Platt Perspective on Business and Technology

Rethinking exit and entrance strategies 14: keeping an effective innovative focus while approaching and going through significant business transitions 4

Posted in strategy and planning by Timothy Platt on October 14, 2016

This is my 14th 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 1-13.)

I focused in Part 13 on the known and the unknown in their various forms, and the change that they bring and as they impact upon an organization. And as a core part of that discussion, I briefly noted and distinguished between what are sometimes thought of as the known known, the unknown known, the known unknown, and the completely out of thin air unknown unknown.

I characterized these situations and how they arise and how they are addressed, in terms of business friction and capacity or inability to gather in and make effective use of available, essential business information in a timely manner. And I focused throughout that discussion on risk, setting aside consideration of more positive opportunity.

I added at the end of Part 13 that I would continue its narrative with a more detailed consideration of business transitions, as risk and benefits analyses and follow-through exercises. And I will do that here, building on the foundation that I prepared for this in Part 13. And in the course of that, I will in fact add in more explicit consideration of benefits and gain, as well as of risk and its limitations, and its remediation. And I will discuss all of this in terms of innovation and product and service change. For purposes of this discussion, I will focus on market-facing innovation as my overtly apparent topic of discussion. But I add here that it is impossible to be more market-facing innovative and successful at that, without also being within-business organizational process innovative too and certainly in fast-paced rapidly changing industries and business sectors. So I am actually writing about both sides to innovation here as they work together synergistically.

I begin with the fundamentals, and by noting some crucially important points of observation that are relevant to understanding risks and benefits per se:

• The difference between risk and loss, and gain and benefit can be and often is a matter of timing. Opportunity, if not acted upon and in a timely manner, can become a source of risk and challenge and of realized loss.
• This fairly clearly applies as being valid if a competitor, for example, that your business should have been able to beat to market with a new market share-grabbing innovation, gets there first because your business systems cannot bring it to production and market effectively enough and quickly enough – and they get there first even though you started first. But the principle raised in the above bullet point is more generally applicable than just to that scenario. Timing and effective follow-through and completion are as important as the initial innovation idea and design that would be developed and capitalized upon.
• And crucial to this point of discussion, the type of shift from gain and benefit, to risk and loss that I noted in the top bullet point, when realized in fact and in the specific instance, is almost always a result of business friction and its level and prevalence, and how effectively the business in question can overcome its limiting influence and perform effectively and in a sufficiently timely manner so as to remain competitive.
• Looking at that point from the perspective of the second bullet point example of this set and reversing the orientation that it is viewed from, gain and advantage and certainly in a fast-paced competitive setting, can hinge on being more successful at reducing and managing business systems friction, enabling your business to complete product development and production, distribution and sales processes more quickly – and even if you start out later than a competitor at initially reaching a new innovation idea that you and your competition are all trying to achieve and bring to market first.

And this brings me specifically and directly to transitions and what they are when framed and considered from the perspective of this line of discussion.

• Business transitions mark periods of discontinuous change, where at least select areas of a business’ ongoing “business as usual” are more fundamentally altered and of necessity. This can mean changes in specific processes and subsystems of them, changes in precise input, or goals that would be achieved through those processes, changes in how these processes and sets of them connect into overall business systems, which usually means at least some change in their goals and almost certainly means change in who is involved as stakeholders, or some combination of all of the above.
• Business transitions can arise as a response to growth or other more opportunity-oriented, positive drivers. And they can arise in response to need, and to limit and if possible reduce or remove sources of risk and loss.
• Once again, timing can be everything here. So to pick up on my new innovative product example of above, a business might have to make a retrenching and reorganizing transition to become competitive again if it seems to always be at risk of being outflanked by competitors who seem to keep on bringing innovations that they are working on, to market first. Some innovations (and not just simple small-step evolutionary change ones), are always going to be essentially inevitable, where if one business does not bring them to market first another will, and soon. More fit that model than do blue ocean opportunity innovations that no one else is even thinking of, let alone developing. So the points that I raise here are fundamentally important and for essentially any innovatively competitive business, and comprise a possible basis for strategic transitions in them too.
• And to continue with my new innovative product example of above, a business that is sufficiently effectively organized so that it can fairly consistently win these races to innovate, is with time going to face need for more positively oriented transition as it grows and as it further tunes its systems, and both for picking what types of innovation to focus on that it can profitably bring to market first, and as it works to bring them to market as realized products and on a larger scale.

I am going to continue this discussion in a next series installment where I will consider innovation as a response to sudden fundamental change in context and/or needs. I will also discuss the possibilities of drifting out of competitive effectiveness, and how both of these possibilities can serve as drivers for entering into business transitions. In anticipation of that, I note that it can be vitally important to make explicit strategic effort to more deeply understanding where your business is now and where that business is headed if it seeks to simply follow a straight-forward more predictively linear path, rather than making a more profound shift and going through a genuine transition. And it is equally important to be aware of the possibilities, at the very least of what types of transitions could be possible, and their implications and consequences. This leads me to the question of what would be planned for in a strategically considered, intentionally entered into business transition, and how such a transition plays out.

I am going to at least begin delving into that progression of issues in a next series installment, fleshing out that preliminary list of to-address points as needed. 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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