If not now, when? become Ambidextrous and grow better!
Unleash your growth potential
The market is going to take every company for a wild ride in the next 6+ months and there are going to be 3-key priority areas management will need to keep a focus on:
- Safety
- Cashflow
- Growth
As customer/business uncertainty delays purchases, makes old business models redundant and freezes contracts; cashflow must be optimised to keep the lights on. And yet, the situation is also opening new markets and exposing new customers to your products. Missing out on these may mean that survival is merely to emerge from this crisis shrunk and outmanoeuvred in the market.
Enter Ambidextrous growth, the principle that an organisation can execute short-term performance improvement and long-term growth strategies at the same time. This is not a new concept, https://hbr.org/2004/04/the-ambidextrous-organization cover’s it nicely and now it’s time to revive it and put it into action.
Why now?
- The decisions you make now will affect any momentum you can generate over the next >6-months
- Your customers are facing immediate pain and long-term disruptions
- If you’re slow at innovation you won’t meet their new needs now or in the future
- Self-test, how much revenue is from fresh propositions vs harvesting old-growth; how quickly can you get a new offer to the market with the ability to scale?
- Self-test answers — if it’s all harvest, and slow to market and scale, the coming market is going to be unforgiving
- Departmental territorialism and misaligned targets will mean your teams execute only what they’re rewarded for
Step 1: Recognise who in your organisation is playing to what priority?
Covid-19 has accelerated the classic management challenge of meeting quarterly and yearly targets, as well as executing long-term growth strategies
The difference right now is that with the pace of change at play, and the disruption to normal consumption, there is an opportunity to bring those windows of short and long-term much closer together.
This lets you push your organisation to free up cash and take advantage of these new opportunities at speed.
Let’s be realistic if you run out of cash the organisation stops moving. The principle concept here is that Cashflow is the main priority.
However, by allocating some of those savings to fund new growth ensures that there are disciplines and incentives in place to explore new cash creating growth opportunities.
Step 2: Putting it into action
Sounds great, right? Now, how do you make it real?
To successfully adopt ambidextrous growth, you need to take some key steps:
- Bring together your Covid-19 Response Team, Taskforces, Corp Dev Teams, Innovation Teams and any relevant special projects and make sure they’re all aware of each other and the group strategy. Any misalignment will lead to lost time and cash.
- Then set about understanding what cost savings are available in the organisation and what your customer's problems are and what they are likely to become.
- Is your current operating model delivering the services/ products your customers need and how are competitors (new and old) optimising and improving your customer’s UX?
- How much cash can be freed from transforming the organisation? Then set the constraints for the amount of capital available to pursue new propositions, markets & white space.
- Divest & Invest, execute a roadmap of activities that will free up cash and invest capital into growth and technology opportunities that will solve your customer’s problems & build your position in the market.
- Learn & Repeat, execute this activity in rapid cycles ensuring that the organisation does not become fatigued by transformation affecting your operating core + ensure that your new growth is achieving short-term tangible wins.
Step 3: Thinking about your entire Ambidextrous System & Developing it
Once you’re up and running with the cycle of savings <> growth investments, you can then begin to manage the organisation across 4 key areas:
- EBITDA Growth/Cashflow optimisation: focus on performance and optimising your existing core operations.
- New Growth: solving customers’ problems and capturing new, differentiated market spaces so that you can generate fresh cash.
- KPIs: connect both 1+2 with incentives based on KPIs so that your teams straddle the crisis of prioritisation and are rewarded for both short + long term gains. Without this people will revert to old behaviour based on in-year incentives.
- Organise to grow!: this model then lets you set up the infrastructure to expand and grow via cycles of cost-saving and investment.
It’s certainly going to be an uncertain time going forward, so agility and the ability to rapidly spot new opportunities and grow them will be essential. Using the myriad of tools from buying companies to building new business units to partnering will ensure you can grow and ride the waves wherever the post-COVID market takes you!
To find out more and how to tangibly apply this to some of the problems you’re facing right now feel free to book in some time for a chat: https://calendly.com/oliver-graham-yooll/30min
