Traditional manager meetings in January often provide a false sense of comfort. Market forecasts and analyses are presented, often by an outside expert. But few companies will make the connection between external market forces and the effect on internal operations.
Companies that fail to make that connection increasingly will find themselves at a competitive disadvantage.
Knowing the latest growth forecast and hearing expert analyses of the market is important information for an entire organization, but it is particularly important for the more internally focused units. Sales organizations, business developers and program managers generally have a good sense of the market and customers. However, technical and operational units have a more internal focus and have nowhere near the same exposure to market and customer conditions.
Two current key market trends — speed and accountability — have direct implications on internal operations. Each has emerged as a critical market driver and a way to set a company apart from the competition. The challenge is for internal organizations to recognize the management challenges that these trends have created and to adapt operational processes to meet these new demands.
Faster execution is the single biggest change in the market. It is now on the front burner in the defense/aerospace and information technology systems and services sectors. The need for speed is being driven by programmatic challenges and competitive realities.
Although “Washington time” still may be slower than “Silicon Valley time,” government officials expect contractors to operate at a faster pace and respond and adapt to programmatic changes more rapidly. However, speed is not an acceptable trade-off for a drop in quality. “You want it fast or you want it good?” is no longer an acceptable response to new demands on technical, operational and delivery organizations. Contractors must adapt current processes to enable speed and agility, while maintaining discipline and governance for quality assurance.
The commitment to be an accountable provider trumps any promise to be a trusted partner. Accountability is what enables trust in relationships. Trust is still essential, but accountability is what distinguishes words from deeds.
The emphasis on accountability has its roots in the increased reliance on service-level agreements. However, accountability has emerged beyond contractual requirements to be an effective competitive differentiator. It raises the bar of commitment for the company and lowers the bar of risk for the customer.
Accountability requires a business to know what is happening along the way, not just at final delivery. It’s having information to quickly identify unfavorable trends and aberrations and keep customers informed. Beyond just having information, it’s having mechanisms and operating practices to share that information internally.
The business implications of execution speed and performance accountability have a direct impact on the daily activities of internal groups. Recognizing these implications is the first step toward an effective operating plan that will attain current year objectives and maintain a competitive market position over the long term.
If you want speed and accountability, use process improvement initiatives to drive operational transformation. It’s not about tweaking existing processes to gain speed or reduce cycle time or implementing new metrics to improve performance monitoring.
Rather, it’s using an understanding and appreciation of these external market pressures as catalysts to drive improvements in performance across internal organizations. Annual operating plans provide the foundation for process improvement initiatives that drive performance.
It’s great to know where the market is headed, but recognizing business implications and aligning internal operations is even better.
Jim Kane (kane@systemsandsoftware.org) is president and chief executive officer of the Systems and Software Consortium Inc.
