Platt Perspective on Business and Technology

Rethinking exit and entrance strategies 8: crisis as a transition demanding challenge 7

Posted in strategy and planning by Timothy Platt on March 25, 2016

This is my eighth installment to a series that offers a general discussion of business transitions, where an organization exits one developmental stage or period of relative strategic and operational stability, to enter a fundamentally different next one (see Business Strategy and Operations – 3 and its Page 4 continuation, postings 559 and loosely following for Parts 1-7.)

I have been discussing a series of due diligence issues over the course of the last several installments to this series, related to single points of failure and their identification and resolution. And as a part of that, I have addressed the specific issues of:

• Timing in single points of failure (in Part 6), and
• Concurrent and sequential causality as those concepts apply to this context (in Part 7.)

The next item to address on the list of issues that I have been addressing there is:

• Event analysis while an event is still actively occurring, and event analysis as a post hoc, after the fact learning exercise, and the differences between them.

That is in fact, the core topic of discussion for this posting, but I start addressing it by adding that this is also a topic of intersection, connecting this series with a second one that I am simultaneously posting to this blog: Business Planning from the Back of a Napkin to a Formal and Detailed Presentation (see Business Strategy and Operations – 3, postings 578 and loosely following.) And specifically see Part 4 of that series, as the installment there that also specifically and directly addresses real-time and post hoc analyses as due diligence tools and approaches. When I simultaneously address what is essentially one single topic in two series of postings, that generally indicates that I see it as being of wider significance and I begin this posting and its discussion by acknowledging that point here and for this set of issues.

I focused, for the most part in Part 4 of my “back of napkin” series on business process and systems analysis per se, starting with identifying and prioritizing what issues to even consider for analytical consideration. And while I started that posting with more of a focus on post hoc analyses, much of its discussion was more agnostic as to timing. My goal for this posting is to focus on what can be thought of as real-time and after the fact analyses per se, and their strengths and limitations. I begin with real-time analyses as carried out during a crisis or other notable event.

• Real-time analyses take place during, and generally in the midst of the actions and events under analysis.
• Capacity to carry out this type of analysis is absolutely essential, and particularly when a business and its employees and managers face the unexpected and have to effectively work through it.
• This can mean real-time crisis response, but it can also mean capturing and capitalizing on unexpected positive opportunity. And it can mean addressing the unexpected so as to prevent it from turning problematical for outcomes achieved too, keeping that event more neutral in this regard.
• And with that point, I raise the issue of outcomes and of the effectiveness of decisions made and processes followed: ad hoc or standardized. The more novel and different from the routine and expected that a business situation is that has to be addressed, the less clearly it will be possible to predict precise outcomes and consequences that would arise from it depending on what processes and approaches are actually followed in response to it.
• Real-time analyses deal with immediate here-and-now situations and developments, and they in turn take place on a short-term and even instant by instant basis, with any longer timeframe considerations of how these situations arose and how best to deal with them – next time, reserved for later. And the timing here collapses in more forcefully as a business and the stakeholders immediately involved have to deal with the more starkly unfamiliar and unplanned for, and the more consequential.
• This emerging business process analytical scenario is also, of course, a scenario where ad hoc approaches at resolution will be turned to if they are ever going to pursued.

And to further clarify what I mean here by real-time analysis, I also refer to it as constituting a more purely tactical approach – and one that can be expected to prove necessary at least occasionally for essentially any business or organization. Now let’s consider post-hoc analyses, and how they relate to their real-time counterparts.

• First of all, post hoc analyses generally take place after all of the action and at least most of the immediate uncertainty in an event under review have been resolved.
• People who conduct these reviews do not in general have to complete their analyses and whatever actions would follow from them within as short a timeframe as they would if they were in the midst of the event under consideration,
• And they generally do not have to conduct these analytical exercises while burdened with the adrenaline rush and the emotional load, that are almost certain to be present for at least some of the active participants involved when a group of people have to face immediately consequential, suddenly emergent unexpected change from their routine.
• But I would focus here on one specific point of difference. Real-time business analysis takes place while everything to be analyzed is actually still taking place, and it stands apart in that from the normal workflow and its processes, and certainly when the events and circumstances faced are unexpected and when they fall outside of any prior risk management planning. But post-hoc business analyses fit into a larger organizing framework, and essentially by definition. They are built at the very least upon the framework laid out by whatever real-time analysis, decision making and action follow-through took place when this event was happening. And they in turn serve as input and organizing framework for any relevant future planning, with that essentially always including next rounds of overall business strategic planning, and certainly where a triggering event has proven to be very consequential.

And now let me at least attempt to dispel a myth, or at least a preconception that can prove mythic in actual application. Real-time business analyses very obviously take place when there are going to be as many communications gaps, information accessibility challenges and other sources of business systems friction as possible. And initial consideration of post hoc analyses would suggest that everyone participating in them would be of clearer head and that they would be more fully informed, and both as to what actually happened, and for how it was or was not resolved, and for any ripple effect consequences realized and how they in turn were handled. And it at least should generally be possible to schedule and plan such a review, so as to include active informed participation of all relevant stakeholders, while that is often not possible during the heat of the moment in actually addressing a sudden change event as it is occurring. All of this would suggest that post hoc analyses should be more thorough and complete and that they would be less impacted upon by business systems friction. (See Open Markets, Captive Markets and the Assumptions of Supply and Demand Dynamics 6 for a basic, orienting discussion of what friction is in economic and business systems.)

But in real world businesses when crises or other more dramatic change events are actually happening, records are not always accurately or fully or unambiguously kept as to what was decided or how, or what was done or how, or by whom for all of this. And as a carry-over consequence of all of that, different stakeholders who have to participate in any post hoc review and analysis, often start out with differing opinions as to what happened, and when, and how, and why. The full roster of potentially significantly involved stakeholders is not always brought into the post hoc analytical process too. And to put it bluntly, those who are brought in all too often have a voice in what is said and in what is concluded and decided upon that correlates more with their level on the table of organization than it does on their role in what happened, or the level of impact from what happened on their area of functional responsibility.

And this raises a whole new set of issues:

• Not just focusing on the details and the process issues that arise in a real-time and post-hoc analyses,
• And not just focusing on the relative strengths and weaknesses of them as methodologies, or the contexts where real-time and post hoc analyses respectively offer their greatest value,
• But on conducting both of them more effectively – as a flawed real-time analysis and its follow-through is likely to lead to a more flawed post hoc analysis than would otherwise take place.

I am going to at least primarily consider this third bullet point and its set of issues in my next series installment. And then after that, as promised in Part 7, I will reconsider growth and scalability, and business transitions in non-crisis contexts – including more intentionally planned for and sought-after transitions. Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory.


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