Establishing Strategic Clarity for Growing and Guiding Our Industry Into the Next Era

NORTHAMPTON, MA / ACCESSWIRE / October 30, 2024 / Cummins Inc.
By Jeff Wiltrout, Vice President - Corporate Strategy

Cummins

How do you build a strategy that guides a company, leads an industry through significant change and stands the test of time through the next decade and beyond?

My role as Vice President of Corporate Strategy at Cummins Inc. requires defining the direction of our company's global strategy - in other words, answering the question above. The thought of establishing a decades-long strategy can be daunting, particularly for our industry, which experiences frequent change with many factors outside of our control. Our reaction to this dynamic environment must be agile while maintaining strength and stability.

Building a strategy is like navigating a journey toward a distant, faraway destination.

• The journey requires you to first determine your intended destination. In business terms, this means defining your long-term ambition.

• In strategic leadership, your next job is to set the initial direction toward that destination. A strategist is often like a navigator who must chart a path to head toward the destination, even if not every step of the journey is clear.

• Lastly, it's important to consistently re-evaluate your progress and the path you're taking despite the inevitable challenges, missteps and setbacks you may experience along the way.

This is the process of establishing strategic clarity.

While every business will face its unique challenges, there are key steps that Cummins has considered when establishing our strategy for the next era that I believe are transferable.

1. Start with the why. Are your mission and vision aligned with your winning aspirations?

The natural inclination when building a strategy is to start with the "what"-our products, services, and what we provide customers-and the "how"-through first-of-its-kind technology and innovation. Growing in a way that successfully guides your company through the next era also requires a clear understanding of why growth is needed in the first place.

In his 2009 TEDx Talk, "How great leaders inspire action," American author and business leadership speaker, Simon Sinek, explained that what distinguishes inspirational leaders and companies from competitors is that they begin with the why.

The "why" may manifest as a mission and vision statement, both of which I believe ground a strategy. They are the lighthouse in the distance that reorients the ship back on its path, giving purpose to all that you do and why you do it. As Sinek says, people don't buy what you do; they buy why you do it.

For Cummins, we don't simply sell power solutions; we are making people's lives better by powering a more prosperous world. We are powering some of the world's most demanding applications - and we find new and better ways to do it by constantly innovating for our customers to power their success.

I challenge you to ask yourself and your colleagues:

• Why does your company exist? What is its purpose?

• What is the driving force behind all you do - that shared belief between you, stakeholders, customers and the world?

At Cummins, we acknowledge that our mission and vision must go hand-in-hand with our aspirations. Cummins believes that every essential industry has a viable path to sustainability and lasting prosperity. It's an aspiration that will take time, money, investment, infrastructure, partnership and immense innovation.

Your mission, vision and aspirations shouldn't simply be statements. They are the pillars of your strategy and must align to achieve success.

2. Know what you need to reach your destination and how you intend to do it.

How do we aim to achieve our "why"? This is the meat of your plan. It's your opportunity to clearly state what you intend to achieve and who you intend to serve. It's also where you should reinforce your strategy for "winning" your market, audiences and customers.

The strength Cummins brings to the table is our partnerships, talent and comprehensive portfolio of the cleanest, most efficient, cost-effective and reliable power products in the world - all supported by a robust service and support network that keeps our customers' operations running.

The transportation industry operates at a time when one solution or product does not and cannot fit all. Cummins must be agile and develop innovative solutions that give our customers flexible fuel and power options that deliver their equipment's operational requirements, improve efficiency and achieve decarbonization.

In the last few years, we have significantly strengthened our position by evolving our portfolio. Today, we design, manufacture and support power products for global commercial and industrial customers across their entire operational lifecycle. Whether through our core businesses, the launch of a fuel-agnostic engine platform - Cummins HELM™ - or our zero-emissions solutions through Accelera™ by Cummins, we will meet the needs of our customers and guide them and others through the energy transition.

Ask yourselves the same:

• What do you intend to offer customers? What should execution entail, and how do you plan to implement that work?

• What are your company's strengths? Are they strong enough to be the customer's preferred choice and propel your business through the next decade?

• Is this work serving not just any customer but the right customer for your business?

I'll add that it's important to identify the qualities and capabilities that give your company an advantage. What do you provide that your competitor can't? Is it your company's deep history and knowledge of its particular industry? Is it the ability to innovate because of top-tier talent? Access to funds that power greater research and development efforts? Perhaps the well-established partnerships, systems and methods make your operations unparalleled. Whatever sets you apart can be a defining factor in a customer's decision to choose you over the competition. Sharing these superpower qualities could make all the difference.

3. Make the steps along the journey quantifiable and actionable.

The world thrives on data. We crave concrete answers that tell us the truth about our performance. Numbers, as they say, don't lie.

I don't think it's news to readers that capturing relevant data is your strategy's final piece of the puzzle. After all, we're looking to establish a strategy for growth that drives us into the next era, so naturally, we need to know where we started to understand how much - or little - our strategy has helped us grow.

Know your key performance indicators. Identify the areas where you're seeking to make the biggest impact. If the strategy is not producing results, it's time to revisit it.

Our strategy for the next era and beyond is working. By intentionally weaving together Cummins' business and environmental strategies, we've already seen the positive results of such an approach. In 2023, Cummins achieved record revenues of $31.4 billion with a record operating cash flow of $4.0 billion. Such performance has allowed us to raise our expectations for 2030. We've invested over $1.4 billion in research and development, empowering over 75,500 employees to build solutions for tomorrow. Giving back to our surrounding communities remains essential and resulted in employees completing 343,000 hours of community service in 2023, helping Cummins achieve $42.1 million in total giving.

Navigating a journey toward distant lands is bold and demanding. It includes unexpected roadblocks, hours of reflection and recalculations, and perhaps even rerouting the course entirely. The same is true for building strategic clarity. Forming a strategy to navigate and expand your business amidst ongoing change is challenging. At Cummins, it's been no different. Despite daunting challenges in the industry, our strategy propels us toward greater growth and impact for our customers, communities and planet.

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SOURCE: Cummins Inc.