Platt Perspective on Business and Technology

Business planning from the back of a napkin to a formal and detailed presentation 19

Posted in strategy and planning by Timothy Platt on October 29, 2017

This is my 19th 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 1-18.)

I began discussing two business models as selectively developed case study analyses in Part 17 and Part 18:

• A hardware store: Alpha Hardware, that went through a more fundamental transitional change as it came to outgrow its original single storefront and its space restrictions there, to become a two storefront business with a more specialized Alpha Hardware and an Alpha Home Goods, and
• A cutting edge technology offering, business-to-business software development company: the e-Maverick Group.

The now two Alpha stores primarily deal in stable and consistently reliable products that for the most part see more cosmetic change than anything else. And the e-Maverick Group develops, markets and sells change and disruptive change when and as they can effectively achieve that, and to a business sector that demands it and on a regular, ongoing basis.

Towards the end of Part 18, I stated that a business such as the Alpha stores, strives for ongoing stability as a defining goal, and they do at least to a significant degree through maintenance of a balanced, reliable inventory of consistently sellable products that their customers would want, and that they would go to them to buy. I did not make a comparable point when discussing the e-Maverick Group there, and turn to consider the role of stability as a business planning goal for them too, and as a tool for further analyzing what the word “stability” even means here.

Let’s start addressing that with a brief reconsideration of Alpha’s product line stability, and I add reliability. That strikes to the core of what makes these two stores viable as businesses, as it addresses the basic requirements faced for them to be and remain profitable, and in business. The e-Maverick Group faces greater potential for both profit and loss: likely greater realized benefit and risk from any one product type offered than would hold for a business such as the Alpha Stores. But the e-Maverick Group fundamentally seeks stability and reliability there too. In their case this means managing product due diligence through risk management activity that is loaded earlier in their product development, production, marketing and sales cycle. Their stability creating due diligence is more focused on optimizing their selection of which products to even begin to develop, their initial production and fine tuning of the ones chosen there, and with continued due diligence selection and product tuning continued through the rest of the earlier stages of this cycle, and at least ideally as early in it as can be realistically made possible.

The goal there is to limit wasted spending and effort. And this is where a crucial type of continue or stop decision has to be made. If a decision is made to abandon a possible new disruptively novel offering too early in its potential development and offering cycle, that might mean tossing away a possible breakaway success and a source of emergent new value during its more readily correctable development stage, growing pains period. Doing so too late on the other hand, might mean only realizing that a new product is in trouble after it has been marketed and even after it has been sold, and certainly after a large investment has been made in it – there in both cash and in reputation.

My earliest experience working with computers, on mainframes and before the first personal computers, critically involved end users having to correct software defects that realistically should have been caught and corrected in-house by the software provider during their alpha testing. And my point here is that even businesses such as the e-Maverick Group have to actively pursue product line stability and I add reliability and as an ongoing effort.

But this only addresses one aspect of a larger phenomenon that applies essentially to any business: a need for resiliency in the face of challenge and change and the unexpected, and both for limiting the impact of emerging problems and for capturing suddenly emerging sources of potential value.

I have recurringly written of and discussed the issues of resiliency and agility in a business, throughout this blog. So my primary point of note here is in how their goals are shaped and performance measured in this specific context. I stated at the end of Part 18 that I would continue its discussion here, at least in part by focusing on and delving into how:

• The specific considerations that I have been making note of here would inform the business models pursued by both of these business types, and their overall strategies and operations and their views and understandings of change: linear and predictable and disruptively transitional in nature.

And I added that I would discuss how their market facing requirements and approaches as addressed here, would shape the dynamics of any agreement or disagreement among involved stakeholders as to where their business is and where it is and should be going, and how.

I have in fact already begun addressing the above bullet point and its issues here, and certainly insofar as a business shapes and operates its systems in order to meet its basic business model goals and stay competitively profitable while doing so. The patterns of risk and potential benefit faced by the Alpha Stores, differ fundamentally from those faced by a business such as the e-Maverick Group for the range of products that they would offer, and for how risk and benefits arising from their sellable inventories systematically differ. This of necessity impacts on the operational processes that support these strategically shaped activities, where I have only noted one aspect of the overall risk management processes that would be followed here, by way of example of that.

I am going to more systematically discuss how business operations would differ for businesses that follow one or the other of these two basic patterns in my next series installment, further discussing the above restated to-address bullet point. And after that I will delve into the issues of the follow-up point that I just repeated after it.

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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