The Quick CEO
October 1 1996 by Robert W. Lear
I don’t know who first brought forth this particular piece of wisdom-I wish I had-but it certainly fits today’s business scene: “It’s not the big fish that eat the little fish; it’s the quick ones that eat the slow ones.”
The pace of business has stepped up enormously in the last few years. The computer, FAX machine, teleconference, streamlined distribution system, overnight mail, jet plane, mobile phone, and the Internet are just part of the new hardware and software a CEO uses to make things go faster. What is really happening, underneath it all, is a mostly new way of organizing to do business quicker than your competition in a variety of areas, including:
- Product development. It used to take months, or even years, to roll out a new product globally. Now, Procter & Gamble does it in weeks.
modifies products on the assembly line. Compaq improves its new computers before they can be sold. New mutual funds pop up every day. If you can’t match ‘em, you can’t catch ‘em. Toyota
- Logistics. Starting with the simple idea of “just-in-time” inventory control, companies such as Wal-Mart now have a full-scale program with their suppliers that replenishes store stocks, shortcuts distribution handling, and eliminates most of the paperwork. Today, many small companies are finding they can fit into the Wal-Mart logistics system and simultaneously apply the same techniques elsewhere.
- Outsourcing. Many CEOs used to think that the more services their companies could integrate and manage internally, the more efficient they could become. No more. In many instances, it is now faster and cheaper to have an outside supplier for payroll, data processing, annual-report production, lawn and office maintenance, strategic planning, safety and guard protection, and information technology. The new service companies, led by quick, entrepreneurial managers, bust their buttons to do the job better than their corporate counterparts ever did.
- Decision making. Forcing decisions down to a lower level and reducing layers of management saves days and weeks in processing everything from capital project appropriations to new hires to petty cash vouchers. Done carelessly, this delegation can be dangerous to your corporate health. Done with infinite care, a little empowerment and trust can quicken and enhance the decision-making process.
- Process mapping. Quick-minded CEOs chart and time the route that a piece of paper, a product, or a project follows through the company, from inception to completion. The cost and time savings stemming from this analysis can be huge. And you will be surprised at how many areas have never been exposed to this fairly simple analysis.
- Customer information. We now have the means to develop and communicate data about customers and markets that we never had before. Once you know who is and who can be your value customers-and who is not and probably won’t ever be-you can concentrate your efforts and stop wasting time in unproductive areas. You can’t guess; you have to know.
How do you become a quick CEO? It’s not easy. You probably will need some consulting help in certain areas that require re-engineering. You may need some new staff members who have experience with quick companies. You may need to replace some slow, loath-to-change managers. You need a lot of information about your own company that you have not yet assembled and analyzed.
But once you and your company become aware of the effective savings of speed, a whole new world of opportunities arises. Inventories shrink, write-offs are smaller and less frequent, and fewer people are needed. Money is released from your lines of credit, and your interest costs drop. Your competitive posture is enhanced. Your profit margins move upward. Your return on investment gladdens the eyes of financial analysts.
Quickness is the name of the game in the next decade for all kinds and sizes of companies. A quick-moving company requires a quick-moving CEO. But it is a delicate process to initiate and manage, so take your time in planning how to do it.
Formerly the CEO of F.&M. Schaefer (19721977), Robert W Lear is chairman of CE’s advisory board. He also teaches at