KQ Article

For those who are prepared, chaos brings opportunity. Recent economic turmoil, for example, offers tremendous opportunities for those who embrace disruptive innovations. Of course, not every disruption is innovative. Success comes when you combine the wisdom to know what not to change with the courage to embrace change everywhere else if it helps generate new, real and differentiated value for your customers.

Focus on the Fundamentals
What does it mean to be prepared for chaos? Having worked with some of the top companies in the world for nearly 20 years, I have made a career finding patterns in how the best companies achieve success. Although there are many factors that determine a specific organization’s ability to achieve excellence, there are four fundamental strategies for success that apply to all organizations, regardless of current market conditions. To make things as simple as possible, here is a “formula” that captures them:

(T + C + ECF) x DE = Business Success

T stands for Talent. To be successful, your organization must be a talent magnet. It is essential that you attract bright, sharp, smart, enthusiastic and high-integrity people who are eager to work for you.

C stands for Culture. You need to create a culture that fosters an ownership mentality, expects high levels of accountability, maintains a sense of urgency and drives employees to be highly engaged. All the research will tell you that the number one factor in acquiring highly satisfied, loyal and engaged customers is highly satisfied, loyal and engaged employees.

ECF stands for Extreme Customer Focus. Whoever owns the “voice of the customer” owns the marketplace. Your team must be fanatical in its efforts to listen to and deeply understand customer needs, wants and desires.

DE stands for Disciplined Execution. Plenty of companies have great ideas. Many have innovative strategies. But in my experience, only 10 to 15 percent execute plans effectively.

It is my firm belief that these four elements must never change, no matter how chaotic the market gets. Talent, culture, extreme customer focus and disciplined execution are nonnegotiable. Any potential disruption that compromises one of these elements should be discarded immediately.

Revel in Change
Now, here’s the flip side. Anything outside of those four elements is fair game. If the four factors of the formula are in place, you have earned the right to be wildly creative with the rest of your business. When a fundamentally sound organization embraces change and pursues disruptive innovations with real
enthusiasm, truly game-changing strategies can emerge. Here are three ways to prime the pump:

1. Focus on continuous improvement. One of the best ways to unlock innovation is to make it obligatory. By this I mean encouraging everyone in your organization to look for ways to make something a tiny bit better. If they happen to come up with an insanely creative and truly disruptive innovation, that’s fantastic. But it’s also rare. To improve your odds, seek to create a culture dedicated to consistent, continuous, incremental improvement. Working a little bit faster, serving customers a little bit better, eliminating one or two mistakes — every single day. This creates a mindset that innovation is expected and rewarded.
2. Teach your team to steal (ideas, that is). Amazing things happen when everyone in your
   organization starts looking for great ideas to borrow. When they get great service at a restaurant, when the dry cleaner does an exceptionally fantastic job, when they see a new product that gets them excited, they should stop and ask themselves three questions: What can I do with this? How can I make this work in our business? What can we do right away? With this attitude, teams find amazing ideas in the most unlikely places.
3. Understand that innovation is a process. Keep in mind, this advice comes from someone who hates process, abhors spreadsheets and can barely tolerate checklists. However: the only way to ensure effective implementation of innovations (remember: Disciplined Execution) is to create a specific, clear process that shows people what they must do to adopt, sustain and perfect a new way of delivering customer value.

There is no question that we are dealing with an unusually chaotic market at the moment. But it’s a mistake to assume chaos is negative. If you focus on the fundamentals, revel in change and prepare your team to be creative, chaos is positive. It becomes a catalyst for powerful, undeniable, difference-making change.