Whether or not to invest in new products, systems or processes is a recurring dilemma for all senior management teams. Do you have the resources to hand, and when will you see a payback?
Young companies or start-ups know that they need to find the funds to invest in developing capability or they’ll go under in no time. Mature companies tend to be more conservative. They’ve built themselves up, are sitting on fat contracts, and are more than happy with the status quo.
“Let’s see if we win it first, before we go investing in that system” is a sentiment I’ve come across in many companies I’ve provided consulting services to. It’s particularly common when someone is “sweating the assets” of a company in preparation for a sale. It appears prudent but relies on the point of view that a buyer is going to believe you’re able to deliver despite the capability not currently existing.
Buyers Know More About You Than You Think They Do
Buyers usually have a very good idea of what’s going on under the hood of your organisation. The best of them are skilled at gathering intelligence. They’ll have built a profile in their own minds of your management team, your methods, and whether you’ll actually be able to deliver. You may write a bid you think is worthy of a Booker or a Pulitzer, but if they don’t believe you, they’ll consider it fiction and won’t buy it.
Whether you sell health insurance to corporates, managed services to utilities or water treatment services to the Health Services Executive, it’s important to remember that while your customer may appear to sit still at times, your competitors certainly don’t.
Capability Diminishes Without Investment
I’m very fond of sports analogies to drive home points I need to make about high performance. They’re very effective in order to highlight what’s required both from a preparation and execution point of view. As a triathlete I’m well aware for the need to prepare thoroughly for the race season. If I’m not hitting the pool deck at 7am twice to three times a week and getting long bike rides in four months out from the race season the chances are I’m not going to perform to a level, I’m happy with. I fractured an ankle in July 2017. By the time I returned to the pool in January 2018 my fitness had diminished to the extent that I was miles behind the very people I had been beating comfortably the previous season. It took over two months for me to return to a reasonable form of swim fitness.
The lesson should be obvious. If you don’t proactively develop your company’s internal capabilities and maintain them, your ability to compete in the market will atrophy just like my swim fitness did. You’ll fall behind your competitors, who’ll take far more glee in your weakened condition than my club mates did in mine. They’ll win all the bids and, though it took me months to recover, it could be years before you win another serious contract.