The speed at which a manufacturer operates can influence quality, efficiency and market position.
Speed is a common denominator among highly successful businesses in today’s competitive marketplace.
Time to market has become the battle cry for manufacturers – especially those who produce high-tech goods, services and equipment. Organizations who shorten their new product development cycle have distinct advantages within their market. Firms that reduce cycle time decrease operating costs. Companies who focus on time compression are the first to enter markets, and the first to reap the reward of speed.
Distributors have also begun to realize the value of speed as a leadership weapon. When distributors shorten the process of serving customers, they become an even more important link in the distribution chain. They become strategic partners rather than simply distributors.
Organizations who focus on speed are emerging as leaders in their market sectors and are reaping the rewards speed affords in the marketplace.
Here are five distinct ways that speed serves a company as leadership weapon:
- Speed increases quality and decreases cost. Speed requires processes that are simplified into fewer steps. The fewer the steps, the less potential for error. Fewer errors reduce expense and increase quality. Higher quality translates into competitive advantage, increased market share and improved profits.
- Speed creates happy customers. Customers will pay a premium for speedy delivery in order to meet their needs. Quick delivery is a value-added factor. Customers will always pay more for more value.
- Speed adds value. Whenever you add value, you add the ability to maintain or raise your price. A higher price usually results in a higher profit – especially if speed has provided you with lower costs by streamlining your operation. A higher profit allows you to streamline your organization even more and forces your competitors to cut prices in order to get business. This inhibits them from spending money to speed up their processes, and results in a slow decline in their ability to compete.
- Speed increases growth. Speed is a time-based market strategy that allows manufacturers and distributors to respond more quickly to changing consumer needs and wants. Speed to market keeps these organizations ahead of the competition and thus increases a company’s growth.
- Speed devastates competition. Organizations that run faster and smarter tend to increase market share at a geometric pace. This frightens the competition and forces it to make hasty, reactive moves, which further reduces their ability to compete. These errors devastate their profit margins, their market share and their stock value.
In the competitive world of long-distance running, speed has a similar affect- especially when the runner passes a competitor while going uphill. When you pass the competition while going uphill, the psychological shock is devastating, and it reduces their ability to recover and compete.
To implement speed as a leadership weapon, the entire organization must make a commitment to being faster than anyone else n the industry.
Top management must provide the commitment and the resources to build a speed-based organization. It must also be willing to replace the traditional hierarchical structure with a non-traditional flat or circular structure that allows easy access to information and facilitates decision-making. Top management must be willing to introduce a team concept that brings together the entire family – supplier to consumer – and integrates total customer satisfaction into the mission, vision and values of the organization.
Speed is emerging as a principle weapon of leadership. It provides such benefits as competitive advantage, value-based pricing, increased quality, decreased costs and market growth. Tomorrow’s leaders are today’s speed-based organizations.