Posts Tagged ‘experimentation’

post-action-leadership

Step 12 of the Business Readiness Process: Assess Performance

Last week, I discussed the importance of exercising leadership before, during, and after an event or plan. Over the years, I’ve found that the most overlooked part of leadership is that which must occur after a plan has been implemented and is sufficiently advanced that there is an opportunity for learning.

aar-ll

Too many leaders miss a golden opportunity to learn from the grass-roots, explain their decisions, and improve by increasing future readiness. This is when leadership is often hardest, because everyone just wants to get back to business as usual. It takes extra effort and motivation to make a difference between a small improvement and big improvement in future performance.

The key to post-action leadership is After-Action Review (AAR). Ongoing feedback and leadership during execution are needed to ensure performance meets expectations and corrections are made. But there is usually also a need to modify training, structures, procedures and systems to get better in the future.

However, these changes must be institutionalized and systematized to be considered full Lessons Learned (LL). These combined AAR-LL processes have been developed by military forces to generate continuous organizational learning and performance improvement.

This ends my series on the Business Readiness Process. Next week I’ll start writing about other aspects of readiness, strategy, and leadership to complement what I’ve covered so far.

Stay tuned!

Recap of Business Readiness Process

  1. Ensure vigilance through situational awareness.
  2. Do preliminary assessment of tasks and time.
  3. Activate organization or team.
  4. Conduct reconnaissance.
  5. Do detailed situational estimate.
  6. Conduct wargame and decide on optimal course(s) of action.
  7. Perform risk management and contingency planning.
  8. Communicate plan and issue direction.
  9. Build organizational robustness.
  10. Ensure operational continuity.
  11. Lead and control execution.
  12. Assess performance.

My name is Richard Martin and I’m an expert on applying readiness principles to position companies and leaders to grow and thrive by shaping and exploiting change and opportunity, instead of just passively succumbing to uncertainty and risk.

© 2016 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

By Richard Martin, Expert in Business Readiness and Exploiting Change

One of the most useful ideas for conceptualizing any kind of change process is the S-curve. Perhaps you’ve seen one of these before. It looks like this:

typical-s-curve

The S-curve is the way natural and human phenomena grow and develop over time. For instance, the plot of a growth of bacteria or yeast in a laboratory follows the exact S-curve. Technically, it’s known as a logistic function, and when we plot it as a rate of growth, rather than cumulative growth, it forms a bell curve, although it doesn’t follow a normal, Gaussian, distribution. In other words, when something starts growing or spreading, it first starts very slowly, then it speeds up until it hits it hits a maximum, after which the growth/spread rate slows down until it basically tends to zero.

The S-curve approximates the cumulative growth or spread of just about any natural or man-made phenomenon, such as:

  • Penetration of a new market segment
  • Growth of new product/service category
  • Learning stages
  • Interest in topics
  • Abilities (which tend to plateau after a time)
  • Etc.

One of the more relevant business applications is in strategy formulation and execution. Take a look at the following S-Curve application. It shows how we can map the different phases of a product or market life cycle onto the S-curve. This gives an intuitive understanding that all good things must come to an end or, as I imply in the title of this piece, “What goes up, must (eventually) come down (or at least level off).”

product-market-life-cycle-phases

New products or markets start as ideas, often as an external start up. I pluralize this because there should be a relatively high number of “experiments” and trials underway at any one time within a diversified company. Another strategy is to watch out for promising startups outside the business (or in an internal “skunkworks”) and then invest in them or simply acquire them once they start entering their rapid growth phase. Companies should have businesses (various combinations of product-market mix) in all stages of the life cycle in order to ensure a constant stream of growth generating ideas and strategic business units.

Another important phenomenon to note is the presence of a decline phase. Unless there is continuing investment in a business line or concept, it will eventually go into decline. We don’t necessarily know when, but we DO know it will happen at some point. This is another reason to be constantly replenishing the pipeline at the earlier life cycle stages of startup and rapid growth. The capital needed to invest in future ideas and growth will often come from the “milk cows” that are businesses in the maturity or plateau stage, although the latter can also provide a good source of financial capital through divestment.

© 2016 Richard Martin. Reproduction, forwarding, and quotes are permitted with proper attribution.

  • You learn more by moving than by staying put. The normal impulse is to stay put and defend your position when you don’t know where to go or what to do. Unfortunately, this leaves you open to rapid change in the market as well as competitive threats. Moving gradually into a new market or a new product or service category gives you time to learn and adjust your approach without over-investing at the beginning. You also get to pull back if, as often happens, you’ve made a mistake or misjudged the situation.
  • Advance on a wide (or wider) front. It’s best to send scouting parties to report back about the lay of the land and the enemy’s positions, then to follow up with more forces if you’re successful. In business, this can mean trying many, small experiments with new products or markets to see what will happen, and then preserving those that succeed.
  • Don’t put all your eggs into one basket. If you can’t make accurate and timely predictions to know what will succeed in the long run then it stands to reason that you need to diversify investments and assets. This doesn’t mean becoming a conglomerate. It is preferable to experiment in a controlled manner at the edges of the business while using profits in existing business lines to fuel that exploratory work.
  • Always cover your moves. When I was a young infantry officer, we were taught to cover our moves with a firebase that could provide support in case we came under enemy fire. It’s better to move gradually over time into a new market or with a new strategy by small steps. This can be done remarkably quickly if you keep up the pressure by making incremental changes in a deliberate and consistent manner.
  • Reinforce success with backup forces. Once you have made it through the enemy’s front lines, apply resources to reinforce the initial breakthrough. The same notion applies to experimental business efforts. Success with one or some of them can be reinforced with new resources or with resources transferred from existing business lines. The result can be better positioning for the future.
  • Maintain reserves to exploit success. All of these principles require some level of resources, first to experiment and then to reinforce success by investing in the winners. This requires the maintenance of cash reserves or access to capital either from an existing business line, by borrowing, or by attracting new investors.
    I’m never too busy to discuss your needs or those of anyone else you feel may benefit from meeting or talking to me. So feel free to contact me at any time!

Last week Target announced that it was shutting down completely its Canadian operation, all 133 stores, and taking a $5.4 billion writedown. What was originally supposed to be the beginning of a glorious international expansion has turned into a lesson in humility and hubris. There was a lot of talk of how they had poor merchandising, high prices, lack of stock, etc etc. This is all true, but the main cause of this was arrogance. They appeared to think they could launch across Canada en masse without learning about the market(s), building a solid supplier network and logistics, and experimenting to adapt to the Canadian marketplace and competitive dynamic.

A military force that’s fixing to cross a major obstacle into new territory always starts with a bridgehead. The aim is to secure a foothold that can be defended and to build up strength and supplies of fuel and ammunition. Only when you’ve done so successfully do you extend the beachhead by probing and seeking gaps in the enemy defenses. You can then attempt a breakout. We can’t be sure Target would have been ultimately successful, but if they had started with a few stores in various parts of the country, experimented, generated experience and lessons learned, and only then tried to expand in phases, they would probably have done a lot better and would still be expanding instead of retreating humbly back to their home base in the US.

I’m never too busy to discuss your needs or those of anyone else you feel may benefit from meeting or talking to me. So feel free to contact me at any time!

Richard Martin is a Master Strategist and Leadership Catalyst. Richard brings his military and business leadership and management experience to bear for executives and organizations seeking to radically improve performance, grow, and thrive in the face of rapid change, harsh competition, and increasing uncertainty.

© 2015 Richard Martin. Reproduction and quotes are permitted with proper attribution.

Pour mieux préparer vos troupes à votre prochaine offensive, faites donc appel à… un militaire !

Richard Martin a servi comme officier des Forces canadiennes pendant 21 ans et y a acquis une très grande expérience en matière de leadership et de stratégie militaire.

Il applique à l’entreprise les vertus essentielles qui font la force des armées : la rigueur et la discipline. Richard Martin forme et entraine les équipes de direction avec les méthodes qui engendrent des bons résultats et font gagner des batailles !

Il animera pour votre équipe de direction un véritable BRIEFING DE PRÉPARATION AU COMBAT qui conduira votre entreprise à la victoire…

« Sachez qu’un bataillon de 750 personnes peut se préparer et se positionner pour une opération de combat en aussi peu que 3 à 4 heures. Qu’attendez-vous pour en faire autant avec votre équipe de direction et mettre votre entreprise sur un pied de guerre ? » – Richard Martin

Durée : 3 à 4 heures, à vos bureaux

Coût : devis sur demande, selon objectifs à atteindre

Inscrivez votre entreprise IMMÉDIATEMENT !

Communiquez avec Claude Janet, pour Richard Martin, Président, fondateur, ALCERA, Conseil de gestion Inc.

T : 514 453-3993

claude.janet@alcera.ca

www.alcera.ca

Vidéos disponibles sur : http://www.alcera.ca/fr/videos-teleconferences.php

Richard Martin est l’auteur de « Brilliant Manoeuvres: How to Use Military Wisdom to Win Business Battles ».

Brilliant Manoeuvres is Sun Tzu’s Art of War combined with Drucker’s The Effective Executive.”

— Alan Weiss, PhD, Author of the bestselling Million Dollar Consulting

Les étapes et le contenu peuvent varier selon les objectifs de l’entreprise/organisation, l’avis professionnel et l’expérience de Richard Martin ou encore les besoins du moment. Il faut surtout se laisser guider par la réalité stratégique ou tactique et non pas juste suivre un procédé rigide. Richard Martin a l’expertise, la discipline et la rigueur pour vous guider dans cette opération délicate.

Attention! Le port de l’uniforme n’est pas exigé… 😉

The increasing success of Uber, the direct-to-driver taxi service, has led me to reflect on the most recent trends in business strategy. I believe we’re now witnessing the demise of intermediaries.

In everything from retail, to entertainment, travel, event management, taxis, and classified ads, businesses that have traditionally earned their keep by providing information or funnelling goods from producers to consumers are being bypassed.

Uber is a revealing illustration of this process. Anybody can register with Uber to hail a driver to go from point A to point B in a city. There are now over 200 cities throughout the world with Uber service. Users get to rate drivers out of 5 (a driver with an average score below 4.5 gets eliminated from the service) and they can use their smart phones to order a car using online payments and the built-in GPS receiver and map. Fares also vary according to demand, which means that you can get a car at any time if you’re prepared to pay a higher rate. And there’s nothing wrong with that. That’s how supply and demand is supposed to work, by finding the right price at the right time.

Taxi drivers and dispatchers in most cities where Uber is present are furious and are fighting a rear-guard battle against the company and the “unlicensed” cars. Weapons include intimidation of Uber registered drivers, vandalism of Uber cars, and municipal regulations. But none of that is stopping customers from using the service. What we’re seeing, therefore, is the demise of one particular type of intermediary, the taxi dispatcher. Increasingly, if you want to drive a taxi Uber will be the way to go. Uber has also created other services, such as package delivery. Could this also have an impact on Fedex and other parcel services?

A few weeks ago Netflix was called before the Canadian Radio-Television and Telecommunications Commission (CRTC). The company has refused to hand over its extensive data on its Canadian clients to the commission. Up to recent years, Canadians have been restricted to broadcast and cable content that has been approved by the CRTC. The objective has traditionally been to protect Canadian producers of content, and by extension, culture. But now with Internet access, Canadians (like people anywhere the Internet isn’t censored) can watch or consume whatever they want, regardless of where it’s from. Even if there are restrictions on streaming, say, videos outside its producer’s home country, there are ways around that. You can set up a virtual private network (VPN) and access it as if you were in that country.

The result is that nationally protected content producers and distributors are competing directly against foreign producers whether they like it or not. As with taxis, customers are either buying directly from suppliers or going through a different type of intermediary. The latter are still intermediaries, but instead of hundreds or thousands, there are now a few companies acting mainly as information warehouses. Customers get the information they need when they need it and can deal directly with sellers. The new type of intermediary is either just an ordering service or an information repository.

There are numerous other examples. Google has put a serious dent in advertising intermediaries, itself becoming the marketplace where advertisers words and pictures, and buyers’ eyes, meet. Search engines and the Internet in general have eliminated Yellow Pages as a viable business. Craigslist and similar web services have undermined local classified and help wanted ads. What’s more, like Uber and Netflix, it’s all done remotely with a lot fewer employees and a lot better accessibility and flexibility for users.

You’ve got to wonder what the impact of physiological and health data generated by smart watches and other devices is going to be on the healthcare industry. If I were in life or health insurance, any kind of health care, or even funeral services, I’d be looking at what the potential impacts could be.

It’s always prudent to look for how your business can be undermined or overtaken by new entrants and competitors who come out of nowhere with substitute products and services. However, if you’re in any kind of business where you’re mainly an intermediary, it would be high time to look at your strategy and business model to see how vulnerable it is to getting bypassed by future “Ubers” and “Netflixes.”

The best defence is offence, so it makes sense to find ways to launch a spoiling attack and see how you can outmanoeuvre new entrants by creating substitutes that undermine your own positions.

Richard Martin is a Master Strategist and Leadership Catalyst. Richard brings his military and business leadership and management experience to bear for executives and organizations seeking to radically improve performance, grow, and thrive in the face of rapid change, harsh competition, and increasing uncertainty.

© 2014 Richard Martin. Reproduction and quotes are permitted with proper attribution.

  • Creativity necessarily entails failure, mistakes, false starts, setbacks, opposition, etc.
  • Most creative individuals produce a lot of low quality output, much more in fact than their best work.
  • Failure is a form of feedback, it tells you what isn’t working and where you need to focus your future efforts.
  • Trial and error is experimentation within different resources, methods, processes, etc.
  • Experimentation requires creativity and imagination. It thrives on divergent and lateral thinking.

Richard Martin is a Master Strategist and Leadership Catalyst. Richard brings his military and business leadership and management experience to bear for executives and organizations seeking to radically improve performance, grow, and thrive in the face of rapid change, harsh competition, and increasing uncertainty.

© 2014 Richard Martin. Reproduction and quotes are permitted with proper attribution.

One of the main challenges in business is finding a way to grow. A company can choose the acquisition route. This is what Richardson GMP did last year when it acquired Macquarie Private Wealth to become Canada’s largest independent (i.e. non-bank) wealth management firm. GE is currently in the process of acquiring France’s Alstom to expand its energy business, while Medtronic is buying Covidien to expand the range and scope of its medical device offerings.

In reality, though, an acquisition is just a means to an end. Companies can also choose to grow “organically,” that is, to create new businesses from within on the basis of existing products and services. In either case, the growth can come from increasing its share and penetration of existing markets, offering new products to existing customers, seeking out new customers for existing products and services, or creating a whole new business by offering new products to entirely new customers.

There is a basic assumption underlying all of these approaches, however. It is that the company continues to define itself in the same way. If we take again the example of Medtronic, we can see that its acquisition of Covidien fits nicely within its corporate mission, which is: “To contribute to human welfare by application of biomedical engineering in the research, design, manufacture, and sale of instruments or appliances that alleviate pain, restore health, and extend life.” (www.medtronic.com). Medtronic and Covidien both make surgical and prosthetic devices based on biomedical engineering.

But what if we go beyond the assumption of staying within an existing business model and mission? When I engage in strategy formulation with clients I often introduce the concepts illustrated in the following graphic. I call these complementary approaches generalization and instantiation of value.

Generalization-Instantiation of Value

Whenever a business has a very specific value proposition, I encourage its executives to question that by having them ask: What is this value an example of? Alternatively, what is a more general, abstract, or higher order way to express our value and mission?

In the diagram I show the process for a restaurant. The most concrete value that customers get is to go to the restaurant for a meal. But what if customers could get value by buying a meal there but taking it out to eat elsewhere? It is obvious that many restaurateurs and customers have already thought of that idea. You can go higher in terms of generality. What if customers could get meals from that restaurant but enjoy them whenever or wherever they want? Then you get a selection of frozen or preserved meals. The same goes for offering catering to clients of the restaurant. You can have any number of levels, but four levels are probably a good number to start with.

You can do this exercise in more ways than one. The restaurant owner could decide to generalize by opening other locations, or franchising, or getting into other types of cuisine, or restaurant formats. The important thing to remember is that you work from very specific and concrete value to a more general expression and form of the same value.

The right hand progression in the diagram is the inverse of generalization. Instead of generalizing upward, the object is to proceed downward from value that is very general and abstract to value that is more concrete. The question to ask, then, is whether you can provide a more concrete instantiation of the general value you are already providing.

The graphic depicts this instantiation process for a company that provides event management consulting to its clients. Through asking progressively more specific questions, the company could go from offering general consulting on events, to helping their clients organize and run their events, to co-owning events (e.g. a conference) with clients, or owning them outright. This could even extend to developing part or all of the content within the event, and then controlling the intellectual property and subsequent rights to it.

The important thing is to see this as a heuristic device to either expand or restrict your business’ existing definition of value. This could even extend to redefining the company’s purpose by creating a new mission statement that is more specific and concrete, or more general and abstract.

© Alcera Consulting Inc. 2014. We encourage the sharing of this information and forwarding of this email with attribution. All other rights reserved.

Military forces engaged in Iraq and Afghanistan over the last decade or so adjusted their structures, weaponry, and training to the exigencies of an originally unforeseen operational context. They went from Cold War based large mechanized formations to smaller, tailored units that could interact with local populations and government forces while keeping insurgent forces at bay.

The same applies to organizations and businesses in the public, private and non-profit sectors. How many organizations are still working within a framework that is no longer relevant to its new reality? I often say that the biggest challenge a small business faces is becoming a medium-sized business. The same goes for medium-sized organizations becoming large or multinational ones. Or vice versa, companies and institutions that must become smaller, more nimble, faster, and adjustable rapidly enough to remain relevant and continue thriving.

 

  • When is the last time you reviewed your organization, structures, systems, and processes to evaluate their relevance?
  • Do you have people and teams working on tasks and responsibilities that are low priorities while others working on high priorities and vital areas are starving for resources?
  • How often do you validate the relevance and effectiveness of your training and professional development?
  • Can you reconfigure teams quickly and effectively or does your organization meander aimlessly and sluggishly while the world changes?
  • Do you conduct regular after-action reviews with all stakeholders and people at all levels of your organization?
  • How quickly can lessons be learned and incorporated into your structures, equipment, training, processes, and systems?

Richard Martin is The Master Strategist. An expert on strategy and leadership, Richard brings his military and business leadership and management experience to bear for executives and organizations seeking to exploit change, maximize opportunity, and minimize risk.

© 2014 Richard Martin. Reproduction and quotes are permitted with proper attribution.