24 May 2024, 18:29
By William Buist Jun 24, 2015

Why increased profits come faster when you slow down

Operational speed is an important business aim, but there’s evidence that those companies which take the time to get things right will generate greater profits. In this article, William Buist offers some advice on how to develop a strategy centred on strategic pace …

Gandhi famously said: “There’s more to life than increasing its speed.” This applies to business as much as it applies to life.

For example, The Economist Intelligence Unit found that companies who slowed down averaged 40% more sales and 52% more profits than companies who had made getting faster and faster their central priority.

It’s important to understand the difference between operational speed and strategic pace. Companies who focus excessively on operational speed are the ones who tend to make demands, followed by explanations of “Just do it!” These managers do not take the time to explain why. Their sole priority is meeting deadlines.

This environment and mindset can be detrimental to employee improvement and to the customer experience.

This strategy also assumes that the only advantage for a company arises from doing things faster than the competitor. Since the company does not take the time to see how their work aligns with customer needs, they do not continue to provide the quality customer experience that people seek as those needs change.

Conversely, those companies that focused on strategic pace are the ones that focused on requiring less time to deliver value, but were not afraid to slow down and make sure that the progress was continuing along the appropriate track. These companies took the time to analyse and refine their value proposition for their products and services, ensured that those met the real needs of customers, and validated authentic alignment to actual experience.

A strategically-paced goal will give a company the tools it needs to be responsive to its customers and its employees to enable growth and success.

A company building a strategic-paced-centred strategy will focus on the following three areas: deep listening; open learning; and effective re-skilling.

Strategically-paced companies understand that alignment and clarity are essential for success, so they strive to get everyone on the same page. This takes time but, once achieved, everyone feels more comfortable working together and giving each other the confidence they need to succeed. Building that environment alone can help improve profits and the employee experience.

A study conducted by renowned psychologist Daniel Goleman showed that by improving the climate for employees, companies could boost performance by up to 33%. It also improved the customer experience, as employees are the face of the company.

Companies seeking to implement a more effective strategic speed plan should be aware of the significance of solid leadership. This leadership should involve strong and open communication that is willing to listen to ideas about how to improve. The leadership should be concerned with the end goal of the organisation and how the goals and processes line up with the company values.

General Motors is an excellent example of a company who uses strong leadership and good communication to improve the business. The director of planning and strategic initiatives for the brand, Nick Pudar, has said that whenever he begins to consider a new initiative, he starts by meeting with all of those who will be involved and discussing with them their goals, their planned actions, and the contributions they will need from other teams.

By including those who are involved with the initiative in the initial conversation, Pudar and General Motors vastly improve the alignment within the organisation. The improved alignment helps these transitions go more smoothly and makes it easier and more efficient to correct any inconsistencies that arise. By taking the time to ensure that the team is united, they – and you – can improve effective speed and production where it matters.

There is more to business than just increasing speed. By treading lightly and finding the optimal strategic pace, organisations will increase their sales and their profits – and you can begin to get off the driven hamster wheel of organisational speed and optimise your time with strategic pace.

William Buist is the CEO of collaborative business consultancy Abelard, and the founder of the exclusive xTen Club, which provides its members with the opportunity to learn from and work with other entrepreneurs. This article was featured in the April issue of Furniture News magazine.

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