Platt Perspective on Business and Technology

Opening up the online business model for new and emerging opportunity 6: finding the right operational and strategic balance

Posted in startups, strategy and planning by Timothy Platt on June 6, 2013

This is my sixth installment to a series on new and emerging online business models and on developing best practices for finding and creating new and novel online business opportunity (see Startups and Early Stage Businesses, postings 142 and loosely following for Parts 1-5.)

I have been writing in this series, and certainly in its last two installments, about coordinately pursuing two business model tracks: a stable, business-as-proven and business as usual approach, and an innovative and more break-away approach. I have written of how both are necessary, with the former focusing in the here and now and the later looking towards longer term business strength and capability. I have, up to here, divided this discussion along lines of a business’ stage of development with Part 4 primarily focusing on startup and early stage businesses, and Part 5 focusing more on established businesses, and even on mature businesses that operate in mature and seemingly settled marketplaces. And I ended both of those postings with questions that have stage-specific implications and that raise stage-specific issues, but that have to be seen as being grounded in general stage-independent issues if they are to be addressed in a meaningful way.

My goal here is to at least begin addressing some of those issues, stage-independent and stage-dependent, for better determining how to develop and mesh a tried and true, current business-oriented approach with an innovative and change embracing approach. And I begin by posing two really fundamental questions that require some individualized thought and analysis to even begin to answer. Put yourself in the position of a business owner, or at the very least as someone with a significant amount of skin in the game through investments of time, effort and money so that this business’ stability and its fate are important to you.

1. How risk aversive, or alternatively how risk accepting are you for the business decisions that you would make yourself, or accept and go along with?
2. What types of decisions and actions would in fact increase or decrease overall risk faced?
3. And how would those decisions and actions create or limit potential overall gain to the business as a whole?
4. Then, making sure you have addressed the second and third of these questions in compatible and directly comparable terms, how do the risks and gains so determined compare for any given decision and action that you might strategically and operationally consider? Which of these decision and action scenarios seem to offer greater potential risk and which greater potential gain?

And now come the really important questions:

• When you made your initial assessments in addressing these above posited questions, what timeframes were you thinking in terms of?

If you automatically gravitate to the more immediate and here and now, you probably focus in your thinking and assumptions in terms of your business’ immediate here and now, and its current and short-term cash flow and business strength. And you are probably more oriented towards developing and maintaining a stable organizational here and now for the business. If you find yourself thinking primarily long-term, you might very well be at least more open to considering the pressures that would require change and business evolution and even perhaps even radical change if pressures calling for that were to arise. If you more-or-less equally considered both timeframes, and with an awareness of which is which in your thinking, you take a more balanced strategic approach. And if you find that you address these questions without timeframe consideration as a meaningful factor – you are following a path that a lot of business owners and leaders take.

• What are your thresholds of level of change, and potential change that you would recognize as even representing a significant shift in risk or gain?

This is a question of how big a fluctuation you would have to see in your business and its performance for it to seem significant, and how long a timeframe it would have to continue developing over for you to note it in this way too. For a business that experiences significant seasonal or other shifts, or that operates in a generally volatile market, a change, positive or negative might have to be large and of significant duration to be really notable, where even a more minor seeming fluctuation might stand out for a business that operates in what should be a very stable markets and with very consistent and predictable sales numbers.

• How stable, or alternatively how volatile are your business and the competitive marketplace contexts that it operates in?

External change and volatility can reduce the perceivable risk of attempting internal, organizational change and can also correspondingly increase the perceivable risk of simply pursuing a fixed business-as-usual approach. And marketplace stability and settled marketplace demands can increase perceived here-and-now risk of change while rendering standard procedures and approaches a more favored course and certainly short-term. (Note that I focus on the risk side here; most business have at least something of a risk management process and even risk management professionals in place, but few explicitly have an office of opportunities and benefits development and management.)

Finding the best mix of operational and strategic stability and change, means finding a balanced strategic vision and approach as noted in the commentary accompanying my first bullet point above (after the numbered questions.) It also means understanding what types and levels of change are significant for you, and as sources of both potential risk and cost, and potential reward and benefit. And it is important to develop that understanding from the perspective of your actual and anticipated business context – and knowing what assumptions you make as to what that will be as you plan and anticipate forward. With this information in place you can address the numbered questions listed towards the top of this posting and with the business stage considerations of Parts 4 and 5 in mind.

I am going to conclude this series here, at least for now, with this installment, though I am certain to return to issues related to it and even specifically raised in it, in future postings and series too. Meanwhile, you can find this and other related postings at Startups and Early Stage Businesses. You can also find related material at Business Strategy and Operations and at its continuation page: Business Strategy and Operations – 2.

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