Create transformative innovation

Spotting the signposts of success

Highlights

Sustaining success:

  • Making success sustainable means understanding precisely why and how it was achieved
  • Regularly review and refresh assumptions before setting the business plan and related KPIs
  • Drill deep to understand why the business is successful in specific areas; determine whether success is the result of a core competency or is derived from having a handful of great people concentrated in one area
  • Build a culture and community that allows people to take calculated risks and accepts failure as the twin of success; regularly review the progress of projects.

Many businesses are intrigued by failure but the same amount of time and energy should be spent evaluating success to assure sustainable, lasting results.

International MBA courses are littered with case studies of how Enron failed and what went wrong at Lehman Brothers. Closer to home, the entrails of HIH Insurance and One.Tel have been thoroughly prodded in the search for the seeds of failure.

Forensically researching the causes of failure will help us understand how not to fail, but that same investigation will not necessarily help us learn how to succeed.

Chief strategy officer for Deloitte Australia John Meacock says, “We tend to look at success at a very high level … and don’t articulate the assumptions.”

Spotting the signposts of success

 

Instead of patting everyone on the back because budget has been reached, it’s important, Meacock says, to check the assumptions on which the budget was built at the end of an apparently successful project. If these assumptions are flawed, then what appears to be success, could in fact be a well-disguised failure.

“If a project was linked to economic growth at say an assumed 2 per cent, but in fact the economy grew by 3 per cent, you should also readjust your expectations accordingly,” Meacock says

Meacock explains that organisations wanting sustainable success must delve deep to understand how any success was derived.

“For instance, we’ve been helping an ASX 50 company with strategy,” Meacock says. “I sat with the leadership team as they talked about a certain type of project where they are making money.”

The team’s plan was to orient the business toward more of those projects. But what appeared sensible was in fact based on incomplete analysis. Meacock says: “The team wasn’t able to pinpoint precisely why they were successful in that area. They didn’t really know if it was due to an organisational core capability or whether they had a capable individual in that area?”

If it was the latter and the company bet the business on them, it would have spelled disaster if that individual was to leave.

As managing director of Australia’s leading corporate sales and management training and coaching organisation The KONA Group, Glenn Dobson believes success has to be better measured. In doing so, it can be used to motivate, reward, recognise and reprimand staff.

“You are less likely to be disrupted if you know your core strengths and competencies and can adjust or adapt. It really is about bringing a scalpel to strategic thinking and planning not a meat cleaver.”

John Meacock, Chief Strategy Officer, Deloitte

“A lot of Australian managers don’t measure success because they don’t feel comfortable acknowledging the successful person … They are worried about staff asking for a pay raise in this era of entitlement and empowerment.”

“The Australian culture is not as aggressively success focused as in the US or Europe,” Dobson says. “The question is, will the culture of ‘she’ll be right’ always be right?”

Meacock is clear, however, that business can’t afford to wait and see.

“My view is that the CEO or chief strategy officer has to go in at a strategic level to identify the core strength, and the board should test and challenge that,” he argues. “The CFO as part of the annual budgetary process should explain the basis for the projections – not just take last year’s budget and add some.

“It’s not easy getting to the essence of what makes us win and then embedding that in the culture and operating model. But it’s important to try. You are less likely to be disrupted if you know your core strengths and competencies and can adjust or adapt.

“It really is about bringing a scalpel to strategic thinking and planning not a meat cleaver!”

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