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Shifting gears

How capable are you to shift gears? Consider the following:

– How central is you operation?
– How many approval levels have you build into your organisation before a new product launch is made?

  • Branch
  • Division
  • Region
  • HQ

– During the decision cycle, what are the criteria?

  • Capital cost
  • Feasibility

– How big is you HR department, your IT department, accounting department?
– How sophisticated are you client and what are the trends?
– Is the market getting more and more fragmented?
– How long does it take for you to get a new product to the market, compared to your competitors?

  • Quicker
  • Equal
  • Slower
  • Never

– Is the culture inward (negotiating with HQ) or outward looking?
– Are your margins under pressure?
– Are competitors consolidating?
– Is there an opportunity in emerging markets?
– Based on the answers do you think you need to rethink your companies approach?

Here are some suggestions:

  • Restructure from divisions to market facing units (both bases on geography and product brands)
  • Make the managers of the business units fully accountable for market definition, operations and strategy and the ability for flexible deployment of resources
  • Make the HQ the support unit for the business units (coaching, IT support, MIS) using the business unit as the pull rather than HQ being the push. Support this by service level agreements
  • Give business unit managers a top line revenue and bottom-line profit target and allow for full flexibility for the funds in between.
  • Approach each business unit manager as an entrepreneur
  • Approach each entrepreneur/business unit manager as a venture capitalist
  • Open up your R+D department and allow them to sell ideas internally (to the business unit as well as externally.
  • Stimulate networks between the business units by moving people around the units regularly
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