'Parallel' Strategies that Work

For many organizations, there comes a time when changes in customer demand coupled with a wider array of choices combine to bring about a need for a strategic reset. While any type of business can be affected, this is especially true for custom manufacturing organizations where advances in technology can render traditional methods of production less than ideal.

In a recent client strategy session, we identified many of their organizational strengths. There were two at the top of the list. The first: strong, trusted relationships with a significant number of accounts, built over decades of delivering reliable performance, high quality, and exceptional value. They’ve developed a keen understanding of these important client segments, and they are well-versed in the “ins and outs” of their clients’ business priorities and requirements. Sometimes referred to as “intangible assets,” these relationships are significant and not to be taken lightly.

The second key strength is their superior organizational capability, in particular their manufacturing platforms and expertise. The breadth and depth of their production facilities has been a key ingredient in their long-standing success. So far, so good.

Here’s the challenge. Many of these important customers no longer require the use of the company’s superior manufacturing capabilities, at least not to the degree they have in the past. In response, the company has “chipped away” at attempts to satisfy these developing client requirements by outsourcing and what they call “bolt on” technology offerings. By the senior team’s admission, none of these attempts constitute a permanent solution while the value-added component of the business shrinks as factory orders slow. What to do?

Here, there was a dichotomy of thought among the senior team. One group was focused on the need to satisfy customer requirements or risk losing them to a non-traditional competitor. Right! Another kept reminding the group that the company is still a manufacturing concern and as such, factory orders that drive value-added are essential to their very survival. Right, again!

After considerable discussion, dialogue and debate, the team reasoned that the ultimate solution was to move ahead in “parallel lines.” This insight is neither easy nor painless. What is meant by “parallel lines” (other than a Todd Rundgren song)? It is setting a course to develop a new and/or expanding line of product and service offerings that can satisfy customer demands while simultaneously exploring new and varied product offerings that will take advantage of existing manufacturing capabilities. In other words, it is imperative to do both and yes, concurrently!

A good place to start is in strategic session with the senior team, in a setting designed for creative thinking and honest, direct discussion with a special focus on the future of the enterprise.

For information on ways to get your organization on the road to a bigger, better future, contact me at joe@ajstrategy.com