Platt Perspective on Business and Technology

Rethinking exit and entrance strategies 15: keeping an effective innovative focus while approaching and going through significant business transitions 5

Posted in strategy and planning by Timothy Platt on November 21, 2016

This is my 15th 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 1-14.)

I ended Part 14 with a to-address list that I repeat here for purposes of series continuity, and that I will begin to point by point discuss in this posting:

1. Innovation as a response to sudden fundamental change in a business’ context and/or needs, and
2. The possibilities of drifting out of competitive effectiveness,
3. And how both of these possibilities: both sudden change and cumulative gradual change and their consequences can serve as drivers for entering into business transitions.
4. In anticipation of that, I note that it can be vitally important to make explicit strategic effort to more deeply understand 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.
5. 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.
6. 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 will begin with sudden and dramatic change, as a transition demanding driver. And I will begin this by noting some points that might seem obvious in the abstract and when you are not immediately facing the uncertainties and the miscommunications and information gaps that are hallmark to the sudden and unexpected, but that can become lost from consideration in the heat of the moment:

• When a big change-demanding event takes place and either within a business organization, or in its immediately impactful context, it is likely to be at least obvious that a significant response and reaction is going to have to be decided upon and carried out and quickly.
• But in the heat of the moment when managers and owners, and hands-on employees are all still trying to figure out precisely what has happened and its full range of impact, it might not be clear exactly what is going to be required, even as it becomes widely appreciated that at least some sort of course-corrective change is going to be needed.

Different stakeholders, with their local perspectives and understandings are likely to primarily see where their part of the business would need course correction and recovery. And they are likely to automatically view the entire emerging event in terms of their own particular local perspectives and their usual processes and systems as have worked up to now.

The basic thrust of this series is an exploration into business transitions, so I assume from this point on in this line of discussion, that prudent judgment will conclude that change is needed that goes beyond simply course correcting back to an operational and strategic status quo ante and that a more fundamental, nonlinear change: a true business transition will be called for. But assume that if this is a large and widely distributed business, and certainly if communications systems have been slowed or compromised, numerous local efforts – that are disjointed from each other, will have been made to simply restore pre-event order and according to previously ongoing patterns of action and decision. Some of this remediative effort will work and certainly short-term, and if for no other reason than because it gets people organized and working towards common goals again. But the more novel and divergent from former business-as-usual, an overall longer term strategically consider transition change is going to have to be, the more likely it will be that much of this early pre-reorganization recovery effort is not going to hold, on its own.

With that noted as orienting context, let’s consider the often deceptive and difficult-to-identify as to form, “drift out of competitive effectiveness” crisis of Point 2, above. At the risk of overly repeating myself from earlier postings here, and to round out this discussion for clarity in what I would say here, gradual drift can take two fundamentally distinct forms, for how it overtly emerges – making “deceptive” and “difficult to identify as to form” reasonable labels here.

• A slow and gradual decline into inefficiency can simply develop and expand in its significance until a tipping point is reached and all of the work-arounds and the reasons that they have been employed, and all of the small inefficiencies that have been overlooked and simply accepted, suddenly coalesce and emerge as what might even seem to be a massive single point of failure: an all but catastrophic single pervasive breakdown.
• Or a slow decline in efficiency and effectiveness, and in overall business resiliency can be spotted and addressed before that tipping point has been reached, and before this drift from efficiency has evolved to the point where it can overtly and more catastrophically emerge as overt business failure.
• I have discussed this dichotomy in this blog in the context of identifying weak points and areas of operational brittleness, and of preemptively identifying and remediating them before they can catastrophically fail where that can be done. Whether these challenges are identified early, or only late and only after business systems have overtly broken down, remediating against them can mean bringing the business through a transition period that specifically addresses the underlying systems weaknesses that have made them possible.

I have written repeatedly and for months now about business systems friction, as caused by communications breakdowns and critical information gaps. When I address Points 1 and 2 from the top of posting list that I offer here, in this context, I write about this source of business efficiency degradation and break-down.

• Businesses that are approaching a fundamental need for transitional change, are often burdened by increased business systems friction as their operational processes and systems begin fraying and breaking down – and whether that emerges seemingly overnight or as a realized slow but inexorable process.
• Effective business transitions reframe and reform business processes and systems, and both strategically and operationally so as to reduce business systems friction back to manageable levels again.

And with that noted, I return to the brief opening, orienting paragraph that I have included in essentially every installment of this series, only updating it to reflect what installment this is, numerically in the overall sequence. I write there of transitions as strategic and operations changes that are entered into “where an organization exits one developmental stage or period of relative strategic and operational stability, to enter a fundamentally different next one.” That is true, if a prior transition and the state that the business was in has been stable and competitively effective. But transitions, and next transitions where a business has gone through this process in the past always take place when a “period of relative strategic and operational stability” has begun to end, or when it would and overtly so if fundamental change was not accepted and made. This posting has been about the end of stability stage there, where fundamental change and a genuine transition has become necessary.

I have at least briefly addressed Points 1 and 2 of the top of posting list in this series installment, and I have at least briefly touched upon Point 3 as well. I am going to more fully discuss Point 3 and continue on from there, starting in my next series installment. 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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