Invasive Principles #2: Speed up your Cycles to get to Resources earlier

Invasive species develop earlier and shorter reproductive cycles that allow them to get to precious energy sources earlier than their native competitors.

Eurasian watermilfoil is an aquatic plant that arrived in the United States, probably as a stowaway in the ballast tanks of a cargo ship, some time before the 1940s.  Its growth cycle starts well before most native plants, with the spring thaw, and it grows rapidly up towards the water surface and the sunlight.  Once there, it continues to grow rapidly, but this time outwards across the surface, creating dense beds that rob native aquatic plants of access to the sunlight that they need to survive.  This has two main knock on effects; it creates an ideal environment for mosquitoes but it also removes an important source of food and shelter for local animals.

In business, the annual accounting and tax cycle acts like a vortex towards which many other corporate processes become inextricably drawn.  Planning and budgeting becomes an annual process, an unintended consequence of which is the much derided but widely practiced fourth quarter spending spree.  Strategy, marketing, IT and other core business processes all follow suit.  What happens all too frequently is that the internal process cycles dictate the rate at which services and products reach the market.  This leaves significant opportunities for companies who can reset their cycles to match the need or desires of their customers.

In the retail fashion industry, Zara has made major innovations to its business model in order to reduce cycle times.  New lines take less time to go from design to production, are made in smaller quantities and are flown rather than shipped to the stores.  In all, Zara has reduced design-to-store time from an industry norm of 6-9 months to 2-4 weeks.  Once in the store, the lines stay there for no longer than 4 weeks, which causes Zara’s customers in its native Spain to visit the stores up to 17 times a year, compared to an industry average of 3 times.

This approach has paid off.  As at August 2008 Zara’s parent company Inditex Group had more than 4,000 stores in 72 countries, overtaking its main U.S. rival Gap to become the world’s largest clothing retailer.  Zara accounts for more than two thirds of Inditex revenues.