Quote: “the questions are the same…but the answers changed”
The power of processes and consistency
Some companies regard strategy development as part of a returning cycle that comes along every couple of years. Is this nowadays the best-practice in a fast-changing environment? What if we can create a continuous process?
In 1942, Dr. Albert Einstein was teaching at Oxford University. And one day he gave an exam to his class of physics students. The exam starts and after a while Albert Einstein sees some fingers in the air and asked “yes, how can I help?” A student asks if these are the same questions as last year. So, Dr. Albert Einstein kindly replies and says “yes, indeed they are”. The student looks a bit flabbergasted…and Einstein indicated, but this year, “the answers changed”. The constantly changing dynamics in the market require a process to constantly challenge the organization and reinvent itself. How can you do this?
Companies that practice an ambidextrous business model, seem to set themselves up for sustainable growth and are capable of future-proofing their business. They continuously analyze the performance of the core of the business and have a process for continuous improvement. Besides managing the core of the business, they also structurally allocate resources to explore the new in a well-defined process. That process to ‘explore the new’ should be founded on a well-developed strategy and is continuously re-assessed by monitoring the external environment. They create Minimum Viable Products (MVP) in project cycles of 3 to maximum 12 months to proof the concept and only then, when successful, they decide to scale. Scaling is important to maximize the impact on the business.
When working at Mitsubishi Chemical Group, our team implemented and practiced this model and was able to proof and scale several new ways of working in our organization.
My services:
- Lead and support strategy development
- Execute detailed business analyses
- Setup and implementation of an ambidextrous model
- Setup, development and implementation of an Open Innovation hub
Book an introduction call to develop your strategy and drastically accelerate the success of your business.
Competition can be brutal. In sports, like 100-meter sprinting or horse racing, a difference of 1% is the difference between a gold medal or no medal at all or to win substantial price money or nothing. Being 1% better versus competition on a consistent basis will bring a tremendous advantage over time. The same applies for business. How can we create such structural advantage?
As a company or professional, you just have to become better in a few crucial areas that really make a difference. How to determine these areas? It starts with strategy development (or self assessment). Companies struggle to create a clear strategy that is based on a thorough diagnosis. Still too many so-called strategies are merely goals or vague aspirations, lacking the substance needed to drive real change. Your company deserves an in-depth analysis as a basis to create your strategy. A holistic analysis includes a deepdive into the main business drivers (non-exhaustive list):
- Markets and applications
- Competitors
- Customers
- Value Propositions
- Value Chain and Business Model
- Financial performance (topline, bottom line, working capital, cash, valuation, multiple,…)
- Commercial and manufacturing (OEE, Overall Equipment Effectiveness)
- Process mapping and waste identification
- Business development (pipeline)
- Technology and R&D (competences, skills, roadmap, pipeline, process)
- Challenges & Opportunities
- Scenario building (foresighting)
- Business processes
- Maturity in digitization
- Organizational structure, culture, skills and competences
It is important that the ‘inconvenient truth’ is uncovered during this detailed diagnostics phase. Sequentially, the Challenges and Opportunities can be ranked on impact, effort and risk to select the limited set of topics that will help you to become successful. Bold resource allocation on a few topics is essential to avoid spreading resources too thin to make a substantial impact. To dramatically accelerate your business, you need to focus on a very selective set of activitiet with unlimited leverage, like strategy and innovation.
Quote: “If you can’t model it, you don’t understand it. If you don’t understand it, you can’t improve it.”
The intention of the diagnostics phase is to get a clear understanding of the status quo and understand the correlation between all the main business drivers. Typically, the interdependence is high, resulting in high complexity. Modeling complexity is day-to-day practice in engineering environments, so why isn’t this the same for business?
Many years ago, as a chemical engineer and Lean SixSigma BlackBelt, I enjoyed modelling complex processes (chemistry, thermodynamics, heat- and mass balances, reactors, sensors and controllers) to uncover relations between parameters that are not obvious for the naked eye. I enjoyed solving problems and challenges that sometimes already existed for over a decade.
Years later, I started applying these practices to solves problems and challenges for customers and was able to use to them to makes commercial assessments, financial breakdowns and even use it for business development.
The diagnostics phase itself is only the start of the strategy development. Here I typically follow 3 phases, as described by Richard Rumelt in his book ‘Good strategy, Bad strategy’:
- Diagnostics (holistic analysis, deepdive, modelling complexity)
- Guiding principles
- Coherent set of actions
When focusing this set of actions in fields of unlimited leverage, unlike cost cutting, a dramatic acceleration of business success is to be expected.