How business infrastructure creates competitive advantage.

“Can you hear me now?” Who hasn’t asked that question in reaction to a weak cellular phone connection?

We used to ask it more often when cellular operators were beginning to build out their networks. But over the years they have invested heavily in network infrastructure and, as a result, their business has grown.

Like a mobile phone network, any growing company has to continuously expand its systems infrastructure to support smooth daily operations and sustained profitable growth. Without the proper systems infrastructure CEOs and senior level executives become disconnected from the growing number of people who do the work and from their plans, results, issues and ideas. And employees struggle to contribute effectively to the success of the enterprise. They lack information to make decisions, coordinate activities, and prioritize the use of resources in support of the company’s strategy. They also trip over each other, miss handoffs, struggle to meet requirements and spend hours in meetings fixing problems.

This is a coping environment that undermines performance at all levels. Customers, employees and eventually investors become disenchanted. Over time, if the infrastructure shortfalls are left unaddressed, the company enters the Danger Zone where growth stalls, profitability disappears and a “crash” is imminent.

In business there are 5 categories of systems infrastructure:

• Strategy
• Operations
• Financial
• Information
• Human capital

When all 5 categories are at the appropriate level of development and working together, you’re in the Fly Zone. Your business is running smoothly, financial performance is improving and all stakeholders are happy. You have the right people doing the right things … right. However, although being in the Fly Zone is good, it’s best to add infrastructure in anticipation of future needs and stay slightly ahead of the curve. This puts you in the Acceleration Zone where you accelerate performance and have the best opportunity to outdistance your competitors.

In the real world where resources are limited, even great companies install infrastructure unevenly but they are careful to select those that best serve their primary strategic needs. For example, a low cost manufacturer will emphasize operational and supply chain upgrades over product innovation and customer service investment. Great companies ensure that they are firmly positioned in the Fly Zone in the areas where it matters most to the strategy and always pushing to enter the Acceleration Zone.

So why do some companies fall behind? Often they get caught stuck in a fire fighting doom loop. Everyone is so busy putting out fires caused by the lack of infrastructure that they have no time, money or energy to make the necessary long term infrastructure upgrades. Only strong leadership can get a company out of this loop and prevent its reappearance. Leaders are advised not to get stuck working exclusively on the urgent. Instead, as Steven Covey advises, they should maintain a level of organizational effort on the important, where infrastructure upgrades live, in effect making tomorrow’s important, today’s urgent.

What Zone is your business in? How are growth, profits, customer satisfaction and employee retention? How much time do your employees spend fixing things? How much do you invest in upgrading your infrastructure? Are you keeping up or falling behind?

No matter what, even if you’re falling behind it’s never too late to begin. So resolve today to go to the Fly Zone, and beyond.