According to Forbes magazine, most companies are still struggling to cut costs, enhance efficiency and improve processes. Companies that fail to manage these issues increase the risks of losing customers, market shares and time sensitive opportunities. However, many CEO’s of large corporations are implementing the following unique solutions to strategically improve their companies.
Differentiate Corporate Strategies
CEO’s sometimes consolidate various business strategies together in order to increase clarity and focus on a few goals. While this does simplify things, it isn’t very effective for managing individual business functions. This means that things like cost leadership, product innovation, accounting controls, customer service and supply chain streamlining all need their own individual strategies. By bringing together leaders from across the business who are individually responsible for sub-strategies, CEOs will be able to formulate a master comprehensive strategy that truly reduces risks and increases revenue.
For example, the marketing director should incorporate what differentiates the company from the competitors and what customers value most about services or products into the marketing strategy. Supply chain directors will use their industry insight to focus on issues like global and local sourcing. Accounting directors will focus on using advanced reporting and forecasts to increase revenue. When unified together, separate corporate strategies are more efficient and cost effective.
Set Enterprise-wide Performance Standards
The CEO needs to ensure that the entire organization, from entry-level to senior employees, have published performance standards. This increase accountability and transparency while also creating a structure for performance incentives. Performance standards may be very different from each other, but they all need to deliver the most value for the business while protecting against risks, waste and inefficiency. CEOs are using more traditional metrics like cost, service and capital to measure the performance of their top employees.
The right performance indicators will strongly depend on the departmental needs and expectations. This means that capital fund managers will need to demonstrate agility in volatile markets with fluctuating demand, but supply chain managers will need to focus on the stability of supply for products with unstable demand. Many CEOs now focus on using performance reviews as opportunities to establish rapport, clarify roles and set goals. They are also using BPM providers to map out and analyze individual processes.
Create a Quality Driven Organization
The key to collectively improve internal processes at the same time is through a quality management system (QMS). Although many companies will not need to seek external certification for the ISO 9001 QMS standard, they should at least establish their own internal quality standards. New technology solutions and sophisticated data analysis enable companies to manage their quality in real time with minimal oversight. This is why CEOs tend to appoint a single leader who is responsible for corporate performance and delivering improvement projects across traditionally separate functions like marketing and procurement.
These CEOs ensure that their organization combines operational excellence with strong data-driven solutions, analytical capabilities and cross-functional decision making. Some CEOs choose to create analytical teams who support quality and process improvement initiatives and decision making through identifying hidden risks and opportunities in unstructured data. In order to be successful, the CIO must support these teams with useful platforms and applications that enable collaboration and analytical decision making.
In closing, many CEOs also cultivate the right leadership qualities in senior management and themselves. They understand that leaders need conceptual skills, so they can recognizes new possibilities, and analytical skills, so they can focus on the facts on the bottom line. Intuitive people skills means they can pick up nonverbal cues and recognizes interpersonal difficulties. Having operational skills will empower them to maintain a standard of consistency and provide stable leadership.
By: Dennis Hung