By: Meaghan Yorro
The urgency for businesses to transform and lead with grit dominate headlines in all forms of social media. The reality is that the same tenets that enable transformation in crisis are the same tenets that maintain shareholder value during the good times.
My perspective has evolved from hard lessons learned throughout a career building Corporate strategy from the top and leading crisis collaboration from within operating teams. Several core fundamentals lay the groundwork when revenue is steady and enable agility when the markets unravel.
Conduct a ruthless resource appraisal. The concept is simple but under-appreciated. Balance sheet optimization and astute management of working capital ensure the company is ready for unanticipated events. A deep dive enables businesses to have a clear line of sight to viable investments and the levers that are at their disposal. Leaders can also gain laser focus on the high-impact opportunities that enable growth and satisfy KPIs. Strategy cannot be developed without this.
Anticipate uncertainty and focus on what matters. Cataclysmic economic disruption is impossible to forecast. Instead, start with clarity in the strategic decisions relevant to your business today. Then build creative alternative scenarios around the critical drivers you can control. Next layer your foundation with the wildcards and quantify economic value for a range of outcomes. Businesses can then make decisions based on relative value creation and execute relevant plans to weather any blow.
Infuse your culture with innovation. Organizations make the mistake of believing the price of ongoing innovation is cost overruns. However, the alternative is stagnation. Special project teams are not sufficient, and innovation is a muscle that all functions must develop over time. Treating it as a norm gives teams a safe space to challenge assumptions and test bold ideas. Planning roadmaps should also incorporate a portfolio of high impact projects, riskier bets and quick wins. The result is the ability to flex and stay ahead of the competition.
Fuel collaboration between sales and operations. Sales & Operations Planning (S&OP) – when properly executed and led by 4 core power teams – is a powerful yet underappreciated tool for agile product and service delivery. Your sales team is in touch with market nuances and shifting customer demand. Your engineers know the resources it takes to build a product to meet that demand, and your shop floor knows what it takes to get it out the door. Finally, your finance team can carry out the financial planning required to execute.
Allow vertical dialogue to drive tactical planning. Strategy easily appears solid on whiteboards and within fancy diagrams, and too often marching orders are mandated from above. However only teams in the field can provide visibility to strains on the assembly line, risks and rewards. Such foresight, empowerment and team cohesion enable contingency planning. The result is an effective plan that marries KPIs and vision from the top.
Above all else, the most effective leaders surround themselves with advisors at all levels, and they intimately connect with the shop floor. Combined with these fundamentals, pivoting becomes an innate reflex to curveballs and thriving in all environments.
About The Yorro Group: We are a strategic advisory firm serving businesses and organizations seeking to scale, implement alternative business models and/or invest in new markets. Our cross-functional teams develop and execute tactical roadmaps to achieve enterprise-wide growth. Primary areas of expertise include strategic finance, commercial feasibility, scenario planning and operations optimization. Contact meaghan@yorrogroup.com for more details.