The Greater Manchester Chamber of Commerce’s latest business survey shows a sharp downturn in the economy, along with concerns over falling sales, export figures, cashflow and investment. This has hit business confidence with many expecting profits or margins to dip.
Managing the finances is critical for businesses in order to cope with volatile times ahead – and this means not spending money on something that’s not directly contributing to their future says business innovator and author Mark Wilson, who this year published Futurestate Design: How to step out of the past to create a business fit for the future.
The book argues that all businesses need to look to the future if they want to flourish and not become obsolete, and presents a strategic methodology for developing a future vision called futurestate design. But in looking to the future businesses must also conduct current-state analysis to ensure they aren’t wasting money today.
Wilson says, “In building a vision for the future business need to break away from how things are done today and imagine what a future generation of services could achieve for a future generation. However an important part of deciding on future strategy is looking at a business’s current state as this is the ‘from’ point and is critical in defining the key transformations needed to realise their future vision.
“Unfortunately some businesses can make the mistake of not understanding where they are heading before carrying out this analysis which can be costly. This can also mean they continue spending money on activities that won’t be relevant in the future. Instead businesses should conduct their current-state analysis when they have clearly articulated their future vision. This ensures they focus time and money where it matters most.”
Seven guiding principles for conducting current-state analysis:
Don’t dig too deep too soon – Businesses need to map widely and rapidly so they can identify what to focus on and what to set aside. It’s important to get a version done quickly so that they can get hold of the challenge more effectively, then they can progressively dig deeper into the areas they need to.
Talk to the people who do, not the people who manage – Always speak to the people in the organisation who are on the front lines, not those who have most ‘corporate’ responsibility. To get honest, real-world insights as soon as possible, it’s vital to establish a culture of honesty so people know they can tell what they really think. There’s far less vested interest in service users than in business owners.
Pay careful attention to measures and metrics – Scrutinise carefully how current KPIs might stack up against future objectives. For example, if a business is trying to keep people on the phone and the future demands a self-service experience, every day a team hits today’s performance targets could be getting in the way of achieving the future vision, by training customers to be more dependent on something the business wants to leave behind.
Ask ‘why?’ until a real answer is clear – Identifying pockets of activity that aren’t necessary is critical and this can only be done with the liberal use of the word ‘why?’ Why does this thing exist – what is its purpose? Why does the business do it that way, when no-one else does? Any answer that even vaguely sounds like ‘because we always have’ or ‘that’s just how we do it’ should cause alarm. Often there will be a good number of ‘I don’t really know’ answers, which is an indication that something is built on shaky foundations.
Sniff out risk-aversion – Has a risk-averse culture prevented better or bolder decisions being made? If reasons not to do things seem to be more common than reasons to try new things, there is a key cultural inhibitor to overcome before the business has any hope of achieving their future potential. Identify risk in hard-wired processes, spot the people who are most likely to inhibit progress because they’re afraid of it, and put a big tick against those who think risk lies in not doing new things. The business is going to need those people.
Get multiple perspectives – Gather inputs on anything important from multiple sources to ensure a balanced view of what’s going on. Expect to have to dig deepest into those areas with the most diverse views. Don’t be afraid to bring in external expertise either, as a fresh pair of eyes can identify something that no-one else even knew to look for.
Be brave – Current-state analysis is not for the faint-hearted. Businesses have to be brutally honest about where strengths and weaknesses lie; and be prepared to uncover things they don’t want to see. It’s really important that they focus efforts on scrutinising the right things, at the right level – and know when they simply don’t have to. If they have something clear and compelling to aim for, they will be more likely to scrutinise their current state honestly and be brave enough to leave the right things behind.
Wilson concludes, “It’s safe to look back, but only when the business knows where it’s going. When a business has its future vision in hand, current-state analysis using these guiding principles becomes a more focused, cheaper and faster exercise. It will enable the business to look back with a future-facing perspective but not get lost down endless rabbit holes.”
Mark Wilson is an expert in digital business strategy and innovation and CEO of Wilson Fletcher. He and his team work with leadership teams to design breakthrough strategies and services and embed digital-first behaviours.
Mark and the Wilson Fletcher team have helped hundreds of companies around the world (including AXA Health, NHS, British Film Institute, News UK, SNTV and LexisNexis) become strong digital businesses, building deep expertise in the challenges established companies face in the digital economy, and the radical shifts in thinking needed to overcome them.
FUTURESTATE DESIGN: HOW TO STEP OUT OF THE PAST TO CREATE A BUSINESS FIT FOR THE FUTURE | MARK WILSON | ISBN: 9781399922104 | RRP £14.99 | Available for purchase on Amazon
Journalists can request a copy for review from Kathryn Hughes: Kathryn@kayakpr.co.uk
For more information on Futurestate Design visit: www.futurestate.design
For more information on Wilson Fletcher visit: www.wilsonfletcher.com
