Platt Perspective on Business and Technology

Rethinking exit and entrance strategies 24: keeping an effective innovative focus while approaching and going through significant business transitions 14

Posted in strategy and planning by Timothy Platt on January 19, 2018

This is my 24th 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 1-23.)

I have been discussing timing, and prepared-for timing of completion windows or at least accommodatable ones, in recent installments to this series (see in particular Part 22 and Part 23.) And in the course of discussing the issues and the questions of settling upon a mutually understood and agreed to set of timing parameters there, for knowing when a business can perform more effectively in how it carries out and coordinates its activities, I raised the specter of timing breakdowns there too. Then I left more direct consideration of those events themselves for here, and this installment.

More specifically, I said at the end of Part 23 that I would turn to the following, here:

• Discussion of breakdowns and their indicators as they arise in the types of work timing, planning and execution that are under consideration here.

Let me be explicitly clear here, and on both what I will discuss next and why. When timing, and the processes that would be carried out in specific timing windows all work out and smoothly and effectively so, subsequent focus always falls on what is to come next and with what has been successfully completed falling from attention or consideration. Businesses that are racing to more effectively compete and perform their next must-do work and then their next after that, do not in fact generally even have the extra time and attention span available for them to be able to do detailed ongoing reviews or analyses of what worked – and whether that performance success was arrived at entirely according to careful design and intent, or whether at least part of it was achieved more by chance. It is the breakdowns in this that stand out, and they form the basis for most meaningful business systems and processes development, and most genuine qualitative business advancement and improvement.

Yes, I have written of the need for ongoing performance reviews in this blog and I will continue to do so, but I also acknowledge that this can be an ideal only, unless it is prepared for and even built into the business as a part of its basic operational systems.

That perhaps-caveat noted, when we consider the issues of timing in complex systems, as I have addressed in the past two installments to this series, we are discussing how, and how effectively a business coordinates its activities, and both according to the priorities of the tasks to be carried out, and according to how and when the resources essential to them, can and do become available. So I focus here on when the wheels leave the road for all of this, and when timing coordination and schedule completion breakdowns arise.

Then after addressing this set of issues, I will consider working capital and cash flow, and reserves in this context, as well as goal planning and goal change and reprioritization. Think of this topic partitioning as my offering an at least somewhat more detailed discussion of what these timing challenge issues and events entail, and with that followed by an at least preliminary discussion of how they would cost-effectively be addressed, and in a manner that would be consistent with and supportive of a business and its business model, and its underlying strategy and operations. And I begin this overall line of discussion here, by focusing on these emerging and at-risk of emerging challenges themselves. And I begin that by discussing absolute and relative priorities, and the question of tasks to be completed themselves and of constituent work processes that would enter into that.

I begin this by discussing absolutes, and absolute deadlines in particular. And I begin that by citing a broadly sketched scenario as a working example, that I would suggest keeping in mind for all that at least immediately follows, to take this discussion out of the abstract:

• You own and run a small specialty manufacturing business that provides a select list of parts for larger manufacturers, that would not find it cost-effective for themselves to develop and produce in-house. And you have a lot of competition for what you produce there, from other small specialty manufacturers that would be happy to find a foothold for expanding their sales reach into your markets.
• Something over 60% of what you produce is in fact needed by your corporate clients, going into their yearend holiday seasons as that is when those businesses that you sell to do the most of their selling, and carry out most of their production for the items that your products fit into. So you face fixed deadlines that align unswervingly with the calendar and in ways that do not allow for much due-date flexibility. Christmas arrives on December 25, and every single year and the businesses that you provide parts for have tightly choreographed and planned out work schedules for getting all of their products out of their doors. And they need your parts or similar by a fixed drop dead date if they are to use them in time in their own manufacturing, and get everything shipped on time to meet the needs and expectations of their customers and their markets.
• You might have a lot of flexibility as to your precise production and shipping timing for the remaining close to 40% of your business activity of the rest of the year. But in this peak business period, all schedules are absolute, and if you let down this one largest client business and just once and even just by a single day, you are likely going to see less business from them in the next year than you would have, because of that. And if you really miss their deadline and by several days you might not get any orders from them at all. (Think of this in terms of your business serving the needs of client businesses that pursue just-in-time manufacturing approaches here, with the lean parts inventories that entails, coupled with tight deadlines for completing their work as an underlying rationale for how this scenario can become quite realistic.)

My point here is that while a lot of business process and task work can and should be thought of as following relative schedules, and have to be thought of how for how schedules are coordinately developed to make more effective use of more widely needed resources, every business faces at least some fixed absolutes that they have to perform in terms of too.

Note that absolutes can arise from a great many possible directions here. For a publically traded company, this can mean for example, meeting deadlines before the end of business quarters, so as to avoid negative performance reviews from stock market analysts whose prognostications influence stock prices and the overall perceived value and strength of a business. This is just one of many possible second examples that I could cite here, some of which are business model-specific or entrance or exit strategy specific, but many of which are more generic and more widely applicable too. Here, to note the obvious, this second example is at least partly exit strategy specific. It would for example forcefully hold significance if a business were to pursue an initial public offering (IPO) route to capital fundraising, and if it was just beginning to pursue a publicly traded business model. But it would not hold as much value or significance if that business were already publicly traded and with a longer track record there, and if it were primarily pursuing a long-term growth and development model.

And with this narrative laid out as a setting for further discussion to come, let’s more deeply consider the wording of my to-address point as repeated above:

• Discussion of breakdowns and their indicators as they arise in the types of work timing, planning and execution that are under consideration here.

And let’s consider those breakdowns and their indicators themselves. And I begin that by noting that a task or a process that enters into fulfilling one can break down, if it does at all, for a wide range of reasons. But, and with my above two scenarios in mind here, even when that happens due to issues arising completely outside of the business under consideration itself, it can still arise at least to a significant degree as a consequence of scheduling and timing problems.

• Business-to-business collaborations, and larger networks of them as arise for example in complex supply chain systems, can make timing challenges a more likely cause of, or at least a more likely contributing factor in these breakdowns,
• And just-in-time manufacturing and related business approaches do too.
• And for my second working example here, stock market analysts apply timing pressures from the outside because they themselves face deadlines too: publication deadlines that would be benchmarked according to the news cycle, but even more so by the timing of the standard business reporting year.

I am going to continue this discussion on timing and scheduling-based breakdowns and on the stressors that lead to their erupting in a next series installment. And I will, in that context discuss breakdown indicators and warning signs too, and as both evidence for clearer and more complete planning, moving forward, and for more thorough review of how a current here-and-now was arrived at. (See my above comments regarding reviews and analysis of what at least overtly might have been successful process and task completion up to now.)

Then I will address the follow-up to-address issues that I cited for coverage towards the top of this posting. 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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