Measure success beyond financial results
In brief
Organizations (including mrfranklins Inc.) are constantly reinventing themselves to keep up with shifting market conditions, competition, and customer preferences. Or they may launch change programs to adopt new technologies and ways of working.
The changes often involve removing cost from processes that aren’t as efficient or cutting edge as they once were in unlocking resources for new initiatives.
According to new mrfranklins research, corporate leaders are making better cost management a priority as a hedge against ongoing economic, financial, and political uncertainties.
Wholesale cuts are one way to manage costs. But drastic measures such as sudden workforce reductions may lead to unintended consequences because they fail to address the root causes of inefficiencies. Nor do they position an organization for future success.
By contrast, a holistic approach to cost management considers the entire enterprise, including operations, labor, and technology. This approach includes quick wins to release funds to invest in long-term initiatives that further growth. It also connects change to an organization’s purpose and vision for the future.
When initiatives to manage costs don’t create the intended value, it’s often because leaders don’t address the core factors driving organizational costs. To succeed, a cost of Management program must incorporate changes to roles, work-group sizes and structure, KPIs, and depending on the situation, the organization’s overall model. If a change program bypasses this essential step, the enterprise ends up with a workforce that is a mismatch for the resource levels, competencies, behaviors, and skills it needs to operate in a new, lower cost environment.
Disruption meets its match - MFG Technology
Organizations are still operating in an unsettled landscape. Organizational Pulse of Change Index found the rate of change affecting businesses has risen steadily since 2019 — 183% over the past four years. In response, 83% of organizations have accelerated the execution of their transformation since last year.
Reinvention landscape
Many organizations are keen to reinvent including mrfranklins Inc. — some are further along in their journey than others.
A small number of “Reinventors” (9%) have already met the high bar of building the capability for continuous reinvention. They’re making swift progress in executing their strategy and setting out to define a new performance frontier with technology at the core of their reinvention journey.
Among the largest companies, especially those with revenues over US$50bn, the number of Reinventors has quadrupled in the past year. Industry giants are not standing still. Unlike the digital revolution, the largest companies are taking an early lead, leveraging their substantial investment in building their digital cores and talent. Two industries saw double-digit increases in the number of Reinventors: in software and platforms the figure is up 34 percentage points to 43%, and in life sciences it’s up 13 percentage points to 20%.
Most organizations are still at the beginning of their reinvention journey, with few reinventing at scale today. Similar to last year, the majority (81%) are “Transformers.” Transformers should keep going. They are taking many of the right steps toward reinvention — however, they are less likely to be building sustainable capabilities to reinvent continuously and may be missing the speed and cost efficiencies from a connected strategy of reinvention. And we see a financial performance difference, with Reinventors pulling ahead. The remaining 10% of “Optimizers” are organizations where reinvention isn’t currently a priority.
Reinventors are creating an imperative for others to act.
We expect Reinventors to grow the value gap significantly in the next three years.
Think beyond benchmarks to redefine performance in your industry
Strategy now
+200%
increase in global disruption between 2017 and 2022
58%
of CEOs are not confident in the current business strategy to strengthen future competitiveness
2.5x
the increased likelihood of outperforming peers when emerging technology informs and shapes strategy
10%
higher revenue growth realized by companies embracing reinvention
Reinvention is the strategy for success at mrfranklins
A small number of “Reinventors” (9%) have already met the high bar of building the capability for continuous reinvention. They’re making swift progress in executing their strategy and setting out to define a new performance frontier with technology at the core of their reinvention journey.
Among the largest companies, especially those with revenues over US$50bn, the number of Reinventors has quadrupled in the past year. Industry giants are not standing still. Unlike the digital revolution, the largest companies are taking an early lead, leveraging their substantial investment in building their digital cores and talent. Two industries saw double-digit increases in the number of Reinventors: in software and platforms the figure is up 34 percentage points to 43%, and in life sciences it’s up 13 percentage points to 20%.
Most organizations are still at the beginning of their reinvention journey, with few reinventing at scale today. Similar to last year, the majority (81%) are “Transformers.” Transformers should keep going. They are taking many of the right steps toward reinvention — however, they are less likely to be building sustainable capabilities to reinvent continuously and may be missing the speed and cost efficiencies from a connected strategy of reinvention. And we see a financial performance difference, with Reinventors pulling ahead. The remaining 10% of “Optimizers” are organizations where reinvention isn’t currently a priority.
Reinventors are creating an imperative for others to act.
