Platt Perspective on Business and Technology

Rethinking exit and entrance strategies 16: keeping an effective innovative focus while approaching and going through significant business transitions 6

Posted in strategy and planning by Timothy Platt on January 6, 2017

This is my 16th 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 1-15.)

I began to systematically address the issues raised in a six point topics list in Part 15 of this series, which I repeat here for continuity of discussion:

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 offered at least relatively complete preliminary responses to the first two of those points in that posting, and I began addressing the third point on that list there too. My goal for this posting is to finish presenting a more complete if still relatively preliminary response to that Point 3, and to continue working my way down that list from there.

I use the word “preliminary” here, because I have only briefly and selectively identified and discussed a few of the issues that arise from the first two points, and I fully expect to return to all six of them, after initially addressing them here, and in future series as well. And with that bookkeeping note in place, I return to further consider Point 3, and with the issues and questions of business systems friction firmly in mind while doing so.

• Managers and executives as a routinely followed practice, focus on three sets of details in their ongoing business performance evaluations – and regardless of whether they carry out these analyses in a carefully considered and even formally structured manner, or as more spur of the moment and ad hoc assessments.
• They look at the goals that the business activities under consideration were intended to achieve.
• They look at the actual results achieved from carrying out those activities.
• And they look at the costs required in practice in achieving them, where “costs” as a whole include expenditure of resources of all types that have just entered into this. That of course means material goods such as disposables with their per-item costs, but it also means employee time required for this effort and costs related to that. And it can prominently include consideration of cost of impact on other activities and other goal-directed effort that might have had to be pushed to a lower priority in order to do this now.
• So at least ideally, and certainly when this type of review is systematically carried out, it includes an inventory and review of essentially all of the points where costs can arise that would be of importance to this business, and more specifically in this instance.
• This, I specifically note here, is one area where ad hoc performance reviews can and do break down for their lack of capacity to offer sufficiently complete analyses for them to offer longer-term learning opportunity. I note this detail here, in the context of pointing out that even when the type and level of analysis that I have addressed in these bullet points up to here, is carefully planned and executed, it is still going to be limited for the gaps that it leaves unexamined.
• And with that, I return to the issues of business systems friction, as noted in Part 15, and Point 3 of the above list. It is just as important to know who knows what, and when and with what perhaps-confounding or conflicting accompanying input, as it is to know what they decide and actually do (on the basis of this information and any assumptions made.)
• And the more background clutter: the more noise in the system in engineering terms, and friction in economic terms that a manager or other decision maker has to accommodate as they decide and act, the more they will have to rely on prior experience and on assumptions: presumptions, that are likely to be based on the assumption of a simple repetition of prior circumstances that do not apply here.
• This means communications limitations and the resulting limitations on what a decision maker knows and can know, forcing them to decide and act on a more default basis, limiting their ability to both recognize and address novelty and the unexpected.
• The issues that I write of here can arise on a seemingly sudden, all-at-once basis and that is when the information availability and communications issues that I write of here, are most likely to appear, and to immediately impactful effect. But businesses that are tightly compartmentalized by silo walls and local fiefdoms of ownership and authority – and with little if any real overall organizing oversight, can run into the same levels and types of challenge, and even if forensic, after the fact systems-wide reviews show that all of the necessary information for preventing a break-down was actually there all of the time, at least somewhere in-house. And with this, I bring the issues of stably, efficiently run businesses and businesses that might be facing change management need into this discussion. A break-down in operations can highlight and reveal a corresponding breakdown in underlying strategy and business oversight, and that in turn can highlight basic and even structurally consistent breaks in the overall capacity of a business for it to run efficiently and with anything like real efficiency when faced with possible change. And all of this is driven by efficiencies and inefficiencies in their information development and flow, and in their capacity to effectively communicate.

And I have both added to my discussion of Point 3 of the above list with this discussion, and begun to address Point 4 here too. I will continue addressing that point in a next series installment and will proceed from there to complete my preliminary discussions of the rest of the points on that list too. 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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