Platt Perspective on Business and Technology

Business planning from the back of a napkin to a formal and detailed presentation 11

Posted in strategy and planning by Timothy Platt on October 16, 2016

This is my eleventh posting to a series on tactical and strategic planning under real world constraints, and executing in the face of real world challenges that are caused by business systems friction and the systems turbulence that it creates (see Business Strategy and Operations – 3 and its Page 4 continuation, postings 578 and loosely following for Parts 1-10.)

I have simultaneously been discussing business transitions in several distinct but topically related series of postings. That includes this series and its more recent installments, and it also prominently includes: Rethinking Exit and Entrance Strategies too, which can be found at Business Strategy and Operations – 3 and its Page 4 continuation, as postings 559 and loosely following, and with its Part 14 the most recent addition to this blog to go live here prior to this posting.

My organizing approach to this topic in this series, has come to focus on how businesses arrive at a fundamental need for entering into discontinuous change: true transitions, as opposed to simple same-linear path forward, business as usual evolutionary change. And I have been orienting and discussing that in large part in terms of essential information availability and communications effectiveness, and the cumulative impact of business systems friction as that can create need for course corrective change and even fundamental transitional change.

I continue that narrative here, picking up where I left off at the end of Part 10 of this series. To be more precise in that, I laid out a basic process and process-subsystem (subsystem assembly of functionally connected processes) taxonomy in Part 10, where I distinguished between:

• Core processes and subsystems that are crucial to the basic business model in place and to functionally creating and maintaining the business’ effectiveness, and
• Peripheral processes and subsystems that might be important to the business and even crucially so but that do not directly enter into defining what a business seeks to do as an organization. These are more supportive in nature.
• And I subdivided that second categorical grouping into primary peripheral processes and subsystems that would best be maintained and in-house, and secondary peripheral processes and subsystems that might best be outsourced for greater business efficiency, or even discontinued as being no longer relevant or necessary.

Then at the end of Part 10, I began discussing how this taxonomy and the reasoning behind it can be used to map out possible transition options, and when they might be relevant in meeting organizational needs. And I stated there that such a business development process would:

• “Begin with the issues of that organizational component taxonomy and with a determination of what is and is not core, and what is and is not peripheral – and what might appear to be both depending on context and situation. Different functionally focused stakeholders might reach different conclusions there, and it is important to both clarify and discuss those differences and reach a working consensus that all key stakeholders can come to at least tacit agreement upon. And for peripheral elements in the business and its operations, determine what of this might in fact be primary or secondary. And for all of this, look for nonlinearities – places where simply scaling up according to the pattern in place would create inefficiencies. And I end this posting by noting an old saying that I have at least occasionally found reason to cite in this blog: ‘the devil is in the details’.”

I said that I would continue that narrative here, with a more explicit focus on the devil in those details, and on what those details in fact are. And I begin addressing that set of issues here.

There are a number of approaches that I could take in organizing a response to the questions implicitly raised in the above bullet point. I chose to begin my approach to that by raising two closely related issues that a discussion of, would lead to resolving that to-address bullet point too:

1. A discussion of normally functioning businesses as they approach and enter into organizational transitions, versus change management-requiring contexts as they approach and face need for change.
2. And performance tipping points where a sufficient number of presumed core processes, and primary peripheral ones are found to be disconnected, less than optimally functional, at excessive risk of breaking down or are overtly outdated, so as to create need for significant prioritized change.

And after at least briefly discussing these issues, and primarily in terms of business systems friction, I will further develop this narrative moving forward in terms of two specific business scenarios: a retail business, and then a software development business case study. And in the course of that I will address the point just repeated, from near the end of Part 10. Collectively, this outlines what I will be writing about in the balance of this posting and at least the next one in this series after this. Think of this phase of this discussion as being akin to peeling back the layers of an onion to get to its core.

Let’s start with numbered Point 1, and distinguishing between more normal business transitions and change management compelled remediative transitions. This is an important distinction to keep in mind, in order to keep the transitions called for and carried out in functioning business in proper perspective.

A business that is facing change management challenges is in most cases a functional disaster, that is in danger of outright failure if its leaders and owners do not take immediate, very strategically considered, and in most cases at least somewhat painful corrective measures. This means business transitions and big ones that often have to be carried out in carefully planned and timed steps, all of which are essential. And they are, and certainly in their extreme, desperation course correction or even course rediscovery measures.

A basically well-run business can find need for making a course corrective organizational and operational transition too. But their leadership and management and their owners, where individual high equity owners enter this, see need for corrective change before a crisis can be reached and plan for and enter into change that would prevent that possibility from arising. This is important; even businesses that need to make more fundamentally disruptive, game changing transitional change can do so more proactively and in order to remain competitive, than reactively and only after crisis has arrived. I have recurringly written in this blog about change management; I am not necessarily doing so here, and for purposes of this discussion I focus on basically healthy and well-run businesses that know that they have reached a point in their development, where they need to step away from a perhaps rut-like simple linear path forward with the same and more of the same that it would lead them to.

Looking at that somewhat differently and from a second perspective, let’s reframe Point 1 in terms of performance tipping points as noted in Point 2 of the above numbered list. A perhaps simplistic approach to understanding this point for its significance and for how a threshold of challenges arises, would be to assume that change management-facing businesses always and of necessity have more and even many more problematical processes and subsystems of them in play, than would be found in any nominally healthy business that is facing a more normal transition. That might be valid on average across all businesses, but it is not and cannot be a valid point of assumptions for any and all specific business organizations that need to change and adapt.

• A better differentiator here, between high problem count and lower problem count businesses, for the numbers of processes needing correction is in how challenges arise for speed and novelty.

Businesses that find themselves facing direct and immediate challenge and even existential risk from the sudden emergence of disruptively novel change, are more likely in general to face significant challenges in a smaller number of specific processes and sets of them, and regardless of whether or not this new challenge impacts upon them as a threat to their existence or brings them to the brink of ruin.

Businesses that approach a challenge tipping point because they have ignored, overlooked or downplayed slow evolutionary drops in overall effectiveness – until they no longer can, tend to have many more individual and systematically connected problem processes and subsystems of them and once again, regardless of whether they are facing change management transition or more normative transition challenges.

With that in place, I explicitly turn to consider the above-repeated to-address points from Part 10. And I begin doing so by stating what should be absolutely known and even tritely so: you cannot fix a problem or even unequivocally identify it if you do not fully know your current situation and its context. And for here and this context, that of necessity has to include knowing precisely what you business does now and how it does that, and what of all of that is core and what of it is peripheral, and what of that is primary and what of it is secondary – and perhaps even a value devoid cost-center for your business.

I stated in the to-address bullet point that I repeated above, that you need to start with an exercise looking at and analyzing the value and effectiveness of what you do in the business, and how you do that and according to the process taxonomy that I have offered here. And that brings me to the second point of detail – that can among other things lead to process areas drifting or outright-falling into dysfunction:

• “Different functionally focused stakeholders might reach different conclusions there, and it is important to both clarify and discuss those differences and reach a working consensus that all key stakeholders can come to at least tacit agreement upon.”

I am going to continue this discussion in a next series installment, with that set of issues. Then after that, and in the context of distinguishing between core and peripheral processes, I will turn to consider the last main topic area included in that bullet point:

• “And for all of this, look for nonlinearities – places where simply scaling up according to the pattern in place would create inefficiencies.”

And I will do so in terms of crucial information availability and communications, and in terms of the two types of case study examples that I have been promising here (e.g. a retail business, and then a software development business case study.) 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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