First of two parts
You could accurately call me Dr. Speed because I love speed.
I don’t mean the speed associated with fast cars, but instead, organizational speed. I really admire large organizations that have a track record of doing everything really fast.
Organizational speed means that as a result of purposeful actions, the organization does all important things measurably faster than its competitors.
Many don’t realize it but one of the constants since the beginning of human life has been that everything that man has touched has continually gotten faster. Everything, including cars, airplanes and even Olympic athletes, get faster each and every year. And now organizations are also becoming part of this speed movement.
Not speedy? You may be risk averse
Organizational speed can be exhibited by the organization’s ability to rapidly respond to problems and opportunities, to move into new product areas, to make fast but accurate decisions, to learn quickly, to shorten time to market, and to hire and retain employees who are simply fast.
It may seem natural that all organizations would desire to be fast, but the exact opposite is true. A majority of organizations and their corporate cultures are not fast at all; at best you could say that they instead move at “deliberate speed.”
Most firms don’t move fast because it takes a special speed strategy in order to successfully move fast, and because many corporate leaders are risk averse, they avoid moving fast because they fear it may result in unnecessary risks and too many costly errors.
For literally centuries, deliberate speed was fine until we entered the VUCA world in the 1990s, where intense global competition, rapid copying, and continuous chaotic change now assign some significant negative business consequences to slow organizations. And often, that negative consequence is irrelevance.
Firms like Kodak, MySpace, Good Guys, Blockbuster, and Blackberry have all moved too slow as organizations, and now their leaders, owners, and employees are suffering the negative consequences. In contrast, firms like Google, Facebook, Apple, and Amazon that are “built for speed” have grown and prospered because of that ability to move fast.
If the speed of change inside your organization is slower than the speed of change occurring outside your organization … your organization is in serious trouble and unfortunately, the insiders will likely be the last to realize it.
The advantages of speed in organizations
Some of the advantages and benefits that a fast-moving firm can receive include:
- First to market has an economic value – Fast organizations get their products or new product features to market first. And as a result, they get media attention, initial customer loyalty, and in many cases, larger margins because there is yet no competition.
- The impacts of problems are reduced – Because the organization moves fast once it senses a major problem, the problem is more likely to be mitigated quickly, thus reducing the economic damage. Because fast-moving firms also share their problems (and best practices) internally so rapidly, the initial problem is less likely to spread without warning to other areas of the organization.
- Fast responses to changes in the environment – Speed allows organizations to respond rapidly to changes in the economic, business, and competitive environment. And that rapid response makes it much more likely that their revised business plan and approach will “fit” the new environment.
- Opportunities are seldom missed – The ability to move fast means that the organization will rapidly see and act on opportunities, thus reducing the chances that any major opportunities will be missed.
- Recruiting/retention – Fast-moving organizations excite potential applicants, especially those who are risk takers or who are fast and innovative. Retention will likely also be improved because of the excitement caused by the speed and the lack of bureaucracy and “having to wait.”
- Lower costs — Although in some cases moving fast can cost more, by avoiding bureaucratic delays and slow decision-making, the firm may offset those higher initial costs, to actually make going fast … cheaper.
- Going fast can be learned — Once an organization learns how to move fast in the product area, it is much easier to transfer that “capability for speed” to other direct and overhead functions. The end result is that the sharing of speed tips makes the entire organization faster.
Benchmark companies known for speed
If you want to learn from firms that are obsessed with speed, start with Facebook. Quotes from its CEO illustrate their focus on speed …“move fast and break things,” and, “if you never break anything, you’re probably not moving fast enough.”
- Facebook recently demonstrated its amazing speed capability within two years by making a 180-degree turn away from its historical webpage/PC-based product delivery approach to the mobile platform.
- Google is also known for speed. And its CEO makes that clear when he expects his employees to “create products and services that are 10 times better than the competition” and that rate of improvement obviously requires both speed and a high level of innovation.
- The rapidly rising Samsung organization even uses the corporate slogan “perpetual crisis” to let everyone know that the environment that it operates in requires adaptability and a continuous improvement in speed.
- Apple stands out as another example of a firm that likes to be the first mover into new product categories and to dominate them from the start. In addition to technology firms, entire industries including mobile devices, medicine, and green energy industries are learning to move at breakneck speed.
- Even retail firms like McDonald’s and Starbucks are learning to change and move rapidly.
It is no longer the big established firms that dominate the small ones … it’s the fast and adaptive firms that now dominate the slower firms.
Tomorrow: The 20 Key Components of Organizational Speed