Meet the next-normal consumer

Posted in Aktuellt, Allmänt, Customer care / Kundvård, Försäljning / Sales on December 29th, 2020 by admin
Consumer behavior has changed radically in response to the COVID-19 lockdown. Understanding which changes are likely to stick will help companies plan for the recovery.
As the world begins its slow pivot from managing the COVID-19 crisis to recovery and the reopening of economies, it’s clear that the lockdown has had a profound impact on how people live. The period of contagion, self-isolation, and economic uncertainty will change the way consumers behave, in some cases for years to come.
These rapid shifts have important implications for any consumer-facing company. Because many of the longer-term changes are still being formed, companies have an opportunity, if they act now, to help shape the next normal. Three takeaways are emerging from our efforts to form a holistic view of the new post-COVID-19 consumer:

  • COVID-19 is changing how consumers behave across every aspect of their lives. As consumers sheltered at home, adoption of new digital services took place at a blistering pace. In addition to growing health and hygiene concerns, economic recession, and the related decline in consumption, the scope of the change to people’s lives is staggering.
  • Broad shifts to new behaviors hide significant variations. Consumer behaviors will likely fluctuate until we reach the next normal. How long they stick will depend on a range of factors including satisfaction with new experiences, demographics, infrastructure, and the severity of the recession.
  • Companies must rethink how and where they connect with consumers. They should expect to encounter structural challenges and upheaval across multiple dimensions. Overall consumption is shrinking, the shopping basket is undergoing a significant change in mix, and consumers are changing the ways they get their information.

For more reading.

Source: McKinsey.com, August 2020

Studie: Företag med mångfald klarar kriser bättre

Posted in Aktuellt, Allmänt on December 27th, 2020 by admin

Företag som arbetar proaktivt med mångfald har klarat omställningen under coronapandemin bättre, det visar en undersökning från Women Executive Search. Undersökningen visar också att kvinnliga ledare klarar distansledarskap bättre.

Den färska undersökningen, som är gjord tillsammans med Rasmussen Analys, visar att 64 procent av svenska chefer tror att organisationer med stor mångfald klarar av att hantera samhällskriser och plötsliga förändringar bättre än heterogena organisationer.

”I kriser har diversifierade ledningar betydligt större sannolikhet för ett bättre utfall då mångfald bidrar till innovativa och moderna lösningar. Det kan vi tydligt se i vår senaste undersökning där bolag som aktivt arbetat med mångfald har varit mer nöjda med omställningen i rådande situation”, säger Women Executive Searchs vd Liv Gorosch.

Samtidigt är företag med ett proaktivt mångfaldsarbete mer positiv till de långsiktiga effekterna av coronakrisen. Där 64 procent uppger att de tror att organisationen kommer att stärkas på lång sikt. Bland de som inte arbetar för mångfald är siffran 48 procent.

Undersökningen visar också att mångfaldsarbete påverkar ledarskapet. Inom organisationer som uppger att de proaktivt jobbar med att öka mångfalden uppger 73 procent att det har varit lätt att ställa om till ett distansledarskap under coronapandemin medan i organisationer där ett sådant arbete inte finns uppger 41 procent att övergången var lätt.

I övergången till distansledarskap har kvinnliga ledare gynnats av pandemin, där de varit bättre på att ställa om sitt ledarskap än männen.

”Det man kan se i resultatet är att det distansledarskap som kommit nu under pandemin faktiskt gynnar kvinnliga ledare. Kvinnliga ledare ser fler fördelar med att leda på distans och vänder man på det ser manliga mer svårigheter med distansledarskap”, säger Liv Gorosch.

Men samtidigt säger 42 procent av kvinnliga ledare som jobbar i en mansdominerad organisation att de behövt förändra sig själv för att passa in i organisationen.

Liv Gorosch konstaterar att det är framför allt tre förändringar som kvinnliga chefer känner att det behöver ändra.

”Vidare visar undersökningen att kvinnliga chefer i stor utsträckning anser att de behöver anpassa sin kommunikation, tona ned sin egen kompetens och hänga med den existerande jargongen för att passa in”, säger hon.

 

 

Källa: DI.se, 27 december 2020
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Vital questions top CEOs ask their teams constantly

Posted in Aktuellt, Leadership / Ledarskap on December 22nd, 2020 by admin

As a CEO or one of your company’s top leaders, there are many ways you can go about determining if your business is on track. But when it comes to understanding productivity, as in how productive your people are relative to the results they’re creating, the last thing you want is to go on a wild goose chase trying to find out what’s working and what’s not. Fortunately, there are some vital questions you can ask to get razor-sharp clarity on your organization’s productivity. The answers to these five questions will help you:

  • Make more empowered decisions about your company’s strategic direction
  • Discover how to more effectively lead and inspire performance.

Asking these questions is a proven practice that disciplined leaders do regularly. They do this purposefully, creating a winning culture, where everyone feels inspired, productive, and rewarded relative to what matters most. Here is a list of the questions:​

Do I Have the Right Talent?

The very best leaders are purposefully and strategically surrounding themselves with talented teams of people. These carefully chosen individuals possess skills and innate gifts that surpass those of their leaders. These employees are working alongside their leaders and behind the scenes, driving productivity, profitability, and overall success.

Part of your responsibility to lead your team requires finding the very best talent and helping them achieve their full potential. You must also choose those who have the capacity to deliver according to job requirements and exude openness to learning and growth when asked or required.

In terms of having the right talent, it’s also extremely important to hire who is right. Studies have shown that 80 percent of turnover is directly tied to bad hiring decisions—and turnover is expensive! In fact, for some companies, hiring mistakes commonly cost hundreds of thousands of dollars.

Do We Have Goal Clarity?

Starting with you and then moving out to the front-lines of your business, determine whether everyone has a good grasp of their major goals. Look for opportunities to pull employees aside and ask “What are your goals?” or “How are you performing against your goals?”

If individuals struggle with articulating their goals, perhaps describing activities they are doing instead, you’ve got your answer: They are not clear on their goals. View this moment of truth as an opportunity to take corrective action to get your team focused on clear objectives.

Goal clarity is vital to your organization’s success. In our experience cultures that embrace a “What’s the goal?” mindset are more productive. In fact, we’ve seen companies once slacking in productivity make leaps in progress by simply asking this question consistently. It’s powerful!

 

Do We Have Goal Alignment?

Assuming everyone at your business has clear goals, explore whether the goals for different departments are aligned or opposed to each other. For example, if a core goal is to reduce overtime across the firm and in response you cut customer services hours, it is likely that customer satisfaction will decrease as the complaints increase. This is a classic case of goal misalignment. High performing companies and leaders work hard to ensure goal alignment.

 

Are We Holding People Accountable?

Real accountability requires sheer discipline if it is going to work. It’s not easy, but the effort and short-lived pain are worth the gain. In fact, this discipline is essential to achieve the goals of the company. You must drive accountability down through the organization to fully impact it.

Regularly scheduled meetings where performance gets reported and measured is an excellent approach to get every team member on the same page and focused on the right goals. These meetings also provide insight into what’s working and what isn’t, who needs coaching, and, ultimately, who is engaged and not engaged.

 

How Are We Performing Against the Competition?

The very best organizations know their competition inside and out. They use this information to spot opportunities and make critical decisions about what direction to take their business and how to increase productivity by developing and supporting their people differently.

Knowing your competition gives you an opportunity to create a competitive advantage. Ask your team to explore how they’d feel if they could do something new or different relative to the competition. Then inspire their productivity, giving your employees the freedom and support necessary for developing cutting-edge solutions that align with your company goals.

 

The Bottom Line

Questions are a powerful teaching tool for leaders. By asking the right questions, your team develops an understanding of what you view as important, promoting clarity and focus. While there is a nearly endless supply of questions you can ask, the five described in this article promotes focus on the issues that drive employee productivity and performance. Use them in great business health!

Source: www.thebalancecareers.com
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”CX avgör kampen om kunderna!”

Posted in Aktuellt, Customer care / Kundvård, Försäljning / Sales on December 18th, 2020 by admin

Uppväxlad digitalisering och ökat hemarbete gör kunderna mer krävande och suddar ut gränserna mellan B2B och B2C. Så här måste säljarna möta en ny tids förväntningar.

En konsekvens av pandemin är att vi konsumerar och kommunicerar allt mer digitalt, både i jobbet och privat. Det har gjort oss betydligt mer kräsna och påverkar säljarnas arbete i hög grad, menar Tiffani Bova, Growth and Innovation Evangelist på kundrelationsjätten Salesforce:

– Kunderna kommer ihåg upplevelsen av ditt företag långt efter att de glömt bort vad de betalade. Customer experience, CX, är det som avgör köpbeslut för stunden och om kunden ska komma tillbaka till dig.

Kundupplevelse är ett mantra som hörs allt oftare. Tiffani Bova definierar begreppet som de ”känslor som uppstår hos en kund som engagerar sig i dina produkter, dina medarbetare och dina olika kanaler för försäljning, service och marknadsföring”.

När vi jobbar hemifrån har vi ”konsumenthatten” på oss även i våra jobbrelationer, vilket sätter ribban högre för de som säljer till andra företag, det vill säga B2B.

– Våra undersökningar visar att närmare nio av tio B2B-köpare förväntar sig säljare som på riktigt är insatta i deras verksamhet och verkligen förstår deras behov. Men bara 57 procent lever upp till det. Kunderna förväntar sig att säljare ska komma med råd de kan lita på och bidra med insikter som verkligen gör skillnad, på ett bättre sätt än dina konkurrenter.

”Säljare vill sälja”

Hur ska ett företag hjälpa sina säljare lyckas i den nya verkligheten? Börja med att studera hur mycket tid de tvingas lägga på andra saker än ren försäljning.

– Säljare vill sälja, det är därför de har valt det jobbet. Idag lägger en genomsnittlig säljare två tredjedelar av sin tid på andra uppgifter, som administration och besöksloggning. Och det beror inte på bristfällig teknik, utan på att processer och attityder behöver förändras.

De flesta tillverkningsföretag lägger mycket tid på att ständigt effektivisera produktionen, men få lägger samma energi på att effektivisera säljarbetet.

– Pumpa säljarnas muskler med den teknologi som finns i dag. Automatisera säljloggen med röstinput och annan data och låt dem dela kunskap som låter alla medarbetare möta kunderna med insikter som är användbara. Se varje kundinteraktion som en möjlighet att samla information och data, analysera den och använd insikterna för att göra rätt i nästa steg.

I en undersökning som Salesforce genomförde i oktober bland 6 000 säljare världen över svarade 58 procent att deras arbete förändrats totalt till följd av pandemin.

Att B2B-försäljning sker digitalt i betydligt större utsträckning innebär många fördelar, hävdar Tiffani Bova:

– Säljarna kan hantera fler relationer digitalt än fysiskt, ha kontakt med kunderna oftare och följa upp lättare, när de inte måste ta bilen, flyget eller tåget för att hålla kontakten.

Tiffani Bova påminner om vikten av att vårda befintliga kunder:

– Det kan kosta uppemot sju gånger mer att ta hem en ny kund än att sälja till en befintlig. Sannolikheten för att du ska lyckas sälja till en befintlig kund är 60–70 procent, medan motsvarande siffra för en ny kund är 5–20 procent. Återkommande kunder spenderar dessutom mer pengar än nya kunder.

Vid ett vägskäl

Hur ska man då göra för att ta hand om befintliga kunder och stärka deras lojalitet?

– Se till att de använder din produkt och studera hur. Om de är nöjda kanske de vill ha mer, eller en annan liknande produkt i din portfölj.

Tiffani Bova konstaterar att vi befinner oss vid ett vägskäl som kräver en ny syn på säljarbetet.

– Det är dags att återuppfinna och omdefiniera framtiden för säljkåren.

Se hela Tiffani Bovas tal på The Sales Conference här.

 

Källa: salesforce.com/se, 17 december 2020
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Börsnoterade bolag ligger efter med nya ersättningsrapporter

Posted in Aktuellt, Board work / Styrelsearbete on December 13th, 2020 by admin
Flera börsnoterade bolag har ännu inte påbörjat arbetet med den ersättningsrapport som för första gången måste upprättas och publiceras inför årsstämman 2021, detta enligt aktieägarrättsdirektivet. Det fastställer Novare Pay i en undersökning. Erika Andersson, vd och delägare i Novare Pay, ser bekymrat på situationen.

Den samlade bilden talar sitt tydliga språk; merparten har varken börjat arbeta med ersättningsrapporten eller slutfört den, säger hon. Aktieägarrättsdirektivet trädde i kraft 2019 med syftet att stärka aktieägarnas ställning och försäkra att beslut fattas för bolags långsiktiga stabilitet. Men utmaningarna är många, säger Andersson. Företagen är bland annat osäkra på hur de nya reglerna ska tolkas i praktiken och därefter tillämpas på ett marknadsmässigt sätt, detta trots att Kollegiet för svensk bolagsstyrning nu kommit med förtydligande hur direktiven ska tolkas.

– Arbetet är tidskrävande, men utmaningarna ligger mer i sammanställningen av ersättningsdata än i juridiska formalia. Svenskt Näringsliv tog tidigt initiativet att färdigställa en typ av mall som skickats ut till majoriteten av de bolag som omfattas av lagen. För de bolag som fått all lönedata i ordning kvarstår att förbereda styrelsen och andra intressenter för de kommunikativa utmaningar som rapporten kan innebära., säger Erika Andersson till Realtid.

Vad är det som krävs nu för företagen ska lyckas med ersättningsredovisning?

– Det mest tidskrävande arbetet är att förstå vilka lönekomponenter och nyckeltal som ska redovisas i de olika tabellerna. Rörliga löner, aktieprogram och tjänstepensioner är särskilt komplicerade att beräkna. Bolagen behöver därför påbörja arbetet i god tid.

Vad är det som krävs av lagstiftarna?

– En hel del. Det är lite mer komplicerat än att klippa och klistra från årsredovisningen. I år har nya regler kommit gällande Riktlinjer till ledande befattningshavare som läggs fram till bolagstämman. Uppdateringarna där handlar om att dessa ska kopplas till bolagets långsiktiga strategi och hållbarhet samt att man ska ange hur stor respektive ersättningskomponent är i förhållande till övriga ersättningskomponenter. Ersättningsrapporten, som ska läggas fram till årsstämman 2021, ska innehålla information om ersättningen för 2020 (likt som i årsredovisningen) men även inkludera mer information om rörliga löner och utfall i aktierelaterade program. Rapporten ska dessutom innehålla en jämförelse av utvecklingen av ersättningen till vd, vvd och bolagets resultat samt utvecklingen av ersättningen till övriga anställda bolaget, där jämförelsen görs över en femårsperiod. Här dyker många frågetecken upp hos våra kunder, såsom om tidigare anställda ska inkluderas och liknande. Under fem år kan det hända mycket inom ett bolag och det blir därför viktigt för bolagen att de är konsekventa i sina redogörelser.

Hur sannolikt är det att man förtydligar regelverket ännu mer alternativt att man gör om det?

– Inte sannolikt i nuläget. Kollegiet för Svensk Bolagsstyrning har nu i december publicerat uppdaterade regler för ersättningar. Även EU-kommissionen ska publicera nya guidelines, men vår bild är att dessa inte kommer att följas fullt ut av svenska bolag eftersom de inte följer svensk praxis gällande redovisning av ersättningar.

Hur stor andel av bolagen beräknas klara/inte klara av att genomföra regelverket i praktiken? Med vilka konsekvenser?

– Vår bild är att implementeringen kommer spreta. En del bolag kommer att vara mer ambitiösa än andra. Det kommer sannolikt ta några år för en marknadspraxis att utvecklats. Reglerna är dock gällande och måste följas av alla börsbolag och statligt ägda bolag, så arbetet måste göras oavsett. Konsekvensen att inte följa reglerna för noterade bolag är dels att man bryter mot vad som står i Aktiebolagslagen (ABL) samt att man bryter mot Koden vilket både kan innebära vite och att man skadar sitt anseende som börsbolag, säger Erika Andersson.

Källa: Realtid.se, 10 december 2020
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How to maintain company culture while remote working

Posted in Aktuellt, Leadership / Ledarskap on December 12th, 2020 by admin

Your managers play a powerful role in maintaining your culture

During this uncertain period of time, when employees continue to work remotely, one of your key goals as an employer must be to maintain your company culture. You worked hard to build a workplace culture that supportp your epployees’ best efforts to contribute, stay productive, and find happiness and fulfillment in their jobs. Remote work doesn’t have to change this special culture. You just need to understand the factors that need emphasis and maintenance while employees work outside of the office.

Maintaining company culture is more than providing team-building activities, or sponsoring company events, excursions, and celebrations—although they can help, even virtually. To maintain a remote workplace culture, employers need to establish a virtual environment in which team members still feel connected and protected. Employees need to feel that their entire team is working hard together, staying productive, and that their opinions matter. To achieve this, they must have regular contact with their manager and their colleagues.

Helping your employees stay connected to the overall vision and goals of the company promotes a feeling of being part of something that is bigger than themselves—a must for employee engagement.

But how challenging is it for employers to achieve this? In its study about the impact of COVID-19 on the business and workforce environment, HR consulting firm Mercer found that more than 40% of businesses experienced a moderate to high impact on how their infrastructure handled the culture and workplace change to working virtually.

 

How Important Is Culture to Your Employees, Even When Remote?

A strong company culture is often a top priority for job seekers. According to a survey conducted by global customer experience and digital solutions provider TELUS International, a majority of respondents (51%) felt less connected to their company culture while working remotely as a result of the pandemic.

When participants were asked what they miss most about working in the office, these were the most common responses.

  • Small talk and interacting with colleagues (57%)
  • Collaborating in person with a team (53%)
  • The separation between work and home (50%)2

It’s important now more than ever for employers to put company culture needs high on the priority list.

According to a study from Virginia-based Hinge Research Institute, when evaluating job prospects, 57% of job seekers across all career levels consider culture as important as pay. For 75% of talent recruiters, cultural fit is more important than a prospect’s work history and experience. And perhaps most notably, 73% of all respondents picked a defined and clearly articulated culture as the top key element of a company’s reputation as a workplace—meaning its employer brand.

 

6 Steps to Take to Maintain Company Culture While Remote Working

Your HR staff, managers, and organization as a whole play critical roles in reinforcing your company culture while remote working remains the “new normal.” And with proper empowerment, your employees can help you reinforce the culture, too. In the aforementioned TELUS study, the three most critical components of creating a strong virtual office culture are:

  • Weekly staff meetings and one-on-ones with managers (66%)
  • Schedule flexibility (65%)

Reinforce and Focus on the Culture You Want to Develop

Workplace culture will develop whether you pay attention to it or not—in fact, you likely already have one. So, you will want to actively discuss your culture with senior leadership, managers, and employees. If you like your current culture, you will want to reinforce it while employees work remotely. In that case, you may as well begin by defining the culture you want to bolster the success of remote employees. Ask each team to establish team norms that strengthen their ability to work together while out of the office, and share them with other teams.

Retain your day-to-day reminders of the culture you want to have and reinforce. Did you eat lunch together once a week when working in the office? Then, eat lunch together virtually. Did your team meet weekly for support and updates? In that case, it’s best to keep meeting. And if your organization normally met to share progress, set goals, and celebrate, continue this tradition during the period of remote work.

Trust Your Employees 

Employees who are treated with trust and respect will likely rise to the occasion. Instead of over-monitoring your remote-working employees, which can hamper their motivation and productivity, find alternatives for your teams to share work schedules—like a Trello board they can use to stay updated and in touch with their progress. Additionally, using tools such as Slack, Microsoft Teams, Cisco Jabber, Workplace by Facebook, and Quip can allow your group to effectively interact without having to attend multiple Zoom meetings. When employees (and managers) are aware of the day-to-day work activities of their team members through workflow and communication tools—and not micromanagement, that knowledge reinforces trust.

Help Your Managers Develop and Exhibit the Behavior That Reinforces Your Desired Culture

A virtual workforce requires stronger leadership skills when it comes to coordinating projects and bringing the team together into a cohesive unit. In a virtual workplace, you miss many of the cues that onsite employees provide through nonverbal communication, like slouching in a chair looking worn out. Provide the coaching, training, and support needed by your managers so they can excel in areas such as the following:

  • Setting stretch goals and objectives for their team members so the employees will rise to the challenge working remotely
  • Establishing high standards for performance so people know exactly what is expected from their performance
  • Fostering a culture that expects and reinforces the accountability of employees for the expected results, and providing critical feedback to let employees know how they are doing
  • Communicating clearly about goals, needed contributions, successes, problems, and opportunities, which will also enable employees to build trust on the team
  • Helping employees manage distractions and leading properly in the virtual environment, knowing that people have challenges with family members, sharing office space, home schooling, etc.
  • Building relationships with the employees and encouraging each team member to actively participate
  • Responding in a timely manner to employee requests for help, input, time, and feedback —especially when they need more of their manager’s attention during remote work from home
  • Paying attention to employee concerns about their growth and development needs, and addressing these concerns by, for example, holding regular coaching and development conversations, and helping workers find virtual events to attend

Embrace Transparency in All Employee Interaction

Transparent communication is critical for maintaining your culture while employees are working remotely. Employees need to trust you, especially during an economic crisis when job security is likely one of their top concerns. In fact, in a survey from promotional product company PromoLeaf and CensusWide of people who found remote work as a result of the pandemic, 48% of respondents agreed when asked whether transparency is key when it comes to feeling a strong sense of job security. Another 47% also said that they wanted to hear from CEOs, leadership, and others about how the company was being affected by current events, and what was being done to protect it, including their position.

However, 38% of responders said that their company needed to do more than they were to keep employees informed.4 This means that despite the fact that nearly half of employees want their company to communicate clearly about the effect of the pandemic, over a third feel that their company can do better. This is a good lesson for transparent communication and its effect on employee trust.

Enhance Employee Work-Life Balance and Flexibility

In a remote workforce setting, attention to your employees’ work-life balance can reinforce your organizational culture of caring.

For example, providing child care support for working parents, more flexible leave policies to accommodate the new normal, and offering virtual social activities will reinforce employee balance.

Providing regular recognition lets employees know that their sacrifices and dedication to their work in a remote setting is truly appreciated.

You do this by acknowledging the challenges they experience in their remote setting by scheduling meetings and interaction time during a core period of hours and respecting family time in the morning and evening. Your employees, for instance, may have to get their children started on home schooling before they have time to get to work.

Address Mental Health Issues Your Employees May Experience

In addition to paying attention to employee work-life balance issues, you must do more to ensure the positive mental health of your remote workers. Mental health issues that employees might experience working remotely include loneliness, mourning the past workplace, missing daily coworker interaction, and concern for their job and economic future.

In the Mercer study, the firm found that nearly 37% of companies surveyed said employees were experiencing mental health issues on account of social isolation and economic anxiety.

Employers can help combat these mental health issues in the same ways recommended to reinforce their culture of caring, empathy, consideration, and gratitude. They need to encourage their workers to use employee assistance programs (EAPs), check in frequently on how they are doing, and allow them to take mental health days for rest and relaxation when they feel they need time to regroup.

The Bottom Line

Maintaining your company culture while remote working can be crucial to your business’s operational and financial viability. By clearly defining your culture and reinforcing it through well-trained management, your employees can feel more engaged, connected, and motivated when working from home.

This, in turn, can result in increased productivity and desire to achieve a shared vision and goals, which can ultimately lead to more positive business outcomes. While the process may seem challenging, it can also be engaging and show that your company culture is worth preserving—and even strengthening—during a time when the work environment as we know it has dramatically shifted.

Source: www.thebalancecareers.com, 23 October 2020
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Eight lessons on how to get the growth you planned

Posted in Aktuellt, Allmänt, Board work / Styrelsearbete, Executive Team / Ledningsgruppsarbete on December 4th, 2020 by admin

Now is not the time to slow down. Growth initiatives are critical for value creation, even survival, throughout an economic cycle.

Maintaining focus on the growth agenda, especially during a downturn, is no easy feat, however. For growth initiatives to deliver lasting gains, they require a clear aspiration, organization-wide alignment, and careful monitoring. When we reviewed 60 recent growth transformations—intense, company-wide programs aimed at enhancing overall corporate performance—we found that more than half failed to meet their targets. So we looked for the biggest pitfalls that tripped up promising projects and the key elements that contributed to others’ success. Our analysis reveals eight lessons that companies looking to reignite growth should apply.

  1. Set targets high enough to compensate for declining momentum in the base business and inevitable setbacksAs we noted in our earlier research, the growth aspiration that leaders set matters a great deal to the shareholder value those efforts generate. Companies whose growth outperformed others throughout the 2007–2017 cycle achieved excess total returns to shareholders (TRS) of 8 percent, while the rest hovered around zero during the period. Yet many companies venture on what they believe to be ambitious programs only to find the results fail to change the growth trajectory of their overall business. Why? The reason often lies in overly optimistic baseline scenarios and a lack of detailed understanding of the business momentum. Over time, competitive activity, shifts in sales channels, product commoditization, and other market factors can erode revenue in the base business. Without a granular view of that underlying business, bold plans, even if executed well, can be undermined by leakage in the base. To produce incremental growth, the targets and priorities leaders set for the growth program need to accurately reflect the business’s momentum and compensate for this natural attrition.Consider the experience of a technology player looking to turn around declining revenues. About a year into its growth transformation, the program had produced an impressive 8 percent in new revenues—yet the company’s total sales continued to decline. The leaders realized that the downward sales trend in other parts of its business exceeded the gains made through the new growth initiatives. The company ended up resetting its targets to take into account the trajectory of its base business based on more accurate market forecasts.

    Companies also need to be realistic about their likelihood of success. All growth initiatives face the intrinsic risk of new competitors or changes in customer behavior shifting the market dynamics, and some efforts are bound to underdeliver or fail altogether. In the growth transformations we reviewed, the success rate ranged between 50 to 70 percent. To offset the likely setbacks, companies should create a pipeline of initiatives that adds up to 130 to 150 percent of the growth ambition. Leaders should also foster an entrepreneurial spirit and not punish failure due to factors beyond project managers’ control.

  2. Define a few growth themes and ensure the entire organization embraces themBefore launching growth transformations, many companies extensively review and update their strategic priorities. This typically entails analyses of market trends, category and product performance, and competitive activities. In studying the practices of growth outperformers, we found these companies go beyond the core and look into potential moves involving geography, market adjacency, and value chain to set their priorities and aspirations.The result should be a set of four to six clearly defined priority growth themes that cover all potential growth levers. That could mean expanding offerings by entering into new product categories or introducing new services, and expanding segments the company pursues by deepening penetration into existing markets or focusing on micromarkets. Defending the existing customer base (through the acquisition of new accounts, churn reduction, and cross-sell) also needs to be part of the mix, as does innovation in products and business models. Improving sales performance management or customer experience and even M&A or partnerships all could be part of the growth recipe. It’s essential that the organization can act on the growth themes within 12 to 18 months and that their achievement be hardwired into incentives for business leaders.

    In our experience, cascading these priority themes down through the organization is as important as the strategic review that produces them. The failure to communicate and ensure organization-wide alignment on the desired direction hobbled the growth program at one industrial company. The leaders had spent significant time developing what they believed to be clear strategic priorities, yet growth failed to materialize. There were two problems, it turned out: the priorities were too numerous for the organization to address with focus and scale, and regional business leaders found them disconnected from near-term opportunities for their units. A subsequent mapping of the hundreds of regional initiatives against the corporate priorities demonstrated that some units pursued growth projects tailored to their specific markets rather than the company’s chosen themes, and those local opportunities were in turn not supported by the corporate programs, diminishing the potential to leverage the company’s global scale.

  3. Protect the margin of your base business while focusing growth on high-margin targetsA growth aspiration sometimes ends up becoming a push for volume at the expense of margin. Sales teams may present “opportunities” that essentially mean lowering prices or focusing on lower-margin offerings to reach more customers—recipes that rarely deliver profitable growth. This risk is particularly acute in companies that lack strict pricing and margin controls. Perhaps counterintuitively, raising margin targets when setting the aspiration for the growth transformation can help deliver the desired results. This requires leaders to identify initiatives that combine volume growth and pricing levers within sales. More broadly, they should pursue ideas that are both growth- and margin-accretive, such as business-model innovations or expansion into high-margin, high-growth markets.When an international agricultural company asked its various units to develop growth plans, for example, it found the country organizations were reluctant to launch pricing-related initiatives alongside revenue-growth efforts for fear this would limit their sales opportunities. Management also realized the organization lacked the pricing systems, processes, and governance needed to avoid margin erosion as business units strove to deliver top-line growth. To address these shortcomings, the company developed a pricing tool through which it could challenge each national organization on its (net) prices at the product level and intervene when it found them offtrack. The new tool not only delivered a 1 percent improvement in earnings before interest and tax, but ensured the revenue growth achieved by the business units did not erode margins.
  4. Make line managers accountable for designing and implementing growth programsOur analysis of successful growth transformations suggests that having a critical mass of employees involved in their design and execution makes a big difference. Companies that score in the top quartile of growth performance mobilized at least 8 percent of their workforce to drive the initiatives. Some top performers deployed 20 percent of staff or more.Additionally, for growth gains to be sustainable, local leaders need to be accountable for their targets—they should “own” their parts of the program. As such, management should empower them to develop portfolios of initiatives (within the corporate growth themes) that are customized for their businesses or regional contexts and are projected to deliver 130 to 150 percent of their ultimate growth target (in line with our point in the first lesson). Line managers—the individuals who know the offerings and the customers best—should then lead the initiatives, not external project managers who lack a long-term stake in the business. Which function these internal leaders come from would depend on whether the initiatives are related to go-to-market strategy, innovation, product development, or inorganic moves.

    Some growth opportunities require establishing or improving cross-functional collaboration. As the chief growth officer of one leading consumer packaged-goods company put it, “Product, engineering, and sales [should] take decisions jointly, so you don’t have fingers pointing at each other.” For example, a food ingredient player noticed the lack of short-term alignment between operations and sales which, as at many organizations, were separate functions. A shortage of customer orders at specific moments led to sizable productivity losses due to production stops and slowdowns. Unlocking growth required making sales and operations jointly accountable for the objectives, key performance indicators (KPIs), and milestones set for different team members.

  5. Fund growth by reallocating resources and reinvesting gainsAsking business unit leaders to come up with growth ideas will inevitably lead to requests for additional resources for sales, marketing, and technology. An ambitious growth transformation does require proper funding, but it should be guided by a structured process of resource reallocation. Often, existing allocations are due more to past performance than future growth potential. Consider instead asking each unit leader to free up 20 to 30 percent of resources from their existing budgets and separate the savings and the gains from earlier initiatives when reallocating these resources to growth programs. Making resource reallocation a mandatory exercise before committing any additional funding forces everyone to invest in their own success.Wherever the resources come from, top leadership needs to communicate early how much funding will be provided to support growth initiatives and how the decisions about its allocation will be made. Setting expectations for new funds and then failing to deliver them can be a major blow to the transformation effort’s credibility and the organization’s commitment to its execution.
  6. Create implementation plans with clear milestonesMcKinsey’s research on organizational transformations suggests that shorter initiatives tend to produce better results. In that study, we found that successful transformations delivered close to a third of the transformation value within the first three months and approximately 75 percent in the first year. Our research into growth transformations found a similar trend: shorter initiatives have higher success rates. Moreover, early successes are important accelerators of the entire transformation.Yet many growth programs are designed to last multiple years. What’s more, they often rely on high-level plans short on detailed proximate goals and expectations. Designing a growth program with specific, measurable, achievable, realistic, and timebound milestones can enable leaders to address execution bottlenecks in a timely manner. This requires setting milestones based on weeks rather than months or years.

    It can be useful to test the larger program with a limited-time pilot. One electronics player that was working on a new direct-to-consumer proposition it expected to become a sizable business first spent six months running a small-scale study with select users to develop and test the proposition. The lessons at each step of the project helped the company fine-tune the expectations for subsequent milestones while the multiyear road map kept the project firmly on its path.

  7. Continuously prune and replenish the pipeline of initiativesIdeate, refine, renew, and repeat is a cycle that never stops, when done well. Our earlier research on organizational transformations shows that companies in the top quartile restocked their initiative pipeline by 70 percent after the first year, often compensating for initiatives that had been canceled. Maintaining such a healthy pipeline of growth projects, however, requires that companies adopt a rapid-learning approach.Continuously monitoring progress and pruning underperforming initiatives allows scarce sales and marketing resources to be redistributed to more promising efforts—and the faster that is done, the better. As for generating new growth ideas, networks of champions for each of the priority themes can be great sources for pipeline renewal: they can share lessons and success stories across regions and business units, often without the involvement of senior management.
  8. Measure and incentivize performance at multiple levels to focus interventions where they are needed mostManaging a growth transformation requires tracking numerous performance dimensions, from market demand to the competitive landscape to the progress of the initiatives themselves—factors that are both within and outside the management’s control. Performance management should include financial metrics as well as operational and leading KPIs. Many of these will be interrelated, and leaders should determine which are best managed at which level of the organization to create the right incentives and enable timely intervention. At a minimum, growth performance management should cover three levels:
    • Overall corporate goals. The top leadership team needs to understand how the growth transformation is driving the company’s top line. Connecting the growth project’s impact to the actual (or forecasted) revenues can reveal influences outside the initiatives’ parameters, such as foreign-exchange effects or sales declines in parts of the business not targeted by the growth transformation.
    • Growth transformation targets. Leaders of the transformation should track execution progress, operational KPIs, and financial impact for each initiative within the program. Creating a performance-management dashboard to monitor these metrics can enable them to address execution problems and redesign or even terminate initiatives quickly.
    • Functional performance. Take sales as an example. Companies whose sales organizations outperform their peers consistently excel in two capabilities: frontline execution through standardized performance management and analytics-driven opportunity identification and prioritization. These sales leaders are three times as effective and twice as efficient (based on gross margin to sales cost) as the median. Sales management should provide a single source of truth on forward- and backward-looking sales performance as compared to targets (such as order book and funnel) and incorporate this into frequent sales-performance dialogues so the insights the metrics reveal are translated into frontline action. The performance of other functions critical to reaching the growth aspiration, such as marketing, innovation, or corporate development, should have similar growth targets and analytics integrated into their performance measurement.

Delivering the growth your strategy calls for is a complex and challenging endeavor for most organizations, particularly during a downturn. To ensure the results meet the aspirations, companies can lean on the experiences of others to guide their targets and approaches to execution. While the temptation to wait for the current crisis to pass may be strong, it entails the risk of falling behind competitors who adopt a through-cycle approach to growth and emerge far ahead in the recovery.

Source: McKinsey.com, November 2020
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