In many aspects, these are heady days in the material handling industry. Technology is colliding in many areas to create incredible opportunities. Often when this happens, success can appear simple. These conditions can make it easy for many to achieve success in the short term. However, to achieve lasting success as an organization, the ability to balance all aspects of growth is crucial.
Is the organization in sync on the following aspects?
- Growth of new product offerings
- Revenue growth
- Production capacity growth
- Employee growth and development
A common strategy for most organizations is to focus on the squeaky wheel. Incoming orders may outpace production capacity, or the company adds capacity before taking the time to develop the new leaders. In both cases, product is being delivered to customers, but all the functions aren’t running smoothly. In this example, it’s getting done solely through brute force at great expense to the organization and employees. Simply put, it’s not sustainable. There will be times when that extra push is required. Even in those times, the entire organization needs to be focused on bringing these aspects into alignment.
Take a look below and see if your organization has synchronized these aspects:
New Product Offerings
When business is good, it can be difficult to think about developing new products. Everyone is busy helping customers with the current product offerings, which can distract from new product development. Before you know it, the current product technology becomes stale. The organization needs to have a person who gets up every morning, fully focused on new product development. They should lead efforts to develop a robust and steady pipeline of new products. They also need to continually evaluate cutting-edge technology (and if it assists customers) to achieve success. Since these tasks leverage the collective knowledge of the company, this leader must seek out valuable inputs from business development, product managers, customer care, quality, supply chain, and outside stakeholders.
When it comes to revenue, the tendency is often to focus on what is familiar. When other sectors are strong, the focus might shift to participate in these growth markets. This may expand the vision to cover more opportunities, but it’s human nature to be drawn back to what you know. It’s not easy to grow a company’s market diversity. Whether it’s a fear of losing focus on traditional business or a hesitancy to try something new, it seems that tunnel vision is a universal hazard. Leaders need to find the balance between aggressively protecting traditional markets and implementing strategies that expand the company’s reach in new directions. It is critical to consciously and aggressively protect traditional markets. Existing customers want to know that you recognize their importance and care about their needs. In that same light, the company must open the funnel regarding new markets. Whether it’s expanding into new international opportunities, broadening product offerings within existing channels or pursuing new industries, the company must open the funnel. When the hot market cools down, it’s this kind of preparation that will keep you from being on the outside looking in.
Production Capacity Growth
Growing production capacity is often the most visible challenge for an organization. It usually entails investing in capital-intensive projects, which come with long lead times and significant risk. There is the ever-present uncertainty that comes with the thought of burdening the organization with carrying costs and zero assurance that the economy will continue to require this level of capacity in the future. Due to implementation timelines, growth here must synchronize a solid understanding of production constraints with revenue projections as far in advance of the need as possible. A climate of trust between the business development team and the operations team will go a long way in balancing these areas. Additionally, it’s important to keep your eye on productivity-enhancing initiatives. Just as technology advances are creating opportunities in the market, it is also creating advances in manufacturing. For all these reasons, shooting from the hip is never the best course of action, especially when it involves spending precious capital dollars.
Perhaps the most commonly overlooked component of growth is human capital. It doesn’t matter if you get everything else right if you don’t have the people–the right people; you can’t execute to the organization’s full potential. To know where to focus, there are many questions an organization must ask itself:
- Are innovative employees working on new product development?
- Do you have proper engineering staffing in place?
- Are the operation’s professionals properly trained?
- Do they understand the incredible value of initiative?
- Have you done succession planning? If so, does the plan have answers for both expected and unexpected changes?
- What level of investment are you giving to the next-generation talent? Is it enough that they feel challenged and appreciated while setting the stage for growth?
By answering these and other questions, a strategy can be defined for employee development. Growing the people within your organization requires much attention. It is also the aspect that takes the longest to recover from when it is overlooked.
It can be easy to work on fixing the squeaky wheel. There is some comfort in taking on the tactical issues of shipping product or enhancing some cool technology in R&D. But at the end of the day, that’s not the point. The goal is to position the organization to succeed when opportunities present themselves. Therefore, the strategy is to develop a team that strives daily to create those opportunities. Better yet, the job is to prepare the organization so that you are creating those opportunities. That is where the fun truly resides.