By IESE Insight
In just the past 10 years, the automotive sector has witnessed the emergence of hybrid and electric cars, the growth of the Chinese market, the use of new materials, and increased connections between cars and the environment. Automakers have always been pioneers but, without a doubt, the rate of change between 2010 and 2020 has been considerably swifter than it was in the first decade of the 21st century. And the pandemic crisis has only accelerated things.
In fact, since IESE professor Pedro Nueno began writing his 2020 book on leading with speed he has personally witnessed many companies significantly increasing the velocity at which they react to events. What are the keys to this acceleration? The author highlights eight:
1. Acquisitions. Growth can be accelerated by acquiring companies open to better management, which can generate new opportunities and increase the speed of the whole organization.
2. Innovation. Constantly incorporating new technologies in all areas of the company increases its speed. Don’t focus exclusively on incremental innovations which only improve what the company is already good at and can become obsolete. That’s what Kodak did with its chemical development.
3. Internationalization, looking to internalization. Move into markets with high development potential, markets that are making progress internally. In this decade, we’ll likely see many companies moving into Africa. The signs are there: the number of African students in European universities is growing, and the vast majority return to their countries after graduating, while Indian students, for example, tend to try to find work in Europe or the United States. African students’ behavior mirrors that of Chinese students who, in the 1980s, were already returning to their country from studies abroad. Nueno predicts that, after Africa, India will be next to embrace this trend.
4. Diversification. To sustain speed over time, it is better to diversify a company’s activities. Nueno finds that family business owners he speaks with consider diversification a vehicle for long-term advancement, as not all sectors have the same growth or potential. However, Nueno warns, managing diversification is not easy. You need a unit director and a board for each area and another board for the whole company.
5. People. Human capital is key to getting results. And it’s necessary to train and motivate your people. Additionally, training is highly valued by employees because it means the company counts on them and is thinking of their development. On an individual level, don’t be afraid to move quickly and decisively, Nueno advises. Though many think speed riskier than the delays caused by reflection, agility is part of efficiency.
6. Entrepreneurship. Entrepreneurs often list speed among their capabilities. But remember, not all entrepreneurs launch new companies; within your organization, employees at every level can develop an “intrapreneur” mindset.
7. Reducing bureaucracy. For many, “managing” means rigorously applying rules and procedures to employees. While professional management is important, this should not mean automatically applying bureaucratic processes decided by mathematical models. That would be better carried out by a robot.
8. Constantly searching for opportunities. Opportunities may be found in new geographies, as mentioned previously. They may also be found in new technologies. If the digital sector — including e-commerce, e-banking, online health, online training, and more — was already experiencing notable growth, the arrival of the pandemic has been a huge stimulus. Stay tuned to health: its continuous improvements have resulted in an increase in life expectancy, which also brings new opportunities. At the same time, Nueno warns, this leads us to reconsider the retirement age; by 2030 it may well be in the 80s — so continuous training will be more necessary than ever.
You may not be aiming to break records for speedy leadership, but ultimately it’s important to make sure your company advances, at least at the pace of your competitors. Efficient leaders aim to keep things ticking along, while maintaining values and peace of mind.