I am sitting in a bakery minutes from my house, steps away from the train station, watching still-sleepy counter workers shuffling brioches and muffins to a rising flow of customers. I shouldn’t be here. I should be on that train now leaving the station, heading into New York City. But a midnight Skype session with a client in China followed by an all-night wrestling match with three young kids kicking and rolling completely disrupted my morning schedule. I missed my train.
In the car speeding to the station, I finally came to terms with the fact that I was not going to make it. I passed through the denial, anger, acceptance process. It took me a full 10 minutes to get over it and come up with my new plan: spend 45 minutes of unexpected free time in a quiet café to write this post.
When plans fall into disarray, great companies and strategists recover more quickly than I did just now. How quickly can you recover when luck scuttles your plans?
Ironically, this is the topic of the day for me. I am spending my afternoon with a huge financial service firm’s corporate strategy department to map out a new method for adjusting quickly to emerging market dynamics. And I interviewed the CEO of two tech ventures who shared a great tip for how to react faster than your competition to new threats and opportunities. I’ve been thinking about this topic for several months and only now recognize that what happened to me this morning–missing my train–is a microcosm of this strategic challenge.
Here are three steps to respond more quickly, and pivot faster, than your competition. If you follow them, I believe you will begin beating your competition at every turn.
1. Accelerate your rhythm: Steve Woodard is the CEO of two fast-growing tech companies, Quadrant Software and SoftBase. We had a fascinating discussion about how he manages double what most of us juggle. A lot of it has to do with having clear goals and communicating them often, always having a door open so people know they can reach you 24/7, and building a management team you can trust.
But at the center of his system is a fast-paced rhythm. He holds weekly and monthly meetings at which he reviews all his priorities with his management team. If you meet more often, your meetings get shorter (you have less new material to debate), and if you meet more often than your competition, it is as if your drums are beating louder and faster. You can respond in a day to changes in the market while they take a month. Verne Harnish, the guru of this kind of stuff, suggests you have a daily “huddle” in which you and your team spend no more than seven minutes running through the numbers and sharing each of your top priorities.
2. Build scenarios: Scenario planning has been around for decades, but still few people understand how to do it well. I’m no expert, but I have helped many companies use scenario planning to increase their competitiveness, and here is what I have found works:
- Identify the top 10 drivers on which your business depends. Consider both external (e.g., the unemployment rate) and internal (e.g., average margin you must pay your distributors).
- Integrate these into three drivers by eliminating or combining them (often two drivers depend on each other, so you can group them).
- Create 10 scenarios by imaging what happens as each driver oscillates. For example, one scenario might be a high unemployment rate in which you must pay a low margin to your distributors; another might be low unemployment and high margin. You get the idea.
- Select two to four scenarios you want to plan for. These are the ones most likely to happen and that would most significantly impact your plan.
- Build out each scenario as a three-page story and then come up with what your strategic response should be.
- Set up a tracking system by identifying what numbers you can track that will let you know that one of your scenarios is emerging.
You now have two to four strategies in your back pocket, and this gives you an enormous advantage. I imagine a war room in the Pentagon. Something happens and the general says, “Bring out the plans for ABC.” They have already thought through the scenario and have a plan. You can reach in your back pocket and pick out the game plan while your competitors fumble.
3. Monitor: Now it’s time to put these two pieces together–your scenarios and rhythm. Create a dashboard that tracks all the key numbers you identified in step 2, then review those numbers in your weekly or daily meetings that you set up in step 1. This doubles your speed advantage. Not only can you respond more quickly when something changes, you now notice changes earlier too.
Then you become unstoppable!
[Image: Flickr user Alex Papke]