Seven Key Success Factors to Consider for Strategic Growth (and Ultimately Project Success)
Written by: Lowell Dye
There are seven critical elements that contribute to an organization’s project selection, management, and decision-making process. Every organization, both large and small, must assess itself against these elements. The closer these elements are to the organization’s set of core competencies and the organization’s strategic and operational objectives the greater the likelihood for success. Let’s take a closer look at each of these in more detail.
1. Customers
Does the new opportunity target the existing customer base, an existing customer in a new area, or are you trying to reach a completely new set of customers? The closer you stay to your core, the more you know about the customers’ markets preferences and buying habits. It is also important to realize that not all customers are the same. You need to differentiate your customers and find the group that is the most profitable. For example, are you targeting an existing customer with a new product or service such as a local delicatessen that has decided to offer delivery service to nearby offices during lunch hours, or are you trying to get into the gourmet catering service?
2. Competitors
Competition is probably the main reason why organizations decide to move into a new business or market area. Whether it is a move because your competitors are in that market and if you don’t move, you will be left behind, or there is little or no competition and you see an opportunity to fill the void. Who are the existing and potential competitors? Also consider that if there are very few competitors, it is important to thoroughly understand why. Is the reason simply that the move is revolutionary and your organization is the first to move in that direction? Or are there no customers because it is cost prohibitive or has too low of a profit potential? In addition, consider the actual product. When comparing what you have to offer to your competitors, it is also important to clearly understand what really differentiates your product or service from what is currently available. Will the project produce a “me-too” product – one that competitors have and without a similar product or service, you might be perceived by the marketplace as a lesser-provider – or will you gain a “leap-frog” advantage over your competitors by being something new and innovative? When there is no perceived meaningful difference between offerings, then price becomes the primary, which then makes what is being offered nothing more than a commodity.
3. Capabilities
Can existing skills, talents, and technology be used to deliver the new project or will it require a totally new or next generation capability? The likelihood of success is significantly greater if the capability is already in place or can be acquired through other means such as strategic partnering. Some organizations try to expand beyond their corporate offerings and get into new business areas by acquiring a capability through a merger or acquisition, only to find themselves selling off the acquisition because it took them too far away from their core competencies. Capabilities are critical because they help to establish credibility and credibility leads to customer confidence. Remember the benefit is what you are offering the customer. Customers often withhold their final commitment until they feel confident that you can make good on your promise to deliver.
4. Capital
Many organizations want to grow but do not have the resources to do so. Can the proposed project be accomplished using existing resources or will additional resources be required, including financial resources? The more the organization can rely solely on available resources the better.
5. Channels
How will the project results be made available to the marketplace and end users? Does the organization dominate the supply chain or have a partnership with another organization that does? Getting the project results to the customer can sometimes be more challenging than developing the product in the first place, thus reducing the success potential. For example, if the normal distribution channel has always been through direct access, such as a specialized distributor, and the growth strategy is to use an indirect access method such as a major “big box” retailer, like Lowe’s® or Home Depot®, then the acceptance criteria becomes substantially different. It becomes even more challenging if considering an internet or web-based approach.
6. Communication
Businesses operate on information and the quality and timeliness of the information is critical. If the new opportunity means establishing, increasing, or modifying your communication process, then the organization needs to determine the impact. For example, simply adding an additional office location in the same city is not likely to create major communication problems. However, pursuing an opportunity in a totally new marketplace or geographic area will likely create many communication issues.
7. Coordination
Integrating all of the other elements will require that there be a clear understanding of the big picture. The greater the number of competencies being affected and the greater the distance from the organization’s core, the more difficult it will be to make sure the all the pieces are fully integrated.
Profitable growth can be a challenge for any organization, especially as opportunities become harder to find and develop. Constant pressure from internal management, stockholders, investors, and politicians to set higher and higher goals and be successful has never been greater. To be successful organizations need to be smart about how they select and execute projects that provide real benefits to all stakeholders. Unfortunately, success targets may be so unrealistic that organizations make restructuring, acquisition, and project management decisions that move them beyond their core abilities. All too often, project and business failures are caused by, or worsened by, over-expanding beyond the core.
Growth choices are some of the most significant an organization can make. The key is to make good, logical decisions with the core competencies as the foundation, while exploring the unknown where the opportunities lie.
