pressure.”
It’s clear from Accenture’s research that changing from a position of strength and ahead-of-the-curve relies heavily on new sources of data and ever-evolving methods of forecasting. Forecasting excellence is and will remain critical to high performance business.
To learn more, visit www.accenture.com.
Author: Lisa Roner, editor, theforecaster
