The pandemic persists, and businesses are struggling.

High inventory, cash flow difficulties—many companies face these problems. But there are also companies that, facing change, adjust quickly and still grow rapidly during the pandemic. New Distribution's recent live series "Growth in the War" has also reported on this. The characteristic of these companies is that they can quickly turn ideas into organizational action, and when the organization acts, it produces results. You are inspired by what you hear, but perhaps only inspired... Why? The specific external environment differs, but the most important thing is—the organizational capability of the enterprise is different! You can learn from ideas and thoughts, but once you have an idea, can you unify thinking and act quickly? Does the organization have the ability to put ideas into action and create results? In other words, you can learn ideas, but "organizational capability" cannot be copied. In fact, organizational capability is the key to winning battles! Why can't your team win battles? How do you build a team that can win? Today I will share some thoughts with you.

What is "organizational capability"?

Organizational capability is the key to winning battles! So what exactly is organizational capability? Simply put, it is the ability of an organization to complete specific tasks and achieve goals. Let me tell you a story. Once, I held a private board meeting for a company owner. She ran a retail business and wanted to transform into consulting services. During the meeting, I raised a question: Does your current organization have the capability to do this? She looked at me, puzzled. I said, you have accumulated mature experience and methods in store location, customer attraction, service, and other operations, but consulting is a completely different business. You need to distill your experience into knowledge, then turn that knowledge into a sellable product—that's the foundation. Also, how do you find potential clients, make diagnoses, provide solutions, negotiate prices, and fulfill contracts? Who in your current team can handle this work? She thought for a moment and said, no one, maybe only myself. Then doing it as a side business is feasible, but as a direction for corporate transformation, you must be cautious! Why? Because your organization currently lacks the capability to operate a new business. Your current business is doing well, but switching to a new project may not be, because there is an organizational capability issue. Facing the same crisis, some organizations are helpless, while others can turn crisis into opportunity—this also reflects differences in organizational capability. Gao Jingjing, the first guest of New Distribution's "Growth in the War" series, led her team to counter-trend growth during the pandemic. I thought there would be a story of turning the tide. After listening to her sharing, I realized, there is no magic touch; the key is organizational capability! With solid basic skills, you can act quickly and accomplish tasks and goals in any new situation. For example, during the pandemic, Gao Jingjing required salespeople, drivers, finance, clerks, internal support, and warehouse staff to all join the battle, picking and delivering goods. Why could clerks and finance quickly join the battle? Because Gao Jingjing usually required non-sales positions to work one day a week in the warehouse to familiarize themselves with business processes. The company operates with processes, and they regularly conduct training, learning, and job rotation—these are basic skills, the fundamentals of building organizational capability. Organizational capability, like individual capability, has boundaries and possibilities. With solid basics, you can break boundaries, create possibilities, and it can continue to grow.

How does "organizational capability" grow?

How does it grow? I have summarized a formula: Organizational capability = Processization + Learning/Grafting * New Tasks Let's go through them one by one. First, processization. I once asked a sales team I was coaching: Suppose there is a book that, if you read it, can help you achieve excellent performance and earn generous bonuses—would you be willing to read it? They said, of course, but does such a book exist? I said yes, but you have to write it yourself—it's your sales manual. What I'm talking about here is an example of processization. Proactively managing knowledge, compiling individual experience, knowledge, and thinking into operational manuals, turning experience into process steps, and becoming an action guide for the organization—this is processization. Ren Zhengfei said: The waste of experience is the biggest waste in an enterprise. I deeply agree. During development, enterprises generate a large amount of experience, operational methods, and valuable ideas attached to individuals. These are scattered; if not organized, summarized, and promoted, it is a loss to the organization. This is not a groundbreaking truth; everyone knows it. But few actually do it. Even fewer do it well. Why? Because the boss lacks this awareness. Although it is not a strategic priority, it is still a top-leader project. If the boss doesn't value it, and management doesn't have the habit, the entire organization won't do it. Processization is the basic action, which is to precipitate past experience. There are two other key points: learning and grafting. If the organization lacks a certain capability, or some personnel need improvement, you can gradually develop that capability through learning, sharing, training, practice, etc. Of course, you can also hire people who can handle the new business; sometimes a new person can bring new capabilities to the organization. Learning is a way of self-growth; external hiring is a way of grafting. Of course, as the saying goes, you learn war through war; true capability growth is always accomplished in specific tasks. For any organization, capability growth is actually achieved by combining self-growth and external grafting on the basis of processization, facing specific challenges, and completing tasks one by one. What you see is that when the pandemic hit, Gao Jingjing's team could all rush to the front line. But what you don't see is that she usually learns a lot and applies the learned methods to enterprise management, building a culture of sharing and learning within the team. For example, some salespeople's commissions can account for 70% of their salary, while others only 30%. She would have the high-commission salespeople share their experience, not just share, but also pair them up for targeted assistance. If the lagging salesperson's performance doesn't improve, the mentoring salesperson is also assessed. This applies not only between salespeople but also between brand managers. Why can organizations that win battles continue to win? Organizations with strong growth capability—those that continuously break boundaries and create possibilities—are more likely to adjust quickly, learn quickly, act quickly, create results, and continue winning battles when facing change and challenges.

Improve the organization's "signal-to-noise ratio"

But just talking about these is not enough. In the live broadcast, Gao Jingjing said that when the pandemic hit, the boss must stand up and lead the overall situation; the boss should rush to the front line of distribution and delivery. Why? Besides stabilizing morale and boosting spirits, there is another important role: sending the strongest signal that this is the most important task for our organization right now, a battle we must win! This involves a concept: signal-to-noise ratio. What is signal-to-noise ratio? Information in an organization can be roughly divided into two categories: signals and noise. Signals are information that directly guides action, and it is the action we should take. Noise is information that interferes with our actions. Improving the signal-to-noise ratio of the entire organization is very important! Why? For example. Once I attended a sales meeting at a company. At the meeting, the boss angrily said to his team, "This year our key task is to promote these two new products, but none of you have taken any specific action, nor have you mentioned any plans. Didn't I talk about this in the meeting? Why do you seem to have no concept at all!" The employees looked at each other in bewilderment. I understood their thoughts: You say a lot of things; how do we know which ones you mean casually and which ones you truly intend to execute? The boss didn't realize that he had said many things on different occasions to different people; some were taken as signals, others as noise, resulting in a very low signal-to-noise ratio in the organization, making it impossible for the entire organization to identify the true signals. You know, within an organization, everyone has some thoughts about what is the priority in current work and future work. If the organization cannot identify the true signals, it cannot unify thinking, form collective will, coordinate, and concentrate efforts to win battles! So, how to improve the signal-to-noise ratio? For important decisions, you must send the strongest signal! Besides the boss leading by example at critical moments, here is a method you can use in daily life: Think about important issues with a pen, and transmit them in writing. Why write it down and transmit it? First, brain thinking is like irregular Brownian motion, with many logical loopholes. When you write, you naturally pay attention to whether there are logical problems, which prompts you to think more comprehensively and completely. Second, when thinking in the brain, if some issues are unclear, you might give up, but when you try to write it as an article, you have to think more deeply. Shallow thinking has little value; what is truly valuable is deep thinking. Third, brain thinking must be objectified into a common thinking target, which is the black-and-white text everyone can see. With this target, it can trigger broader thinking and discussion among team members, and then reach a consensus. When you express ideas in writing, team members will realize that this is a "signal" that needs serious attention. The energy transmitted by this signal is incomparable to a few words spoken casually on any occasion. Moreover, this method can guide everyone to participate in thinking and discussion, and finally reach a consensus, which can promote truly effective action that leverages organizational capability and concentrates efforts! Of course, this is just one way to improve the signal-to-noise ratio. The key is to know that there are two types of information in an organization: signals and noise. Improving the signal-to-noise ratio, unifying thinking, and forming collective will are the only ways to concentrate efforts, leverage organizational capability, and continuously create results to win battles!

Summary:

How to concentrate efforts to win battles? Ultimately, it depends on people! But what about people? How to rely on people? Let me summarize again:

  1. Like individuals, organizations have capabilities. Its foundation is individual capability, but it produces a synergistic amplification effect. Team synergy is actually the synergy of members' unique experiences, knowledge, and ideas.
  2. Organizational capability needs to grow, break boundaries, and create possibilities. Organizational capability = Processization + Learning/Grafting * New Tasks.
  3. Processization is about mining individual experience to form references that guide team action. Everyone knows it, but few do it well, because although it is not a strategic priority, it is still a top-leader project.
  4. Learn war through war; every challenge and every new task is a good opportunity to improve organizational capability.
  5. To leverage capability, the organization must consider coordination and alignment. The essence of coordination is information flow. Information is divided into signals and noise; signals guide action, noise interferes with action.
  6. Think about important issues with a pen, transmit them in writing, guide the organization to think and discuss, and finally reach a consensus to promote truly effective action.
  7. That is, improve the signal-to-noise ratio, unify thinking, and form collective will to truly leverage organizational capability and concentrate efforts to win battles. Many bosses pay close attention to new models, new methods, and new tools, but have little concept of the core "organizational capability." Today's content may not help you solve immediate problems, but the pandemic will eventually pass, and uncertainty will always exist. Organizational capability is the foundation to help you win future battles. I hope this article helps you build your foundation. Focus on in-depth interviews in the FMCG industry, thinking about the latest changes. If you want to communicate, you can add WeChat by long-pressing. When adding, please indicate your company, position, and name. More articles -END-