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Speed Doesn’t Kill … Slow Kills Organizations

by Nov 11, 2013, 6:11 am ET

You could accurately call me Dr. Speed because I love speed. I don’t mean the speed associated with fast cars, but instead, organizational speed. I really admire large organizations that have a track record of doing everything really fast.

Organizational speed means that as a result of purposeful actions, the organization does all important things measurably faster than its competitors. Many don’t realize it but one of the constants since the beginning of human life has been that everything that man has touched has continually gotten faster. Everything, including cars, airplanes and even Olympic athletes get faster each and every year. And now organizations are also becoming part of this speed movement.

Organizational speed can be exhibited by the organization’s ability to rapidly respond to problems and opportunities, to move into new product areas, to make fast but accurate decisions, to learn quickly, to shorten time to market, and to hire and retain employees who are simply fast.

It may seem natural that all organizations would desire to be fast but the exact opposite is true. A majority of organizations and their corporate cultures are not fast at all; at best you could say that they instead move at “deliberate speed.” Most firms don’t move fast because it takes a special speed strategy in order to successfully move fast, and because many corporate leaders are risk averse, they avoid moving fast because they fear it may result in unnecessary risks and too many costly errors. For literally centuries, deliberate speed was fine until we entered the VUCA world in the 1990s, where intense global competition, rapid copying, and continuous chaotic change now assign some significant negative business consequences to slow organizations. And often, that negative consequence is irrelevance.

Firms like Kodak, MySpace, Good Guys, Blockbuster, and Blackberry have all moved too slow as organizations, and now their leaders, owners, and employees are suffering the negative consequences. In contrast, firms like Google, Facebook, Apple, and Amazon that are “built for speed” have grown and prospered because of that ability to move fast.

If the speed of change inside your organization is slower than the speed of change occurring outside your organization … your organization is in serious trouble and unfortunately, the insiders will likely be the last to realize it.

The Many Advantages of Speed in Organizations

Some of the advantages and benefits that a fast-moving firm can receive include:

  • First to market has an economic value – fast organizations get their products or new product features to market first. And as a result, they get media attention, initial customer loyalty, and in many cases, larger margins because there is yet no competition.
  • The impacts of problems are reduced – because the organization moves fast once it senses a major problem, the problem is more likely to be mitigated quickly, thus reducing the economic damage. Because fast-moving firms also share their problems (and best practices) internally so rapidly, the initial problem is less likely to spread without warning to other areas of the organization.
  • Fast responses to changes in the environment – speed allows organizations to respond rapidly to changes in the economic, business, and competitive environment. And that rapid response makes it much more likely that their revised business plan and approach will “fit” the new environment.
  • Opportunities are seldom missed – the ability to move fast means that the organization will rapidly see and act on opportunities, thus reducing the chances that any major opportunities will be missed.
  • Recruiting/retention – fast-moving organizations excite potential applicants, especially those who are risk takers or who are fast and innovative. Retention will likely also be improved because of the excitement caused by the speed and the lack of bureaucracy and “having to wait.”
  • Lower costs — although in some cases moving fast can cost more, by avoiding bureaucratic delays and slow decision-making, the firm may offset those higher initial costs, to actually make going fast … cheaper.
  • Going fast can be learned — once an organization learns how to move fast in the product area, it is much easier to transfer that “capability for speed” to other direct and overhead functions. The end result is that the sharing of speed tips makes the entire organization faster.

The Benchmark Firms Known for Speed

If you want to learn from firms that are obsessed with speed, start with Facebook. Quotes from its CEO illustrate their focus on speed …“move fast and break things” and “if you never break anything, you’re probably not moving fast enough.”

Facebook recently demonstrated its amazing speed capability by within two years making a 180-degree turn away from its historical webpage/PC-based product delivery approach to the mobile platform. Google is also known for speed. And its CEO makes that clear when he expects his employees to “create products and services that are 10 times better than the competition” and that rate of improvement obviously requires both speed and a high level of innovation.

The rapidly rising Samsung organization even uses the corporate slogan “perpetual crisis” to let everyone know that the environment that it operates in requires adaptability and a continuous improvement in speed. Apple stands out as another example of a firm that likes to be the first mover into new product categories and to dominate them from the start. In addition to technology firms, entire industries including mobile devices, medicine, and green energy industries are learning to move at breakneck speed. Even retail firms like McDonald’s and Starbucks are learning to change and move rapidly.

It is no longer the big established firms that dominate the small ones …  it’s the fast and adaptive firms that now dominate the slower firms

THE 20 Key Components of Organizational Speed 

Once you accept the premise that speed is an essential characteristic in business, it is only logical to next begin assessing which elements of an organization need to move significantly faster and precisely how fast each one needs to be. Organizations are complex, so they have many components and each one of those components must be designed and measured for speed. If your organization decides that it needs to increase its organizational speed to match that of its business environment, here are some of the areas that must be fast.

    1. A culture of speed is required – rather than a piecemeal approach, the most effective strategic solution for increasing speed across the organization is the development of a “culture of speed.” Just like any other type of corporate culture, a speed culture permeates every department and business process including hiring, production, product development, finance, decision-making and logistics. In order to maintain speed in a speed culture, every new program, idea, product, process, etc. must be evaluated for its positive or negative impact on organizational speed.
    2. Organizational speed must be defined, measured, and rewarded – measurement is critical for improvement. The overall speed of an organization can be measured based on how fast (in weeks) after it identifies a major change or problem in the environment that it successfully plans and funds its response. Fast-moving organizations start by closely monitoring their environment and then rapidly responding to any new technologies, actions by their competitors, new laws/regulations, changes in economic factors, and changing customer and market forces. All speed related failures must be analyzed in order to determine and then fix the factors that contributed to the increased reaction time. Obviously employees and managers that move fast and accurately must be both recognized and rewarded.
    3. Innovation is closely related to speed – there has to be a reason for moving fast and one of the primary ones is the need for innovation. Because innovation may have up to 10 times more economic impact than a focus on productivity and efficiency, the rate of innovation as well as the speed of innovation must be monitored and continually improved.
    4. The speed of collaboration is important – collaboration between employees from different teams is an essential component of innovation. As a result, the frequency and the length of collaboration interactions must be increased.
    5. Fast employees are needed – some individuals act, react, think, and learn faster than others. Leaders need to vigorously recruit only those who can operate successfully in a fast environment, because unfortunately a single slow employee like “Homer Simpson” in a team can permanently reduce everyone’s speed. Fast employees and the jobs that require a fast employee must be prioritized in the recruiting, retention, and redeployment processes.
    6. Fast managers are also needed – you must be a fast manager in order to manage fast employees. Unfortunately, not all managers and leaders are adept at moving fast and at making fast and accurate decisions. The rare “fast manager” and leader does understand the process for increasing speed, and as a result they are usually familiar with the most effective tools and approaches for increasing speed in their processes and their employees.  Clearly managers and leaders need to be selected based on their capability of moving fast.
    7. Firms must be fast in adding and releasing talent capabilities – organizations must be able to rapidly increase their talent capabilities through fast hiring. And at the same time, they must also be able to rapidly reduce labor costs during slow business times by releasing contingent workers. In addition, the internal movement of employees must be sped up so that talent can be quickly redeployed to areas within the organization where it can produce a higher rate of return.
    8. Rapid but accurate decision-making is critical — unfortunately few realize the importance of fast decision-making in a fast-moving organization. Decision-makers must be assessed, hired, and trained on their ability to make fast but accurate decisions. Drug maker GSK actually improved decision-making speed by 45 percent merely through the redesign of its office space.
    9. Learning speed is critical – in a fast-moving world, organizations must learn rapidly immediately after new knowledge and information appears. Organizations must develop processes for identifying and then learning about this new information, tools, answers, and solutions. In fact, Google research has identified “learning ability” as the key competency in their hiring.
    10. The speed of sharing is also important — once an organization’s employees learn about new information or best practices, there must be a process to ensure that their information is rapidly shared throughout the organization. Wikis, forums, and social media platforms can all be used to speed up best practice sharing. The time that it takes for the entire organization to eventually learn about a new practice or solution should be measured to ensure that it is continually getting faster.
    11. Technology is essential for speed – in today’s world, it is almost impossible to be global, low-cost, highly innovative, and fast without the extensive use of technology. Process and program leaders must constantly search for new software and hardware that can enable both faster speed and higher quality. Leaders must also assume when new technology or tools are implemented that each will eventually become obsolete. To avoid a reduction in speed, a process for finding a replacement before the obsolescent date must be included in the implementation plan.
    12. You must identify barriers to speed — just like PCs, even the best designed processes and approaches tend to slow down over time. As a result, there should be a formal survey tool that allows managers to periodically identify any current “barriers to speed.” In a “culture of speed,” all employees must be educated on the value of speed and each employee should subsequently accept ownership of their role in continually improving speed and innovation.
    13. Processes must be built for speed – all business processes must be continually assessed for speed. Those that fall behind must be redesigned and all new processes must include the essential design components for speed. In a fast-moving world, processes must also have a Just-in-time capability to handle sudden and fast arriving situations.
    14. Processes must be integrated – interrelated processes that are dependent on each other must be either coordinated or completely integrated if speed goals are to be achieved. This integration is necessary to ensure smooth and fast handoffs between functions and to ensure that roadblocks to speed are quickly identified and eliminated.
    15. You must cut approvals for speed – requiring excessive approvals not only hampers speed but it also frustrates innovators. Where approvals cannot be eliminated, you must dramatically reduce the time required for getting them.
    16. Anything that is “slow” must be jettisoned – with age and use, many organizational elements will either slow down or they will fail completely in matching the speed of change of the organization. That means that there must be a conscious effort to identify and quickly jettison processes, tools, and programs that slow down the organization’s speed. In the same light, employees who lose their capability for speed must also be rapidly identified and then fixed or released.
    17. You must measure your speed — you can’t improve something that you don’t measure. As a result, there must be metrics for measuring the speed of each important corporate process. Incidentally quality must also be measured, because customers have learned to expect both speed and quality.
    18. Provide benchmark comparison numbers for speed — decision-makers must be provided with comparison numbers both from within and outside your firm so that they can accurately assess how they rate on speed within your firm and in your industry.
    19. Distributing “speed reports” can help – widely distributing ranked reports demonstrating the differentials in speed between the different departments, managers, and processes can spur internal competition while also allowing the slowest to learn from the fastest.
    20. Train employees to be fast – some employees are slow simply because they’ve never been trained on how to act fast. The training and development function must develop courses, educational materials, YouTube instructional videos, and webpages to help employees and managers learn how to think and act faster. For example, most employees do their tasks in a linear way (i.e. one step is completed before the next step is executed). By teaching them how to take simultaneous or parallel actions, employees can do more high quality work in less time.

Want to achieve extraordinary results? … Set unreasonable timetables! — John Patrick, former IBM strategist

Final Thoughts

In the business world speed is everywhere, so products like mobile phones and computer chips now become obsolete in less than 12 months. In the area of people management, leaders are just beginning to realize that they can make a major contribution toward increasing organizational speed. Yet despite the initial progress, there are still naysayers in talent that worry that moving fast will increase errors and mistakes. But it’s equally important to realize that if you can learn rapidly from each of those talent related mistakes, you essentially turn a negative into a positive.

From the competitive standpoint, if you want to be an industry leader and remain highly profitable, your organization must master organizational speed and become a “fast company.” And as an individual employee you must also realize that, if you want to remain employable throughout your career, you have no choice but to continually improve your own capability for speed.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • Martin Snyder

    Oh I don’t know that everything is getting faster….I think for recent human history we were able to get a lot closer to some pretty real limits, and we have bumped up against them.

    Commercial airliners are 50mph slower than they were in 1958. The dynamic Q factor of supersonic airflows are just too expensive and likely always will be…. I’m using a 2006 laptop that is plenty fast. Supercars are stuck at 3 seconds to 60 and even that is a waste since telemetry and surveillance means nobody can drive fast anywhere. We are almost certainly stuck well below the speed of light…for the foreseeable future the fastest guys were the Apollo 10 crew at a tick over 25,000 miles per hour….

    I think the era of speed is over and its now about cost and quality, but that’s just me…..

  • http://salesgenomix.com John Hoskins

    Dr. – great article! I wish my prospects would walk this into the C suite and share it with leadership. I am amazed at how slow people are to adopt new ways of thinking. The decision velocity in most organizations is something close to tectonic. I think you have nailed a big problem with our economy today. Everyone is frozen – waiting for the next shoe to drop from Washington. Kudos on your keen insights and advice.

    John

  • Robert Dromgoole

    Martin, I’m sure you’re poking a little fun at John. Maybe the better way to say it is speed to execute? Or change or evolution speed? In years past, we’d just take too long or move gradually in approach. But it seems now evolution and change are coming faster, even if airplanes are traveling slower. (That said talk to Richard Branson, and Space X, they’re working on a new kind of fast).

    I agree with John about speed. There’s an old addage in recruiting. “Time kills all deals.”

    Well written!