A Strategic Growth Model for the 21st Century

Executive visibility and investor interest in operational excellence has never been higher. It’s almost impossible now to find a company that doesn’t have some type of business improvement program.

Compared to 25 years ago when I worked at American Standard, I spend much less time today convincing managers that legacy management practices generate a lot of waste. There are hundreds of case studies demonstrating that operational excellence and lean business practices can have an immediate and long-lasting impact on productivity, quality and customer satisfaction.

What’s usually missing, however, is an understanding of how to get from the basic process improvement tools, and a limited focus on keeping up with the competition, to an advanced management system that drives breakthrough growth and vastly superior financial performance. This requires a comprehensive growth strategy.

A HOLISTIC BUSINESS GROWTH STRATEGY

Our strategic growth model consists of five core elements:

  1. Mission and core values
  2. Operational excellence
  3. Value innovation
  4. Disciplined execution
  5. Leadership

I use a tree to illustrate this approach because trees can thrive and grow for hundreds of hears with proper care. Imagine your organization as a tree as we touch on each of these elements and how they contribute to healthy strategic growth.

Mission & Core Values

Your organization’s mission—its primary reason for being—are its roots. This is where all growth begins. If your roots are strong and deep, your people will know what your company stands for and have a strong sense of purpose.

Your core values define the rules of engagement. They empower every member of your organization to make difficult decisions and choices. Your core values are how you connect what you VALUE to what you DO.

Having a clear mission and core values gives an organization the focus it needs to develop transformational leaders.

Operational Excellence

Operational excellence relentlessly tries to reduce lead time and eliminate waste and variation in the value chain. It ensures responsiveness and capability in all manufacturing and business processes. Core elements include continuous improvement, data-based decision making, and team-based improvement programs.

Operational excellence must be balanced with innovation. As illustrated above, growth comes from both sides of the tree. In today’s dynamic, global economy, business leaders need to work simultaneously in each area rather than bouncing back and forth depending on market conditions.

Value Innovation

The value innovation element of your growth strategy is about discovering and providing value that’s currently unrecognized by your customers. This side grows when you physically connect with your customers, observe them using your products and services, and uncover unarticulated needs. The resulting innovations are new, built from scratch, and revolutionary, not evolutionary.

When thinking about innovation opportunities, can you:

  • Eliminate features or processes taken for granted in your industry that aren’t valued at all by your customers?
  • Reduce features of limited value or outside the core interest of your targeted customers?
  • Raise the standard for those things that your customers value most?
  • Create something entirely new that no one offers?

Disciplined Execution

The core element, or central trunk, of this strategic growth model is disciplined execution. Without a plan your company will lose focus, waste resources and time, and not deliver exceptional value. As Steve Jobs once said, “Deciding what not to do is as important as deciding what to do.”

The vast majority of companies fail to execute their strategy because they do not have a detailed plan for executing it. The strategy deployment process establishes a plan for executing your business strategy, and it provides a framework for monitoring progress. Having a disciplined review process forces managers to do root cause analysis and implement countermeasures when things do not go as planned.

Leadership

The final element of this strategic growth model is leadership. All organizations have leaders, but few have effective leadership.

In my experience working with hundreds of companies, it takes a few unique attributes to transform an organization and lead it in a new directions.

Great leaders:

  1. Are active listeners and exceptional communicators. Their passion and enthusiasm shows through in everything they do and say.
  2. Lead by example and are always willing to support and create excitement around a shared vision of the future.
  3. Possess a servant leadership mentality that puts their unique abilities in the service of others.
  4. Nurture and consciously develop other great leaders.
  5. And finally, great leaders are not afraid to be a little crazy, or to question accepted norms. And they are certainly not afraid of failure.