Platt Perspective on Business and Technology

Rethinking exit and entrance strategies 10: moving beyond the crisis context to consider more normative business analyses and reviews

Posted in strategy and planning by Timothy Platt on May 26, 2016

This is my tenth 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 1-9.)

I primarily focused in Part 9, on real-time and post hoc analyses and reviews, as they would be applied in identifying and working through non-standard situations and anomalous events: situations that are not covered by everyday routine or standard processes and practices as more routinely expected and prepared for. Then at the end of that installment, I began addressing the crucial, but too often unacknowledged roles that these performance reviews and analytical processes can play in an ongoing business-as-usual context too. And I ended that posting by noting that:

• Most business managers, leaders and owners come to take their normative day-to-day for granted, and most of the time that does not at least overtly carry any costs, while seemingly streamlining and speeding things up. After all, everyone knows what to do next and how, and they at least should already have all of the necessary resources in place to do so, and as a matter of established routine.
• But if you never really look at and review your basic, standard ongoing processes and systems and yes – even when they are performing as expected and desired, you can never take that first, crucially essential step that you would need to take if you were to innovatively improve your business there. If you do not conduct real-time, and post-hoc longer timeframe reviews and analyses of your routine, you will never find ways to create new sources of competitive value for your business from doing better. And you will leave that to your competitors and yourself to a role of playing catch-up and to developing reactively. And this approach creates crisis events, at least long-term and makes them more likely.

I add to that, the additional point that:

• If you never really look at and review your basic, standard ongoing processes and systems, and with that same level of consistent if periodic care and attention, you are going to be a lot slower and a lot more delayed in catching the emergence of any gradual, long-term loss in the effectiveness or relevance of your standard day to day business practices and processes too. The more carefully that you look for trends, and both up and down in the effectiveness of your day to day business, the earlier you will become aware of adverse change, and the more cost-effectively you can address it. The alternative can mean waiting until a downward shift in performance for some area of your business, has passed a crisis threshold. And barring the completely unpredictable and a suddenly emergent crisis, this means that you should be able to forestall at least most potential sources of that level of adverse event from erupting around you.

I could just as easily write here of more effectively capturing novel and unexpected sources of opportunity too. My basic point here is that both real time, during the transaction or process, and post hoc reviews hold value and as basic, recurringly repeated due diligence exercises.

And a likely rejoinder to that is that most effective businesses, and even most less than fully effective ones carry out regularly scheduled strategic reviews anyway, and at least annually. That is true and these exercises are important. And when they are effectively carried out they look into areas of operational practice that has been found to raise red flags too. But this is usually carried out primarily if not exclusively at the executive suite and senior management level – and particularly for large organizations with complex multi-leveled tables of organization. And the people in the room for that have often never actually seen their business as it is carried out in day-to-day practice, as that is now operationally defined, and certainly as it takes place at a lower organizational level. And problems at those levels usually only find their way into these higher level review and analysis processes if they have well and truly hit a wall and failed, and with notable effect on the business as a whole. Top-down performance reviews mitigate against identifying emergent problems early and addressing them before they reach significant threshold levels of severity.

That noted, I am writing here of carrying out at least semi-annual or annual reviews routinely and at lower levels of the table of organization, along and within its basic organizational arms. And findings and questions that need resolving at that level, would be passed up the chain for inclusion at a next higher level in reviews and analyses that would be carried out there. And ultimately the feedback and insight assembled from this bottom-up process would be brought from throughout the organization as a whole, to the executive suite and its annual review process, helping to more effectively shape both overall operational review and longer-term strategic planning.

• As a bonus side benefit to this approach, keeping an organization connected in this way, both helps identify emerging challenges and opportunities, and areas where resources need reallocation and where priorities have to be updated.
• But at least as importantly, this type of shared, bottom to top analytical review process mitigates against the proliferation and the calcification of dysfunctional silo walls, and fiefdoms as can arise within a less overall connected business enterprise. You have found such a barrier when you find blocking resistance to participation or incapacity to do so, in this overall process.

I focus a great deal on innovation in this blog and have in fact repeatedly noted it in this series too. But I will turn to more specifically consider it, and the issues of fostering and developing it in my next series installment. For purposes of this series and its orienting context that means considering how businesses develop, support and prioritize their innovative capacity when approaching, going through and moving forward from significant business development transitions: and both when they are sudden and when they are planned for. 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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