The lead-lag strategy to transformative change is an acknowledgment of the time necessary to acquire and provide resources to a project. Lead time is a common phrase when attempting to collect the supplies for a project; participants often hear that the supplies will take weeks to arrive at the facility. For instance, Dow Chemical uses advanced forecasting to identify and project the availability and demand of resources for products, as well as the demand for products (Sweeney, 2010). The real value of Dow's analytical approach was not on producing volumes of numeric data, but rather the focus on the lead-lag (i.e., input-output) relationship to economic demands and the need for input resources and external output demands (Sweeney, 2010).
The lead-lag strategic approach in transformative change focuses on the various resources associated with initiatives and the external commitments an organization may have to stakeholders. The timely acquisition of resources and the preparation of distribution of the products will result in considerable cost savings because items arrive and ship when best suited to the situation. For instance, knowing when to ship a new high-profile product for an expected customer demand (e.g., the advertisement of a new soft drink before a holiday weekend) is highly desirable. It allows the product to arrive in time to take the best advantage of the economic market. Reynolds and Yetton (2015) describe the balance of internal indicators (i.e., lead) and external indicators (i.e., lag) to address the lead-lag cyclical supply and demand relationship.
The strategy's primary criteria require a clear understanding of the organizational resources and the ability to achieve infrastructure capabilities. The knowledge associated with the resources is generated from collecting data about the change initiative's organizational systems and processes. Analyzing the data allows for a robust understanding to identify the lead and lag times involved in resource-product management. Long-term or longitudinal trend data are an excellent method to obtain the necessary information to view historical lead and lag instances. Flow- ever, forecasting models are needed to get future knowledge.
Bottom-up or Top-down Strategy
The bottom-up and top-down strategy is a combination of two management styles; bottom-up is decentralized management, and top-down is the centralized management approach. According to Tsai and Bever- ton (2007), the top-down approach of decision-making allows the senior management to use the inherent power of the position to focus the organization's resources on developing shared involvement (i.e., commitment to perform) to a project. The top-down approach provides for the explanation of the strategic rationale of a change initiative. An advantage of the top-down or centralized strategic approach is the central management's ability to view the entire organization when making major wide- scale decisions (Tsai & Beverton, 2007).
The significance of this central decision-making ability is evident when viewed in comparison with the bottom-up or decentralized strategic approach. A decentralized decision-making focus is centered on the specific business unit and not the entire organization, and that limitation is a weakness. The limited focus inherent in decentralized decisions creates a lack of holistic vision and decisions that may benefit the lower-level business unit may be inadequate for the larger organization. An example of this is strategic sourcing agreements that provide low-cost travel for the organization while sacrificing the better periodic deal for a single person through a cut-rate online site. The decentralized strategic approach has advantages that allow for the justified use of the strategy.
There is considerable flexibility and encouraged involvement in decentralized management, which profoundly influences the efficient use of resources and business unit performance (Tsai & Beverton, 2007). The focus of business unit management on the unit's issues allows for a more informed local concentration. Therefore, the decisions are more likely to result in an increased benefit to the business unit. Tsai and Beverton (2007) indicate a significant relationship that is at the heart of the decentralized model; decentralization is democratic and allows for increased involvement of the employees closest to the decision-makers.
Transformative change initiatives using the top-down and bottom-up strategy has the advantage of benefiting from two different decision-making approaches that can work together when implemented. The centralized approach takes a wide-scale view of issues. It can consolidate information from the lower business units in an organization. The decentralized approach can focus the necessary energies on the business unit and create the required benefit. Together, both approaches work nicely to provide the organization's different views and focus the required resources at the appropriate level on providing the best results.