Those who have traveled around the world will likely concur that the U.S. is a fast-paced environment where people rarely take a moment to relax. As Americans, we're running at high speed, and most of the time we're still not keeping up. Strangely, the same cannot be said for our automakers and suppliers when making decisions to move their businesses forward. And as we look around, it's easy to see that speed to execution has not been their strong point. How important is speed? Based on the economic results of the past four to five months, I consider speed one of the most critical elements in our society.
A year ago, I was caught saying, "Who would have ever thought that one of our domestic OEMs would be bought by a private equity firm?" Today, that same private equity firm is in potential merger discussions with General Motors. And if that doesn't come to pass, Cerberus will likely turn to another suitor tomorrow. Chances are, however, that by the time you're reading this, the deal will be done. I don't think any of today's economists would say they could have predicted the economic situation we are currently in. After years and years of inappropriate practices, it took only a few months for the economy to fall—and to fall hard. Banks that were relatively stable on Friday were being bailed out on Monday, and the stock market has been nothing short of a roller coaster ride. People who have never struggled financially have awakened to a world full of risk and concern over their ability to survive. It's happening fast.
Automotive suppliers are looking at a number of factors including: the overall economy; potential GM-Chrysler merger (or some divestiture of Chrysler by Cerberus); significant piece-price reductions from customers; raw material cost increases; and supplier consolidation. And they are undoubtedly wondering how it all happened and so quickly. Some of them have leadership dealing with decision-paralyzing shock, and this delay will be the death of them. This is not a time for hesitation or no response.
Speed is important. Speed to execution is critical. So what can companies do to enable quick, concise decision making? To begin, speed to execution in businesses requires a strategic plan that offers the flexibility to make modifications in times of rapid change. There needs to be an individual in the organization dedicated to the daily monitoring of the economy, market, customers, and suppliers. Most importantly, this person has to have their finger on the pulse of the business. Some companies have hired advisors to fill this role, but most are not in a position to hire a consultant. As a result, they must pull the best person from their organization and dedicate them to this function. This person must assemble the right team to provide all the necessary information in real-time, from both internal and external sources, allowing an ongoing flow of knowledge to the CEO and management team. Monthly meetings are mandatory to review the plan with the team, but more frequent meetings may be required during this difficult time. The organization must be willing to revisit the strategic plan and make the necessary modifications required to adapt.
If your company does not have a strategic plan for 2009, making one is the most important first step. For those of you who suggest that in the interest of speed there is no time to evaluate and develop a strategic plan, I'd simply respond that you don't have time not to develop a plan. And if you don't make one this time, it's likely that you won't be long for your present job. You may not have one. Planning is key. Yet be careful not to over-engineer the process. Put your team together for an entire day to discuss what is required of your company for 2009. Talk about where you stand today and where you'd like to be at the end of next year. Discuss what your customers are doing, issues that need to be resolved with suppliers, how you'll weather the financial storm. Write the absolutes on the board and assign ownership and due dates for solutions. Everything else should go on the back burner. That's all that is required. No four-day offsite that generates a strategy binder to collect dust on the book shelf. Just a plan that is monitored regularly in order to make decisions and accomplish goals.
The most critical part of speed to execution is monitoring the plan regularly and making decisions, while holding team members to task. The individual responsible for driving the process needs to hold people accountable. Companies MUST make decisions to change the way they do business and adapt with the changing world around them. The days of "waiting it out" and sitting on decisions are gone. Companies who ignore this fact will only be passed by in favor of those who move quickly. After all, it's about adapting to the changing industry . . . an industry that may have only enough room for one domestic automaker.