Posts Tagged ‘strategy’

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.

Here’s the link to my April 2017 column on Defence Leadership or download as PDF.

by Richard Martin

© Kheng Guan Toh

I’ve been answering questions lately (from my daughters, among others) about the threat of war, specifically nuclear war. This obviously comes from the worries about North Korea’s nuclear capabilities and intentions, as well as American ones.

Although this concerns military strategy and geopolitics, the underlying analytical approach can be applied to any consideration of threats, whether a generic SWOT analysis, or the evaluation of a specific security or competitive menace.

Threat analysis goes beyond risk analysis. Risk is the product of the probability and impact of a negative event or cause. Risks are usually categorized under three headings: natural, technological, and human. Focusing on the last, there are criminality, security, labour conflict and many other sub-categories of human originated risks. The problem, however, comes in evaluating the likelihood of a human risk. If we are considering only generic risks, we can talk about probability and impact in abstract terms. For instance, what is the probability of a criminal act? We can use statistics about, say, white collar crime in corporate settings as a starting point for assessing the risk. There are statistics describing the probability of certain acts in certain situations along with average impacts (including their statistical distribution).

But how can we assess a specific threat where there is no historical or statistical data to illuminate the analysis? That’s where military-style threat analysis can be very useful. Military threats are broken into two parts: capability and intent. Capability is self-explanatory: What can the potential or actual enemy do? What are the quantitative and qualitative characteristics of his forces? How many tanks can he deploy? How many aircraft? In the case of North Korea, how many nuclear bombs, of what type, and through what means can they be delivered? I discussed this at length in early September with Dr. Sean Maloney of RMC, an expert on nuclear history and strategy.

While there is uncertainty in capability assessment, at least we’re dealing with tangible realities. Intent is a completely different ballgame. How do we know what the enemy will do? How will he react to our own threats or efforts at conflict resolution? These are imponderables and we must consider a range of scenarios to determine the inevitable commonalities that arise in each, so we can prepare for them. We must also examine the action-reaction cycles that occur because of the moves and countermoves by both sides.

An analogous approach can be used in analyzing and assessing business threats, even though the stakes are obviously of a completely different order and importance. Whether you’re trying to assess your competitors’ next moves, or your market’s reception of your new product, you can learn a lot by considering the threat as both capability and intent. This allows you to disentangle what is possible (given assessed capabilities) from what is probable (given assessed intentions) over a range of scenarios. The insight gained can then be incorporated into your own strategy and contingency planning.

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

by Richard Martin

Copyright: Tomas Griger

After the magnitude 8.3 earthquake in Mexico last week, an acquaintance of mine was fretting about how these natural disasters couldn’t be a simple coincidence.

Of course, that acquaintance was referring to the apparently large number of violent systems in the South Atlantic this hurricane season in combination with an earthquake. I’m not sure what these phenomena have to do with each other. How are weather and geology supposed to be connected? Perhaps in the very long term, on the scale of eons. But over days or hours? Not likely.

Humans have a propensity to see causality and correlations where there is just coincidence. Most things happen for no reason at all. It’s easy to see patterns where there are none, especially in nature. If you see linkages where there are none, you can drive yourself crazy with anxiety and paranoia. Things happen. Sometimes they bunch up in time and place. Other times they are more or less spread out.

The trick to being prepared isn’t so much to predict specific causes or events, it’s to prepare for generic outcomes and effects. If you’re in a hurricane or seismic zone, you can’t predict when or where events will occur, but you know that they will occur with a certain frequency and power. For instance, every decade or two, there is a major hurricane in your zone. Every year there is at least a major tropical storm. Geological risks are much harder to characterize, but if you are in high-risk seismic region, then you have to prepare for the worst case.

Of course, preparedness and resiliency are largely a function of wealth. Storms, earthquakes and other natural events are a lot costlier in wealthy regions, but relatively less destructive of life and limb. In poor regions, the relationship is inverted; there are many more deaths and the destruction, although extensive, costs much less. However, the time to rebuild and recover are a direct function of wealth. The greater the capital resources, the faster and easier it is to absorb the costs of reconstruction and resiliency.

These factors also play into the perceptions of coincidence, causality and correlation. We must keep things in perspective when assessing probabilities and impacts. Human destruction is greater in poor countries and increases toward the past. Material destruction was less in the past and is continually increasing. This isn’t because of some connection between events. Rather, it comes from the increased investments in infrastructure, housing, and transportation networks. What was the damage along the Gulf Coast or in Florida prior to people building houses right on the water?

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.

by Richard Martin

It’s Saturday morning and I’m sitting in my hotel room in Dubai. I’m here to conduct courses in strategic and operational management and leadership. I’m pondering the power of a vision and the means to achieve it.

I first was in the United Arab Emirates in December of 2002, as I prepared to deploy to Kuwait as the Canadian Forces Liaison Officer to the Coalition Forces Land Component Command prior to the invasion of Iraq. I was able to get into the city of Dubai on a few occasions with some of my colleagues for some R&R. The city has grown a lot in just those 15 years, and even since I started conducting courses here in 2014.

It’s gaudy and slick, hyper-modern and traditional, avant-garde and retrograde, all at the same time. If you like cutting edge architecture in the most bizarre locations with basically nothing around it, then you must visit Dubai. The skyline looks impressive from the sea, but when you’re in the city, all you see during the day is buildings, roads, and a haze combining humidity and dust and the beige-grey desert merging into the same coloured sky on a horizon that you can never quite make out. At night, it’s lights everywhere, sometimes quite pretty. Not as gaudy as Las Vegas, but still extravagant.

What is it about cities in the desert that makes them so attractive to adventurers and admirers alike? There is really nowhere to walk, as everything is designed around roads and a superb metro system. But even if you could walk, you wouldn’t want to for most of the year, as it’s extremely hot and humid. As I write, it’s forecast to go up to 45 C today, but the humidex is predicting 81 C!

The United Arab Emirates, of which Dubai is the most famous state, was founded in the early 1970s under the visionary leadership of Sheikh Zayed, ruler of Abu Dhabi. Abu Dhabi has most of the oil, but Dubai has the chutzpah and international reputation. The current ruler of Dubai is Sheikh Mohammed, who acceded to the post upon the death of his older brother in 2006, but who was also the de facto ruler for a decade before that.

It’s hard to believe, but as late as 1965, the city had a population of only 20,000. Most of these were huddled close to the Dubai Creek, a small inlet from the Persian Gulf. It was a marketplace, but the majority lived off fishing and pearl diving! Now, it’s a global trade and financial centre, and increasingly a manufacturing location and tourist destination. People from around the world come here to work, to make money, and to play.

Most of what Dubai is today, from Emirates Airlines (based in Dubai), the Burj Khalifa (the tallest freestanding building in the world), to the Palm Jumeirah (artificial islands shaped like a palm tree), is a result of the vision and leadership of Sheikh Mohammed. One of his many books is available for sale everywhere, appropriately titled My Vision. As prime minister of the UAE, in 2010 he issued a long-term federal vision for the country, called Vision 2021. Not many countries are led this way—essentially as an integrated organization.

It’s an interesting study in the power of vision combined with the resources to achieve it. Contrary to expectations, though, the city isn’t built on oil money. Exactly the opposite; it’s designed to avoid dependence on oil and natural resources. A possible example for many other jurisdictions around the world.

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

by Richard Martin

Strategy is the set of actions undertaken by any entity that is striving to survive and thrive in the face of change, uncertainty, risk, and opposition.

There are two basic strategic postures: defence and offence. Defence consists in temporarily conceding the initiative to an opponent to buy time and reconstitute one’s forces.

Offence consists in seizing and maintaining the initiative to achieve one’s ends through:

  • confrontation (i.e., direct action against antagonists to resolve a conflict or otherwise achieve one’s objectives);
  • competition (indirect action against antagonists by letting a third party decide in a competitive arena); or
  • cooperation (combining forces with other actors to achieve mutually compatible or synergistic interests and effects).

These four basic options–conceding, confronting, competing, and cooperating–constitute the building blocks of any strategy.

This is important, because it entails that there are always options when confronted by opposition, resistance, or obstacles of any kind. We can build a strategy that leverages our strengths while mitigating our vulnerabilities and that is not limited to confrontation or aggressive posturing.

So, before embarking on a strategic decision, you should always consider the four options with their potential benefits and costs, as well as their possible and probably consequences.

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

by Richard Martin

OK, this week I’m going to go out on a limb and be deliberately provocative: I’m going to talk about politics, but as it pertains to strategy, manoeuvre, and readiness.

The more I observe Trump’s behaviour, the more I discern a certain method in his apparently mad approach to politics and communication. Let’s leave aside his policies and decisions, whatever you or I may think of them, and focus purely on the form of his communications and manoeuvres.

I think Trump is demonstrating masterfully the strategy of misdirection. This is purportedly how magicians entrance the audience so they focus on something innocuous while they perform their slight of hand, thus creating convincing and mystifying illusions.

Misdirection is also a fundamental tenet of military strategy and tactics, the aim being to get the enemy to concentrate or watch in a certain area or direction while friendly forces manoeuvre to bring their strength to bear against the opponent’s key weakness or vulnerability.

Consider the following. Trump regularly sows confusion and sends the media and his political opposition onto wild goose chases. Trump may have personality problems, but I can’t believe he’s so maladjusted as to be stupid. In fact, I think his Machiavellian instincts are a result of his intelligence. His tweets are illustrative of how he attempts to manipulate issues by sowing false scents, confusion, and bloviation.

One of the deception tactics used in the Second World War in North Africa, by both sides, was to mimic columns of armoured vehicles by sending trucks to drive around and kick up dust clouds that could be seen rising beyond the horizon. My gut tells me this is what Trump is doing most of the time. What his ultimate aim is, I’m unable to fully discern at the moment, but it may not be completely in line with his public statements. Or not. That’s why his strategy may be having an effect.

It would be wise therefore, for allies and opponents to take his strategies and tactics seriously, if not for their content, at least for their form. They may be hiding something solid or truly substantive behind a facade of obfuscation and subterfuge.

Military tacticians are taught to beware of the easy path over the battlefield. If you’re advancing too easily and quickly, it might be because the enemy is luring you into an ambush.

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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.