Our work with midsized and large companies over the last +15 years points unilaterally in one direction: A faster pace of change results in a shorter line of sight. Escalating complexity and disruptive threats mean that timely detection, assessment and response to change is harder. And the ramifications of missing a beat are larger and swifter than ever.
As a result, CEOs and Executive Teams have to reset their management compass and rethink their practices and routines. In this environment, setting strategy is no longer an annual event but a continuous adaptive activity. Allocating resources toward strategic objectives must be a dynamic process to keep up with reality. And effective execution is not a multi-year deployment of linear plans, but an iterative process of sensing change, testing options and adjusting course before committing to large-scale roll out.
In the late summer of 2014, 6 years after the onset of the global financial crisis, BoConcept had yet to find a way to decisively break a long downward spiral in both top and bottom line results.
It wasn’t for lack of trying. In fact, organizational confidence and energy was dissipating as a host of initiatives to break the gridlock were implemented, but with few results to show.
It was becoming clear that the swath of disparate projects, while all well intentioned and aiming to solve a part of the larger problem, were in fact adding complexity and confusion to a situation that lacked a clear diagnosis and coherent way forward.
In a quick succession of bold moves the CEO welcomed a new chairman of the board, introduced 3 new members to the executive management team, and engaged Strategy Office to design and drive a 30-month transformation program with the objective of delivering 10% EBIT in the financial year 2016/17.
Together, the new leadership team and Strategy Office spent the first 6 months remolding BoConcept’s strategic foundation - right sizing the market, store and product portfolios, developing a strategic market model, a new collection strategy and B2B approach, and redesigning the product-to-market process.
The next 6 months focused on improving BoConcept’s execution capacity and effectiveness by optimizing the operating model and organizational structure, improving the collaboration of the executive team, and implementing a strategy execution framework to ensure consistent and disciplined value realization.
Half way into the program, almost a year ahead of schedule, BoConcept began delivering consistently above the target metrics. In turn, this allowed management to start looking ahead, identify and prioritize the long term investments necessary to adapt to a changing retail environment and realize the full potential of the company’s business model.
In the spring of 2014 SimCorp found itself in a situation of strategic ambiguity. From one perspective, the company was faring well, consistently posting high single-digit revenue and EBIT growth and being the darling among industry analysts and pundits. From another, the company needed to prepare for a future with new demands from customers, shifting technology platforms and potential newfintech competitors.
Like the proverbial frog in the slow-heating water, management had to make a judgment call as to the severity of the situation, and the scope and pace of an adequate response.
SimCorp management decided that the company was approaching a strategic inflection point. It also saw that this realization was not yet widely understood and accepted in the organization. Indeed, coming off a year with record revenues and a 25% EBIT margin there was hardly any sense of a burning platformnor a compellingimperative for acorporate transformation.
To break the status quo without alienating the organization Strategy Office was brought in to facilitate the global management team through a series of discussions of the key dilemmas and choices facing the company, and help adjust the strategic direction and priorities on this basis. Those first workshop discussions became the basis for a collaboration that is now running on its third consecutive year.
Through 2014 we collaborated to adjust the strategic direction, and create focus, coherence and alignment around a handful of corporate priorities. The resulting concentration of resources and management attention quickly yielded progress on five strategic battle fronts and gave the company a clearer focus and a simpler story to align priorities and execution through the business.
In 2015, we worked with management to explore big shifts in the operating environment and define a 2020 Vision and Strategy in response to these. In parallel, we worked on designing a more scalable and effective operating model to underpin the 2020 aspiration and to imbed a strategy execution framework to drive progress and disciplined value realization.
What started as a traditional project assignment has evolved into a long term engagement covering the full strategic agenda of executive management. In 2016, our cooperation is focused on making the changes induced by the 2020 strategy fully operational and harvesting the efficiencies of the redesigned operatingmodel.