IN TOUCH : Why one size doesn’t fit all

Businesses that fail to deliver on their growth strategies may be lacking the leadership skills necessary to successfully implement those strategies – and different strategies require different skills.
That’s the finding from an in-depth study involving executives from such corporate heavyweights as General Electric, IBM, Pfizer and Bank of America carried out by the US-based Forum Corporation in partnership with The Economist Intelligence Unit and MarketOne. It specifically identifies the capabilities to lead three main types of growth strategy: organic growth; strategic alliances; and mergers & acquisitions. While eight capabilities stand out as being necessary for all three, the study found that each strategy also demands quite distinct capabilities – and business-unit leader who masters one can’t necessarily handle the others, explained Forum executive vice president Galina Jeffrey on recent visit to New Zealand.
“If you’re asking someone to grow the business organically then they need to be focused on customers, generating innovation and experimentation, executing relentlessly. With strategic alliances it’s all about building relationships, developing shared vision, engaging others… So the work for the leaders in that situation is very different than for M&As or organic growth.”
The research identifies the specific competencies needed to successfully execute mergers and acquisitions as: maintaining an external focus; bridging differences in styles, values processes and cultures; adapting to changing environment; and improving processes continuously.
It’s not that people can’t play across all three – Jeffrey says her own skillset is currently being applied across section of the US business where growth is organic, the recent acquisition of an Asia-Pacific operation and range of strategic partnerships at both the supply and delivery ends of her company’s consultancy work.
“On any day, I might be asked to make decision against any one of those and this research is really helpful. I can say okay the decision I’m being asked to make is in this channel so the beacon driving the decision if it’s organic growth is customers and innovation. Whereas the beacon driving decision related to an acquisition is whether this is going to engage and retain the people who just got told I’m their new boss.
“That’s very different driving principle – and in both cases it’s having people who are really comfortable with ambiguity.”
The latter increasingly features as necessary leadership trait in today’s world – and can be learned, says Jeffrey.
“What you need is people who are adaptable and resilient and that feeds into how well they cope in an ambiguous situation. And when you look at adaptability, you can raise people’s adaptability.”
Sure it’s more the stuff of experience than of classroom learning, agrees Jeffery.
“But I think you can also turbo-charge people’s learning on that by giving them some earlier experiences and just being focused and purposeful about how you develop your leaders.”
Looking at the over-arching capabilities is good starting point. The study identifies four sets of practices that stood out as the ones most crucial to any growth strategy.
1 Fixating on customers while being clear with employees which includes understanding customers and determining their unmet needs, communicating clear strategy and compelling vision, and building well-functioning team.
2 The ability to prudently shun tradition which is about challenging the status quo while exercising seasoned judgement.
3 Getting people to own the strategy – then listening to their concerns about it, which involves coaching and listening to others. Establishing climate of ownership, the study says, is “one of the critical few practices” that differentiated top performers from those performing just on par.
4 Getting and keeping people focused on key objectives.
The two primary challenges for organic growth strategies are cited as ‘cultivating satisfied and loyal customer base’ and ‘responding to customer pressure for improved products and services’. One dilemma for leaders in this mode is while experimentation and innovation can drive long-term growth, it can suck up profits in the short term.
Challenges facing those whose growth is predicated on alliances or partnerships include aligning business unit goals, plans and structure; sharing information to enhance integration; and making efficient decisions with core team – hence the strong requirement for building trust and engagement.
For the M&A mode, the challenges tend to be around retaining and engaging the best talent from acquired companies, using the strategy as foundation for long-term results and quickly demonstrating the value of the move to investors. All of which requires level of comfort with diversity and ambiguity as well as strong external focus.
•Findings from the study are contained in research report: One Size Doesn’t Fit All. More details from www.forum.com