As is often the case lately, I am inspired by the political arena and the two very dissimilar presidential candidates (although by the time you see this column the election will finally be decided). One of the candidates has frequently remarked about how unpredictability can be an advantage on the world stage, while the other has portrayed herself as one who will keep with past commitments and chart a steady course. Voters decided which path makes sense for America, but what about in business? Is predictability a good thing or not? As you might expect, my answer to this question is: often predictability is a good thing. But there are times when it is not.
Lets explore this, starting with the power of a predictable customer experience. This of course assumes it is a great customer experience. Customers want an excellent and predictable experience that extends from order to delivery to product performance. Any changes to that predictable experience may result in customer dissatisfaction and complaint. Changes require communicating to the customer the nature and timing of the change and the potential impact. This is true even if the change is something you consider positive or an improvement; you may not understand how the change affects the customer or what the customer may need to do to deal with it. Predictability of the customer experience is highly important, and it is built upon a foundation of well-understood processes, effective systems and trained and motivated employees.
Another area where predictability is positive is within the work environment. People value an environment in which they understand the rules and what it takes to succeed. This assumes that the company culture is a good one in which employees feel valued and motivated, and which is grounded in basics like ethical behavior and safety.
It is also beneficial for a leader to be predictable. If a leader is predictable, the organization is more likely to know how to satisfy the leaders needs, and by doing so also satisfy the needs of the overall company. This leaves plenty of scope for each leader to establish their own ways of working with their organizations, such as which data or reports they need to see, what hot button topics they wish to be consulted on or informed of, and how decisions are to be made within the organization.
Predictability is extremely beneficial for the communities in which your business operates. The community wants to be sure that you are a responsible member of that community, and that you have reliable safety and environmental practices. It is advisable to have a quality process related to how you interact with the community on a regular basis. Hosting tours of your facility and encouraging employee participation and volunteerism in the community can be great ways to establish good will and two-way communication. Be sensitive to changes at your company that could affect the community such as construction, truck movements and the like.
Predictability is highly valued with regard to financial performance and reporting, of course. A predictable financial forecast has tremendous value to your CEO, board of directors and shareholders. Suppliers also value accurate forecasts of future needs, as this allows better management of manufacturing schedules and inventory, thus reducing costs while also satisfying customers.
While on the topic of suppliers, in general it is good to be a predictable customer for your suppliers. If you are seen to treat suppliers fairly and predictably over a long period of time, you are more likely to be classified as a long term and more strategic customer to whom benefits such as better pricing and favorable contracts may be given. Understand how your suppliers classify customer relationships and where you fit in their hierarchy.
In what situations is predictability not advantageous? Lets start with your suppliers. As an example, I read once that car insurance companies rely on their customers resistance to change, and do not hesitate to steadily increase the pricing on policies for their most loyal and long-standing customers. While this may be an extreme example, it does reflect the reality that you must periodically test the market for your supply needs and be prepared to adjust your suppliers share of your business accordingly. However, even in these situations you can adopt the policy of predictability by laying out a fair process (such as a well-managed bid process) and sticking to it.
In business strategy, too, the benefits and debits of predictability must be weighed and evaluated according to the specific situation. If you are planning a major new strategy, entering into a merger or acquisition or rolling out a super new product, the element of surprise in the marketplace may be a tremendous advantage. On the other hand, there may be situations that benefit from communicating to the market. This could include strategies in which you are seeking overall industry cooperation, for example to benefit the environment or improve safety. Be sure to consult your legal team in such instances.
While valuable in many business situations, beware of predictability turning into complacency. Progress and growth do require change, and nothing in this column is meant to discourage change! You can even manage change in a predictable way-by establishing clear objectives and targets, communicating the case for change, setting up clear leadership for the change process and updating people along the way. Be sure to create a climate and culture in which new ideas are welcomed even if they challenge conventional thinking. These new ideas could become the foundation for a better future.
Sara Lefcourt of Lefcourt Consulting LLC specializes in helping companies to improve profits, reduce risk and step up their operations. Her experience includes many years in marketing, sales and procurement, first for Exxon and then at Infineum, where she was vice president, supply. E-mail her at email@example.com or phone (908) 400-5210.