Strategies That Set High-Pace Businesses Apart

In today’s rapidly changing landscape, being slow doesn’t just result in missed opportunities. It can potentially jeopardise companies, particularly in markets where swift competitors can adapt and respond at a moment’s notice.

Glenn Burgess

“I feel the need … the need for speed!”

This iconic line sets the tone for the original Top Gun movie, but it just as well could be the mantra for today’s chief executive officers. CEOs everywhere find their organisations struggling to keep up with the quickening pace of change in everything — from customer expectations to business concepts to societal trends — and it’s preventing companies from truly maximising value.

Thanks to technology, like mobile phones and social media, ideas spread very quickly worldwide. Companies that can’t keep up with this fast pace are at risk of becoming less important.

This is especially true for those who can’t quickly create and sell something new that people want. They end up losing customers and money.

Being fast isn’t just important for making money or getting a bigger share of the market. It’s also crucial for protecting a business. Being quick to react can help minimise problems that might hurt the company.

Speed is now a big advantage, and it helps companies become stronger and more resilient.

The Two Dimensions of Speed

When we talk about speed in business, we’re looking at two important aspects that determine how quickly a company can act:

Speed of Insights: This means how fast a company can understand what the market needs. It involves identifying the important signals in the industry that show upcoming trends and understanding what customers might want in the future. It also means being able to see potential problems on the horizon.

Speed of Action: This is about how quickly a company can organise itself to take advantage of the insights it gains. It involves processing the information, deciding what the company should do in response, and then putting those decisions into action.

Companies that are good at both of these things can consistently provide customers with what they need, when and where they need it, often faster than their competitors.

This helps them stay ahead and be more successful. It also helps them react quickly to challenges that could hurt their business, avoiding problems.

According to Kearney’s analysis, companies that focus on being fast tend to perform better financially. They found that companies with the highest five-year growth rates and profit margins were more likely to have certain capabilities that are crucial for being quick in how they operate.

These include having a range of products that help them get to market faster, using data and tools to make customers happy, and having flexible supply chains and operations that can respond rapidly.

Some companies that excel in these areas are Tesla, Farfetch, and Amazon, and they have shown impressive growth rates and profit margins.

Regenerators Vs. Optimisers

Most companies today are not primarily focused on speed. Instead, they aim for optimisation, which means becoming exceptionally good at certain things and constantly improving their operations to maintain that excellence.

Their goal is to achieve the best possible state, and they concentrate on making internal functions, processes, and decision-making more efficient to deliver ongoing small improvements in performance.

However, their success relies on stability and predictability, which doesn’t align with today’s dynamic environment. This can make it challenging for these “optimisers” to stay competitive in their areas of expertise.

In contrast, there are companies that recognise the competitive advantage of being fast. We refer to these companies as “regenerators.” They have developed a model and supply chains that remove traditional obstacles to speed, allowing them to quickly gather insights and take action.

According to a recent survey of top executives conducted by Kearney, regenerative supply chains empower businesses to make proactive decisions based on changes in factors like customer preferences, trends, and regulations, adjusting their production, inventory, and logistics in real-time. Their ultimate goal is to create lasting value.

The success of regenerators hinges on four key elements:

1. Regenerators rely on data — & they can make sense of it.

Despite the progress in data analytics over the past decade, many companies still rely on decisions based on managers’ instincts or “gut feelings.” However, this approach is often imprecise, providing only general guidance at best and can even be entirely incorrect.

In contrast, “regenerators” make extensive use of external data, combined with advanced analytics and AI tools, to swiftly and accurately understand both internal and external factors influencing their business.

They employ digital technologies to access a wide range of data sources that offer insights into customer sentiments, expectations, and behaviors that drive demand.

This approach enables a deep understanding of individual customer needs, as exemplified by a South African healthcare executive in our survey.

Walmart serves as an excellent illustration of a regenerator. Their remarkable customer engagement capabilities continuously provide insights into customer thoughts and emotions.

Walmart leverages this data to improve the shopping experience in ways customers might not have even realised they wanted. For instance, when they noticed a growing demand for customers to place online orders and pick them up in stores within two hours instead of three days.

Walmart quickly developed and implemented a new buy-online-store-pickup fulfillment model. This decision turned out to be a significant asset and competitive advantage during the pandemic.

Tesla is another prime example of a regenerator. The automaker monitors an impressive 2 to 3 billion data points related to people’s driving habits daily. From this wealth of data, the company identifies key aspects for hardware and software design improvements, which drive product enhancements and development.

2 Regenerators empower localised decision-making

Optimisers tend to prefer a hierarchical decision-making approach, where multiple levels within the organisation are involved in making the “right” decision. However, this approach is not conducive to speed.

Conversely, regenerators assign decision-making responsibility to where it makes the most sense, whether at the top level or on the frontlines, in order to facilitate a quick and comprehensive company response.

In a recent survey by Kearney, 55% of respondents agreed that a culture emphasising cross-functional collaboration is crucial in a regenerative model.

For instance, at regenerative organisations, significant decisions with broad, cross-functional implications and long-term consequences, like capital allocation, factory relocation, product redesign, or market entry, are made by individuals who can focus on the bigger picture and long-range planning.

On the other hand, responsibility for tactical decisions that require swift action, such as those related to sourcing, logistics, manufacturing, and distribution, is delegated to the most suitable points within the organisation—where they can act quickly and effectively, often referred to as “where the rubber meets the road.”

In practice, this means entrusting decision-making to individuals who are closest to the raw materials allocation, product manufacturing, and finished goods shipping. These are the points where the most accurate and relevant information needed to make the best and quickest decisions is readily available.

This approach also helps foster a growth and innovation mindset by building employee confidence and commitment, as noted by 60% of executives in the survey who consider it a significant driver of a regenerative model.

An executive from an Indonesian tech company emphasised that “regenerative leaders must be open with their employees to empower them.”

3. Regenerators reward speed over perfection

In most companies, managers are typically evaluated and rewarded based on their ability to optimise their specific area of responsibility. They use internal benchmarks that emphasise making gradual improvements over time.

In contrast, regenerators use metrics that focus on how quickly they can gather insights and translate those insights into effective actions.

For instance, in product development, competitive advantage now hinges on a company’s ability to swiftly identify a customer need and deliver a product to meet that need. Regenerators prioritise getting a product to the market quickly over creating a perfectly complete product initially.

They then gather customer feedback promptly and make updates or improvements to the product as necessary, sometimes in real-time.

This approach resembles agile software development, where the goal is to create a “minimum viable product” that can be adjusted to fix issues or add features.

Another example can be seen in fulfillment. Regenerators have moved beyond scan-based replenishment, where a replacement order is triggered as soon as an item is scanned, to intention-based replenishment.

This new approach measures the time it takes from identifying a emerging market need to getting the right items to the location where the need exists.

The difference is in anticipating future sales rather than merely reacting to a transaction, which may or may not indicate future demand.

4. Regenerators create powerful ecosystems based on the seamless exchange of data

Achieving operational flexibility to swiftly put decisions into action is arguably the most challenging aspect of speed. How can a company mobilise its people, products, and physical assets to move as quickly as possible?

For regenerators, the key lies in utilising ecosystem partners that can provide specialised capabilities as and when needed, on demand.

In fact, in our survey, 52% of executives emphasised that partnering and collaborating within a thriving ecosystem is a critical component of a regenerative supply chain.

This approach involves a greater reliance on external entities such as design firms for new product development, contract manufacturers for production, and third-party logistics providers for distribution.

These partners can be quickly brought together to meet a new market need or respond to a business threat. Real-time data sharing across these partners ensures that everyone is informed of the need as the company identifies it, and they are motivated to respond promptly.

In some cases, this ecosystem can be internal, as exemplified by Procter & Gamble (P&G). P&G relies on what they call their analytics and insights ecosystem to gain an unparalleled understanding of consumers and their buying behavior.

This ecosystem comprises three distinct AI and analytics platforms that, when working together, enable P&G to gather and analyse consumer purchasing behavior data far more accurately and rapidly than traditional methods like focus groups and panel surveys.

According to Kirti Singh, P&G’s chief analytics and insights officer, this ecosystem empowers the company to “operate at the speed of the markets” and examine thousands of real-time, behavior-based data points every day, week, or year across the country.

Singh noted that they are moving towards leveraging the Internet of Things to acquire more real-time, behavior-based data, which is far superior to traditional habits and practices.

Buckling Up for Faster Times Ahead

The challenge of lacking speed has haunted companies for decades. Take, for example, a notable food manufacturer’s missed opportunity two decades ago.

The company failed to seize on a dieting trend that was rapidly gaining traction in the United States. By the time the company noticed the trend and responded with a related product, it took 14 months — too late, as the trend had already faded away.

What sets the current situation apart is the unprecedented pace at which things are moving today. The repercussions of being slow extend far beyond just missing a few opportunities.

It can now place companies in extremely vulnerable positions, especially in markets where competitors can swiftly sense and respond to emerging trends. Companies that can’t keep up may find themselves struggling for relevance or even facing the threat of extinction.

Business leaders are acutely aware of this reality. According to Kearney’s survey, 70% of Chief Operating Officers acknowledged the urgent need for their businesses to adopt a regenerative supply chain approach, making them faster and more agile.

By developing capabilities that remove barriers to quick decision-making and action, companies can transform into regenerators, enabling them to outperform and outmaneuver their rivals.

This capability is just as vital to companies’ strategies today as it was to the mission of Maverick and his fellow fighter pilots in the iconic film from 1986.