Steve Niesman is North America’s President and CEO for NTT DATA Business Solutions, directing operations for the mid-market SAP provider.
As business leaders, we’re constantly looking for ways to create strong and sustainable performance, and there is no shortage of advice. Simon Sinek tells us to “start with why,” and McKinsey tells us to develop our institutional superpowers—to name a couple.
Each strategy is wonderful and speaks to the secret sauce that truly makes a company’s heart beat. They highlight that profitability is a byproduct of that secret sauce, not a target within itself. It turns out that focusing on the financial goal alone can be counterproductive.
In many industries, what we do can be seen as a commodity. Whether you sell ERP technology like my company, manufacture consumer goods or provide financial services—you are one of many. We all know what it’s like to be there.
Shift your focus to both “how” and “why.”
Now, because we operate in crowded markets, what we do is not necessarily as special as how or why. And while Sinek speaks about people buying why you do something as the primary focus, I would revise that slightly to make the “how” and the “why” equal.
For example, look at the supply chain issues from the past few years. Now, we’re seeing that having a dependable global supply chain can be a real superpower, or what McKinsey calls a functional capability. In some cases, the “how” can be very powerful.
To be clear, I am defining the word “how” in a way that is more holistic to your organization. I don’t mean, “Plug in this technology and walk away happy.” Tools like technology can only make a difference based on what you do with them and whether you’re using them to their full potential.
In this instance, the “what you do with it” part must serve your purpose or a differentiating capability. How many times have you sat in a room of people excited by one trend or another and found yourself asking, “Why would we do this?” You might see some financial returns in the short term, but you might not sustain them over time if you don’t have a good enough reason.
Consider a real-world example via the cloud.
Let’s look at this through the lens of cloud infrastructure. There are plenty of sources to tell you to adopt the technology to further your business. In fact, McKinsey has projected the global value of cloud to be around $3 trillion for companies that go beyond adoption. Plus, many solution offerings will eventually only be available in the cloud. Yet, I’ve seen companies approach this as nothing more than an IT initiative without aligning it to their business strategy or mission. Here’s the problem.
They have focused on the basic definition of “how,” the one that simply seeks to plug in a tool and wait for the magic to happen. There is no magic. There is only your purpose and how you strategically fulfill it. If we go back to the holistic definition of “how,” then the discussion might go beyond deciding whether to keep your technology stack on premises or move to the cloud. You might also look at which version is best, public cloud or private cloud.
The benefit of going to the public cloud is that you get out of the infrastructure business so you can focus on strategic initiatives, innovation and other high-value tasks that align with your “how” and “why.”
So, let’s say you’re leading a consumer goods company, and you’re looking to redirect resources for more product development and overall innovation. You might choose public cloud for its flexibility and access to its on-demand resources across a network that can be accessed from many geographic locations. Thus, you can access resources as you need them at scale.
Those who prefer private cloud/on-premises often choose it because they have the in-house expertise to manage it, and they want to deliver specialized products or services using their proprietary software/hardware/configuration. They also tend to have a growth pattern that is steady or a known quantity, and they have more capital for upfront investments as well as ongoing scalability. That way, you can have access to a larger network with consistent updates and services, even as your growth rate turns out to be both exciting and variable.
Yet, when you bring this to the table for discussion, you could have some embrace it and some resist based on concerns other than your “how” and “why.” For example, your IT team might recommend keeping everything on-premises due to fear of job loss, while others might agree because they think that’s what you want to hear. And some won’t know how to respond because they’re not skilled in this area.
Meanwhile, you were just trying to figure out how to grow your business by being the best manufacturing company at delivering personalized products in a way that’s scalable and profitable or the best at leveraging your data to connect consumer insights with product development and pricing. Because you believe in building long-term relationships with the communities you serve—and the people who live and work there.
To help work through this, you may need an independent review from someone with no stake in the outcome of your decision. There is a risk in moving too fast if you haven’t done enough upfront planning. Implementations of this sort can prove costly if you end up making changes midstream. And the sum of all these parts can make this feel complicated.
Come back to your “how” and “why.”
That’s what brings us back to your “how” and “why.” It’s the best tool you’ve got for creating a well-planned roadmap with everything defined and aligned correctly.
You ultimately need to decide on the tools that will allow you to focus on that last mile, your business processes and capabilities that make up your secret sauce. If your operations are efficient and set up to their best advantage, then you can focus your time and resources where you need them most.
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