Platt Perspective on Business and Technology

Balancing innovative change and ongoing reliable stability and consistency 6: strategic thinking, planning and execution 3

Posted in strategy and planning by Timothy Platt on July 11, 2017

This is my 6th installment to a series in which I explore tactical and strategic approaches to business management and leadership, and best practices approaches for coordinately pursuing both as context dictates. See Business Strategy and Operations – 4, postings 655 and loosely following for Parts 1-5.)

I began discussing a set of to-address points in Part 5 that I repeat here for continuity of discussion, with some minor rephrasing for this change in their context:

1. I will move on in this narrative to discuss the questions of identifying disconnects between strategy and tactics, and as early as possible when they do arise.
2. And I will consider and discuss startups, as a business context where founding executives can find themselves facing learning curve challenges in understanding and addressing the issues that I raise here,
3. And the sometimes significant challenges that large and complex business organizations can create in aligning strategy and tactics, with effective disconnect identification and remediation implemented, as a core ongoing due diligence process.
4. And I will return again to my starting case study example for this series, to consider lessons learnable and remediative approaches that might be possible for that business – and at least some of the trade-offs that would have to be resolved in that too.
5. And that is where some very specific, crucial negotiations-related issues enter into this series’ narrative.

I began addressing Point 1 of this list in Part 5, and plan on focusing on Point 2 and the startup and early stage business context here. But before doing so, I will begin by reconsidering Point 1 as a point of context for the rest of the issues raised in that list, and with explicit consideration of one of the key words that I included in it: “early.” And I will address that in terms of “early what,” and of the consequential results that arise from disconnects between strategy and tactics.

I have written repeatedly here in this blog, about single points of failure and about what can become more catastrophically disruptive events, at least in local contexts within businesses. Think of that as representing a possible end point extreme consequence of disconnection between overall strategic goals and their planning, and more day-to-day tactical implementation. What is not allowed for and included in a business’ strategic planning and understanding: ad hoc tactical work-arounds included, is not generally going to be effectively supported and certainly not in any consistent or systematic manner. Think of the breakdowns that I write about in this series as points of inefficiency and of lack of resiliency in a business that arise from lack of consistent and systematic inclusion there, where process flows do not and cannot smoothly fit together when the unplanned-for and even the contrary to planned for are suddenly added in.

And this brings me to that key word from Point 1: “early.” The more quickly you can spot emerging consequences from these disconnects, the more rapidly and effectively you can move to limit negative repercussions. But at least as importantly and generally more so, the more rapidly you can spot where a disconnect is, the more clearly you can see precisely what it is and what would have to be changed operationally and even strategically, in order to at least close the gap that enabled it.

I have written in this blog about slowly emerging problems that are not always addressed and corrected at an operational, business process or practice level, at least until a tipping point has been reached and they seem to all but erupt forth as crises. And I have written about truly disruptive events, that can create sudden crises and essentially all at once and without any defining features that post hoc analysis could identify as overlooked early warning signs. And I have written in that context of operational process breakdowns too. Here, I step back from operational processes and flows of them per se, to consider how they do and do not actively operationalize the overall strategy that should be informing and shaping them.

I am going to pick up on this in my next series installment where I will consider established businesses, and large and complexly structured ones in particular, where drift in context, need and or opportunity faced can lead to strategy and tactics disconnects. But with this posting’s starting point discussion in place, I turn to consider the perhaps simpler and more baseline context of startups and newly formed businesses, and the above Point 2.

And I begin addressing that with consideration of the business plan that at least should be in place and that at least in principle should be followed:

• An effective business plan, at one level of understanding, lists and explores each of a relatively standard set of functional areas that a new business has to thoroughly prepare for and both in what it does and how, and in better understanding and in better being prepared for the context that it will face.
• As an in-house functional area example of what would be included there, I cite the need for a good business plan to include a basic financial plan in it, and both for what liquid resources are available and for how they might be held in reserve or expended, and if so for what, and with what at least starting priorities. This portion of the overall business plan would include a day one starting point discussion of what would be brought to the table by the business’ founders and by any early funding-providing supporters (e.g. family and friends for the most part.) And it would develop from there, and generally with three business development scenarios, for how expenses might arise and for how and when revenue might begin to come in: a “best case:, a “worst case” and a “normative” scenario. All three of these model scenarios would include in them a set of assumptions as to what levels of challenge and opportunity that might be expected. And all three would be developed to accommodate at least a measure of less predictable challenge that might arise too, and an approach for capitalizing more effectively on any seeming windfall opportunity that might arise too, at least at an accounting and liquidity management level. The idea here is to be systematically organized, and to be as prepared for the possibilities as possible, to improve the chances of your new business succeeding.
• As an outside context example, this would include a market analysis that would at least ideally, objectively consider what the best markets and the best consumer demographics are, to pursue in your marketing and sales initiatives, where members of the buying public would see value in what you would offer.
• And you would, of course include discussion of functional areas such as marketing and sales as in-house factors too, as well as a detailed analysis of the worth of the unique value proposition that you would bring to market, or of the at-least unique enough value proposition that you would offer, with a goal there that you should reasonably be able to expect to capture a significant market share from offering it.
• That, in brief and I add selectively stated format, is what enters into a well written business plan. And most of it and for topic areas noted here and for those that I have overlooked here, is operationally oriented and even as you also include at least some strategically oriented elements too.
• Here, I write of business plans from what might be considered a reversed, mirror image perspective, and with strategic planning and insight serving as the foundation point and with the above and similar more operationally framed and tactically driven elements added into that.
• Then, the goal is not to arrive at specific functional area approaches that look like they would work; it is to arrive at combinations of them that would work together and in specific alignment with the mission and vision that the business would be built around and in specific coordinated alignment with the overall business strategy that is being developed.
• I write here of an iterative, step by step process of business planning refinement, and with a goal of developing strategic and operational, and strategic and tactical together, to arrive at a best for you overall system that accommodates all of your strengths and all of your challenges, and in ways that flexibly allow for as much of the unexpected as possible as you strive to achieve your mission and vision goals.

Startups have no historical record and no ongoing body of experience to build from in reliably recognizing where of-the-moment, necessary ad hocs that are turned to, might become the basis for ongoing operational and strategic practice and pattern, and when they are more contextually disconnected from what the organization as a whole would do moving forward. And startups and early stage businesses that are still small and of necessity so, and their leadership do not always know when the operational and strategic patterns that they are building and setting in motion, are going to be cleanly scalable and to what point of growth, and where disconnects might begin to emerge from simple linear growth beyond that point. Any such a priori understanding is going to have to be brought in by the owners and founders, and by others who they bring in who they actually listen to on this. And that is where business plans and the effort in developing them and the ongoing effort of following them and of continually evaluating them for ongoing relevancy, enter into this narrative.

Think of Point 2 as addressing a starting point where awareness of the issues that I write of here, have to be built into a business, in the form of an ongoing awareness and recognition of the simple fact that the unexpected and the unplanned-for can and with time will emerge – and regardless of how thoroughly and carefully a new business is planned out from its start.

As noted above, I am going to continue this discussion in a next series installment, with the above stated Point 3:

• And the sometimes significant challenges that large and complex business organizations can create in aligning strategy and tactics, with effective disconnect identification and remediation implemented, as a core ongoing due diligence process.

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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