As leaders we are inundated with challenges. There are the daily fires to put out as operational requirements are aligned to meet market needs in real time. There are occasional game-changing challenges from external sources over which we have no control, like Covid-19 or an economic downcycle. And then there are the strategic challenges leaders face as market forces shift and require new approaches and skills. All of which are sprinkled with the reality of accelerating technology innovation.
It seems exhausting and overwhelming. So, let us identify what really matters. There are three principles that should be at the heart of every decision a leader makes as they grapple with all three of these types of challenges.
1.) Outside-In Thinking rules. Challenges can best be addressed by understanding how the various solutions will impact others. If a solution appears to take something away of value to a stakeholder group, that is probably not the right solution. Outside-in decisions looks at the problem through the lens of the stakeholders outside the company and are the input needed to guide decisions. Here are some examples:
- Customer challenges: Customers are undergoing many pressures these days, including a lack of experienced staff, which often means less pre-planning, which in turn increases demand for short turnarounds. They also face operational challenges and are struggling for greater efficiencies. These two issues alone place greater burdens on your company. While a short-term solution may be to overtax your own people to get the goods out the door and perform the extra service they are requiring, longer term it is more effective to develop a business operational system that anticipates these issues and accommodates them—at least for high-priority customers. Most manufacturers are no longer just selling widgets but service plans to help with situations like these.
- Employee challenges: The millennials and Gen Z are not the same as the boomers. Ha! You already know that. They want balanced lifestyles, rapid advancement, to know they are valued and to bring their dogs to work. They are not the problem. There are many with great skill and drive. We need to learn how to cultivate their commitment and engagement on their terms, while communicating the expectations of the company relative to accountability and adding value. We cannot force them to be us. We need to adapt to their needs and will be rewarded with their contributions.
- Industry challenges: Industry models are evolving rapidly with new technology. The cycle of change is speeding up and new competitive developments are happening more regularly. While you do not have to be a leader of the industry, you cannot afford to be a laggard. The good news is you do not have to do everything your competitors do—Walmart and Target have very different approaches and investments. But you do need to be aware of which area of your organization would benefit from being reimagined using new technology, such as how to speed up turnaround time or how to better serve your customers in your existing market approach. Do you need better data analyzed more regularly?
A good test of whether you are deploying outside-in thinking is to look at your organization’s metrics. If they are focused primarily on tracking outcomes for financials and operations, then it is likely you are not thinking “outside-in.” Metrics that are about employee development and training, new product or service innovation, customer satisfaction and loyalty, etc. are more likely to reflect an “outside-in” approach.
2.) Technology matters and you do not have enough. With the advent of AI, we will see a geometric growth curve of new technology applications—technology as product, technology as service, technology as operations, technology as data analysis, and so on. You cannot do everything, which is why it is important to understand the long-term strategy goals and prioritize and develop the technology needed to create efficiency and capability in your pursuit of goals. If your organization does not have a technology plan, then you are behind. If you are underspending on technology relative to competitors, you need to adapt or be outpaced. For some more information, check this out: https://breakthroughmaster.com/artificial-intelligence-what-does-it-mean-for-your-business/
3.) Relationships are more valuable than ever. It is a hard lesson I still have not learned well but it is not important to always be right. Enduring relationships, which are increasingly harder to achieve, are vital. What is an enduring relationship? It is not just about counting how many close friends you have or how many customers you have retained. It is about what have you done to invest in those relationships to ensure they are locked in for the future. It matters with company associates, it matters with customers, it matters with your service network. No matter how much technology there is, people are involved. They are usually the decision makers. Do I buy or not buy? Do I stay or do I go? Do I answer your calls first or put you off? If you are a financial planner you want to be able to take them with you if you change firms. Could you? If you are the firm, you want them to stay with you. Will they? Who has done the better job of cultivating the relationship? If you want to know what your customers think of you, look at your customer-facing policies. What is behind each one? If is to streamline your business efficiencies, or manage costs, your customers know that. They are perceptive when it comes to knowing if they are valued or not. A few ways to tell your customers they do not matter, but common in customer management:
- Sending out a harsh “you will be dropped notice” as the first payment reminder even if that customer has always paid.
- Customer service agents who say, “It is our policy…” The customer hears, “we are not responsible.”
- Extra charges to cover hikes related to material prices that are never reduced when prices stabilize or drop.
Do you want to lead your organization to higher growth? Start with “outside-in” thinking. Make decisions with the target audience in mind. Then adapt the technology you need to deliver what they need. Then be sure the relationships are stronger than ever. Rinse and repeat!