Posted tagged ‘Art of War’

How many business improvement initiatives can a company manage at any one time?

October 24, 2008

Operating a business in these challenging times is certainly not easy. In the last two posts, I introduced a number of strategies that make sense during an economic downturn. One of these strategies can best be classified as a sales strategy – that is, how to reignite opportunities that one would otherwise expect to stagnate when the economy is in difficult straits and businesses are adhering strongly to the philosophy of hoarding cash because “cash is king.”

The other strategy looked to the internal workings of a company and focused on how a company might best use underutilized resources that are suddenly available because sales are lagging. In this context, we discussed the development of best practices and the optimization of internal processes.

It is on this internal opportunity that I would like to discuss in today’s post.

The internal business process redesign discussion begs the question as to how many initiatives can a company manage at any given time. Is there an optimal number and if there isn’t, how does one determine how many initiatives are manageable so that business opportunities and the needs of clients continue to be addressed?

In all of my research and studies, I have yet to come across a discussion that addresses this particular question. To address this question, I will rely on my thirty years of experience as a CEO and consultant and share with you what I have learned from my experiences as a strategist.

To perform this analysis, one must:

  • Understand your company’s strategic goals
  • Define what tactics are required to support these strategic goals
  • Establish what each department must do to achieve the strategic goals
  • Determine the time and effort required by departmental staff to support the achievement of the core goals that essentially enable the company to deliver value and stay in business

What remains after performing this analysis is the amount of time available for personnel to address new improvement initiatives.

In other words, this analysis is predicated on assessing the company’s priorities and the core roles that must be fulfilled. After all, customer support personnel must perform their support function or the company risks client defections. Sales and relationship professionals must be engaging prospects and customers to assure growth. Accounting and internal support staff must make certain that the infrastructure exists so that the organization can run efficiently. These are the prime functions of these departments.

So is there an optimal amount or maximum number of initiatives a company can manage? As best as I can tell, the number of enterprise-wide initiatives that a company can swallow is typically between one and three. (Note added 11/09/08: Interestingly, several weeks after this post was written, the Obama Transition Team was enagged in a similar conversation and may have reached a similar conclusion.)

The reason that I believe this to be so is that I have concluded that most people have a difficulty managing more than five significant goals or projects simultaneously at any given time. And if one considers that the average person has two or three core functions for which he or she is accountable, this only leaves so much space for professional and organizational development without impacting the core responsibilities that each of us have.


The Art of War and the Art of Battle

August 22, 2008

The goal of a business strategy is clear-cut:

Win the customer’s preference and create a sustainable competitive advantage, while providing sufficient return for owners or, in the case of a publicly held company, the shareholders. A strategy defines the direction the business will take and positions it to move in that direction.

A strategic plan outlines how the war will be won. It defines the critical hills that must be taken. With that information in hand, the generals must determine how the resources – people, equipment, finances, timing and focus – will be allocated. If those resources are insufficient or lack the ability to win the war, the leadership must plan to supplement its army.

The allocation of these resources and the timing for deploying them is in essence the art of battle. It is how we will win the war. In business, we refer to this as the tactical or operational plan.

One of former President Dwight David Eisenhower’s favorite sayings was “In preparing for battle I have always found that plans are useless, but planning is indispensable.”

At the World Business Forum in New York City, New York City Mayor Rudolf Giuliani said, “You have to be prepared for the worst things that can happen in order to get people through things. My mentor in the Attorney General’s offices said that I should always prepare four hours for every hour I planned to spend in court. When you’re prepared, the unanticipated is just a variation on the anticipated.”

Mayor Giuliani recounted that at the turn of the millennium, the entire world undertook massive preparations for what was termed the Year 2000 problem. Private and public sector leadership were concerned that all computer systems would no longer function accurately when the calendar turned from 1999 to 2000 because of the way that calendar years had been coded. There was a widespread concern that banks would no longer have access to funds, patient age records in hospitals would be completely inaccurate, traffic systems would cease to work and even prisons would find themselves without secure systems.

Billions of dollars were spent to recode software applications, and still, there was a widespread fear that catastrophe loomed somewhere as certainly, some application must have been overlooked. To be certain, The Mayor challenged his management team to create extensive plans to ward off this possible catastrophe. In effect, he charges his management to plan for an eventuality where New York could no longer function.

On January 2nd, 2000, leadership throughout the world breathed a collective sigh of relief. There was no computer-spawned catastrophe and while there were some inconveniences, these inconveniences were quickly remedied.

Mayor Giuliani might have felt that this massive investment in contingency planning might not have been all that valuable, given the limited scope of the challenges that appeared in January 2000. After all, nothing significant happened. But, as he explained, it was our Y2K preparations allowed us to be ready for September 11th, 2001 when an unthinkable tragedy brought New York to a standstill.

Indeed, it is difficult to anticipate the exact scenario and match the plan to the anticipated circumstance. Yet, the very act of planning provides us with the means by which we can anticipate responses and adjust our actions accordingly.

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