Platt Perspective on Business and Technology

Rethinking exit and entrance strategies 19: keeping an effective innovative focus while approaching and going through significant business transitions 9

Posted in strategy and planning by Timothy Platt on June 21, 2017

This is my 19th 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 1-18.)

I offered a to-address list in Part 17 and Part 18 that I repeat here for continuity of discussion:

1. 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.
2. 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.
3. 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.

And I offered at least an initial discussion of the first two of these points in those postings, noting that I would delve into the third of them here. I will do that in what follows, and in terms of the responses that I have already offered when addressing Points 1 and 2. And I begin that with the absolute fundamentals:

• True transitions, as I use that term, involve changes away from the current here-and-now of a business, and in ways that do not simply involve linear, readily predictable change along the lines of the pattern: the template of a business’s current operational systems, already in place.
• True transitions are by definition disruptive and novel and new, for what they bring and for their impact. And that can mean introducing fundamentally new processes and/or resources, and new goals and priorities that they would help meet.
• And this can mean closing down and shifting away from what has been a business’ standard and usual too. And this means both increased cost and increased risk and both for what is dropped and for what is added in, as well as possible new and emergent benefit. I have at least touched on this point already in this blog. But I expand on what I have said about this set of issues here, for purposes of fleshing out this line of discussion.
• Direct costs are increased as new systems have to be developed, and with that frequently involving bringing in new staff with areas of specialization and expertise that are new to the business, and that that business might not already be fully prepared to effectively performance-review for their specific task performance, among other details. This type of detail becomes important, for example, when a team member under review faces what they would argue to be task completion challenges from bringing new into the business, and that they should be allowed additional time to resolve them.
• If new employees are brought in to manage tasks and take responsibility for completing them, that are new and unfamiliar in detail to the managers who would supervise them, those managers are unlikely to be fully aware of what would and would not be realistic timelines for completing them. They would not start out knowing or fully understanding where legitimate impediments or challenges might arise and even when a hands-on expert in some technical skills area is working efficiently and effectively. And they might not know what would qualify as best performance benchmarks either. This is definitely a situation where managers and supervisors are going to have to go through learning curves – not in how to do this work themselves, but so that they know enough about it and its requirements so as to be able to effectively manage the people who do it and support them in their effort to do so.
• This, as presented here, directly addresses lover level and middle managers who are already in place in the business and who would have to help manage what this business is transitioning into, at its points of change. But goals, prioritization and scheduling issues of the type that I raise here, can have ripple effects too, and certainly when task completion dependencies arise that have to be accommodated, and where shared resources can become business performance bottlenecks. These ripple effects can spread out through large areas of a business and its overall functional systems, and particularly where key processes that widely connect to multiple areas in a business might be slowed or stopped by performance dependencies that mean employees not having the starting point resources that they would need for them to proceed.
• That addresses a few of the direct cost issues that arise here. Now I turn to at least briefly consider some indirect cost issues too, and I begin with one that could arguably be said to be both direct cost and indirect cost in nature: the need and expense of prototype testing.
• I could include this in the top half of this list of discussion points and as reflecting direct expenses that would go into carrying out a more fundamental change, and a true transition. But prototype testing is in many respects a risk management and risk-related due diligence exercise too, in which a new, next step process or approach, or a more comprehensive new system is locally tested and refined for more effective use and deployment in a business – if it proves itself as being worthy of that.
• Prototyping can be very disruptive for the offices, manufacturing facilities or other business areas that are tasked with actually testing these proposed changes. Time and effort in doing that, means not being able to carry out proven approaches in meeting standard ongoing goals and on time and according to priorities set from above.
• So the people and the teams that are assigned prototype testing responsibilities need to be supported in doing this, with allowances made as they go through learning curves in performing this New, and as they get up to speed with it.
• And allowance has to be made in addressing resource allocation requests, that this prototyping might require – and even at least somewhat unexpectedly, as experience with the systems being prototyped prompt refinement in them, and perhaps some recovery and correction too. And new and novel approaches that sound great on paper and in development and design, sometimes prove less than practical, and prove to be more expensive than desired when put in practice. Ideally, that type of challenge emerges during prototyping if it is to arise at all, and that in fact is one of the core risk management reasons why businesses prototype. But sometimes real problems only overtly make their presence known when scaling up from small scale and organizationally localized prototype testing too.
• The ripple effect issues that I made note of above, can and do enter into all of this.
• And this brings me to a second, and less easily preemptively planned for risk management, indirect cost issue that I would raise here: calculating into a transition’s budget the possible costs of failure of at least some aspects of a change program that is put into place, and with or without prototyping but with need for Plan B development and execution in any case.
• Real transitions do not always go smoothly or according to what might be more idealistically preconceived budgets. And even when they do succeed and certainly overall and as refinements and corrections are identified as to need and carried out, initial budgets can prove to have been unrealistic.
• These points reflect real costs that can collectively add up significantly, but they do not always all fit into the step-by-step budgeting of a change creating development so I offer them as indirect costs here.

I have discussed change and transition from a How perspective in the above narrative. The Why side of this, that orients and informs this How, is that change would be made with a goal of more fully and effectively fulfilling the business mission and vision and its overall strategic goals and their realization. That underlies all that I have said here up to this point.

I am going to step back from the details of Points 1 through 3 of the list of to-address points listed at the top of this posting, to reconsider the context that this transition is carried out in. And to be more specific there, I will address the issues of urgency, and its impact on both what is done and how. And I will also address all-at-once and step-wise transitions.

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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