Blog Article Written By: Ray Attiyah, Chief Innovation Officer
Several years ago, Nike embarked on a journey to build a massive ERP
(Enterprise Resource Planning) system. I recommend ERP systems to any growing business, but what made Nike’s effort so significant was its intention to combine ERP with supply chain optimization and CRM (Customer Relationship Management) functions. For those that are unfamiliar with the size and scope of this kind of project, trust me, it is a massive undertaking.
Anyway, Nike’s $400 million investment ended up costing the sporting goods brand $100 million in lost sales and a 20% drop in their stock price, not to mention a bevy of class action lawsuits. The company’s VP of Global Operations (at the time) openly admitted, “For the people that follow this sort of thing, we became a poster child (for failed implementations).”
What happened that caused such a disruption? The answer is unreliable systems and processes – our fifth obstacle that prevents organizational growth (in our series of seven).
ERP systems are only as good as the systems and processes that support its functionality. The same goes for an organization’s employees. While a failed ERP implementation is a symptom of system and process problems, so too are inflated lead times, poor on-time delivery, employee turnover and chronic miscommunication.
Systems and processes are an organization’s DNA; but unlike our own genetic makeup, we have the ability to strategize and select how we want our operations to function. I believe that every employee wants to succeed, but they need appropriate systems and processes that will allow them to do so.
Think about it like a mind-body connection. When systems and processes are streamlined, the organization doesn’t have to compromise between the health of the mind (strategy and objectives) and the body (day to day operations). When systems and processes are inefficient, there is a misalignment between the mind and body causing sluggishness and turmoil. Only when an organization’s mind and body are aligned through efficient systems and processes can top-leaders seize opportunities in the market with confidence that their front-line will handle the complexity that comes with growth. Without the most efficient systems and processes in place, growth is only in size, not sustainability.
So, keeping in mind the importance of having the most efficient systems and processes, let me leave you with a couple of questions to ponder:
- Is your organization prepared to truly grow?
- How would you personally handle a new customer and/or new market if it/they were added tomorrow?
- What would it take to give you confidence to add complexity?
- What functions do you wish could be more efficient? What solutions can you provide?
2010 so he can focus on how to most effectively spend his time in 2011. According to senior advisor Valerie Jarrett, “the President’s ‘biggest regret’ was that because of economic turmoil – ‘he had to spend almost every waking hour in Washington working on solving that crisis.’”
With superficial relationships, it’s what you miss that matters. Specifically, you miss an opportunity to gather market intelligence and consumer insights. Your customers have a valuable perspective. They can provide information about potential future demand that is important to keep in mind when budgeting, scheduling and purchasing. They can also help you identify product improvements and gaps in the marketplace.
Like the President, the emergency of the day can prevent you from spending time on other important business matters. Great leaders have to learn to juggle them all. How well do you handle all of the elements of your business?