If you a running a competitive business these days, you already have world-class operations (if you didn’t, you’d be out of business or on the short path there to.) That is, you have already applied process technology and process management to your operations. That’s the good news. The bad news? So have your competitors. (They wouldn’t be serious competitors if they hadn’t.)
Now here’s the thing about process-managed, world-class operations: with few exceptions they can be outsourced; they can be bought off-the-shelf. The very fact that they are definable and describable in detail means that they can be replicated … elsewhere. And, because they are out-sourceable, they are not really part of your core raison d’etre; in other words, they add no value that others don’t also offer. They are not required to “play” and are not a source of competitive advantage.
What does an enterprise really do? How does it really add value? What is the sine qua non, the raison d’etre, of any enterprise? It is this: to align the needs of the market with the capabilities of the enterprise. To do this, the management of the enterprise causes resources (financial, human, and physical) to come together in a way that satisfies a particular set of market needs. And to do this, management does six things that cannot be outsourced, that add the real value of the enterprise.
1) Understand the market. Without a serious, in-depth understanding of the market, there can obviously be no way to know where the opportunities in it are … except by luck, which is hardly reliable. There are 200+ elements about your market itself your competitors, your product/service alternatives, your customers, your channels and your political, social, and environmental market factors. You must know them, and be able to predict each of them at least one product/service development cycle into the future. And, of course, this data has to be analyzed to extract information from it.
2) Use the data to pick opportunities. If you have a complete set of market data and it’s analyzed appropriately, much of the work involved in making good market opportunity investment decisions is fairly straight-forward. Of course, there’s always a need for the insight that comes from talent and experience, but at least you won’t be arguing about something that you could have had real data on.
3) Get marketing deeply involved with product/service development. As a competitive enterprise, you already have a world-class product/service development process. But chances are the people who deeply understand — and continuously track — market needs aren’t providing the input that intelligent product/service development stage or gate decisions need. These marketing (or product management) people will need the data collected in step one, and will have to continue to track it.
4) Align the downstream sales and promotion organizations with product/service development Properly developed products (or services) will dovetail with the product’s promotional and sales plans and resources. Effectively sold products have to be so dovetailed.
5) Treat the whole thing as a single process. Market understanding, opportunity identification, product development, and sales/promotion need to be a single, interlinked process with elements feeding back to upstream elements. Put the process in place.
6) Manage by process principles. Your core enterprise activity, as described above, is the process of aligning the market’s needs with your enterprise’s capabilities. Because it’s a process, it can me managed by time-proven process management principles: continuous improvement, lean thinking, and constraint analysis.
See how easy it is … to explain anyway.
Ralph & Mitch