Be two to three times faster than competitors in providing customers what they want, when and where they want it, as this often leads to faster growth and double the profitability.
Deeply understand your true costs, beyond averages, to identify profitable areas, optimize operations, and strategically undercut competitors.
Don’t just reduce internal process times; strategically leverage speed and responsiveness to create a competitive advantage that rivals cannot easily counter.
Integrate time as a key management variable alongside cost and quality to reveal hidden inefficiencies, capital requirements, and productivity gains across the organization.
Identify and eliminate the vast majority of non-value-adding time (often 95% or more) in processes to significantly improve productivity and reduce costs.
Keep substantial financial reserves (“dry powder”) to capitalize on market disruptions and downturns, turning potential threats into opportunities.
Structure your business to be resilient across a broader range of potential futures rather than committing entirely to a single predicted outcome.
Be willing to sacrifice some short-term performance to ensure long-term stability and success, especially when facing adversity.
Cultivate an outwardly focused, competitive culture within your organization, clearly defining the opponent and rallying employees around a shared goal to win.
To make an inward-focused culture more responsive, conduct competitive comparisons to show employees how competitors are outperforming them, serving as a wake-up call for action.
Actively seek out and investigate anomalies or unusual successes within your business, as they often reveal hidden opportunities for new strategies, growth, and competitive advantage.
Minimize batch sizes in both manufacturing and knowledge-based work to reduce wasted time, accelerate cycles, and improve overall efficiency.
Focus on improving quality in all processes, as quality problems lead to rework and lost time, directly hindering speed and efficiency.
Flatten organizational hierarchies and empower local managers to make rapid decisions, enabling quicker adaptation to market conditions and customer needs.
Identify and cater specifically to the “heavy spender” segment (20% of customers driving 80% of volume) by offering more choice, product understanding, and positive service experiences.
Instead of merely reacting to supply chain disruptions, strategically leverage the crisis to create disadvantages for competitors and gain a relative advantage.
Shorten supply chain lead times to reduce exposure to oscillations and disruptions, thereby insulating your business and improving performance relative to competitors.
Invest in faster supply chain options (e.g., more frequent, partially full containers, priority transport) even if it means paying premiums, to insulate yourself from oscillations and outperform competitors.
Implement daily monitoring (e.g., Flowcasting) to identify and address variances across all supply chain elements, even those not directly owned, to improve stability and performance.
Consider strategically holding larger buffers of raw materials (e.g., a year’s supply) to maintain production during supply chain disruptions, potentially generating significant profits when competitors are stalled.
Incorporate the full costs of stockouts and overstocks into product profitability analysis to justify paying more for faster, more reliable supply chain steps.
Strategically use your balance sheet by paying suppliers faster (e.g., 24 hours) to demand better performance, and potentially extending accounts receivable, making it harder for competitors to match your terms.
Design business models that generate negative working capital (e.g., instant customer payment, delayed supplier payment) to improve financial efficiency.
If you have sufficient scale, maintain a broader and deeper inventory to offer more product availability, leading to faster turns and a competitive edge.
When facing cost issues, analyze processes through the lens of time to identify and eliminate inefficiencies, which often leads to significant cost reductions.
Analyze working capital productivity (receivables + inventory + payables) to pinpoint time-related inefficiencies that are dragging it down, then address those to improve balance sheet performance.
To achieve significant speed improvements, first focus the organization by reducing product lines or service offerings, as complexity hinders velocity.
Accelerate processes by a factor of four (e.g., to 25% of original time) to achieve approximately 20% lower costs, primarily by eliminating unnecessary overhead.
To implement small batch production, ensure short setup times, minimal material movement, and decentralized “on the floor” scheduling to reduce costs and working capital.
Focus on optimizing logistics to rapidly move products from suppliers to customers, as this can be a core competitive advantage.
Apply agile methodologies in software development to reduce “batch” sizes (major changes) by focusing on minimum viable products and iterative improvements.
Capitalize on the ability of software to provide instantaneous feedback from users, allowing for rapid iteration and improvement compared to slower feedback cycles in physical products.
Reframe product returns from a cost center to a marketing opportunity by making the return process exceptionally easy and customer-friendly, reducing purchase risk for buyers.
Make cancellation processes as simple as initial purchase (e.g., one-click cancellation) to enhance customer experience and potentially gain a marketing advantage.
Implement a callback option for customer service to reduce customer wait times and improve satisfaction.
Design production systems for rapid recovery from disturbances, as demonstrated by Toyota, to minimize downtime and maintain output during crises.
When transitioning platforms or ending upward compatibility, carefully manage the process by offering attractive new products and ensuring existing customers feel valued, not abused.
When undertaking significant organizational or cultural change, ensure the potential benefits (“size of the prize”) are substantial enough to motivate management to overcome internal resistance.
Recognize that culture is difficult to change and shouldn’t be the initial focus of a transformation; instead, implement new strategies and then adapt the culture to solidify the benefits.
As an owner, actively demand caution and prevent the business from becoming overextended, acting as a counterbalance to management’s potential risk-taking.
If using external management, maintain active ownership involvement to counterbalance their behavior and ensure alignment with long-term family wealth goals.
When making investment decisions, prioritize businesses or assets that offer long-term viability and can sustain operations across multiple generations.
Consider acquiring competitors to consolidate market position or expand capabilities, even if it requires careful justification to regulators.
When competing against dominant players like Amazon, identify and focus on market segments or business areas that they are less interested in, creating a defensible niche.
Public companies should invest in understanding the unique competitive strategies and advantages of private companies, particularly their ability to leverage “dry powder” and longer time horizons.
Adopt a more risk-averse approach to business decisions, similar to private companies, to achieve greater long-term profitability by avoiding deep downturns.