Capture game-changing opportunities and reinvent your business model

Part 22

During the past few weeks, you have been reviewing about business renewal. You have scanned the portfolio for possibilities. Then you considered the size of the potential value. And, finally, you have done the shortlist. 
Now that you have determined which of your business units are ripe for renewal, you can move to the next phase of the process known as the reinvent phase. In this phase, you will develop the strategy for renewal that best meets your company’s needs.
This phase has three parts: (1). Structure, in which you’ get the various pieces of your organisation ready to launch the renewal effort. (2). Stretch, in which you’ll prepare your team members to think broadly about the task before them. (3). Screen, in which you’ll decide which renewal strategies of the 12 we’ve outlined should be serious contenders for your final strategy selection. In this instalment, we will review first part – structure. 

Structure 
Structuring has eight pieces. They are: Leadership, confidentiality, objectives, mission statement, assumptions, phases, timing and connection. 

Leadership
Too often people jump into renewal before clearly thinking it through. But that road leads to failure. Rather than pay heavily down the road, it is better to take time upfront to set up the effort for success.
Renewal initiatives need a high-powered senior executive, like assistant general manager (AGM) with enough organisational clout to enable the working team to do its job. The important point here is that he must possess the necessary authority to make decisions about renewal—both strategically and tactically. 
The role of the AGM includes chartering the effort, defining the decision makers and the working team and appointing the project leader. It is the AGM’s responsibility to get the right people on board. 
The AGM also makes the necessary resources available to the team. In addition, he may be called on to run interference for the team with high-level management and also be called on to remove any roadblocks as they arise. 
At the same time, the appointed project leader should ensure the working team will stay focused and on schedule. He will identify issues and develop plans for addressing them in partnership with the AGM. It’s essential that the project leader’s leadership of the renewal effort should be seen as a dedicated assignment with sufficient time set aside to do the work properly. It cannot simply be piled on top of an already full workload. 
As soon as the project leader is selected, it is time to fill out the working team. For an effective working team, you need representation from the different parts of the company that will be affected by the decision. At the same time, the working team should be small enough to get things done.

Confidentiality
Confidentiality is necessary in renewal since you will be planning major changes to the business. The last thing you want is for word to get out that you are considering closing a branch office or cutting down the product range. Such things can be a considerable distraction to your organisation and customers. 
Be clear on few points: Who needs to know there is a renewal effort underway? Who needs to know the intermediate results and insights along the way? Which parts of the renewal plan can be shared fully with the company and which parts should remain confidential? 

Objectives 
You must define your objectives in the renewal effort at the very beginning. Typically, objectives encompass such things as: Growth and profitability targets that will make the renewed business a valued part of the overall portfolio. Growth and profitability targets for the legacy business during the transition. Maximum allowable risk in the renewal effort. Competitive positioning after the renewal effort. 

Mission statement 
The mission of the effort is defined by answering three questions: What are we doing? Why are we doing it? How will we know if we succeed? If you don’t know the answers for all questions, don’t start your renewal efforts. 
You may also consider a fourth question: How could we fail? By answering this question, you can identify the potential stumbling blocks before you hit them. 
Once you’ve answered these questions, embody the answers in a paragraph that sets forth the mission of renewal. This mission statement will remind your people why they are doing this effort and will help keep the entire team focused and on crack. 

Assumptions
The purpose of stating your assumptions is to identify possible conflicts or differences of opinion early in the process.  Try to identify up front the difficult issues and sources of conflict that must be dealt with to successfully renew your business. For example, you could assume that ‘we are going to maximize value’. That is true, but not everyone may agree on what this means. One decision maker may chink it means you need to acquire a regional competitor. Another may think you need to add services. A third may think you need to slash staff to get your costs in line. 
To properly define your assumptions, you must establish three things: 
What will you assume at the start of the effort? Which decisions will you make during the effort? Which decisions will you hold until later!
Assumptions can be both useful and dangerous. They are useful in that they enable you to more closely define the scope of the work you’re doing. They are dangerous in that they can lead you into bad decisions should your assumptions be faulty. 
For example, suppose you took it as given that you should only look inside your current region for new opportunities. But if you have already mined that area thoroughly, there may be little opportunity remaining. Because of your assumption, you will not look at other regions and may miss significant chances to grow. 

Phases 
Divide your renewal effort into phases, each of which is manageable and lasts no more than three to four months. Phases may be completed more quickly than that, but anything longer tends to wander and lose focus. If you try to do everything at once, it’s like trying to boil the ocean—you may put in a lot of energy, but not much happens. 
For example, phase one might include a decision on which geographic markets your renewed business should target. In phase two you might decide where to locate your office, how to staff up with local personnel and how to introduce your products and services to the local business community. 
Just because some decisions must be held until later does not mean they are unimportant. They may be huge investments that are critically important to the organisation’s success. But they should trail today’s decisions as opposed to lead or be made in parallel with them.

Timing 
Setting up the timeline and the required resources is key to a successful renewal effort. Rather than treating renewal as an ongoing process (in which case, it will continue forever), you need to treat it as a project, one that has a beginning, a middle and a measurable end. At each stage, set milestones: When do you need to finish the effort? To meet that date, when do you need a completed evaluation? To meet that date, when do you need your choices defined and your knowledge gaps filled? 

Connection 
A major challenge in renewal is connecting the decision makers and the working team early and often. Set up a short discussion session between the decision makers and the working team at the close of each of the working team’s sessions. 
Doing so takes the focus away from preparing formal presentations and places it on an engaged conversation between the decision makers and the workers.
(Lionel Wijesiri is a retired corporate director counting three decades of senior management experience. He is now an independent consultant and a freelance journalist. He may be contacted on [email protected])