Stay on track
It’s important to keep the building blocks of your business visible so you don’t drift from them as you make decisions on surviving the down times. You do that by constantly revisiting the goals you’ve set.
“Although it’s hard — and I fall short of it at times — (you need) to make those a living part of your process — your management, leadership process,” Frey says.
To make those building blocks a priority at UTC, every month, Frey gathers his chief financial officer, chief operating officer and the top three leaders of each business unit for an operations review. Depending on the topic at hand, others are brought into the conversation based on their specific insight or to broaden the spectrum of thought. But the important aspect is that the meetings are regularly scheduled to keep a continuous pulse on how close the company is to reaching its goals.
“We review, ‘OK, how do these things that we’re doing, these initiatives, relate to our strategy?’” Frey says. “We try to discuss it on a regular basis and to measure ourselves against how we’ve progressed toward our goals.”
For example, UTC has a five-year plan titled Vision 2x. While already the largest specialty trailer manufacturer in North America, the company wants to be twice the size of its nearest competitor. In order to reach that goal, UTC has to capture market share —hence the reason to acquire Wells Cargo. So as the group of company leaders sits down every month, a portion of their conversation is dedicated to thorough analysis of where UTC stands in the market.
“We, in each segment, every month, measure what’s our trailing, 12-month market share for our business units,” Frey says. “If we’re trying to gain market share, what is the strategy? Why should we gain market share? Part of our strategy or competitive advantage we call ‘why us.’ We discuss: What are the things that we’re doing to create brand trust that causes the customer, the end user of our product, to prefer to buy from us rather than our competitors? What competitive advantage did we create, and how much better have we gotten? What are we doing to improve our products and processes so that the value of our product is better?”
Then the company leaders go through what initiatives drive competitive advantage.
“Is it a product development initiative, is it a cost-reduction initiative, is it a service initiative that we’re going to pursue, and how well are we doing on that initiative?” he says.
The conversation should be in-depth about the processes or initiatives you’ve undertaken to move toward your goal and whether or not they’re actually working. You need to set criteria and ask specific questions that will allow you to measure your progression.
UTC reviews the top two or three initiatives in each operating unit. And though the criteria will be specific to your business and industry, Frey uses vehicle registrations to measure market share.
By doing a regular, thorough analysis, you breathe life into your strategy and vision. It allows you to determine where you’ve faltered and what corrective action needs to take place to get back on track as well as whether the adjustments you’ve made to counteract the economy and down market are helping your business stabilize.
“By keeping those building blocks alive and part of your discussion on a regular, ongoing basis, it keeps us from drifting away from them,” Frey says. “Most of us, in the fray of day-to-day battle, drift from the adherence of these fundamentals and lose discipline. We end up doing lots of stuff but not all of the critical initiatives that drive us toward our vision.”
