I was speaking to two senior HR leaders this week and there’s a common theme starting to surface around demands in their marketplaces.  In a broader and broader range of industries, goals are being driven by customers more significantly and specifically.  I understand that’s the basis of any business, but the demands are starting to shift.

The demands from your customers moving forward are:

  1. Reduce your costs to them.
  2. Provide innovation, show them how to do things better, faster, cheaper, easier.

 

Many businesses are not geared up for these demands, their people aren’t trained to be innovators or business improvement experts.  Business may not be experienced in reducing costs in any given context. In many industries employees and manager are hands-on people doing the job they’ve been asked to do to the best of their ability.

We are demanding much more of our people moving forward, and much more through every layer.  Managers and leaders at every level need to be nimble, proactive drivers of change.  Doing things, the way they have always been done isn’t acceptable.  Just because it’s worked for 30 years, doesn’t mean there isn’t a better way. And if your company management aren’t demanding it, then your customers are and if they don’t get it from you, they’ll go somewhere.

In any given business, especially a well-established business, creating a sustainable advantage through technology and process is getting harder and harder.  If you run a trucking company, it’s difficult to create a sustainable advantage over any other trucking company through technology, systems or processes.  Even if you designed an engine that used 20% less fuel, your competition will have the same technology shortly after you.  Just look at the airline industry, developing fuel efficient engines didn’t provide a strategic advantage, no one airline has access to any technology not freely available across the globe.

 

So where is the sustainable advantage a business can easily tap into?  

The answer is its People!

 

I’ve quoted 25% possible productivity improvement; leaders sometimes quote more.  With all things being equal, the difference between two companies where the technology, systems, processes etc. are similar or equal, the difference between a good company and a poor company is its people. And a great culture comes from great leadership, at all levels in the organisation, and off course it starts at the very top.

The ’great way things are done around here’ is a key differentiator moving forward, it will be what builds a business or drives it out of business.  A strong positive people culture certainly meets criteria for sustainability, its valuable, it rare, and it hard to imitate.

A great culture is built through every aspect of your interaction with staff, right from the induction through their work experience and roles (especially their interaction with peers and management/leadership) to their departure voluntarily or through outplacement.  Leadership is about the experience the employee has during their tenor. A culture built on driving for continuous improvement, looking at ways of doing things better to cut costs, being innovative and creative doesn’t just happen because the CEO or your customers want it too.  Continuous improvement and innovation in delivery is a company-wide endeavour that must start at the top and permeates throughout the business as ‘the way things are done around here’. That you already have leaders at all levels is also an erroneous assumption.  This needs to be by design and diligently developed.

The companies of the future will demonstrate a level of flexibility and innovation in delivery or be left behind on the scrap heap.  Leadership at all levels is the answer; making that a strategic priority now is the burning platform.