In business, there's a speed difference: It's the difference between how important a firm's leaders say speed is to their competitive strategy and how fast the company actually moves. The difference is important regardless of industry and company size. Companies fearful of losing their competitive advantage spend much time and money looking for ways to pick up the speed.
In our study of 343 businesses, the companies that chose to go, go, go to try to gain an edge ended up with lower sales and operating incomes than those that paused at key moments to make sure they were on the right track. What's more, the firms that “slowed down to speed up” improved their top and bottom lines, averaging 40% higher sales and 52% higher operating incomes over a three-year period.
How did they disobey the laws of business physics, taking more time than competitors yet performing better? They thought differently about what “slower” and “faster” mean. Firms sometimes fail to understand the difference between operational speed (moving quickly) and strategic speed (reducing the time it takes to deliver value). Simply increasing the speed of production, for example, may be one way to try to reduce the speed difference. But that often leads to reduced value over time, in the form of lower-quality products and services.
In our study, higher-companies with strategic speed always made changes when necessary. They became more open to ideas and discussion. They encouraged new ways of thinking. And they allowed time to look back and learn. By contrast, performance suffered at firms that moved fast all the time, paid too much attention to improving efficiency, stuck to tested methods, didn't develop team spirit among their employees, and had little time thinking about changes.
Strategic speed serves as a kind of leadership. Teams that regularly take time to get things right, rather than plough ahead full bore, are more successful in meeting their business goals. That kind of strategy must come from the top.
