Business is slowing down
It appears the top executives of many businesses didn’t get the memo about the need for speed.
News flash: business is speeding up.
Okay, maybe it isn’t news. But if it isn’t, why are so many businesses slowing down?
No, it isn’t your imagination. Read “The Hard Evidence: Business is Slowing Down,” Tom Monahan, Fortune, 1/28/2016). Among Monahan’s findings, using 2010 as a baseline:
- IT project delivery has slowed, from 8.5 months to 10 months.
- Open positions take longer to fill, from 42 days to 63 days.
- Purchase decisions are taking 22% longer.
Like all statistics, these are open to alternative interpretations. IT Projects might, for example, have become bigger and more complex over the five years covered by the study.
Or maybe it’s due to Agile: Emptying a dynamically managed backlog might take more time than finishing waterfall projects that exercise tight scope management. Completion is one thing. Agile’s shorter time to first value is something else.
For hiring, with 2015’s lower unemployment rate, open positions might have become harder to fill. For purchasing … I’m sure we can come up with something if we put our minds to it.
Or not. Monahan’s data match my experience — the average business errs on the side of caution, never mind the impact on velocity and agility.
What if Amazon made decisions this way? Google?
A better question: What will you do if Amazon or Google decides to invade your markets?
This sort of invasion isn’t always apparent, either. For example, do you think the folks at Dex realized Google Maps was an invasion when it first appeared?
Truth in advertising: Neither did I, until I realized that’s where I was looking for nearby sellers of what I wanted to buy, leaving the Yellow Pages on my kitchen bookshelf.
But then, nobody was paying me to realize it, so I don’t feel all that bad about missing it.
Here’s a guarantee: If your business sells physical products, it’s at risk of invasion from competing products with embedded intelligence and connection to the Internet of Things. If you sell some form of services … see Google Maps, above.
Justifying delay until flank attacks appear by claiming a “fast follower” strategy is a losing proposition. Among the reasons: fast followers are rarely the companies that know how to be fast.
How does a business become fast? Getting rid of everything that makes it slow is a good place to begin. Start with decisions — things politically-driven business managers avoid like a rabid weasels, by the way, so a business speed-up artist is operating in a target-rich environment.
And there’s no richer set of targets than the variety of governance and steering committees that pervade most enterprises.
Maybe you’ve avoided this infestation. But probably not. The bigger the decision, the more likely it will be governed by a committee, specifically to give decision-makers political cover should something go wrong.
Here are five straightforward steps for scaling back committee decision sclerosis:
- Size: Committees generally make decisions by consensus. The difficulty of reaching consensus grows polynomially with the number of committee members: In round numbers a committee of ten takes three times as long to reach consensus as a committee of five.
- Composition: Most committees are composed of representatives from different business constituencies. They’re included to protect their areas’ interests. Committees designed like this aren’t just a consequence of siloization — they’re an endorsement of it.
Populate your committees based on expertise instead.
- Cadence: Most committees, most of the time, gravitate to a monthly meeting schedule. This make the month the standard unit of time for decision-making. Worse, it builds wait-for-the-next-meeting into the management culture.
Do something radical: Insist that all committees meet weekly instead. Don’t worry about this congesting the company. The effect can be the exact opposite: Committees that meet four times as often ought to have meetings that only last a quarter as long.
- Culture: Make culture your new governance. Build the right decision habits into it, and culture can be your decision-making “lane markers.” Reserve formal governance committees for use as its guard rails.
Unless, that is, your company makes a habit of hiring and retaining employees and managers it can’t trust to make good decisions. If that’s the case, fix your staffing practices.
Then make culture your new governance.
- Disband: Do you really need a committee to make this decision? Rely on individual stewards instead, requiring them to make decisions consultatively rather than by consensus or, at the other extreme, solely through their personal judgment and expertise.
There. That wasn’t so hard, was it? Sure, most members of most committees will run away screaming in terror.
But that’s a small price to pay.