Business formation is changing the way we see Strategy, Management, and Leadership roles and function…

31 Jul

“It is all changing so fast” – just look at the way we communicate with all the tools and gadgets we have available. Laptops have just started becoming cost effective, and now they are already making way for “IPad’s”, “Smart phones”, and “tablets”.

The Information Age is here; also commonly known as the Computer Age or Digital Age, characterized by the ability of individuals to transfer information freely, and to have instant access to any type of information that would have been difficult or even impossible to find previously. It has become a fast paced, radical, and challenging world, where information is power, and the lack thereof, will cause your down fall some believe, just about everything out there is information driven, and it informs every aspect of life and living as we know it today, in one way or the other.

Information shapes the business landscape; so too our own managing styles and management philosophy, thereby business practice are adapting, with new entrants that are also becoming fashionable; the likes of BI, MIS and BA. What do we know about all these changes taking place, have we kept up? What do they hope to achieve and how do they work?

Today several new entrants are with us, they have come a long way in the making, and it is only now that they are finally coming to life, and extremely useful. With that said, they also come with some integration problems and challenges of their own, they are; Business Intelligence and Business Analysts as well as Management Information Systems Analysts still seen as new kids on the block – however we hear a lot of BI and BA talk, things are changing likewise with MIS also becoming a buzz word.

  • Business Intelligence or (BI), is as a standard defined as the ability for an organization to take all its capabilities and convert them into a digital format, to become available as knowledge, ultimately, getting the right information to the right people, at the right time, via the right channel, makes it valuable. This is done digitally, via a computer interface…  (All the stuff you can find on you company’s computer systems – is information, once it is used, and available at the touch of a few buttons, or on request, then it becomes knowledge) mostly in electronic, or digital formats.
  •  A Business Analyst or (BA), typically is someone who analyzes the existing or ideal organization and the design thereof, through the use of systems, including businesses, departments, and organizations redesign, or just design. The old Research and Development department.  Now days, they tend to deal with structure, policy, procedure, resource allocation and reporting lines. Also seen as Business Reformist, of sort, some call them change agents. BA’s also assess business models to find ways of integration with new technology, in order to streamline business processes and integration. Mainly focusing on the analysis of the organizations projected future strategic business needs and resource requirements, their aims are; to reduce operational cost, streamline operations, eliminate waste, retain and grow customers, and their satisfaction through ingenious methods and strategies to link them and connect them with the origination, through emergent technology, and cut on expenditure. (their application differ from business to business, and so too their scope of work)
  •  The Management Information Systems or (MIS) Analyst (MISA) duties typically include research and development of Key Performance Indicators (KPIs), in order to design a management information system (MIS), the goal thereof is to provide information that is needed to manage organizations efficiently and effectively.Management information systems involve three primary resources: people, technology, and information or a decision making matrix for management. Management information systems are distinct from other information systems, in that they are used to analyze operational activities in the organization.Academically, the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision-making at the operational level.

The down side to all these new entrants is this; it’s still early days for BI, MIS and BA, they are still finding their feet so to speak, most of what they have on offer comes at great cost, and they are intensive resource users. Did I say they are very expensive, and so too their solutions. Small to medium size firms rarely can afford one, or even all of them. They just follow the principles they stand for and practice, to bridge the gap. Some are blissfully unaware of their existence and use and application, most of which originated in the fastest growing industry, electronics and IT. (Information Technology).

Therefore, until such time that it becomes a cheap and or affordable solutions, and resource, it should be the exception rather than the rule in the business environment, for some time still to come.

However, in some areas of business, and management they are seen to be replacing strategist with business analysts and business intelligence – just as a fashion statement. We will see how that works out for them in the long run, or not.

Their roles and function are also still not that clear cut. Some of these guys also tend to be interfering with operations, and their way of traditionally doing things; this gets them all worked up and hot headed, by serenading as quality improvement experts, systems design experts, and protocol testing for compliance, calling it a compliance test.

So, there is some integration problems with them, especially into the old business models, and even traditional business models too, the problem is you now have n new sharp knife, where do you use it? Problems in placing and effecting these people, are still being sorted, as well as their reporting lines and structures, as departments, or support function etc.

They also seem to enjoy the creation of lots of red tape – and they could also produces large amounts of useless information which can lead to development overload and total stagnation for the organization…if not well managed.

Remember figures can be manipulated to tell any story.  Research has no solution just in facts, the solution to problems are in the detail of those facts, and then the planning. Research  just give us options, and strategy should emerge from it to become useful at all, if those facts prove to be right, then we should have a great strategy emerging, if not, its back to the drawing board. Furthermore, if we don’t have clear guidelines, functions, and roles for strategist, and BI,BA,MIS, then we are causing friction, bottlenecks and waste. These two – strategy and the new entrants – just don’t belong in the same stream, they operate from two totally different paradigms – or streams of thought.

Other setbacks encountered with these new entrants are; there structures are fallible. Electronic systems are only as good as what it is functional and easy to use. Effective, as long as what the system is operational, and maintained. As efficient, as what the people – operators are trained, and feeding in the right data. Very susceptible to garbage – garbage in garbage out – that is the norm. Most of them come at great cost, and takes years to perfect, not always the best solution.

Too much new ness focus can be harmful at some point, as an example with BI/BA/MIS introduction, the old saying of if it’s not broken don’t fix it, stays true.

The other problem is integration, and connectivity. Not all these nice to have systems and technology can talk to each other all the time. This creates huge problems at some point, where old and new meets.

Some consultants tend to be over eager and way to confident that change and lots of it is the only way? Consultants will tell you that their system is the key to all your troubles vanishing, which remains to be seen, the proof is as always in the pudding. (Ok, don’t curse me, I know I am generalising a bit here with the BI guys, it’s a blanket testament, there are really good, and great products out there, with support that works, it’s only to get a point across, that low budget projects deliver little results –  I am not braking legs here).

They could also let an organisation fall into the information overload traps, and then systems become unstable, and chaos ensues, where systems are more often off, and not working than on, and operational.

The potential to foresee and comprehend the new way of working in business environments, that are in step with changes and other developments, still requires migration strategies. BA’s can serve that purpose with forecasting and risk reduction here. They can and should support each other, the strategist and not be pitted.

Change causes friction; the new entrants will impact on their environment and do expect challenges and problems, when we want it to start moving and becoming fluid, then dynamics change too now.

We seek sustained Development and Growth, these are two strong internal forces competing for resources, and should become an emerging strategy if we guide them, a new doctrine on business development even.

Business intelligence means nothing, without these strategic inputs and guidance, and subsequently a full on strategy.

Strategy never had BI before, nor the advanced communication systems like we have today…and they made it work. Strategy also has a few new entrants in its own corner; OODA and CAPS.

The writing is on the wall if we are not committing to change fast enough, then we are not applying any of these new tools, and testing them. With tools come new possibilities and applications, like the OODA loop and CAPS.

Be prepared to have time and resources set aside to facilitate transition periods – training is always a great way to facilitate change.

We have some new tools

In the absence of totally new ideas, some say we then need to marry the old with the somewhat new, OODA is but one example of this proposed union, its old, yet its new, it is an acronym for; Observation, Orientation, Decision, Act.

This was a tool developed originally to assist fighter pilots in dogfight situations with, to get inside their opponent pilots (heads) decision making circle, to think faster than him, clearer and focused. Thereby out thinking and fighting, thus gaining the initiative over its opponents, simply by being able to close the decision making loop faster than its opponents. This is where we all want to be, surly with all the new advances we can speed up thinking too, having the initiative on your side, means you dictate the terms.

When the professionals say that business has to become fluid

Then they are implying that it is reacting with global, local and economic trends; it is in step with economic activity as it unfolds.

Business today is mostly found to be;

  • Pre-emptive; implying that owners are taking steps or measure against something possible, like theft, fire and hijacking insurance – perceived and or anticipated threats  in order to become self mitigating.
    • Mitigating is being pro active in building up preventive measures; to have some safeguard – both physical and economic – to act as a buffer against potential failure and risk; as a built in deterrent against failure,
  • Situational; designed and created for a very specific  environment / customer base, occurring only as long as those particular set of circumstances exists
  • and has become a lot more reactive; very slow to respond to this fluidity, and to counter its effects, as if fighting against change.

Fighter pilots know all about getting one self out of reactive situations let alone into it. The fighter pilot would fly in formation into battle, as soon as they spotted (doing observation) a plane, they observed to see the type of aircraft, its markings, and its likely target… (in the old days before radar that is)then they would (orientate) – four of them six of us, two break off, and go high, the rest follow – this was how they would mentally orientate different scenarios, and then act on the best one.

This mental act relates to a decision being formulated, the decision is always the runner up to actions – you cannot skip a step in the OODA loop going forward – that should logically follow in the loop – then they each make decisions as to how to, when to, attack or not, and then they go over to action. This is where the risk and reality of the decisions was analyzed, filtered and then processed…during decision. Decision – formulation, it’s not a simple yes/no, it’s detailed and specific, it deals with cause and effect, risk, and survival– right before taking action.

They then act. If at any stage they don’t get to the next step, they, back up with a step, this way they never got over analytical –(wanting to meet, think about things, and then park it because its way to complicated) – so if they can’t act, they make a new decision, if they can’t decide, then they re- orientate, if that fails they observe to see more.

This could happen where an airplane disappears behind clouds, or in the sun, or breaks off and dives…behind cover etc.

These principles are all tactical, and have great application for today’s young leaders and managers, who has to negotiate fluidity, where we don’t see our people going over to action much, they first want to consult, meet, talk, and get approval, and seem to think- think-think about things way to much – I am sure you can relate?

How about, if we can change our decision maker’s perspectives – just like those fighter pilots of old – and the way they think (or don’t) – and teach them to use this process and gather required information (to observe) like this.

We can, if we teach them the CAPS tool, yes another acronym – people today abbreviate a lot, even on twitter, and social networks, give them more of same – the way the new generation do communicate best; use more acronyms, its sticks. Like CAPS, it stands for; CONSEPT, ATTRIBUTES< PERCEPTION< SYSTEMS.

It is simple and works in most if not all situations. Say we have to do a customer survey to get insight about spending patterns, and some assumptions about customer activity and the intentions of competitors.

Then this step would be our (orientation step in the OODA loop), and it would also be our Concept step in the CAPS cycle. CONSEPT< ATTRIBUTES< PERCEPTION < SYSTEMS:

CONSEPT = survey – the deliverables, what do we want or aim to get out of it, what will the use be? What purpose will it serve?

Once we have identified the concept, and its aims, then we can proceed with the attributes; the attributes of a survey for instance will be (minimum 4 attributes make up a concept);

ATTRIBUTES =

  1. The approach – which medium will be used – direct, door to door, social media, SMS, polls, competitions, etc.
  2. The target market – why are they are target, who are they, where can/ will we find them?
  3. The criteria required – specific indicators could be; gender, age group, income group, authenticity, why do you buy? Which criteria will add value?
  4. The detail summery of the survey – should be concluded; in a presentation, a report – the format required and the specific deliverables required from the survey.

PERCEPTION = how we make decisions now, is based on out orientation thereof, how we have come to think about it, creates the perceptions – insights. We create ideas through the use of knowledge, info, data, stimulus, and information for instance. This brings about insight; a point where we get that aha moment, where the lights go on, where we can eventually connect the dots so to speak and say – this is required to do that with.  Then we have a perception on how to perform a task, now we need to find the system, the resources, the nuts and bolts…

SYSTEMS = Short version; Systems is the process of understanding how things influence one another within a whole, by creating a structure from its parts, and linking them so that it can function as one complete effective and efficient unit, delivering on its purpose.

If we still don’t know, we step back in the OODA loop and re – orientate – we should then get a better perspective. This implies, seeking more info, more clarity, advantage, climbing higher so that you can see well. Creating a new perspective requires a change of thinking, – that will influence our new fresh thinking.

The cycle is repeated continuously. A competitor who is merely reacting to conditions as they occur, or who waits for a directive, who has a poor awareness of the situation, and little guidance on how to act on it…will be outclassed if you follow the OODA loop in conjunction with CAPS.

This is just not happening; nowhere on the internet do I find lots of refreshing new perspective? I do see the opposite however. Even daily I still read how people keep selling it as if new and fresh – strategy that is, in the canned variety – over and over, it never grows old, to them it has no expiry date.

Then, I freeze up, those days of modelled strategy the likes of Porter’s –and his five forces model – is surely done and dusted? Are we still taking a more deliberate strategic approach after having used these tools? – Deliberate strategy is a strategy formation processes that emphasizes the benefits of acting intentionally, planning as if nothing changes much – for those who don’t know yet. Oh boy, are we in trouble?

Planning and Strategic Thinking should become everyone’s job function

Plan and think before you act, is an age old and sound advice.

The top management is in charge to formulate a strategy supported by a bulk of analysis – this was taught by a MBA school of a faded grey past, they have served us well, and in some instance still do – when dealing with lots of logistics.

When the truth of the matter is this; strategic management and strategy belongs to all levels of business today, everyone is a strategist in his or her own right, and I say rightfully so.  We can’t give it a label, when in fact it should be seen as an ever evolving thinking process, a life skill even, and a birth right, practiced by all.

This new way of thinking, surly favours the model of Emergent and not Deliberate strategy (Henry Mintzberg and James A. Waters), which can be seen as acting out on responses to an unexpected opportunity or problem that usually gets addressed at that point, at grass roots level.

Then, it cannot be seen as a business practice, a model, or theory only, in which we find creative ways for people to influence a plan to become better at performing the art and skill called strategy.

No, strategy does not belong to business philosophy only, it can’t, it’s both an art and a skill, it’s situational and practiced since the beginning of time, and by everything living….

It’s been with us, part and parcel of our own evolution and the creation of modern day life, both as a key mental tool – and survival art, and it has become a science too…since then.

In his rush to gather and hunt, man realised that he required structure; he needed to spread the work evenly, and make sure that everyone performed a task, essential to the group’s survival and even unsound decisions filter in.

Nevertheless, the core functions of gather and hunt became the essence or the basis of strategy as we know it today, of the scheme we call manufacturing today. There was no vision, no certainty, just a loosely knit strategy, supported by a social structure and an element of risk to consider. What made it work was the unity, the sense of purpose, that made “doers” do good. We planned short, medium and long term…

A lot has changed since.

Strategy today is not a five year and even a ten year plan anymore, no, it’s short term, and at most medium.

The facts are this;

  • The term strategic is defined as a process by which a plan is forth coming, and if we involve resources, time, effort and other means then a strategy is born, anything that gives a plan, greater leverage, could be considered strategy today. A plan is the basis to strategy emerging from it.
  • Strategy is not just a definition; that will ring-fence the significance, components or process for us. No, strategy is fluid today; it does not require form, it either follows trends, practices or norms that work. Trends are defined as either a general direction that something moves toward or something that is in fashion or stylish.
  • The most successful strategic management philosophies are those that follow a standard or a norm, or a new trend.
    • By definition then, a norm is a standard, a routine, a rule, a best practice, principle or even a model. PC or Desktops will stay…
    • Where-as trends, by definition, are things that are here and big today, but nothing and forgotten tomorrow. IPad will not last, but its big today…
    • Both have its usefulness in strategic terms.

The demands on strategy are changing to;

Problem solvers; Looking locally at how problems are solved – especially by those norms practiced culturally that provide the best direction and ability to adapt and overcome, our current situations with, and succeed in solving other problems that were created by not having solved certain problems first, as a result then, requires strategic perspective.  People, who can see the connections between events, and problems, are in short supply.

Not enough participation; one of those demands on strategy emerging is looking at people, and how they would like to participate and practice their trade, or share their gifts, talents, and resources, and be managed, especially when working with the younger generation of today. They are people who would rather “want to be worked with” than “told to worked”, they want to be seen as equal partners, they want to feel incorporated in whatever the challenge or industry is contending with.

The point is this; we have moved away from normative strategy to formative strategy. Normative is top down, the CEO say and we do, Formative is bottom up, people identify problems at grass roots today, and opt for a solution that gets sanctioned at the top only. We have literately turned strategy implementation on its head, bottom up, no longer top down, we have moved, or migrated from a total western strategic philosophy, to an more eastern philosophy. (As was practiced in Japanese vehicle production plants, where they fixed the problems at the station.)

We have thinkers today, knowledge hungry people; educated…we have left behind the doers…

There has never been a more exciting time in our history, tons of information abound, and just as many perspectives on business. This article was an attempt to get us talking about these aspects emerging, and the informers of emergent strategy, to build a better collective agreement on the best course of action, and where to next. Hope you enjoyed it?

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3 Responses to “Business formation is changing the way we see Strategy, Management, and Leadership roles and function…”

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  1. Index of posts on this blog – Strategic Management « Strategic Management - August 3, 2012

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  2. Strategy without a solid corner stone, sociology – will become a mental stonewall, built with only bias and denial. « Strategic Management - December 10, 2012

    […] assessments only, are very poor and inadequate ways for designing proper contingency factors. Mitigation is a cradle to grave strategy on its own, as you design, so you must mitigate […]

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