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Let's assume that an organisation's vision, policies and processes, mission, objectives, infrastructure and people are all in place effective and efficient. Strategy in this case is all about getting from where we are to where we have decided to be.

A useful approach to implementing and executing this is the balanced scorecard. Yet how many organisations have achieved what they expected with this tool. Strategy execution is the missing competence and much money and time has been lost in discovering this sad fact. CRM is another sink of funds driven as much by vendor hype as by the inclination of senior management to make a decision amd forget about it. In such cases, the core problem is failure to clarify up front what the business strategy really is and then to ensure that the right decisions are taken to implement that strategy undistorted by measurement and reward systems that are pulling people in other directions.

But even in setting strategy, it is all too easy to assume that the future is going to be like the past. Dynamic systems theory is one important tool that can provide significant counters to strongly held intuitions (see the recent study of an investement bank's improved approach to resource realignment in a rapidly contracting market and the value of not taking the easy way out with similar size cuts across all departments). The  cost of failing to take a broad view of a business supply chain can be seen in sevral studies which modelled logistics practices in an airline and a large FCMG - in each case,local optimisation of resource led to costly drops in service levels elsewhere; agent based modelling was able to demonstrate at very low risk how exactly to change the rules and correctly predicted a far more satisfactory balance.

As more data becomes available and as computational costs continue to decline, it will become feasible to apply much more sophisticated approaches to these and more extreme events. Failure properly to measure and properly to respond to operational risk is one of the biggest threats to any large organisations survival. The impact of changes in climate and pollution are affecting insurers and is already being reflected both in their ability to absorb rsik and in the premiums they charge. Lack of planning for these eventualities will soon not be regarded as a reasonable position to adopt and, it seems likely given current trends, that in future individual board members will be asked to sign off their adherence to Higgs (and his successors). Where are the scenarios, someone will (ask after the event). What process did the board have in place for responding once it was clear that that scenario had materialised? Who ensured that the process was adhered to? How does it compare with best practice? Compared to the pressure on quarterly performance, the cumulative impact of these changes is the destruction of a board and perhaps the company not just the CEO. S-O, the Patriot Act etc are all likely to add to the demand for better accountability.

In all this its better to be lucky than good. Its even better not to need the luck in the first place. 




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