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The Need For Speed and Why It Is Critical for Business Success
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First of two parts
I work in the Silicon Valley, where we have a long-established mantra of “faster, cheaper and better.”
But now no matter where you work in the world, almost everyone can sense the fact that every aspect of global business now seems to move significantly faster than it did even 10 years ago. You could even label the 21st century as “the century when speed dominated.”
This increased speed means that new products and product features come to market at an amazing rate, copying is almost immediate, everything you rely on seems to become quickly obsolete, and long-established businesses routinely lose out to faster moving startups.
In this environment, even notable fast-mover firms like Google and Apple occasionally don’t move fast enough. This was the case where they both failed to effectively seize on the amazing social media and microblogging opportunities that the faster-moving startups Facebook and Twitter quickly dominated.
In the past, the business domination rule was simple: Large and established firms will dominate the smaller ones.
However the new rule has become, “It’s the fast-moving and rapidly adapting firms that now dominate the slower ones, whether they are large or small.”
Executives are beginning to realize that the need for speed may not just be a luxury; it is probably already a critical success factor for business survival.
This point can be illustrated by the once industry-leading firms of Friendster and MySpace, which both went from domination to obscurity in a handful of years. Their demise was in part because the speed of their employees and managers simply could not match the speed of their marketplace.
You can also look to the mobile phone industry, where brand-new phones now become almost unsellable within six months of their introduction. Firms like Kodak, Xerox, Sears, Blockbuster, and RadioShack that once dominated their industry are now but a shadow of their former selves as a result of becoming bloated and slow. The probability has increased dramatically of any dominant firm rapidly falling out of the top-tier in their industry.
We already know that many business essentials including computers, Internet downloads, printers, and package delivery have successfully responded to this “need for speed” by improving their speed capability by as much as 20 percent per year. However having equipment and technology that enables speed may not be enough if a key remaining business success component, the employees, lags behind in the race for speed.
For example, recent speed-related train accidents have demonstrated that fast-moving equipment simply can’t function if the employees operating it are not capable of handling the speed that the equipment is capable of.
The key strategic learning for executives should be that in order to dominate their market, all of the major components of a business, including equipment, capital, and people must all move in unison and at a speed that matches the firm’s best competitors.
Unfortunately, a quick assessment at almost any firm reveals that it is the people component of a firm that is dead last in increasing its speed.
The talent management group that manages the people component doesn’t have a weak response; instead, it has no response whatsoever to this business imperative of continually enhancing “workforce speed.” Because executives routinely repeat the phrase that “our employees are our most important asset,” it only makes sense that HR should take a proactive role in improving the speed of that most important asset.
HR could have a proactive impact on organizational speed through the way that it hires, develops, moves, and manages employees.
If you’re not sure whether your HR function has a focus on speed, you can quickly find out, because having a “speed capability” would be part of job descriptions, employee performance appraisals, promotion criteria, performance metrics, and reward criteria. And there would certainly be classes for employees and managers on how to increase their speed.
Unfortunately, it is almost impossible to find HR organizations anywhere that even list enhancing workforce speed as one of their primary goals, no less offering services and programs that measure and increase that employee speed. Outside of firms like Google, Facebook and Yahoo, it’s hard to find any organization where managing workforce speed is a major funded HR initiative.
There are three categories of speed, including:
“Speed-capable” employees, managers, and teams also identify and respond to problems and opportunities measurably faster, they anticipate environmental changes, and they are forward-looking, so they plan and use if-then scenarios to prepare for a range of possible fast-arriving events.
Additional organizational speed factors include your response to competitor actions, organizational learning speed, project completion speed, problem-solving speed, and growth speed (i.e. the speed in which the firm moves into new regions, customer categories, and new industries).
Speed principles can for example be applied to decision-making, where firms like Glaxo Smith Kline have demonstrated that redesigning their inside workplace to enhance employee interaction can cut decision-making time by as much as 45 percent.
Tomorrow: 10 Steps That Will Allow HR to Effectively Manage Workforce Speed