Posts Tagged ‘Exploiting Change’

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By Richard Martin

The ongoing saga in Catalonia is an excellent illustration of how crucial it is to consider a range of scenarios before implementing a decision that could be heavy with consequences. And the scenarios shouldn’t all be rosy and positive for us. Consideration must be given to the worst-case possibility as well, so we know what we may be up against before acting. This entails a detailed consideration of competiting and opposing positions, as well as those of other stakeholders and bystanders. It also means preparing contingency plans for the most probable and dangerous possibilities so we aren’t caught flatfooted if they come to fruition.

A well-known radio commentator (and former politician) here in Montreal said this week that he had the impression that the Catalonian prime minister and regional authorities hadn’t really thought through the potential consequences of the independance referendum held a few weeks ago. I agree with him; both sides appear guilty of amateurish improvisation. It seems as though both the instigators of Catalonian independance and their opponents inside and outside Catalonia have given little or no thought to the inherent risks in their decisions and actions, as well as the range of possible responses of the Spanish government, population, businesses, and other countries. I also little or no evidence of forethought in securing international recognition for the referendum and subsequent moves. It’s as if it was all being driven by pure emotion, with not a lot of rational consideration of options.

Such conflicts usually build and fester over time until they reach a feverous level. And it takes two to tango. Threat generates counterthreat; action entails counteraction. Not all outcomes can be foreseen ahead of time, but a great many can be characterized to some extent and compared to see which are most probable and consequential. This is the essence of risk management.

Whether we’re talking about a political entity, a business, a non-profit organization or an individual person, prudent forethought should be given to the range of scenarios and options available or possible before deciding and acting. No forecasting or planning process is perfect, but the benefits of a disciplined and rigorous assessment of the situation and its various branches and outcomes will always pay dividends in better decision-making, management, and leadership. And this includes looking at the situation from your opponent’s or competitor’s standpoint. If I were to take this action, what would my opponent do?

It’s how we try to play sports and games, and it’s the essence of strategy, military, diplomatic, political, and commercial.

Copyright 2017 Alcera Consulting Inc.

By Richard Martin

There has been a lot of chest thumping and ink spilled in recent days about the announcement that Airbus and Bombardier Aerospace have agreed to transfer control of the new C Series airliner business from the latter to the former.

There are important implications from this transaction in terms of politics and economic policy. My goal here, however, is to focus on the readiness and strategic implications for the two companies involved. In a nutshell, both Bombardier and Airbus saw a window of opportunity open and jumped through it at the right time.

© Sergey Ilin|123RF Stock Photo

For Bombardier, Airbus brings financial, commercial, and industrial know how and credibility. If you want to be a global player in the market for commercial airliners, then you have to have a global network with a strong backbone, including the robustness and resilience to batten down the hatches during storms, absorb shocks, and bounce back when the weather turns. Bombardier, while technically able in terms of innovation and development, didn’t have the wherewithal to compete against the big boys: Airbus and Boeing. As a business decision, this opportunity makes eminent sense and I’m sure will be a long-term success.

For Airbus, the opportunity was just too good to pass up. Airbus acquires a brand-new design with huge commercial potential, especially in Asia and the Far East. Talks between Airbus and Bombardier had apparently been ongoing for two years or so, but had broken down more than once for undisclosed reasons. The biggest advantage for Airbus, though, is that the tie-up with Bombardier’s C-Series deals a blow to Boeing. Airbus no longer has to continue developing an aircraft in the same size-class as the C-Series, while acquiring new capabilities and geographical reach.

The big loser in this manoeuvre is, however, Boeing. The latter was evidently trying to destroy the C-Series by lobbying for punitive tariffs on the planes if sold in the US. However, Airbus already has facilities in the US to assemble the aircraft. Delta Airlines, Bombardier’s lead customer for the C-Series in the US, has already declared that they will wait for the planes that are assembled in Airbus’s Alabama factory.

The biggest difference between Boeing and Airbus when faced with Bombardier’s competition is the fact that Boeing chose to view the C-Series antagonistically, as a threat, whereas Airbus viewed it positively, as an opportunity. The same goes for Bombardier. Claims and counter-claims of “illegal” government support are overblown. No one is blameless in that regard, and Boeing is probably the most hypocritical of all.

Regardless, from the standpoint of business strategy and business readiness, Airbus and Bombardier have shown that exploiting opportunities are just as important, if not more so, than trying to prevent or mitigate threats, as important as these may be.

© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

Strategic Readiness Bulletin Number 3 – 16 October 2017

Are We Entering a Post-NAFTA World? (Download as PDF)

By Richard Martin, founder and president, Alcera Consulting Inc.

Richard Martin issues Strategic Readiness Bulletins on an as needed basis to clients, key decision-makers, and other influencers, to highlight recent or evolving risks, threats, and opportunities for companies and organizations resulting from chaotic change as well as international and national situations of a political, economic, technological, or social nature.

The Strategic Readiness Issue

© Michał Barański | 123RF Stock Photo

With the current NAFTA negotiations underway it’s hard to tell yet whether they will be a net positive or a net negative for companies doing business across the Canada-US and Mexico-US borders.

My aim isn’t to assess the probabilities either way at this stage, but rather to highlight the need for prudent risk management and contingency planning to address various post-NAFTA—or “new” NAFTA—trade arrangements between Canada and its most important trading partner, specifically the US.

The diagram on the right below summarizes the strategies for risk and threat management. When we work to lower or eliminate the probability of occurrence of a risk/threat, then we’re in the realm of PREVENTION. However, if prevention fails, we still must have measures and plans in place to contain its most damaging consequences. This is where MITIGATION comes into play.

© Alcera Consulting Inc.

Businesses with NAFTA exposure must be aware of the risks and threats arising from potential changes to the trade agreement. This is prudent and may even lead to the identification of unique opportunities whether Canada-US trade relations continue much as before or change in a significant way.

Who Can Be Affected?

  • Manufacturers and other businesses that depend on imports and exports
  • Transportation and logistics companies with cross-border operations
  • Federal, provincial, and local government agencies and departments
  • Ports and border-crossing facilities
  • Tourist and travel related businesses
  • Sectors that are highly sensitive to changes in tariffs or trade restrictions

Assessing Your Situation

If you haven’t already done so, it’s time to consider the probabilities and potential impacts of the risks and threats your company faces if there is a change in the trading regime under NAFTA, or even just between Canada and US. This isn’t alarmist, it’s common sense and prudent leadership.

I can help you, but you can get a head start by considering the following questions.

  • What is your current dependence on imports and/or exports to the US (in terms of total revenue, volume, profits)?
  • What business lines or activities are in areas of HIGH POLITICAL SENSITIVITY (soft wood lumber, auto manufacturing, aerospace, etc.)?
  • Can you “immunize” to a certain extent against disruptive changes by diversifying your clientele or supplier relationships?
  • How sensitive are your prices and costs to small changes in trade restrictions and decisions?
  • Have you developed contingency plans for supply, transport, or logistics?

About Richard Martin

Feel free to contact me to discuss this and related strategic issues.

Richard Martin is an expert in identifying, assessing, and preparing for strategic risks, threats, … AND opportunities, so companies and organizations can exploit change, instead of passively reacting or succumbing to it.

Richard.Martin@alcera.ca

www.alcera.ca

www.exploitingchange.com

www.facebook.com/exploitingchange

(514) 453-3993

Previous Strategic Readiness Bulletins

The North Korean Nuclear Threat

Is Canada Facing an Incipient Refugee Crisis?

 

by Richard Martin

Copyright: faithie | 123RF Stock Photo

There are an infinite number of ways to be wrong, but only one way to be right. Trial and error is the process of evolution, science, business and innovation. We produce many more “errors” than “successes,” so we must continually experiment with new ways of doing things.

Readiness is the product of this trial and error process. If we continually are working to improve our understanding of our surroundings and what will work to get us to our goals, then we can’t help but adapt to the constantly changing conditions by mitigating threats, and exploiting gaps and opportunities.

I like to think I’m in illustrious company, as shown by this sampling of aphorisms and quotes. I’m particularly fond of the approach of the great philosopher Karl Popper.

“Experience is the name everyone gives to their mistakes.” Oscar Wilde

“What is today called ‘negative feed back’ is only an application of the general method of learning from our mistakes-the method of trial and error.” Karl Popper

“The first principle is that you must not fool yourself-and you are the easiest person to fool.” Richard Feynman

“Reality is that which, when you stop believing in it, doesn’t go away.” Philip K. Dick

“Our whole problem is to make the mistakes as fast as possible…” John A. Wheeler

“Criticism of our conjectures is of decisive importance: by bringing out our mistakes it makes us understand the difficulties of the problem which we are trying to solve.” Karl Popper

“All our knowledge grows only through the correcting of our mistakes.” Karl Popper

“The more we learn about the world, and the deeper our learning, the more conscious, specific, and articulate will be our knowledge of what we do not know, our knowledge of our ignorance. For this, indeed, is the main source of our ignorance – the fact that our knowledge can be only finite, while our ignorance must necessarily be infinite.” Karl Popper

© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

By Richard Martin

© Alexskopje | 123RF Stock Photo

The recent spate of natural disasters (hurricanes, earthquakes) have shown once again the need for readiness and resiliency for operational and business continuity. I’ve also been working with a client organization to review and upgrade its continuity programme. Here are some basic principles to keep in mind.

  • Readiness for business continuity is a leadership responsibility. It is a strategic concern and must be led by senior leadership and executed by the entire organization and its “chain of command.”
  • Business continuity is part of contingency planning and preparedness to respond and recover after prevention has failed. In other words, it’s part of your risk/threat mitigation strategy.
  • Insurance is needed to help recover and rebuild after a disaster or a crisis, but it can neither prevent nor mitigate the impacts as they unfold. That is where the entire preparedness and readiness programme come into play.
  • There are three phases to business continuity planning and management: preparation, response, and recovery. The preparation phase should always be in effect, and not just an afterthought.
  • Business continuity planning (BCP) must be conducted on a cyclical basis, for instance every year. It must be aligned with other normal management processes such as annual budgeting and capital planning so any required investments can be identified and adequately resourced.

© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

by Richard Martin

Back in March I put out a Strategic Readiness Bulletin titled “Is Canada Facing an Incipient Refugee Crisis?

The situation has evolved to the point where the Canadian Forces have been tasked to set up a temporary reception centre near the Quebec-US border. Asylum-seekers are being temporarily lodged in Olympic Stadium and the old Royal Victoria Hospital in Montreal. The Canadian Border Services Agency (CBSA) and RCMP have sent reinforcements south of Montreal to help with the overflow of migrants arriving on foot at the border. Most are of Haitian origin, but it seems that other nationalities may also be arriving and that the mix could very well change quickly.

You can surmise from reading my bulletin, referenced above, that this situation was entirely predictable, if not in its specifics, then at least in outline. I don’t think we’re at a crisis point yet, but that could develop rapidly, as we saw when the same thing happened in Europe two summers ago.

A crisis occurs when you lose control of a situation, and you are constantly reacting to conditions rather than shaping them. If at any point border crossings or reception and housing facilities are overwhelmed, then it will be a crisis.

The question at this point is whether plans and actions can be undertaken now to prevent and/or mitigate these possibilities. Organisations must stay ahead of events by envisaging various scenarios and possibilities and implementing plans and measures to cater to them, before they occur.

And this isn’t just a federal or provincial government responsibility. Municipalities, private businesses and non-profits can be affected. Some small municipalities are already being stretched by the demands of reacting to the situation.

If you are running a business, can this affect you? What if you are near a border area, or have clients in the US, or depend on shipments to and from the US? Could you be affected. I talk more about this in the bulletin, so you should definitely check it out.

Also, here are some other articles I’ve written over the years that you may find of interest, especially for interagency cooperation and planning.

Five Myths About Crises: Why we’re surprised by unsurprising things.

Crisis? What Crisis?: The type of crisis we’re facing, and how it is likely to unfold.

Mobilizing for Readiness: What you need to do to mobilize your team or organization.

Proven Techniques for Crisis Leadership: Leading effectively before, during, and after a crisis.

Battle-Proven Principles for Disaster Leadership: The focus of this article was disaster management, but there is a lot of good information, especially for public agencies.

© 2017 Alcera Consulting Inc. Reproduction and sharing permitted for non-commercial reasons.

by Richard Martin

  1. Velocity: Action is a vector. You can get to your objectives earlier by combining the right direction of movement with fast speed of execution.
  2. Decisiveness: Don’t wait for perfection; move when you can act and generate results that contribute to your aim.
  3. Opportunism: Accelerate execution and results by exploiting favourable events and conditions.
  4. Momentum: Consider changes carefully, as it takes time and energy to change direction and speed.
  5. Preparation, planning, and logistics: Use time judiciously (or make it) to prepare for action; consider all relevant factors, conditions, scenarios, and risks; develop courses of action to achieve your aim and select the optimal one for detailed planning; balance resources and priorities accordingly.
  6. Initiative and creativity: Tell your people what outcomes they are responsible for, and let them find the optimal ways to achieve them; give them the requisite authority and resources in line with their needs and overall priorities; make them accountable for their actions and results.
  7. Security: Protect your flanks and lines of communication through 360-degree situational awareness; validate your assumptions.
  8. Surprise: Don’t advertise your intentions, unless you can be almost certain of the results beforehand.
  9. Depth: Act in waves and phases; don’t put all your eggs into one basket; reinforce success and stop doing what isn’t working; don’t expect success on the first try, but be ready for it nonetheless.
  10. Reserves: Always keep forces and resources in reserve, because you can never foresee everything beforehand.

© 2017 Alcera Consulting Inc. Reproduction and forwarding for non-commercial use are permitted.

By Richard Martin

Business leaders must constantly decide on how much time to devote to future planning versus present action. The needs of day-to-day management and decision-making tend to swamp us as leaders and managers. We get caught up in immediate, tactical issues, and lose sight of the bigger picture, where we are ultimately headed, and what we will do once they we there.

Should we focus on immediate goals and problems, or should we live more in the future, even to the point of only considering our long-term vision and development of our organizations? At extremes, we could devote all our time and resources to the present or, conversely, we could be pure “visionaries.” In fact, wisdom lies somewhere in between, neither being purely myopic nor purely far-sighted. But how should we make this decision, and how do we determine when and how much they need to shift our attention from the near to the medium to the long term?

The key lies in what I call the “future paradox.” Some decisions and actions will have immediate or short-term results. Others will take longer to come to fruition, even to the extent of taking years before they are fully actualized and the results are in. This can generate a significant lag between decision, action, and results, between cause and effect. The problem comes from this lag.

We can’t afford to be stuck in the present, but the further out we look, the less the definition and clarity, the greater the uncertainty. Present commitments and decisions are essential to build future readiness and achieving distant objectives, but these may severely constrain our future freedom of action.

 

This is the future paradox: We must decide and act now to generate short-, medium-, and long-term effects, but we can only do this with increasingly fuzzy knowledge and information. In other words, change takes time, but conditions can and do change between our decision point and the time that our actions start taking effect.

We have a current reality and we articulate a vision of where we want to be in the future. This vision is nothing but the overarching objective of our undertaking. To speak in military terms, it can be to win a war or achieve an peaceful outcome in our nation’s interests. But it can also be to capture a road crossing and then be ready to face a counter-attack. In business, it can be a strategic goal, for instance to launch a major international expansion, or it can be much more mundane and tactical, for instance to win a contract with a new client. It is the future vision that drives most of our decisions. The gap between the objective and the current reality is the fuel for planning and decision-making. It frames our actions in the short, medium, and long terms. Over time, we should approach—and eventually arrive—at our ultimate destination, our vision, or overarching objective.

Some things we can do relatively easily and quickly. These decisions lead to short-term plans and actions. Others take more preparation and lead time. These are our medium-term plans and actions. Finally, some things we must start right away, with a view to gaining results only in the longer-term future. For instance, we can be facing a decision on whether to invest in a new factory. We must secure the capital and start the building or acquisition process now, but it can take months or years before the new facility comes on line. This requires a long-term plan and actions.

To make matters even more complex, though, the definition of short, medium, and long terms depends on the scope of responsibilities and roles. For a large company, the long-term can be, in some cases, decades. For a sales person or a production team, it can be tomorrow or next week. It is the scope of activities and effects that determines the extent of the time horizons under consideration.

© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

by Richard Martin

People brag these days about being so busy that they can’t answer all their emails, or even all their phone messages. Busyness and hurriedness are praised as if they were virtues. Notice I didn’t say efficiency or effectiveness. We confuse being constantly occupied and on the run with performing at a high level and being effective.

If you can’t take time to look to the future, or to assess where you’ve been, where you are, and where you’re headed, then it’s time to slow down. Slowing down to go faster and to be more effective and efficient only seems paradoxical. But if you never take time to think, or even to just let your mind wander, how can you come up with innovative ideas, creative approaches, and unusual perspectives? As the old saying goes, haste leads to waste. But it also leads to habits and well-worn paths. As I learned in the army, it’s on the usual path that ambushes occur. If you want to seize and maintain the initiative, you must do something unusual. And if you’re too busy to plan, you’ll always be in reaction mode and will cede the advantage to others.

What can you do if you’re harried and “too busy to plan”?

  • Set aside regular down time to rest and recover.
  • Do an after-action review after each major undertaking to generate lessons learned and incorporate them into your processes and thinking.
  • Use your best time for the most impactful thinking, forecasting, and planning. In other words, don’t try to do your most important work when you’re tired, worn out, and in a rush to get home or get on the next flight.
  • Don’t do busy work when you travel. Use that time to read, think, let your mind wander.
  • Read a lot in a lot of different areas, including fiction, history, philosophy, and science.
  • Exercise and do recreational activities regularly.
  • Play games and listen to music.

Think I’m being frivolous? Well, research shows that top performers in all fields undertake deliberate practice, which is difficult and draining, and then rest regularly. How can you come up with your best ideas and think things through when you’re constantly running from one thing to another?

Not only is it undignified, but it undermines your performance.

Richard Martin’s 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.

Contact me to apply the whole thing–or just a piece, as needed–to improve your strategy, your readiness… and your results!

Did you know that an infantry battalion only needs about 3 to 4 hours of prep and planning time to be battle ready? What are you waiting for to get the same benefits for your outfit?

Why Sunday and What Does “Stand To” Mean?

Sunday? I want you to get my insights and advice first and fast, so you can prepare and up your readiness and results before others even know what’s happening!

And Stand To? It’s the order used in the military to get forces to man the parapets and be in a heightened state of situational awareness and, yes, readiness, so they can face any threat or undertake any mission.

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.

© 2017 Alcera Consulting Inc. This article may be used for non-commercial use with proper attribution.

Strategic Readiness Bulletin Number 1 – 1 March 2017

By Richard Martin, founder and president, Alcera Consulting Inc.

Richard Martin issues Strategic Readiness Bulletins on an as needed basis to clients, key decision-makers, and other influencers, to highlight recent or evolving risks, threats, and opportunities for companies and organizations resulting from chaotic change as well as international and national situations of a political, economic, technological, or social nature.

What Is the Strategic Readiness Issue?

Asylum on Canadian flag.

Asylum on Canadian flag.

Recent events and fears in the United States are apparently pushing many resident aliens and immigrants in that country to reconsider their future there. In recent weeks, we have learned that hundreds of individuals and families, sometimes with very young children, have braved cold weather and harsh conditions to cross the border into Canada. They are arrested and detained, and then presumably further processed by Canadian government agencies after requesting refugee status. As many commentators have already pointed out, if there is a mini-surge of “walk-in” refugee claimants in the winter, what will happen when the weather improves up north (literally), and it gets worse down south (figuratively)?

We can think what we want of this situation, but the important question to ask is: Is this a risk, a threat, an opportunity, or some combination of these? Readers may believe that I’m being alarmist, but this is furthest from the truth. The essence of readiness—whether for defence or for profit—is anticipation. As the old military saying goes, “Time spent in reconnaissance is never wasted.” We can extend this by adding anticipation and planning as well. Readiness is a function of awareness, which in turn requires surveying your surroundings and making projections, highlighting potential outcomes and effects, and developing scenarios and contingency plans to react or act in a timely and effective manner.

Who Can Be Affected?

This is nothing but a quick list of businesses, organizations, and agencies that could be affected by a refugee or border crisis of some kind in coming months:

  • Manufacturers and other businesses that depend on imports and exports
  • Transportation and logistics companies
  • Federal, provincial, and local government agencies and departments
  • Ports and border-crossing facilities
  • Towns and villages near border crossings, official and unofficial, including their fire departments, schools, hospitals, and other medical facilities
  • Charitable and/or community organizations such as the Red Cross, the YMCA, local associations, NGOs, etc.

What Are the Risks and/or Opportunities?

Here are two simple scenarios to show how companies and organizations can be affected by a surge in refugee crossings and claimants.

Scenario 1: A small town near the Quebec border with the US is overwhelmed with refugees in the early summer. Available facilities are rapidly claimed by federal and provincial government agencies. There is a need to lodge, feed, and care for a relatively large influx people seeking to enter Canada as refugees. The town’s administration is overwhelmed by the influx and local citizens are increasingly enraged by the “threat to law and order,” people crossing their property, and perhaps even squatting.

Think this is far-fetched? Consider the following headline in a Globe and Mail article of 7 February 2017: “Manitoba town pleads for federal help with refugee influx.”

Scenario 2: A transportation company depends on cross-border shipping and logistics for a bulk of its business. The refugee influx gives rise to political actions by the federal government to control border access better. Even though people are crossing at secondary and tertiary border locations, or even unmanned areas, CBSA steps up searches and security at official crossings. This introduces long lineups and delays at border crossings. American officials do the same in the other direction for no logical reason.

Assessing Your Situation

You can look at any kind of disruptive scenario from two perspectives: defensive (as risk or threat) or offensive (as opportunity).

Defensive Assessment: Risk is the product of probability and consequence/impact. Reducing or eliminating the risk probability falls under the rubric of prevention. Responding to, containing, eliminating and recovering from the risk impact is called mitigation. I’ve illustrated this in the following diagram. As you can see, contingency planning is any preparation and planning you conduct to be ready for a risk should prevention fail. If prevention is your 1st line of defence against a risk scenario, contingency planning is your 2nd line of defence (recovery is the 3rd line).

assessing-risks-and-threats

Offensive Assessment: On the offensive side, it can sometimes be difficult to see what could be an opportunity, but it follows the same basic logic as defensive risk and threat readiness. Opportunities are thus the product of the probability of a positive event occurring and the beneficial consequences. In that case, your first wave of attack is the scouting and reconnaissance you carry out to detect the opportunities. These are then assessed as to their expected value (probability times benefit) and you can create various initiatives to develop them into full-blown offensive thrusts—the 2nd wave of attack—reinforcing successful ones and pulling back from unsuccessful ones—the 3rd wave of attack.

In this Strategic Readiness Bulletin, I wanted to point out the potential risks, threats, and opportunities that loom for companies, organizations, and agencies as they look at the unfolding refugee situation. It’s up to you to take steps to increase your offensive and defensive readiness.

picture1Richard Martin is an expert in identifying, assessing, and preparing for strategic risks, threats, … AND opportunities, so companies and organizations can exploit change, instead of passively reacting or succumbing to it.

Richard.Martin@alcera.ca

www.alcera.ca

www.exploitingchange.com

(514) 453-3993