Competing against hot start-ups? Your colleagues could be your downfall. Here is how to get it right
If you are working in a corporate or an established business, most likely your company is facing strong competition from a number of start-ups, or have start-ups lurking at the perimeter.
Your company is not alone. Most industries are now in a similar situation where cash-rich (but profit-poor) start-ups are responding to customers' shifting expectations of products & services, aided with strong discounts to lure customers at all costs (literally). Established companies either struggle to make a clean transformation to align with shifting expectations, or fork out cash to meet the discounts, or both.
It's a tough competition. The Industry Box team members have first-hand experience of working in established companies, and realised that your stakeholder colleagues are genuinely your make-or-break between competing successfully to retain customer base and profit, or wasting years of efforts and stretched resources on promising projects that fail to turnaround the company.
In the following sections, we will dissect the criticality of stakeholder colleagues, and why they could sway between being a stumbling block and a supportive force so readily. Finally, we will identify a number of ways to set them up as a supportive force.
Stakeholder colleagues are your company's basis of success
For teams leading transformation projects to compete against start-ups, the common feeling is usually that of "if only my stakeholders were more helpful, our transformation efforts would have been more successful".
This feeling might be true, but overlooks one fact - without these colleagues, the company wouldn't have survived to this date for you to lead your projects. They had pioneered the previous generations' new products and services, or applied professional judgement to manage risk over the past years, or simply helped milk declining business areas to make funds for transformation.
They are your company's basis of past success, on top of which you are crafting the basis of future success. The continuity between past and future is the unique element they carry, and critical to your success:
Continuity of customer base
One of established companies' greatest assets is their existing customer base. Your stakeholders could help you navigate the customer universe, from core customers through casual customers to non-customers.
This deep knowledge about the customer universe could help you base your product and service development strategies, as well as expedite marketing and sales efforts. Even if your project focuses on non-customers, the act of contrasting between existing and non-customers could help you get understanding that could otherwise only be acquired through substantial experimentation or numerous failed launches. You now bag them without hassle.
Continuity of corporate machinery
Hot start-ups scale at an astonishing pace. It could treble from 30 to 90 within a year, and still have vacancies to fill. This contrasts with established companies' frozen or shrinking headcount. The pasture farther afield looks greener.
But let's see it from another angle. Your established company is likely to have colleagues who know the company inside out, and every piece of advice they give is rich in history and tailored to the company's context. Moreover, most people have nurtured rapport and could get thorny issues discussed and agreed upon without descending into chaos.
This may not sound much, but they could tell you a similar project was taken up 5 years ago but failed so that you could avoid the pitfalls; they could get customer support ready for your new product even though you informed the department late; they could have good links with the media to promote your new product in any way you need. Hot start-ups may have the money, but not a well-oiled machinery to spend efficiently.
Continuity of purpose
This is an obscure continuity item but arguably the most important. Established companies have their deep lines of history about its establishment, rise in scale, facing first challenges, and changing courses over the years. In comparison, hot start-ups may have a great success story from humble beginnings, and may also have a few heroic stories of surviving hostile competitors, but they are still shallow and have taken place over a limited timespan.
This line of history helps all members to appreciate the deep purpose of the company through actual happenings, instead of relying on grand vision statements that resort to cliches. This solid understanding of the past and present purposes enables you to communicate how the purpose will be enshrined or shifted by your transformation projects. It also enables you to design your project in terms of how the current purpose is impacted, and therefore what preparations and communications need to take place.
Without such strong purpose, getting the message across to the company requires strong faith from the audience, which often comes with coercion, doubts or mis-interpretations.
The continuity dilemma that sways your colleague stakeholders towards the "stumbling block" arena
In the previous section we have outlined the continuity functions brought by your stakeholder colleagues on behalf of your company, and how they form the basis of your success.
Nonetheless, in reality crafting future success from this basis is challenging, as most managers leading transformation projects in these companies could testify.
These stakeholders appear to operate with a conservative mindset, watering down innovations and preferring incremental changes that are not competitive enough. They also take a waterfall project approach that requires a full P&L prediction and signed-off implementation plan that is tracked from the start, not allowing the flexibility required to compete in a fast-changing environment. The company machinery also appears slow and spend most time monitoring and questioning progress, forcing the project team to spend more time on internal lobbying than external competing.
Funding transformation projects yet hindering their chances of success appear counter-intuitive, but it makes sense from the point of continuity - it is the continuity dilemma that does the swaying.
Continuity dilemma of efficiency
As an established business, it is very efficient at serving existing customers through its existing setup - product and service set, customer support, sales and marketing, legal and risk control, finance and accounting. Even the executive team is set up this way.
Transformation projects bring in drastically new opportunities, but also upsets the efficiency balance - new ways of operation, new tools, new risk profile, new accounting needs. In addition, transformation project outcomes are usually small in scale compared to the existing setup, yet requires attention and adjustments that outstrip the existing setup's changes.
In the eyes of these stakeholders, providing due attention and support to transformation project is important, but perhaps not as important as maintaining efficiency to keep the existing setup competitive. After all, without the existing setup generating profit, there will be no transformation.
Continuity dilemma of knowledge base
Transformation projects are more than just launching new products, services, internal processes or internal tools. Otherwise, there is nothing transformational about them. They require new ways of looking at the customer universe, project design and implementation, competitive strategies, and data collection and application.
This package of new ways is sizable, and require taking up of both skills and knowledge. Moreover, the stakeholders also need bridging skills to operate in both the existing and the new ways, as they toggle between the existing setup and transformation projects. The learning, un-learning, and re-learning needs are hard to balance, and harder still to put into consistent practice.
Continuity dilemma of company shape
The ideal company shape change is one of pure scaling up, i.e. same setup, just getting bigger and bigger. Most corporate machinery are designed to function in this mindset. There will still be adjustments in the setup, but they are gradual, and often happen as above or below-average sizing up compared to the overall growth.
Transformation projects could significantly change the company shape within a short timeframe - opening up new business areas, changing what the brand means, antagonising existing customers but welcoming new customers, causing other departments to change their headcount and ways of work etc. The change goes beyond the transformed area and permeates throughout the organisation.
To the stakeholder colleagues, they have to consider how the shape is likely to change, what the impacts are, and whether to control the change to balance the risk. As an example, a high-end supermarket chain launching 1-hour delivery service could cannibalise its brand perception if the delivery service is outsourced and do not treat the customers appropriately. The operations team and the executives may intervene and demand in-house delivery team despite a delayed launch.
Adding up all the dilemmas - double the effort, half the impact
With all these dilemmas running through your stakeholder colleagues' minds, it takes a lot of mental processing to make a decision that have a clear response to each dilemma. Once a decision is made, it becomes understandable that they would like constant monitoring and feedback, so as to re-decide if the decision does not turn out as expected.
But time is money and lost time could mean lost windows of opportunities. Both the transformation project teams and the stakeholders are expending a lot of efforts to push the project forward amid all the continuity dilemmas, yet the slow speed means the projects ultimately suffers.
In the next section, we will identify ways to set up transformation projects based on this continuity framework, so that the dilemmas no longer pose hazards to the projects.
Benefiting from continuity without the dilemmas - we suggest the "satnav" approach
The challenge of stakeholder colleagues is also prominent in traditional change management projects, and a lot of established businesses would ask project managers with change experience to bridge between transformation projects and the rest of the company.
These project managers would usually deploy a standard approach practised in change projects, which is insufficient for transformation projects. A more fitting alternative is called for.
Standard approach - upfront mapping, clearing and route-planning
The standard approach emphasises upfront preparation before planning takes place. The project manager would take the time to identify all the stakeholders and likely impacts, then work down the corporate hierarchy to interview with each stakeholder to validate the impacts, get buy-in, and identify further stakeholders.
As the project progresses, the project manager would organise regular meetings to track project status, and field for questions and feedback. They will also organise workshops and training for the impacted stakeholders to understand the impacts and how they should operate post-change.
The standard approach's limits - good for start-stop projects, but not for transformation projects that are fluid and continuous
Change projects could be large in scale, e.g. moving customer support offshore or standardising accounting software and processes across the globe. But they have well-defined objectives, modules, starts and completion. Like a preset package of change.
With their package nature, change projects' impacts on knowledge base and company shape are more limited and could be scoped out upfront. Actions could thus be designed to help stakeholders get through the small dilemmas before the project goes into implementation.
Most of these change projects also focus on improving the efficiency of the existing setup. Any efficiency issue is likely to be transient as the stakeholders move from the current practice to the new one. Efficiency continuity dilemma is not a concern.
On contrary, transformation projects are fluid and continuous in nature. Fluid in terms of adjusting the objectives and scope of work in response to start-ups and the wider competitive environment; continuous in terms of striving to create new business areas or new ways of operating with the hope of becoming a significant contributor to the company. They are more akin to an internal start-up that start small, grow quickly, disrupt the company and is there to stay.
With their fluid and continuous nature, the stakeholder set and impacts will shift as the project progresses, while there are multiple permutations on how the project will alter the company shape. An emphasis on upfront preparation will give stakeholders a false sense of security that this project is like another typical change project. They will be ill-prepared for the continuity dilemmas along the journey.
The alternative approach - continuous mapping, clearing and steering like using a "satnav"
Our recommendation is to shift the efforts from getting all stakeholders readied upfront to helping them tackle each challenge as they arise. Similar to planning for the fastest route using a paper map vs. having a satnav that receives up-to-date traffic information to alter route as traffic condition changes.
The activity set thus changes from locking down the project scope and phases at initial planning and using these materials to give stakeholders the full journey, to getting them to appreciate the fluid and continuous nature of the project, and to be ready commit efforts along the way to consider the dilemmas.
At the same time, the project team also needs to change from creating the perfect end-to-end project design and implementation plan at the start, to having an acute sensitivity towards emerging risks, the stakeholders to be involved and the potential impacts on the three dilemmas. The project team is responsible for helping stakeholders quickly get on top of the challenges, and power through the dilemmas to reach a decision.
Like a satnav, it's not just about the processing power of the machinery, but also the timeliness and quality of information feed that keeps a car on the optimal route at all times. As a transformation project progresses, the project team has to keep the relevant stakeholders up-to-date on what is happening and what decisions are due, and balance between creating noise and not being kept close enough to the project.
Practise the "satnav" approach by curating the project information lifecycle
Shifting from the standard approach to our alternative approach relies changing how stakeholders see your project - they need to get comfortable with the fluid and continuous nature of your transformation project. That calls for a revamp of the project information lifecycle at every stage:
Mission, vision, strategy, roadmap - taking the internal start-up analogy further, you need to move away from the "traditional project" view of "milestones, timeline, impact analysis, P&L prediction" which is suited to start-stop change projects. Start creating pitch decks just like start-ups. If you are able to create a simple website (restricted to internal view) like a start-up, even better. Keep it updated so that you can always point your new stakeholders to it before someone else forks out your business case written 18 months ago
Know your company - a pitfall the Industry Box team has witnessed across companies is that transformation teams are formed with a mandate to "disrupt". The team members feel empowered to make ambitious plans and expect the rest of the company to follow, creating the dilemmas without providing sufficient time nor information for the stakeholders to make good decisions. We believe that the transformation teams should take time to understand the company's machinery, operating environment and shape, and have those in minds as transformation plans are drawn up.
Invest efforts in smoothening information dissemination - this is not just about selecting the best communication tool on the market. Information is the most precious resource in our approach, first to help your team assess stakeholders impacted and scope out the dilemmas, then provide your assessment to those stakeholders, and finally to facilitate discussions and decision making. Spend time practising the information dissemination loop between your team and stakeholders, build up rapports and experiment on the the suitable frequency and level of details of communications, and refine the set of tools where needed.
Practise stakeholder-centric project communication - all-hands status meetings and thick presentation decks take up too many people's time and most content is not of interest to a stakeholder. This will sap stakeholders' interest and cause them to disengage. Instead, keep general status update short and self-service (stakeholders could read them as they wish), and identify stakeholders relevant to an emerging issue and engage them specifically. Not just that discussions become more efficient with fewer people, those involved are also more energised as their efforts are spread less thinly.
About Industry Box:
Industry Box is dedicated to introducing streamlined & frictionless stakeholder management, as we believe this to be a hidden productivity blackhole for most companies and managers.
Apart from raising awareness about this issue and promoting industry best practice, we have also designed a digital tool with all the best practices built in, so that managers & leaders can introduce and benefit from best-in-class stakeholder management without the learning curve.