Strategic IT Leadership
September 29, 2008
Do IT executives in manufacturing & consumer products believe that the combination of globalization, a market downturn, faster product cycles and a new generation of technologies warrant IT organizations revisiting their technology environments?
Like many answers, it depends. I would like to think it is the responsibility of the IT executive to continually monitor their technology environments and adapt them to a changing global requirement. It should not be a reactionary process to a downturn or any other external/internal factors. In a rapidly changing world and the breakneck pace of technological advancement, IT executive should be taking a pulse of not only their core environment but also scanning for newer, more effective ways to improve their technology.
Notice the word effective, not efficient. If an IT executive knows their job, he/she will realize the difference. Why? An effective decision would look at all areas of business and technology while an efficient one may be myopic and see only seeks to reduce costs due to the market downturn. IT executives should be thinking more strategically, not operationally or tactically. Otherwise, they may miss opportunities to catch the next wave, whether it is technology, business trend or even regulatory changes, thus leaving their entire organization behind the curve.
Necessity or Luxury?
September 24, 2008
Strategy In A Slow Economy (continued)
(part 2 of 4)
The question is easy. The answer is difficult and often requires a sobering look at your business and how you really are viewed by your customers. In an ideal world, we would all be selling only necessities. But, an economy built on necessities doesn’t get very far, nor does it provide much opportunity.
The good news is that, even if you honestly provide a product or service that is a luxury, there are ways to make it seem more necessary and compelling, even enough to sustain you in a turbulent economy.
Here are some very basic suggestions that can help you paint the story for your business in a slow economy.
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Keep your products/services focused on helping others save money. Demonstrate how you can reduce costs. This is a common strategy in marketing and can be applied to just about everything.
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Revise your approach to pricing and payment if you can. Offer flexible payment options and be willing to negotiate some discounts for your best customers. Make these changes in the context of ensuring customers have continued access to your vital product or service.
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If you have a direct, aggressive competitor, make sure you let your customer know the advantage or your product/service during tough economic times. They need to see you as tuned in to their needs and challenges.
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Look for opportunities in your community to sponsor events that address the challenges of the economic slowdown. Host a community group at your offices. Let your company vehicles be used to help deliver meals to the needy. These are a thing that money cannot buy, that’s good will. And good will often carries companies through rough times because customers want to feel they do business with someone that cares.
The list goes on and on. By thinking creatively about your products and services, how you can create a “necessity-based” value in the minds of your customers, you are engaging in a fundamental strategy exercise that will help you ride out the rough economy and prosper more quickly when the economy recovers.
And that’s the final point here. Act tactically but plan strategically during tough times. Remember, economics is a cycle and the next boom is just over the horizon.
On PMOs
September 24, 2008
On Project Management Offices (PMOs), simplicity should be the rule. PMOs can become complex and, in order to effectively manage the process, simplify it to the basics. The more complex the PMO requirements, processes and environment, the more likely it is to become unmanageable, or simply ignored by those who would most benefit from it. If a PMO is developed with the correct people, practices and goals in mind, it will be simple, efficient and successful.
I’ve had the misfortune to see PMO’s crash and burn because of unnecessarily complex processes mandated early in its existence. Simplify it to the basics; don’t over complicate the structure and it will manage itself. A popular phrase in business and technology is core competency. Simply put, core competency is a distinctive area of expertise of an organization that is critical to its long term success. These are built up over time and cannot be perfected instantly. The development and execution of a Project Management Office SHOULD be a core competency, but it should not be thought of as a quick fix for a turnaround situation nor should it be formed in a crisis. My belief is that a core competency (like an organizational PMO) can be simple in nature and should be thoughtfully and systematically introduced within business. The fundamentals of a PMO should be a measure of an organizations project management need, not a reaction to a problem or because it’s trendy.
PMOs should simplify an organization’s management of projects not add another level of complexity while simultaneously ensuring success.
Strategy In A Slow Economy
September 17, 2008
(part 1 of 4)
By John G. Stockman
Selling more or changing your prices is not a valid business strategy, especially in economic times like we are facing today. It is a simple and obvious fact that often eludes many organizations.
I’ve spent the past several months involved with clients who are facing drastically reduced revenues, product and service cancellations as well as real threats to their very existence. What I’ve been surprised to see is the number of people in these organizations that believe you can overcome a bad economy by trying to increase sales volume or entice people to buy your product through arbitrary price cuts.
Each time I’ve encountered this particular situation, I’ve been forced to take my clients through the basics of both strategy and economics. To survive and, possibly, thrive in a turbulent economy, your Business Strategy is critical. You must be prepared to answer and act on some very basic questions –
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Is my product or service a necessity or a luxury? If it’s the latter, how do I make it the former?
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How sensitive is my customer base to economic fluctuations? Am I missing a customer segment that can help me through this economy?
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How will my customer base perceive a price change? Does it do more harm than good?
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When does this economic downturn end and how do I position my organization to capitalize on the good times to come?
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Is my entire organization prepared to function in a down economy without drastic cuts?
These are just some of the questions that I will address in this series of articles about the importance of Business Strategy and how a down economy can actually make your organization more successful. I will help you build your capabilities and understanding about targeting new opportunities, avoiding mistakes that damage your organization and energizes your team past your competitors.