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Evaluating projects can be the springboard for assessing where your business is and what it needs to do to grow, says Michael Friedenberg.
As the dust settles from the economic malaise of the past few years, it's astonishing and refreshing to once again hear how companies are preparing for growth. It's also fascinating to see so many companies going through the similar exercise of product and project evaluation. You know the deal: organizations take a close look at every product within the company and determine which to feed and which to starve.
What I love most about this exercise is that the intrinsic value of your organization can come to the forefront and allow you to truly assess where your business is today. This exercise can give you insight on four key areas often cited by top business leaders but, due to time constraints, often ignored.
Trust, Candor, and Communication: We usually throw these words around a lot, and we all like to think that we truly have a trusting and honest culture. However, these attributes will be tested quickly once you suggest killing a certain project. We all have certain walls that protect us and nothing feels warmer than having an initiative that seems to be core to the overall business goal to work on. Once you start grading projects on a scale of A (huge opportunity), B (necessary for the overall success of the business), and F ( not enough value to maintain), you'll quickly see who's protecting themselves and who's taking an honest view of the overall business goal. It's imperative that emotion is placed aside and true project analysis is done. As former GE Chairman Jack Welch recently stated, "If you have an old organization and you add technology, all you have is an expensive old organization." Hopefully, true trust and candor will allow these protective barriers to be broken down and collectively your team will shift resources toward projects that serve the business and customer better.
Succession Planning: This is probably the biggest area of neglect of any organization. As you go through project analysis, you'll quickly realize how many people you have--or don't have--to either lead existing initiatives or new ones that will drive the future. Every manager's success can be defined and measured by the components wrapped up in an effective succession plan. If you don't have one, then you're failing on multiple levels. Your employees need to know where they stand and where they can grow. You need to determine if you're aligning your talent in the proper way to energize the individual as well as the business. And you need to identify where you have weaknesses. As you look at your priority list and begin to plan for future growth, I can assure you that you'll only go as far as your people will let you.
Preparation: We're all moving so fast and being asked to do more with less. However, it's astounding to hear so many executives look back over failed projects and say that they were rushed and not truly prepared for the task. As you evaluate all the projects being put forth to you, are you first asking yourself, "What's the risk and opportunity to this endeavor? And, do I have what I need to succeed?" If you honestly answer these questions, you'll have a much better view in determining potential success. And, if you do have an honest and open culture, everyone in your organization also should understand this answer, which will allow everyone to have comfort in the unknown and which will allow everyone to feel comfortable in taking on new endeavors or putting others on the back burner. This also allows the blame game to be put aside so if something does go wrong, everyone was involved, and if everything goes right, the entire organization reaps the rewards.
Customer Focus: Business is hard enough, but if you're concentrating on projects or initiatives that don't ultimately serve the customer better, you're doomed to fail. As we've learned in business and in school, it costs five times more to acquire a new customer versus selling deeper to an existing one. So, that means that if you can drive 5% incremental revenue from your existing customer base, you have the potential to increase contribution margin by 25%. Not bad! But why is this so hard to execute? The reason is that we forget who we're serving. Within every organization we should be changing the poor processes, people, and products and leveraging the good ones. And, as Anne Mulcahy, CEO at Xerox, recently shared at a business conference, if we do this through the view of the customer, we'll surely be offering solutions rather than selling products. At the end of the day, it really is all about raising the value proposition one offers the customer. For some great thinking on this, take a look at the new book by InformationWeek adviser and frequent Optimize contributor C.K. Prahalad called
The Future of Competition (Harvard Business School Press, 2004), in which he describes an emerging world where companies and their customers are "co-creators"" of value.
So, as we embark on new growth opportunities, make sure that you're set up to succeed. Do you have the right people in the right place, and focused on the right things? Have you fostered an atmosphere of candor, trust, and openness, so that the best ideas can flourish and existing products can be funded--or squeezed--accordingly? Only you can answer this initially, but be assured that your customers and competition will have plenty to say in the near term.
As always, I'm eager and grateful for the opportunity to listen and learn from you, so please send your thoughts or feedback to me at [email protected].
Michael Friedenberg is a VP at CMP Media LLC and the publisher of InformationWeek.
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