Do Differently With Less

The mantra for 2014: Get the basics right, pay attention to details, and be different in at least one meaningful way

We have reached the stage in our economic recovery of a new normal. This new normal has a “Hunger Games” feeling to it: an environment of constant threat, scarcity, and few early warnings. From a managerial perspective, it can best be described as precarity, a condition in which there is little predictability or security. There is also a lot of fear in society, post-recession.  Will I be employed tomorrow? Will I be able to pay the rent? A survey by the United Way Toronto and McMaster University released in 2013 showed that close to 50 percent of people in the broad GTA now are employed in situations best described as precarious.  Beyond the significant stress involved, what does that mean for their willingness to consume, risk, or borrow?

A second feature of the new normal is innovation, particularly its absence. In Canada, innovation makes virtually no contribution to productivity.  Data show, for example, that Canadian businesses have invested in capital and people to spur productivity growth. But in contrast to U.S., Canada has done nothing in the area of multi-factor productivity (the productivity of all the inputs used in the production process), which essentially represents innovation. While we do have successful firms, Canada is not an innovative nation, at least not in the sense of big-bet innovation. 

A third feature of the new normal is the rise in customer-predatory business models. As an alternative to innovation, many companies are basing a growing part of their revenue on taking advantage of customers, often when human errors are made.  While the outrageous foreign roaming charges levied by cellphone companies are particularly controversial, other companies are following their lead.  Airlines lure customers to make purchases, then charge fees for checking luggage – fees that are well in excess of the variable cost associated with moving that bag. Financial institutions now charge a small fee for a printed statement. The problem is that these measures work. Each measure is small, but to the already-stressed consumer, it is the death of a thousand cuts. 

The fact remains that managers still have to manage in this new normal. So now what? I suggest that in the coming year, every manager thinks and acts as if he or she was running a small business: focus on getting the basics right, pay attention to details, and be different from competitors in at least one way that matters to customers. 

Operations, not strategy, will win in 2014. Open a new set of conversations, starting with the people who work for you and who already know to to fix things 

You probably have heard the expression, “do more with less”. To most managers, this is an impractical idea that inevitably decreases employee motivation.  For your managerial agenda, I suggest that you be guided by a more useful idea:  “do differently with less”. The moment you aim for the same goals and targets but with different means, you open a new set of conversations about how to get there, starting with the help of people who work for you and who already know how to fix things. Tap into the knowledge you already have — it’s free.

Where to begin? With the basics. Go back to Peter Drucker’s vital question, “What is the problem that your product or service is being hired to solve?” So many businesses can overlook this simple truth in favour of pursuing more complex strategies, or ensuring that new trends or fads have had thorough airing.  We get excited about what we’re doing but forget that if someone doesn’t buy our product or service, our enthusiasm means nothing in business terms. To get the basics right, begin with this question or run the risk of not being relevant to the future. 

Next, do an inventory to see if you’re getting the basics right. How are the quality and consistency of your products or services? What’s the state of your sales force? Do you have the right people in the right places? Are you investing prudently? Is everyone making the right effort? Are your measures clear and simple? And as you adapt, are you doing so with a realistic sense of what’s coming?

For the coming year for most businesses, operations will be much more important than strategy. By operations I include sales, R&D, customer service, and the like. You don’t need a new strategy; pay attention to operations. 

As well, invest time in identifying ways to go from a point of parity to a point of distinction vis-a-vis your competitors. Conduct a few low-cost experiments. The difference that can separate you from others in the industry can be as simple as a frugal adaptation of your production process.

Managing on 2014 will boil down to doing differently with less, developing agility by getting the basics right, ensuring people are paying attention to the details that matter, and generating critical differences. Operations, not strategy, will win in 2014.

Douglas Reid is Associate Professor and Distinguished Faculty Fellow in Strategy at Queen's School of Business. This article is adapted from remarks at the Business Forecast Luncheon 2014, held December 6, 2014.

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