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26 January 2010 • 10:51 am The last couple of weeks have seen a coincidence of two sudden, massive, and mostly unexpected lurches. The magnitude 7.0 earthquake that has devastated Haiti is human tragedy on a scale rarely seen (until one recalls the 2004 Asian tsunami), and was certainly not anticipated by the island’s millions of residents. Nearly as unanticipated was the lurch in the U.S. political landscape, marked by the GOP’s victory in the special election in Massachusetts and the Supreme Court’s decision to overturn limits on corporate participation in election campaigns. I am closely following the aftermath of both Haiti and U.S. politics, since the response to unanticipated change reveals much about the health of the organizations involved.
(I write of Haiti and U.S. politics together only to illustrate a point, and not to imply any comparison between these events. I hope that you will join me and millions of others who have already contributed to one of the many organizations leading Haiti’s earthquake relief efforts.)
In my experience, organizational preparedness for major, unexpected changes varies widely. Most organizations pay lip service, with little more than rueful acknowledgement of the possibility of disruption. Some develop ‘business continuity’ plans, which are targeted at sustaining key assets and processes, like computer systems and networks, in the event of catastrophe. Far fewer have a comprehensive, robust capability to weather the literal and figurative storms of unknown and unexpected events. The most effective organizations prepare not for specific disasters, but with a well-tested process for making effective strategic and tactical decisions in the face of sudden, significant, unexpected change.
Every organization’s strategy is the result of its mission, its internal capabilities, and its external environment. Over time, mission and capability are likely to evolve to reflect the changing realities of the external environment. The normal strategic planning process, when properly executed, entails continuous monitoring of environment and management of capability and strategy itself. Sudden change in the external environment requires rapid and confident recalibration of the strategy. The decision making process is the same, only the time scale is different.
The difficulty with which most organizations mange and execute strategy means that they are ill-equipped to handle the inevitable lurches. Fingers are pointed, emotions flare, poor decisions are made, and must be made again, efforts are wasted, and chaos reigns. By contrast, healthy organizations quickly pick themselves up, look around to understand the new realities, quickly make well-informed decisions, and get on with the urgent tasks at hand.
How will your organization handle the next lurch?
13 November 2009 • 7:00 am  I am a big fan of public radio, and my local station in Chicago, WBEZ. I don’t always agree with their programming decisions, but for over 25 years they have been my primary source for thoughtful and intelligent programming, both locally-produced and nationally syndicated. So it was with more than just professional interest yesterday that I read the following anonymous blog entry (emphasis and links added) on WBEZ’s Facebook page – I’m a stakeholder. more
12 November 2009 • 7:00 am  read this book Most popular ideas in the domain of organizational management have a limited shelf-life. Those that gain widespread attention usually do so on the strength of a published work. My bookshelves are filled with titles that in their time, were purported to be the next ‘big idea’ in management, but have since faded into relative obscurity. This pattern is as much a function of the audience for the ideas as the ideas themselves; executives and managers crave the easy answers and magical insights that are promised by these works. So when an idea remains relevant and applicable for more than a few years, it stands out.
Of course, balanced scorecard has been an exceptionally durable concept. The idea of a scorecard (a collection of measures) as a tool for management has been around for decades, and is thought to have originated at General Electric during the 1950s. Kaplan and Norton elaborated the idea of a scorecard as a tool for strategic management beginning with their first Harvard Business Review articles on the topic in 1992 and 1993, and their book The Balanced Scorecard in 1996. The BSC articles and original book were extremely popular, and remain so today.But I never recommend Kaplan and Norton’s first BSC book to anyone embarking on a journey of strategic management.
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5 November 2009 • 7:00 am  A brief Talk of the Town piece by Nick Paumgarten in this week’s New Yorker has finally shaken me out of my lengthy unplanned hiatus from the Tenacious Blog (a combination of an early October speaking gig followed by an extended trip to my alternative universe in the tropics had conspired to keep me from writing for several weeks now). For those of you who have waited patiently for my return, much gratitude for your loyalty. I’ll be trying to write regularly again, but am making no promises.
The New Yorker piece begins with a recollection of the news item from a few weeks ago, in which two Northwest Airlines pilots overshot their destination (Minneapolis) by over a hundred miles (the pilots claim they were engrossed in a complex work scheduling program on their laptop computers), then goes on to comment on the effect of multi-tasking on our performance. According to Paumgarten:
Studies have shown that multitasking, even of the law-abiding kind, doesn’t work. You just perform each task less efficiently. Marshall McLuhan predicted that technology would sharpen our senses, but, instead, as the writer Michael Bugeja said last week, it seems to split them. (A few years ago, Bugeja, with a colleague, started writing an article called “Media Saturation Kills,” but he got distracted by another deadline and never finished it.)
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13 October 2009 • 7:00 am In the previous posts, I introduced a case which offers a practical, real world example of how risk analysis can enrich the strategic planning process. We learned of PrimeCorp (a disguised name), a large company with a national presence in the U.S., and met Jim and Curtis, PrimeCorp’s head of Strategic Planning and CEO, respectively. If you haven’t read Parts I through III of this series of posts, please do so now. It contains background needed to understand this post.
Outcomes at PrimeCorp
As a result of the risk-adjusted forecasts, both the baseline and with leadership expectation of the impact of the proposed strategic management system, PrimeCorp had satisfactorily completed its cost-benefit analysis and projected payback. Curtis (PrimeCorp’s CEO) soon thereafter approved the project as proposed, and our work was underway. Working closely with Jim (PrimeCorp’s head of strategic planning), we undertook to transform the way in which PrimeCorp managed its strategy. The transformation took about two years.
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9 October 2009 • 3:26 pm In two previous posts, I introduced a case which offers a practical, real world example of how risk analysis can enrich the strategic planning process. We learned of PrimeCorp (a disguised name), a large company with a national presence in the U.S., and met Jim and Curtis, PrimeCorp’s head of Strategic Planning and CEO, respectively. If you haven’t read Parts I and II of this series of posts, please do so now. It contains background needed to understand this and the following post.
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6 October 2009 • 7:00 am In the previous post, I introduced a case which offers a practical, real world example of how risk analysis can enrich the strategic planning process. We learned of PrimeCorp (a disguised name), a large company with a national presence in the U.S., and met Jim and Curtis, PrimeCorp’s head of Strategic Planning and CEO, respectively. If you haven’t read Part I of this series of posts, please do so now. It contains background needed to understand this and the following posts.
The Different Approach
We already knew that a key element of PrimeCorp’s existing strategic planning process was its financial forecasts. The annual planning book (hundreds of pages, highly confidential, and not shared beyond the executive team), contained page after page of spreadsheets describing past and expected future performance of each of PrimeCorp’s several divisions, as well as an enterprise-wide roll-up of the numbers. The executive team, which consisted of the heads of each division (as well as such corporate functions as HR Finance, and IT) annually created their individual division forecasts as a function of past performance, and their own expectations of the next five years of future results. This process was time-consuming and filled with understandable tension – between division leaders’ desire to soft-peddle the numbers, and CEO and board pressure to raise revenue and manage costs to achieve year-over-year improvement in profitability.
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5 October 2009 • 7:00 am Continuing our introduction of the element of risk into strategic planning, your humble correspondent now endeavors to share a practical, real world example of how risk analysis can enrich the strategic planning process. A caution – some basic mathematics are involved, but I’ll try as best as possible to avoid the use of jargon. And at the end of the case, I’ll offer a tool and an hour of telephone-based guidance on how to apply this tool in your organization for FREE to the first five readers who respond to the offer – with no strings attached.
A few years ago, I was faced with a unprecedented challenge by a client, to attach a dollar value to the benefit of a proposed consulting engagement. The details of the organization are not important to the concepts in the case, but suffice to say I was hungry for the opportunity to consult to this large organization.
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1 October 2009 • 7:00 am  As promised a couple of weeks ago, I’ve now gotten a copy of Sam L. Savage’s The Flaw of Averages from my local library. Although I am still reading it, I can already say that it is an enjoyable read, accessible, and contains a wealth of valuable insights that I’ll be sharing with you. I’ll be buying my own copy soon, and encourage you to take a look at it as well. It has already gotten me thinking more about how much better we need to understand the concept of risk.
We have all grown up in an era in which computing technology has had an increasing influence on the way we think about pretty much everything. In my first year of high school, slide rules were required for those taking physics classes. By the time I took the physics class (in my senior year), we were able to instead share the one calculator the school had bought for each classroom in the physics department. I suspect that some of today’s technologies will someday be as outdated as slide rules are today. If you don’t even know what a slide rule is, don’t worry (but you can read more about it here).
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29 September 2009 • 1:58 pm  Chris Brogan A couple of months ago, a friend clued me into Chris Brogan’s blog. Brogan is an author and social media guru (of whom I hadn’t heard before) that my friend had seen give a great speech. It was otherwise hard for my friend to tell me exactly why I should pay attention to Brogan, but he told me that I needed to. So I subscribed to his blog, and have occasionally been engaged, and sometimes even fascinated with his postings.
One such fascinating moment was today, when Brogan posted a (sorta) amateur video of his entire keynote speech at a recent new media conference in Atlanta. The video is over an hour long (caution: it contains some coarse language) and worthwhile if you want to get a fresh and expert perspective on using social media (e.g. Facebook, Twitter, etc.) effectively in marketing. But even if you don’t watch more than a few minutes of it, you’ll see a new, cool, elegant (in the sense of simplicity), and prospectively scary new idea called BackNoise.
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