Platt Perspective on Business and Technology

Intentional management 42: elaborating on the basic model for adding people and their management into the equation 3

Posted in HR and personnel, strategy and planning by Timothy Platt on August 14, 2017

This is my 42nd installment in a series in which I discuss how management activity and responsibilities can be parsed and distributed through a business organization, so as to better meet operational and strategic goals and as a planned intentional process (see Business Strategy and Operations – 3 and its Page 4 continuation, postings 472 and loosely following for Parts 1-41.)

I have been addressing the Who side of intentional management as a systematic business management approach, since Part 38 of this, and a specific to-address list related to that since Part 41, at least for its current form and contents. And I repeat that list here, as a starting point for this posting and for purposes of smoother continuity of narrative:

1. How is a business under analytical examination being managed now? (Note: this is a complex question because it raises issues of what it is doing in principle and as a matter of intended process and practice, and of what is actually being done and on a day-to-day basis and by whom and where in the organization and under what circumstances, and how consistently. The following questions in effect dissect out what would go into this question and what would go into answering it and from both the intended side and the actual in-practice side to that.)
2. Does this business actually follow a seemingly entirely ad hoc approach as if it had no past and as if the experience of here and now, could hold no informative value in its future either?
3. Or does it more systematically pursue at least a close approximation of the default model approach as laid out in Parts 38 and 39?
4. Or does it in some systematic manner differ from that, with non-default features brought in and included, and for at least specific areas of the business?
5. If this business does at least situationally resort to consistent non-default management approaches, where and how and when does it do so?
6. Is this resorted to in order to address specific perhaps recurring problematical situations or events, or in order to capture available value from specific perhaps recurring opportunities that the “standard” approach cannot handle in and of itself? Does this, in other words, reflect an alternative approach that might be resorted to on a needs and opportunities, functional process-defined basis?
7. Or do one or more specific areas of the business (e.g. specific departments or specific organizationally distinct sections of them, or specific satellite offices in a larger geographically dispersed enterprise) simply pursue their own course in how things are routinely done and across all functional areas and processes carried out?
8. This is only a starter list and one of the goals of any business review and analysis here would be to progressively, iteratively refine and elaborate on what is asked here, drilling down into the specifics of the particular business and away from the more generic as has been offered up to here.)

I have focused on the first four of those Points up to here in this overall narrative, but returning to Points 2-4 for the moment, those business model options can in brief be identified respectively as:

• An essentially entirely ad hoc business model and business management approach,
• An essentially entirely planned out and strategically oriented and executed, business model and business management approach that is centered on overall business-wide consistency, and
• A more hybrid business model and business management approach, where at least certain functional areas recurringly face operational contexts that they have come to address with novel, nonstandard approaches that do not actually fit into the overall operational or strategic plans in place – even if they are carried out very consistently as “standardized” ad hoc process flows in and of themselves. In a hybrid context as discussed here, the rest of the business is managed for the most part according to a more centrally planned out, Point 3 design.

I concluded Part 41 by stating that I would “turn to Points 5, 6 and 7 of the above list in my next series installment. And in anticipation of that, note that I will focus there on communications enablers and restrictions, and on how a Point 2, 3 or 4 approach is arrived at and particularly by the best managers who seek most actively to perform as effectively as possible in reaching all of their assigned goals and on time.”

I begin here with an initial focus on that last detail. When less experienced or inefficient managers and their teams of employees follow standardized and formally agreed to processes and procedures and in ways that do not deviate from normative and expected paths, outcomes achieved do not necessarily particularly raise issues as to the validity and effectiveness of those normal operating procedures per se, and even if their outcomes are less than expected – unless of course more effective managers and their employee teams begin facing the same business challenging results from following them too.

This becomes more interesting as a source of possible challenge to the validity and effectiveness of processes and systems in place, when good managers and even the best of them have to find work-arounds to get their jobs done and meet their deadlines and performance goals. And in this, it is not as important at least in the here-and-now instance, whether the more non-standard approaches that they use as work-arounds are one-off and unique to the instance, or whether they have become standardized, even if unofficially so for some specific type of work.

• One-off work-arounds can arise in a variety of contexts. To start, I would argue that they arise in the context of business systems fragility and from lack of operational agility, where tasks that are supposed to be carried out in some planned for, standardized and expected manner cannot be resolved through them, at least consistently and reliably. In practice, this type of event sheds light on the overall levels of communications efficiency or lack thereof in the organization, when a manager has to make it up as they go along in order to resolve a sudden challenge, and without opportunity to obtain either approval or support from their own manager or above on the table of organization, for how they would resolve matters and get their assigned tasks done. (I assume here that more effective communications would lead to change in official and expected processes in place that do not work, with new alternatives that do.)
• For a second context, consider businesses where results achieved are viewed as being more important than how they are achieved. This creates opportunities for hand-off disconnects when work flows have to be passed on to other teams and other managers for further work on their part. That business model approach and the consequences that result from it can come back to haunt a business. To at least briefly cite a relatively simple case in point, friction-point that this approach can create (that I have seen play out) consider the impact of ad hoc unplanned use of bottleneck creating, limited availability, shared resources that many need but that few can use at any one time, as a business growing pains example. But I could just as easily have cited how this management approach throws off task completion and overall work schedules in general, too.
• Systematic but nevertheless unofficial work-arounds, create fundamentally distinct channels for managing and carrying out work flows that are not allowed for or included in officially expected operational systems. They do not arise because of one-time, disruptively unexpected events. They arise from a long-term break-down of officially recognized and offered processes and procedures and systems of them, and with senior and executive management often left unaware of this. So they do not even know that the operational plans and processes that they have arrived at for carrying out their strategy in place, do not and cannot work and for at least some key areas of their business. In a more extreme and ongoing form, this scenario usually leads to change management resolution, or at least a need for that. But in any event, this reflects long-term and much more systematic and deep-set business inefficiency and risk.
• Note that I write in the above bullet point, of unawareness on the part of the most senior management in place, and of their operational and strategic planners. I am explicitly not writing here of businesses that for example, acquire smaller specialty businesses to round out their portfolios of value creating strengths and resources, that maintain them as if largely separate entities, allowing and even encouraging those new parts of their now expanded systems to maintain their own processes and even their own internal corporate cultures, so as to protect the sources of value they paid for when acquiring them. I am writing here of businesses that have essentially by default, split off what amounts to independent fiefdoms within their organization that in effect go their own way.
• How can that arise? I am fairly sure that every large and widely distributed business organization has at least a few empire builders in their management hierarchy who at the very least would like to do things their own way because of that. I have certainly worked with people who fit that mould. But communications breakdowns and the drift from “official” that that can create, are commoner causes of this, even as they in effect can force the development of protective silo walls in the organization, walling off even entire lines on the overall table of organization so those within them can get their jobs done.

I have in fact at least begun addressing Points 5-7 of the above to-address list in this discussion, and with a goal of at least briefly outlining some of the forces and pressures that managers and that non-managerial employees face as they seek to carry out their jobs and succeed there. I will continue that discussion in a next series installment, from a more explicit Who and Why perspective for these business systems participants. And then I will turn to Point 8 of the list and the issue of asking the right questions in the right ways for specific businesses under consideration.

Looking further ahead, I will then turn to consider individual personality, preferences and experience in shaping management style, and the issues and challenges of shaping a consistent management approach while supporting individuality and diversity, and differences in vision and perspective. But turning back to the question of what I will focus in on in my next series installment to this, I will begin by posing a seemingly simply question that I will start that with:

• What makes a good manager?

This is at least easy to ask, and it can be conveyed in just a few words. I will use this question as an organizing point for what follows 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. Also see HR and Personnel and HR and Personnel – 2.

On the importance of disintermediating real, 2-way communications in business organizations 3

Posted in social networking and business, strategy and planning by Timothy Platt on August 12, 2017

This is my third installment to a brief series on coordinating information sharing and communications needs, and information access filtering and gate keeping requirements (see Part 1 and Part 2.)

I began addressing disruptively novel change in an organization and in what it brings to market, and what it has to be able to bring to market if it is to remain competitive there, in Part 2. And I focused in that installment on that array of issues, from a within-business perspective and in terms of its internal systems and their needs and capabilities. My goal here is to flip orientations from that, to consider the business’ outside contexts and how they impact upon and help to shape and prioritize the decisions and actions that I addressed in Part 2, within the organization. And I begin this by at least briefly categorically listing a few of the key players that would enter into any analysis of, or discussion of a market-facing business and its more meaningful outside world. In anticipation of this posting, I cited four of these stakeholder types at the end of Part 2 and I re-list them here with a fifth such entry added in too. Note that while the order that I offer these stakeholder categories in, might seem arbitrary, I chose it with a specific narrative flow in mind for using it. And I add that their order is probably unimportant in general, as any of them can hold greater or lesser importance for their level of direct impact, depending on the business in question and its circumstance:

1. Any business equity holding outside shareholders where this category applies,
2. Change and its pressures as arise in their general customer base and marketplace,
3. And from a business’ individually dominant clients as a special case where an enterprise has them, and both from when a single major client accounts for a large percentage of the work activity and the incoming revenue generated, and from when a significant number of a business’ perhaps individually smaller clients all start demanding change, and when they speak with a single voice and as if one on that.
4. And from among a business’ competition,
5. And from outside regulatory organizations.

Let me begin here by at least briefly clarifying Point 1 of this list. Equity holding outside shareholders can mean stockholders for a publically traded company, and certainly in this context if that company is failing to make changes that a significant percentage of their shareholders would see as necessary, and who are dissatisfied with the business for its financial or other (e.g. environmental impact) performance because of that. I have seen stockholder revolts and they do need to be taken seriously and even if major shareholders from within the business can quash any proposed action from outsiders in shareholder meetings and proxy votes. And this can also mean dissatisfaction and even pressures to influence and even control, coming from major outside investors such as venture capitalists, or from funds managers who individually manage and make ownership decisions that involve large numbers of that business’ outstanding shares as a percentage of shares traded. Think of this as the influence of many smaller voices speaking out as one, and that of individual very large voices as they speak out, respectively. Both can mean significant pressure on a business and its planning and execution, and certainly for what have come to be contentious actions or positions taken.

Now let’s consider Point 2 and Point 3:

• Point 2’s market participants individually make their decisions as to what to purchase if anything, and when and where, as individuals and for the most part as individual product end users. This need not involve concerted organized action in any particular way, though fad purchasing can lead to what amounts to that, as can viral marketing and its capacity to at least transiently enlist what can become large numbers of same-minded purchase decision making participants who are otherwise unrelated.
• Point 3 addresses larger single voices and decision makers, and does represent concerted, longer-term organized voices.
• Think of Point 2 and Point 3 here as marketplace counterparts to the two categorical equity holder types noted here regarding Point 1 stakeholders.

Point 3 stakeholders include, among others, single dominating client businesses in business-to-business arenas. And it just as significantly includes major wholesalers that might take on a large percentage of what a business offers in more of a business-to-consumer context. And it includes in that vein, single large retails that might do the same, or even buy out all of what some business produces. Let me take that out of the abstract by citing two examples. Globally, Walmart sells more than one million US dollars worth of toilet paper every single day for overall gross sales. And that number is old now by several years. Their gross annual sales for this one product type is probably at or above half a billion dollars per year now. That type of purchasing power influences suppliers and original manufacturers of all types. And to turn to a smaller but still significantly sized second retail business, for a second such example, consider Trader Joe’s: the supermarket chain. Their approach where possible and realistic, is to only sell products branded to their own name. And they go to small producers and buy out everything they produce for some product type, to exclusively sell in this way, as carrying their brand and as having been vetted for meeting their quality standards. This can, for example, mean buying out an entire vintage year from a small wine producer, or entire production runs and essentially everything that a small pasta or similar manufacturer makes for sale over a contractually agreed to period of time.

Switching categories again in my above-cited categorical list of stakeholders, large numbers of irate stockholders and the news stories their anger and frustration can and do create, can have a very significant collective impact on a business, as can single larger voices for Point 1 and its participants. The collective impact of smaller individual marketplace participants, as by analogy addressed in Point 2, or of single larger ones as per Point 3 can have massive impact too. And for the former, consider the marketing disaster of a business facing a consumer boycott that is heralded and followed as an unfolding news story in the press and on television and online. That can kill a business if it cannot effectively respond and resolve matters. And the loss or threat of loss of some single balance sheet shaping, major purchasing customer can have an equally significant impact too.

I have already at least begin tying this posting’s line of discussion, to this series and its main topic in the above paragraph where I cite the crucial importance of communications here, and of open and as necessary, transparent communications and certainly with all involved parties included there. And that leads me back to the above list of five stakeholder categories and the two groups I have skipped over up to here: Point 4 (a business’ competition) and Point 5 (outside regulatory organizations.)

Let’s start with Point 4. Few people start out thinking of a business’ competitors as holding a stakeholder position to them, but that in fact can be a valid way to view them insofar as a business and its primary competitors in particular, as so strongly influenced by each other. Businesses have a stake in how their competitors do, even in more zero-sum game theory contexts where they thrive to the extent that their competition does not. But in the real world, competitive relationships are not always so simple and do not always take on a strictly win-lose position. As a case in point, a larger, market dominating business might absolutely need the cover of having viable competitors in order to avoid the costly and even all but devastating challenge of antitrust action. Remember, courts have been known to go so far as to force the break-up of companies deemed to be monopolistic and irretrievably so as currently organized. A business that was facing that type of possible action, after for example being warned of it through prior court action, would probably see it as disastrous for them if one of their larger and more presentable competitors looked like it might go under!

Businesses, and certainly in countries such as the United States, are legally barred from colluding with each other as that can be seen as violating antitrust and antimonopoly laws for constituting market manipulation of one form or other. But there are in fact a relatively wide range of contexts where selective and allowed collaborations, and their game strategies that go beyond simple win-lose, would offer greater value and safety and for all businesses concerned.

And this brings me to the above list’s Point 5 and outside regulatory organizations. I am going to address that stakeholder category in my next series installment and will continue from there to more fully discuss all of these categorical stakeholder types in terms of communications and in terms of simplified, disintermediated communications. In anticipation of that, and as a simple example, many legal systems have strong and strongly enforced antimonopoly laws in place that directly impact upon and limit how competing businesses can communicate with each other. But even then, there are carved out exceptions and complexities, as apply for example where businesses that create and sell competing antivirus and anti-malware software products are allowed to work together for example, for sharing updates on new and emerging threat vectors. And a great deal of regulatory law that essentially all businesses have to work within, involves sensitive personally identifiable information and how that can and cannot be communicated and between whom and under what conditions.

There is an old saying to the effect that the devil is in the details. That certainly applies when the issues of this series are considered in more specific contexts. I will at least begin delving into the communications details of all of this in my next installment, having focused on who would do this communicating here.

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. And also see Social Networking and Business 2 and that directory’s Page 1 for related material.

Business planning from the back of a napkin to a formal and detailed presentation 17

Posted in strategy and planning by Timothy Platt on August 8, 2017

This is my 17th 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 1-16.)

I began working my way through a three point list of to-address topic points in Part 12, that I repeat here for continuity of discussion:

1. Different functionally focused stakeholders might reach different conclusions as to which processes and subsystems of them are core or peripheral to a business, and as to which might be secondary-peripheral of them – and if so of what type (e.g. necessary but outsourceable, or no longer needed and dispensable.) And it is important to both clarify and discuss those differences, and to reach a working consensus that all key stakeholders can come to at least tacit agreement upon, and certainly if a business is to enter into and carry through upon the right transitions for its own needs, and in the right way and with the right timing.
2. Then after that, and in the context of distinguishing between core and peripheral processes, I said that I would turn to consider areas and aspects of the business that can be linearly scaled up, and areas that represent true nonlinearities – places where simply scaling up according to the pattern in place would create inefficiencies.
3. And I added that I would discuss all of this in terms of crucial information availability and communications, and in terms of two types of case study examples: a retail business, and a software development business.

And I at least began taking that narrative out of the abstract in Part 15 with an analysis of this set of issues, framed in terms of the retail store case study example promised in Point 3. I continued that case study discussion in Part 16, completing an analysis of that business in Point 1 and 2 terms, and I will finish it here, now focusing in on the communications issues and challenges of Point 3. After taking that step forward in this narrative, I will turn to consider the software development business, case study example, as also promised in Point 3.

But as noted above, I begin this with my retail store example: a hardware store, Alpha Hardware, that chose to make a more disruptively route to business expansion by splitting their store as a business that was located in a limited space that they could not expand upon in one location, into two separate more specialized storefronts: Alpha Hardware (in their original location) and Alpha Home Goods (in their new second location.) Simply seeking to develop a second location clone of the original store in a new location would have represented a more linear path forward following of their business model in place and would have been much less dramatic a change. They instead close a much more disruptively novel transition approach here.

Everyone working at the original single location Alpha Hardware knew that the store was way too cramped for space and both for the volume of business conducted and for the range and diversity of products and of individual stock keeping units (SKUs), or separately ordered and sold product variations and versions carried and sold, that they had to find room for in their showroom. The dynamics of this are simple and essentially immutable:

• When a store has fixed and limited shelf space available for offering its products to its customers, and/or a limited in-house inventory storage space so they can have the short-term required reserves for keeping their shelves replenished,
• And the number of customers seeking to buy from them increases, this creates real and in time undeniable pressure to limit what is offered and sold, to the items that fly off the shelf through completed sales the fastest. Items that only sell slowly, take up room and keep doing so, robbing the store of opportunity to do business and make sales for items that would move more quickly – and leaving customers looking for them frustrated because the store cannot keep enough of those faster moving items in stock.

Everyone at Alpha Hardware knew this, and both for the more traditional hardware side of this store and for the newer and expanding household goods side of it. They saw the impact of this, as customers came in asking for items that they no longer stocked because not enough of them sold for them to make sense to carry, given their space limitations. They saw this when they did run out of items that they did actively carry. And they saw this as they saw genuine opportunity and value to the store to carry a more diverse selection of goods, if they could only find a way to do so. And with all of these people working in the same relatively small space, they did talk about all of this as well as about more socially connecting issues that helped to bring them together as a small community and as a workplace team.

When Alpha Hardware as a storefront, split off its household goods side to their second location, they were fortunate enough to be able to find and secure a spot for that directly across the street from their original store. This meant communications stayed easy and strong. I have already made note of the importance of that, at least in passing, and consider it in more detail and with a more direct focus of attention here. Consider what happens when communications are poor or even essentially nonexistent between work areas in a business and even in a single location, and for a perhaps extreme case situation when employees and their managers find themselves competing for limited resources – that all involved sides feel entitled to, and that all see themselves worthy of claiming highest priority for.

Effective business planning, as a core requirement, has to be able to identify where such impasses might arise and has to be able to proactively where possible, address and limit these challenges. And effective business planning, as a course correction measure has to be based on the data and insight that would identify where resource bottleneck and other challenges might already have led to conflict and to dysfunctional competition within the business, where an enterprise can in effect find itself at war with itself, or at the very least a low level version of that.

• I am writing here about within-business friction, and about the rigidity and loss of agility and resiliency that communications breakdowns can lead to, where it cannot be possible to more effectively share limited resources if the involved parties requiring them cannot in some way communicate with each other effectively enough to do so.

If a business is not organized clearly enough and with sufficiently effective communications systems in place and working, to be able to at least nominally address these and similar challenges, it is not going to be in a position to even know if it is facing simple linear path forward short-term problems, or more systematic and longer term ones. And it is not going to be in a position to know if it is facing need for a true disruptively novel path forward change and a true transition, or a need for simpler problem remediation and a continuation of business as usual.

I am going to turn to my second, software producer case study example in my next series installment, but in anticipation of that introduce it here as the e-Maverick Group: an e-commerce software developer and provider that seeks to offer cutting edge and next generation software solutions to their business clients. And in orienting anticipation of that next installment to come, I repeat here a briefly stated detail about this type of business that I first offered here in this series in Part 16:

• While new products and even new types of products do arise and appear on the shelves of hardware stores, and home goods stores too, a great deal of what is offered is fairly standard and stable in function and in basic form.
• That situation is not going to hold true in my software business example where even seemingly consistent product types can fundamentally change in both what they offer and how and at a steady, rapid pace.

The e-Maverick Group is change and even disruptively novel change driven, in ways that a business like Alpha Hardware would never be and that has implications when considering the types of issues under discussion here. And I add with that in mind that fundamental, disruptively novel change in what a business offers, as noted in the above two bullet points, often means at least a need for equally fundamentally New in how they do so 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.

Rethinking exit and entrance strategies 20: keeping an effective innovative focus while approaching and going through significant business transitions 10

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

This is my 20th 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 1-19.)

I focused in Part 17, Part 18 and Part 19 on a series of How, oriented issues 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.

I turn in this posting to the more Why side of these and related issues and to how they fit into a larger strategically oriented planning perspective, and both in terms of strategy per se and as strategic intent can collide with emerging day-to-day reality. And I begin that, and addressing the main area of consideration for this posting by repeating the basic, and even tritely simplistic Why consideration for all of what I have been discussing here, that I noted at the end of Part 19, and certainly for any best practices context:

• “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 is a valid point, but as I will discuss here, there is potentially at least a virtual mine field of ambiguity in it. Part of what I will do here in this posting will be to point out and address at least some of the details as to where that claim of ambiguity holds true. Then after offering that as a frame of reference for what is to come here, I will begin considering the details of what goes into the above bullet pointed Why assertion in specific detail.

It is rare for any business to find itself doing one thing and one thing only at a time, and even when it is a single person enterprise that only takes on and works for one client at a time. Businesses carry out in-house oriented and prioritized tasks and processes, and client-facing ones, and supplier and other supply chain-like tasks and processes, and at least some marketing outreach – and even if they primarily rely on satisfied customer word of mouth in acquiring new business, and more. My point here is that a well run business of any complexity, or simplicity for that matter, is essentially always balancing at least small sets of competing tasks, goals and priorities against each other at any given time. And this competition centers on combinations of any and all of the resource bottlenecks that they might have to accommodate to stay in business, whether that means:

• Time and staff availability to work on what and when,
• Liquidity and cash availability,
• Parts and supplies inventories with their here-and-now availability limitations,
• Access to specialized equipment,
• Or whatever else might become a performance limiting or constraining factor for a business under consideration.

The list of potential bottlenecks here can be significant for any business and it is open ended when considered for businesses and industries in general and certainly when possibilities here are more explicitly noted and not just categorically labeled.

Think of those factors and considerations as arising external to any specific task or process flow that is competing for what it requires for completion, but internal to the business itself. And those within-business factors are matched with ones that are external to it, such as urgency to complete at least certain specific customer sales requests on very tight schedules.

• Dire customer need for a product offered that can only be produced at a certain rate without reprioritizing production line output, faced by an established repeat business client, can prompt this
• As can rapidly approaching calendar deadlines for seasonal products and big purchase orders for them,
• And early completion or delivery bonuses from specific customers for their purchases, as three of many possibilities there, with this third example commoner in business-to-business contexts.

And these three examples are all drawn from one arena of activity here, with a business to marketplace context. Reconsidering in-house tasks and process completions, they compete with each other too, as I have noted both here and in other contexts in this blog when for example referring to bottleneck equipment and other resources that for whatever reason might be available, but as an at least always somewhat inadequately scaled shared resource that is widely needed. Internal within-business, and external factors and forces influence and shape each other here, and can and do serve to set overall priorities and for all bottlenecks and potential bottlenecks faced.

• Effective operational systems in this context, flexibly seek to meet competing needs, and certainly when prioritized scheduling is required, and with a goal of meeting higher priority scheduling requirements first but without unduly sacrificing what start out as lower priority ones – and so they do not become high priority remediation requirements if nothing else.
• And effective strategy facilitates and supports operational systems so they can be flexible and resilient in this and so they can be better able to both identify and respond to scheduling change needs as called for.

And with that, I return to my quote about change, as offered more towards the start of this posting:

• “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.”

A well crafted mission or vision statement is brief and clear and simple and in most cases can be summarized for their core requirements and goals in a single sentence. But simplicity can give way to complexity and to differences of understanding when these basic business starting points are used to buttress support for meeting competing resource-demanding needs, and when and at what pace and how. So the alignment apparent in the “overall strategic goals and their realization” of “the business mission and vision and its overall strategic goals and their realization” might be more apparent than real at times, and certainly as understood in an immediate here-and-now by competing stakeholders.

I am going to continue this discussion in a next series installment where I will consider accommodating response considerations to this, such as the development of urgency scales, and timeframe compression and extension responses. I will discuss this in costs terms that include but can go beyond the strictly financial. And I will turn this narrative back to more explicitly addressing business transitions while doing so, where I have addressed change and the competition between needs and goals here, in more general terms. 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.

Meshing innovation, product development and production, marketing and sales as a virtuous cycle 6

Posted in business and convergent technologies, strategy and planning by Timothy Platt on August 4, 2017

This is my sixth installment to a series in which I reconsider cosmetic and innovative change as they impact upon and even fundamentally shape the product design and development, manufacturing, marketing, distribution and sales cycle, and from both the producer and consumer perspectives (see Ubiquitous Computing and Communications – everywhere all the time 2, postings 342 and loosely following for Parts 1-5.)

I focused in Part 5 on a restaurant example, where that business’ owner had decided to pursue a farm to table approach as the defining vision of their restaurant. Earlier, in Part 3 I offered a restaurant-oriented example of a downward vicious cycle, that fits a pattern that I have come to call a restaurant death spiral, where loss of business leads to cost cutting and corner cutting that in turn drives away customers and creates still greater loss – with that pattern repeating until the restaurant finishes failing. Think of the Part 3 scenario of this series as background and prelude for a Part 5 change of direction recovery here, for the level of urgency and determination that that would bring a business owner to, in order to avoid repeating what might in any way be viewed as returning to a lessons-learned failed path.

• What do the two business model approaches of Parts 3 and 5 have in common? Any realistic answer to that would have to include a rigidity that can create vulnerability and certainly in the face of the unexpected, and increased risk in any case, and certainly when the Part 5 scenario is pushed to its logical pure-play extreme.

And this brings me to the set of issues that I would at least begin address here in this posting, as encapsulated in this following set of bullet points:

1. Discussing what businesses respond to, and in the specific context of this series, as they respond in patterns of decision and action, review and further decision and action that can have recurringly cyclical elements to them.
2. And it means addressing how they would respond at a higher level strategic and overall operational level and not just at a day-to-day, here-and-now details level, and certainly if they do so effectively.
3. In anticipation of that point, I cite agility and resiliency as organizational goals – and as buffering mechanisms against the down-sides of change. I have already touched on this set of issues (e.g. in Part 5) but will return to further consider it in light of my discussion of the above Points 1 and 2.

I begin with Point 1 of that list, and with the point that the two just-referenced case study examples hold in common: their inflexibility and what it is grounded in.

• Business owners who pursue a Part 3 scenario or analogous approach to running their business, generally seem to be pursuing known and easy more than anything else, and with a goal of limiting risk from avoiding forays into what for them would be the unknown and unfamiliar.
• Business owners who pursue a more purely Part 5 scenario or analogous approach to running their business, do so with a goal of never, ever again risking falling into a known failed pattern: a once followed easy but long-term dangerous trap like the restaurant death spiral. And when I posit a Part 5 approach as a break-away from that downward spiral and with all of the pain that it had caused, the pressures to pursue their new course can be very intense.

Rigidity and the resulting fragility that it can engender, arise in both of these scenarios. And addressing the questions of what businesses respond to, and both one-off and as a matter of developing cyclically recurring processes, has to begin with a deeper understanding of goals and priorities and of what really should be added into the basic business mission and vision where that has to be fundamentally reconsidered.

Let’s consider the farm to table, local-only sourcing restaurant of Part 5. They started out pursuing this approach after what their owner came to see as a near death experience for their restaurant dream and for their own personal financial wellbeing too. And they began to see some real success from this as their business began to flourish. Then they hit a wall in the form of locally sourced supplies limitations that arose from really challenging weather and crop loss for the farms they would buy from. And this leads me to a fundamental question.

• Does this restaurant owner seek to run a locally sourcing farm to table restaurant only and with that their one and only mission defining goal?
• Or do they seek to provide the best food possible from the best ingredients possible where that might usually mean buying and using local and from specific partner business farms – but where they would selectively deviate from that when necessary for maintaining both quality of food and the variety that they would want on their menus?
• What, ultimately, are their operational and process-based priorities there?
• And what are the actual priorities of their customers and of their potential customers who would be drawn to quality, and even if they see value in farm to table and local sourcing where possible?

Transparency and openness are important here, in what such a restaurant offers its customers and in how it describes and explains and markets itself. And the same can be said for openness in how this restaurant maintains connection with and support for the local farms and dairies and other largely family owned and run enterprises that they began turning to when first becoming a farm to table restaurant. It is important to note here that farm to table restaurants do not just approach a within-organization business model and its requirements when pursuing that approach. They join a community with their family owned small farm and dairy providers that can become both mutually supportive and mutually rewarding and for all involved.

I am writing about marketing and communications here, but more importantly I am writing about a rethinking of what a business does and how, and with the necessary selectively expressed flexibility needed to address and surmount challenges. And yes, this might even mean buying premium quality canned Italian tomatoes or buying distantly grown ones – whichever would best meet the restaurant’s quality criteria and needs, until locally grown can be freshly available again. (I noted in Part 5 that elements of this scenario are now dated by the improvement of long-distance transportation, and even for ripe produce and at good costs at point of delivery. But I offer this example and continue developing it here because basic decisions with their competing alternative resolutions still arise and will continue to do so, as change and the unexpected force reconsideration and decisions, and in ways that might be novel to the business model in place. And the farm to table ethic of buying local and supporting local producers where ever possible, has to be taken into account here too.)

I am going to continue this discussion in a next series installment with Point 2 of my above-repeated topics list. And in anticipation of that, I note here that I will begin that line of discussion where I finished this posting, at a point where decisions have to be made that can be grounded in business ethics and related terms and in how a business and its owners enter into and participate in larger communities that only begin with their customers and their potential customer bases. I will discuss this in the context of meeting strategic and operational needs within a business, to keep it viable and profitably robust. 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. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 continuation.

Rethinking vertical integration for the 21st century context 17

Posted in business and convergent technologies, strategy and planning by Timothy Platt on July 23, 2017

This is my 17th installment to a series on what goes into an effectively organized and run, lean and agile business, and how that is changing in the increasingly ubiquitously connected context that all businesses, and that all individuals operate in (see Business Strategy and Operations – 3 and its Page 4 continuation, postings 577 and loosely following for Parts 1-16.)

I focused on symmetrical and asymmetrical power and control relationships between businesses in supply chain and related collaborative systems in Part 14, Part 15 and Part 16 of this series. And I have build that flow of discussion around three case in point examples: FedEx (in Part 14), Eastman Kodak (in Part 15) and Apple, Inc (which I have recurringly turned to and discussed throughout this series.) Those three business enterprises serve as the leading and even dominating participants in the business-to-business collaborations that they have entered into, and essentially without exception throughout their histories.

Then at the end of Part 16 I stated that I would conclude this series here, with a discussion of:

• Alignment and divergence in what participating businesses seek to achieve in business-to-business collaborations, and in how they would pursue their perhaps diverging goals there.

I also stated that I would reconsider Apple, Inc. in this context too and I will do so. But before I do that, I want to reconsider a point that I raised and then questioned in Part 16, readdressing it here in an explicitly international context.

Certainly for long-term collaborations and ones that have proven mutually beneficial and to all businesses concerned, you would most generally expect all partner businesses involved to see value in continuing these arrangements, as proven sources of value to them. Decisions and actions that would challenge these relationships by reducing their value to trusted and reliable partner businesses there, would create risk, and risk that would probably not be off-set by a compensatory gain in value received. And with this, I postulate a stable win-win game theory scenario as a path towards maximized value received and all around, and minimized risk created and once again for all businesses involved in these systems.

I then at least briefly made note of how a more within-collaboration, win-lose or at least win-indifference strategy might arise. Rethinking these business-to-business arrangements in the more general terms that I offer in my series: Some Thoughts Concerning a General Theory of Business, starting with its Part 12, these less mutually supportive strategic and operational approaches can arise for a variety of reasons, including time limitations for how long a collaboration can continue and a variety of other sources of uncertainty (see Section VI of Reexamining the Fundamentals for that series as a whole.

What are some of the specific forces that can lead participating businesses away from a more entirely win-win approach, and particularly in an international and transnational context? And I add to that: when alignment of aims and goals among business-to-business collaborative partners gives way to divergence and a more win-lose approach, is it always the overly larger and most dominant business in these systems that drives that? I begin addressing these two questions with a set of concluding remarks that I will then go back to explain.

• Outside governmental forces and the agendas that shape and drive them, as an increasing important source of this divergence, can create overt disjunction of goals and aims between collaborating businesses, and can create what in key respects can become win-lose scenarios, for businesses that those governments can see as foreign. I write here of protectionism when this is carried out in order to help home-based businesses in general, but this type of government policy and practice approach can also serve to advance overall national economic goals as well as promote specific business enterprises.
• And yes, a business that would seem to qualify as being more subordinate in a business-to-business collaboration and according to all three criteria offered in Part 16, can find itself driving these win-lose disjunctions from how they conceive mutual long term benefit, and even when all businesses involved seek to maintain these collaborations very long-term.

One of the governments that I have in mind here is that of the People’s Republic of China, the (seemingly) dominant collaborative partner business in this is Apple, Inc., and the smaller and (seemingly) more subordinate businesses involved here are China and otherwise foreign-based enterprises that provide parts and subassemblies and even significant production capabilities to Apple as that company seeks to manufacture its marketable, Apple-branded products as economically as possible. Apple in fact primarily manufactures both its iPhones and iPads in China in factories such as a Pegatron Corp. facility located just outside of Shanghai. Note that Pegatron is headquartered in Taiwan, but they do a lot of their manufacturing in mainland China, and particularly just outside of Shanghai, so a second government in this story is the “breakaway” government of the Republic of China (Taiwan).

Just considering the People’s Republic of China in this narrative, one of their primary requirements that they impose on foreign companies that operate in China, is that they must partner with a Chinese company for all that they do there. And a second requirement that they just as adamantly insist upon is that these foreign companies transfer technical knowledge to their Chinese partner business, (and through them to Chinese government and Communist Party owned and controlled enterprises as well, as the Chinese government sees fit.) Basically, China takes a long-term perspective here and with a goal of requiring that foreign businesses that seek advantage now, only gain it at the long-term cost of creating what can become their most challenging next generation competitors.

I picked a controversial and I add extremely complex example here, intentionally. The allure of China’s cheap labor and the allure of its massive marketplace with its sales potential have proven to be more than enough as a source of incentive, to bring foreign businesses and even strategically well run ones to enter into these agreements. Some of them have come to see the longer-term consequences of this for their potential downside as they have in fact created profoundly challenging competitors out of what had started out as “simple” collaborative partnerships. And to take that out of the abstract, I cite what is currently the largest railroad rolling stock manufacturer in the world now: the Chinese manufacturer CRRC Corporation, LTD. They and their immediate predecessors in China entered into business-to-business collaborations with a number of foreign rolling stock manufacturers and acquired best of breed technology solutions from all of them. Then CRRC combined the best of all of this under one roof and in ways that these technology providers could not do directly and to their own advantage, and still avoid antitrust action in their court systems. And CRRC grew and grew and is now the biggest and most dominating business in this entire industry.

With that cautionary note and the always-present potential for at least smaller scale variations on it, I turn back to the initial core area of discussion of this entire series, which I reconsider in the light of this and the preceding 16 installments to it: vertical and I add horizontal integration as it is and can be developed towards in-house, and the risk and benefits dynamics of that. And I reconsider Apple Inc. again in this: the case study that I began this series with and that I have in large part built this series around.

• Are Apple and I add other smart phones and related ubiquitously connectable devices in the process of creating what might become their very own next generation CRRC, as Chinese businesses, operating under China’s skewed copyright and patent protection laws, decide how the technology they acquire from their foreign business partners can be repurposed?

And this brings me to a final thought that I will end this posting with, and this series as well. International trade agreements are currently coming under intense fire and particularly from more technologically developed countries such as the United States. And one of the clarion calls leading the charge against them is the prospect of “foreign interference” in national legal systems. The focus there is on how a foreign business from a signatory nation with less stringent environmental protection or worker’s rights laws, might force their partner nations’ governments to pay hefty fines for imposing protective laws that are “in restraint of trade,” and that cause treaty violating avoidable loss of income and profitability from that. But the one area of law where challenges would in fact most likely arise would be in how foreign governments do or do not protect intellectual property and trade secrets and related sources of business-defining value – of a type directly challenged in my above-cited rolling stock example.

• As long as businesses see risk and uncertainty from entering into collaborative relationships with other businesses, and particularly in foreign countries where adequate safeguards are not in place, the pressure will be on to do more and more in-house and through in-house vertically integrated systems, horizontally integrated ones or both in order to safeguard business defining sources of value.

This is becoming increasingly important in our increasingly interconnected global community and marketplace.

I am ending this series here but I will definitely return to this set of issues in postings and series to come. 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. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 continuation.

Planning for and building the right business model 101 – 30: goals and benchmarks and effective development and communication of them 10

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

This is my 30th posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Business Strategy and Operations – 3 and its Page 4 continuation, postings 499 and loosely following for Parts 1-29.) I also include this series in my Startups and Early Stage Businesses directory and its Page 2 continuation.

I began a discussion of outside-sourced business funding, and the consequences of having outside business equity holders in Part 28, with consideration of venture capital and angel investors. I then turned to consider crowd sourced outside investors in Part 29, as a rapidly emerging business development funding option. My goal for this posting is to continue and complete, at least for purposes of this series, my discussion of crowd sourced funding, and to at least begin a more thorough discussion of the more in-house oriented issues of exit strategies as a business plan consideration.

I wrote about the finances of crowd sourcing and of how many people, each making an individually small and even tiny investment, can collectively lend a business a very large amount of money. And I wrote of the largely “no strings attached” nature of these investments where individual investors cannot make significant equity holder claims on a business they crowd source invest in: meaning their not individually having much if any of a say in the running of those businesses.

The one and only real exception to that second point, at least that I can think of off-hand, would arise if a significant group of crowd sourced investors in some particular business, all came to see its behavior and its use of their loaned funds as being so egregious as to prompt them to enter into a class action law suit against that business. This circumstance would probably arise, if it did, as a consequence of negative social media driven viral marketing against the business, with an initial smaller number of irate investors pulling in more and more other potential plaintiffs to such a legal action until they reached what amounted to a critical mass of collective discontent. And at some point in this process, this group would have to hire the services of a hungry law firm to represent them. But the most they could reasonably ask for in claims against this business would be a full refund of monies actually loaned out, and a sizable percentage of that would go to their class action suit lawyer and towards paying off a variety of filing and other legal fees related to their case. Crowd sourced financing loans start out small on a per-lender basis. These irate investors would get back even less than that starting amount potentially due to them, and perhaps a third or more less than they has initially paid out and even if the business paid out every penny received this way to end the suit. So no one would actually get much of anything back and winning here would be more of a moral victory than a financial one; this is probably one of the reasons why I have never heard of such a legal action actually taking place. And this single exception scenario simply reinforces a point that I just made above, of crowd sourced investors “not having much if any of a say on the running of those businesses” that they invest in through the crowd.

The one other aspect of crowd sourced investment that I at least made note of in Part 29 was the marketing value that this can create for a funded venture. Think of the above paragraphs as addressing an at least potential negative viral and crowd sourced marketing and its consequence. Here, I focus more on the positive side to this. And I am going to more fully explore what that means here, and by way of comparison with the at least potential positive marketing value of being able to claim to have received venture capital funding support, as a new and still largely unknown business venture.

Venture capitalists, essentially by definition make significant cash investments in the businesses that they select to work with. And they do this on the basis of in-depth reviews and analyses of the businesses that they consider investing in. So when a venture capitalist or venture capital group invests in a business, they add to that venture’s reputation, the fact that they have been objectively professionally reviewed and found to be a good bet for success. And this is always arguably a significant vote of approval as the investing business offering it, does so by “putting their money where their mouth is” for it. This has marketing and reputation building value for a business that is invested in and particularly when the venture capitalists involved have a good reputation for their own professionalism and for their investment savvy and success.

Most venture capitalists are industry specialists and focus on businesses of types that they have expert familiarity in, when making their investment decisions. They know what to look for and what to look out for there, and both before making their specific investment decisions and as they seek to actively promote the success of their investment choices. And they have the expert familiarity to make meaningful positive contributions to the success of the ventures that they invest in that go beyond the offer of funding support alone, where for example it is common for venture capitalists to join the boards of directors of the businesses they invest in, or offer explicit business development advice to their owners and executives. They reduce their own risks and increase their possible and likely payouts and profits there, in all of this. But the marketing value that their funding and other participation offers to a venture that they invest in, is not going to primarily take the form of supporting their client businesses’ particular marketable offerings: their product or service specialization or what they particularly bring to market. It is going to be in support of those businesses themselves and their strategies and operations, and their capabilities as businesses per se.

The marketing and reputation building value that a venture can accrue from garnering crowd sourced funding support is going to oriented more towards the perceived value of their mission and vision goals and in what they actually produce that would at least attempt to fulfill those generally stated goals.

This distinction is telling, and it also connects in very strongly with where these funds come from:

• Business-oriented professionals and their venture funding businesses, for venture capitalists,
• And end users and consumers and people from the marketplace, in the case of crowd sourced funding.

In both cases these investors and groups of them evaluate and arrive at an understanding of value of a possible investment opportunity. And both categorical types of investors offer marketing support as they do that too, from the perspective of the demographics that they represent. It is just that they tend to use words like “value” there very differently, with venture capitalists focusing on cash flow and monetary return on investment, and crowd source investors focusing more on non-monetary returns, and societal and other “big picture” criteria for success.

And this brings me to the questions and issues of exit strategies as my next to-address topic here. I have been addressing the value and perceived value of a business and its potential, in the last few postings to this series, and in this installment to it too. But I have done so in terms of what could be a fundamentally immutable business development pattern, and with an initial and fundamentally unchangeable goal for the businesses under consideration. Exit strategies represent fundamental change and true transition points where same and linear evolutionary change in a developing business, give way to fundamentally new and different.

The term exit strategy is used in a variety of ways; I use it and certainly in a new and young business context, to represent the goals and strategy transitions that a business and its founders and owners can come to face as their new venture first reaches a point in its development where it is now bringing in at least some profits and at an at least largely consistent period-to-period pace (e.g. month-to-month, quarter-to-quarter, or whatever period the enterprise is strategically planned out for and on a routine basis.) With this brief orienting note in place, I am going to more fully address exit strategies in the context of this series, in my next installment to 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. And you can find this and related material at my Startups and Early Stage Businesses directory too and at its Page 2 continuation.

Building a business for resilience 22 – open systems, closed systems and selectively porous ones 14

Posted in strategy and planning by Timothy Platt on July 19, 2017

This is my 22nd installment to a series on building flexibility and resiliency into a business in its routine day-to-day decisions and follow-through, so it can more adaptively anticipate and respond to an ongoing low-level but with time, significant flow of change and its cumulative consequences, that every business faces in its normal course of operation (see Business Strategy and Operations – 3 and its Page 4 continuation, postings 542 and loosely following for Parts 1-21.)

I began working my way through a set of to-address points in Part 20 and Part 21 that I repeat here with some minor rewording, for continuity of discussion purposes:

1. Thinking through a business’ own proprietary information and all else that it has to keep secure that it holds.
2. While reducing avoidable friction where there can be trade-offs between work performance efficiency, and due diligence and risk remediation requirements from how information access is managed. This, in anticipation of discussion to come, means consideration of both short-term and long-term value created and received, as well as short-term and long-term costs.
3. And this means thinking through the issues of who gathers and organizes what of this information flow, who accesses it and who uses it – and in ways that might explicitly go beyond their specific work tasks at hand.
4. What processes are this information legitimately used in, and who does that work? With the immediately preceding point in mind, what other, larger picture considerations have to be taken into account here too?
5. And who legitimately sees and uses the results of this information as it is processed and used and with what safeguards for the sensitive raw data and the sensitive processed knowledge that are involved, where different groups of people might have legitimate need to see different sets of this overall information pool?
6. Think in terms of business process cycles here, and of who does and does not enter into them.

I addressed Point 1 of that list in Parts 20 and 21, and went on from there to at least begin to address its Point 2, in Part 21 of this series as well. More specifically, and certainly for my Point 2 coverage up to here, I have addressed these issues in terms of a specific case study example: a business-to-business printing company that I refer to here as Alphatext Design.

• At the end of Part 21, I stated that I would continue on from there by more fully and systematically considering the issues of communications and information sharing per se in an organization,
• And how changes in the de facto patterns of what is communicated and by whom and to whom in this, might increase or ameliorate friction in these systems.
• And I added that after addressing those issues, I will turn to consider Point 3 of the to-address list as offered at the top of this posting.

I begin doing that here with an at least brief and selective discussion of communications patterns in an organization, and by making a specific categorical distinction as to how they are organized and maintained:

Hard communications channels are formal business process and official communications pattern-driven, and become rules defined for what information can be shared with whom and under what circumstances, and essentially whenever an information access due diligence or risk remediation system is put in place.
Soft communications channels arise as employees network with and share information with colleagues outside of the scope of any formally considered hard communications channels in place, in order to more effectively carry out their jobs. These communications channels can be thought of as representing work-arounds of convenience and even of necessity. And they can become highly standardized too, and certainly where they are consistently found to work.

In a context of the type raised in my Alphatext Design example, consider the perceived need that can arise when Sales and Accounting staff members who are working with the same business clients, share information about them and even informally, and certainly where problems appear to be developing for those clients that would have wider significance for both Sales and Accounting, and for Alphatext as a whole. To take that out of the abstract, consider the need for both Accounting and Sales personnel at Alphatext to know if one of their regular clients is suddenly facing what might be a cash flow challenge and has had to ask for a change in the number of days receivable for billing, and how soon they have to pay for signs ordered and already delivered. If this is a really good, steady client that is simply hitting a short term difficulty, then giving them some timing help on their sales orders and payments due, might make them a strong and reliable client forever as their problems resolve and they can go back to their usual payments due schedules. And word of this to other potential Alphatext clients, that this is more than just a good printer: it is a good supply chain partner, might hold real value to this printing business too: viral marketing value can be all but invaluable here. But I posit this Sales and Accounting information and insight sharing as falling outside of those pre-considered and already planned for hard communications channels, and as taking place in a less formal and more flexible soft communications channel context – and even as the insight arrived at might require both Sales and Accounting input to bring it into focus.

• In this example, certainly, soft communications channel information sharing can reduce friction and misunderstanding and enable a smoother and in fact risk reducing response, and for both Alphatext and for their printing-requiring business customers.
• But soft communications channels, as more ad hoc and flexible information sharing routes are more risk-prone too and for their potential leakiness if for no other reason.

What does the emergence of soft communications channels say about a business? There are a number of possible answers to that question, but I pick up here on what is probably the most obvious: the more officially contrived and managed “hard-wired” channels in place in that business are not working all that effectively, and limit and thwart and even block real communications where they might in fact be essential and in at least specific, key areas of that business. So the employees and I add managers who hit those work performance and work completion barriers, created by a combination of their official information management and security systems in place, and their own information demanding problems, find other ways to communicate to get their jobs done.

How do these two communications systems arise? Let’s consider that from a new business’ day one, or at least from soon after that. Startups and early stage businesses, and smaller and more agile businesses in general often at least start out soft channel communicating, and generally as their basic approach. A more hard-channel approach would only arise if required in a specific overtly “need to know” context. And hard channel communications channels often only arise as a more generally followed approach when and as need for them becomes compelling obvious as the business in question goes through its learning curves and as it course corrects in response to them.

Larger and more structured businesses and I add businesses that are stringently outside-regulated for information security compliance, more generally follow hard communications channels approaches and certainly when their information flow significantly includes sensitive and confidential information such as personally identifiable client information or business trade secrets. But the rules based systems managing this can become hidebound and restricting and at least somewhat out of date too and certainly over time. So even rigidly enforcing hard communications channels-only businesses, can in practice find themselves functioning through at least some soft communications channels too, and certainly locally in their overall systems, in the manner of my Alphatext example.

And this brings me directly to Point 3, of above:

• And this means thinking through the issues of who gathers and organizes what of this information flow, who accesses it and who uses it – and in ways that might explicitly go beyond their specific work tasks at hand.

I have already begun addressing this here in this posting, in a hard and soft communications channel context. Hard channel access is at least formally regulated and most often by a combination of Information Technology as a department or service and a Risk Management office, or department. Soft here, can be seen as a synonym for “useful and even in-practice essential work-around,” or for startups and related “business as usual.”

I am going to further explore Point 3 in my next series installment, with these points of observation as a starting point. 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.

Technology as the tide that raises all boats 9 – but often unevenly 6

This is my 9th installment to a discussion that I initially began as a single stand-alone posting in April, 2012, but that needs reconsidering. I focused in that posting, on a key issue that enters into a determination of how and when change rises to a level of significance so as to qualify as true innovation (see Outsourcing and Globalization, postings 25 and loosely following for Parts 1-8, and Part 1 of that in particular as the foundational urtext for this narrative.)

I focused in Part 8 of this, on the pace and scale of change and of innovation, considering two related but nevertheless categorically distinct arenas where innovation can take place:

1. Innovation within the business and in how it is structured and organized and in how it functions, operationally, and
2. Innovation in what that business brings to market as products and services offered.

My primary area of focus there was a continued discussion of the relative potential pace of change and of innovative change in particular and in both of these contexts. Then at the end of Part 8, I said that I would continue from it here, with explicit consideration of:

• Globalization and the scale of the marketplace, and its capacity to create and support progressively finer-scale niche markets even as it drives global conformity too, and
• The realities of the technology diffusion and acceptance curve, and of push-back pressures from the marketplace as they would serve to limit and shape the pace of accelerating innovation acceptance and of innovation occurrence as well, where technological factors alone might dictate faster and faster.

I begin this posting and its line of discussion with the first point and by acknowledging what should be obvious to essentially everyone, and everywhere now: a combination of ubiquitous, anywhere to anywhere communications and computer-supported connectivity and information sharing, has effectively limited the barriers that have traditionally divided us, and removed them entirely for many purposes.

• Since the advent of wireless telephony, and certainly since the advent of inexpensive, computationally powerful, readily available smart phones, globalization has meant all of us and everywhere at least significantly starting to come together as a single overall globally connected community.

China has its great firewall: its Golden Shield Project to try to limit and control the global conversation at least as far as it would include their own citizens. And at least some other nations actively seek to control their people, for their being able to join this conversation flow too. As an extreme case in point example of that, consider North Korea where all phone conversations are monitored, no average citizen has access to computers or the internet, and cell phones do not exist – except for a small and carefully monitored minority.

The more restricted the access to this globalization that the citizens of a country are, the more forcefully that country and its citizens are pushed into being de facto late and last adaptors to change taking place around them. The more openly connected a people are, the more visible and the more accessible the change taking place around them can be for them, and the more pressingly intrusive it can become too as new keeps rushing in to supplant current with next and with a still newer next after that. And this can serve to pressure people towards the faster adaptor end of the innovation acceptance diffusion curve.

I am going to return to that set of issues a bit later in this series. But let’s step back from it, at least for the moment to consider a key element to the first of the two topics bullet points offered above: scale in globalization. I wrote of two at least apparently conflicting drives in that bullet point that are emergent to globalization per se, and certainly in a ubiquitously connected context: its capacity to create and support progressively finer-scale niche markets and its drive to create global conformity too (as the dynamics behind the Pareto principle weed out perhaps many possible alternatives, leaving single “best” or at least most accepted alternatives predominating, and wherever change leads to possible diversity.)

When anyone and seemingly everyone who would potentially fit into and support a niche market can do so, it becomes possible to achieve a sufficient available consumer base for it, to make it feasible for businesses to produce and sell to it, in meeting its niche defined needs. And it becomes practical and feasible for businesses to actively pursue and meet the needs, and profitably so, for more finely, narrowly defined niche markets too. This in and of itself means support for diversity and for several and even many alternative product or service possibilities and all at once, each achieving real market success. But the forces behind that empirically observable diversity winnowing mechanism: the Pareto principle, keeps cutting back on at least widely available choice, at the same time with the emergence of market dominating winners too.

• Think of the balance of diversity and its supportive pressures, and of conformity in the form of Pareto principle winners,
• As representing the creative destruction dynamic, that is sometimes offered as a working definition of disruptive change per se. Old is swept away by change, and so are many and even most emerging change options too. And it is not always going to be apparent, and certainly not up-front, which particular new will thrive, or even which new possibilities will even survive as the flow of change advances.

And this brings me to the second of the above two topics bullet points, which I have in fact already begun to address when discussing and analyzing the issues of the first of them:

• The realities of the technology diffusion and acceptance curve, and the pressures of the marketplace that would limit and shape the pace of accelerating innovation acceptance and of innovation occurrence as well.

I am going to more fully discuss this and its implications in a next series installment. 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. I also include this in Outsourcing and Globalization – and see that directory for related material. And I include a link to this posting as a supplemental addition to Section VII: Reexamining Business School Fundamentals (reconsidered), of Reexamining the Fundamentals too.

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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