It’s a story that plays out in nearly every company: Growth creates complexity and complexity impedes productivity and profitability.
A company starts out with a product that meets a market need, and through an effective sales and marketing program it builds a good list of customers. As customers and orders increase, new employees are hired to keep up with the workload and new processes and systems take form to make sure products are produced and delivered.
Soon, the company reaches the stage of growth where the CEO needs executives and managers to help direct and oversee the activities of the growing employee base. In addition to managing the workforce, executives and managers are called on to configure and implement more efficient processes and procedures necessary to effectively serve the growth of orders and customers.
Increased complexity impacts communications and disrupts the focus on value-creating activities. But for a company to create value, i.e., to produce a return on invested capital greater than the cost of capital invested, every employee has to be engaged in doing the right things the right way. And that means that everyone must understand the company’s values, vision, mission, and strategy, and fully understand their important part in upholding those values and accomplishing the organization’s goals.
To borrow from Albert Einstein, today’s problems cannot be solved with the same level of thinking that created them.
Many companies have great ideas, a clear vision, sound strategies, and detailed business plans, yet a large percentage fail to create the enterprise value investors expect.
What do high-performing companies do differently?
They focus on strategic actions that strengthen the competitive advantage, implement practices and processes that drive execution, and cultivate a performance-oriented culture.
According to a Forbes article, companies that have appeared on Fortune’s annual 100 Best Companies to Work For list also see higher average annual returns, with cumulative returns as high as 495% instead of 170% (Russel 3000) and 156% (S&P 500). These companies build a strong competitive advantage and a culture that creates value.
So, how do we think differently to solve problems that depress earnings and growth?
We facilitate organizational alignment that focuses on strategic actions to drive excellence in operational execution, and we provide coaching and leadership development to revitalize a culture that inspires employee engagement and unleashes the organization’s core intelligence. This methodology strengthens the competitive advantage and enables an organization to create extraordinary value.