Through our Tuesday TouchPoints series, we are sharing a diverse set of content we hope will be helpful to those managing through volatility, working from home, or just connecting.
By HPA Senior Advisor Chris Fox
As the United States moves beyond peak coronavirus cases in many locations, attention is increasingly turning towards the phased re-opening of our country. At HighPoint we observe three general approaches in how companies are dealing with enterprise-wide initiatives in this context.
Some senior executives continue to hunker down while their companies remain in shutdown mode and attempt to avoid additional layoffs; these executives say that internal decision-making processes are still largely frozen. Others have pivoted cautiously toward a limited set of initiatives, such as cost reduction or opportunistic M&A. A third group of executives are taking the advice of HighPoint Senior Advisor, Chris Fox, recognizing that in the new business environment they must in fact move faster on key enterprise-wide initiatives and reimagine how things are done.
Chris, a former McKinsey & Company consultant, Fortune 500 VP of Strategy and expert on leading large-scale enterprise program management efforts recently shared an interesting set of observations on how companies should think about existing and planned Enterprise Project Management Office (EPMO) efforts.
Observations on the Changing Business Environment
We are experiencing a period of ‘Schumpeterian creative destruction’ that is unparalleled in its pace, breadth and depth. Much ink has been spilled in describing the changing business environment, but three developments have profound implications for EPMOs:
1. The planning and execution horizon is now measured in months rather than years
- The pace of change in the business environment has just rapidly accelerated; at the same time, the uncertainty around the likely shape of that future environment has been magnified
2. Resource allocation needs to reflect a new capital market reality
- The cost of capital has increased for all companies, reflecting an end to a period that combined low financial volatility with accommodative monetary policy; investors today require greater returns over a shorter time horizon; management focus and decision-making must reflect this
3. There is unprecedented opportunity to reimagine old approaches and practices
- The rapid pace of demand destruction and supply chain disruption empowers management to fundamentally reimagine ‘how things are done’, both within and outside the company
Implications for EPMO Efforts
A. Move faster to execute priority initiatives and capture value
- It may be tempting to slow down to process the rapid changes taking place in the business environment, but in fact the greater uncertainty coupled with pressure from investors means that faster execution is required; every organization needs to increase its ‘clock speed’
B. Reprioritize the portfolio of current initiatives managed by the EPMO, giving precedence to those that can drive material near-term payback with greater certainty
- Swarm resources to initiatives whose returns are large and realizable over the short term
- Eliminate initiatives expected to produce only incremental returns in the best of times
- Park initiatives with high returns that depend upon a particular ‘view of the future’; re-visit them later as the future business environment comes into better focus
C. Reimagine the possible by initiating a systematic effort to identify new initiatives
- Reimagine ways of getting work done, e.g., determine how the organization can streamline internal processes or engage differently with its customers or suppliers; dust off ideas previously regarded as ‘too difficult’ or ‘too disruptive’ – this is the time to sweep away vested interests
- Shape the strategic landscape, e.g., improve competitive position through acquisitions or alliances; engage with regulators and law-makers to remove unnecessary barriers to competition or customer engagement
This is a challenging time for all of us, and perhaps particularly for those executives charged with steering their company through this period of accelerated creative destruction. If there is a silver lining, it is that bold leaders have an opportunity not just to protect their companies, but also to rapidly put in place the new ways of doing things that will position them for long-term success.