Category: Strategic planning

Tokyo interweaving the old with the new

Posted on by Ray in Strategic planning, System effectiveness, Systems
Analysts walking to HCRL, notice the cleanliness of the street (c) 2011 Silverton Consulting, All Rights Reserved
Analysts walking to HCRL, notice the cleanliness of the street (c) 2011 Silverton Consulting, All Rights Reserved

We spent a couple of days last week in Tokyo and I was struck by the contrasts I saw there.

I was amazed at the extent of public transportation available from the bullet trains to the Tokyo Metro.  It’s hard to deny the advanced technology present in the Japanese rail system. I don’t think I have seen anything quite so well organized or as integrated outside of perhaps the densest cities in Europe.

For instance, in the Shinigawa station, where we were, they had multiple bullet trains, many different metro lines, and multiple express trains to nearby locations.  All located within walking distance within a single station.

I was also struck by the orderliness present within the chaos.  We weren’t necessarily taking transport at rush hour, but there was a mass of people moving throughout the station, whenever we were there.

River of people

It looked to me like a river of people going in all different directions, like currents or eddies in a stream – moving around obstacles, forking off to one track or another, with counter streams at least as busy, going in an opposite direction.  I guess I had a unique vantage point due to my height but all I could see was orderliness, constant movement and people moving with purpose and calm detachment.

No litter, anywhere

The other thing I found interesting is that there was absolutely no debris on the streets.  Masses of people moved through the streets and stations every day but the grounds and roads were spotless.  The streets were cleaner than most small cities I have ever seen.

Chicago, New York, San Francisco, and most other major American cities look like trash heaps in comparison.  I don’t know what it is about Japan, its people or culture but they obviously care about the way their city looks and try hard to keep it clean.

But office culture endures

On the other hand, Tokyo and perhaps all of Japan still remains stuck in the American office culture of the 50’s, 60’s and 70’s. As we rode the trains throughout our travels, one could see floors of cubicles, full of workers.

I suppose this is present in any major city throughout the world today, but it seems like telecommuting is not available in Japan.  Perhaps this has something to do with their compact dwellings, their culture and/or environment, which requires more face to face time between management and employee. But to my mind this seems counter productive and old world.  Note, I may be biased telecommuting from my home day after day.

Nonetheless, I was very impressed with what I saw of Tokyo and the people there.  They seem to understand how to co-exist peacefully with high population density and to efficiently move their population wherever they need to go.  America should aspire to do as well.

Comments?

 

Strategy is dead, again

Posted on by Ray in Corporate growth, Strategic planning, Strategy, Uncategorized
American War Cemetary - Remembering by tienvijftien (cc) (from Flickr)
American War Cemetary - Remembering by tienvijftien (cc) (from Flickr)

Was talking with a friend of mine this week and he said that strategic planning has been deemphasized these last few years mainly due to the economic climate.  We have discussed this before (see Strategy, as we know it, is dead). Most companies are in a struggle to survive and had little time or resources to spend on thinking about their long term future, let alone next year.

Yes, the last few years have been tough on everyone but the lack of strategic planning is hard for me to accept.  As I look around, products are still being developed, functionality is being enhanced, technology continues to move forward.  All of these exemplify some strategic planning/thinking, albeit prior efforts from 24 to 30 months ago.

Nonetheless, development has not ceased in the interim. New features and products are still being planned for introduction over the next year or so.  Development pipelines seem as full as ever.

One could read the apparent dichotomy between deemphasizing strategic planning but continuing to roll out new products/enhancements as indicating that strategic planning has little impact on product development.  Another, more subtle interpretation is that strategic thinking goes beyond near term product improvements to something longer term, perhaps outside the 3 year window we see for current product enhancements.

In that case, then the evidence for reduced strategic planning will not show up until a couple more years have passed.  Thus, we should eventually see a slow down in new or revolutionary technology offerings.

Such a slowdown is hard to view.  Apple seems to introduce a revolutionary product every 4.5 yrs or so (iPod ’01, iPhone ’07, Ipad ’10).  Other companies probably have longer cycles.  But any evidence for a strategic planning reduction may ultimately show up as a slowdown in the rate of new/revolutionary product introductions.

Other potential indicators of decreased strategic planning include margin erosion, loss of core competencies, reduction in market value, etc.  Some of these are objective, some subjective but they all sound like a better topic for an MBA thesis than a blog post or at least my blog posts.

For example, Kodak over the last 15 years or so comes to mind as a strategic corporate catastrophe playing out.  They almost invented digital photography/imaging.  But for whatever reason they failed to react to this coming transition until it was too late.  The result is a much diminished company of today, e.g., over the last 15 years their stock price has been reduced by a factor of 12X or more.

There are probably many more examples of both business strategy failure and success but from my perspective the choices are obvious:  Ignore strategic planning for too long and your company struggles to survive or implement strategic planning today and your company may thrive.

What other examples of strategic failure and successes can you think of?

Strategy, as we know it, is dead

Posted on by Ray in Scenario planning, Strategic planning, Strategy

Or at least that’s how the WSJ reported it yesterday.

Years back when I was working in corporate strategy we used to have this yearly dance called strategic planning.  Every year we would fan out to all the business units, look at what they were doing and try to figure out what they needed to be doing three to five years down the road.

This process typically lasted the better part of a quarter or so and culminated in a presentation to upper management on a direction to pursue for the business unit.  What would happen next was often the best part.  Some business groups would shelve the work and not look at it again.  Other business units would invest time and effort to incorporate the strategic plan recommendations into what they were doing that year to try to make it happen in 3 to 5 years time.  At the end of this process, annual budgets would be declared “done” and the world would go back to work.

But that was the old, dead strategy.

The “New Strategy”

The new strategy is defined by adaptability and flexibility to take advantage of any opportunity that presents itself.  This results in strategic plans and operating budgets that are updated monthly, just-in-time decision making, and wider ranging planning scenarios.  For example:

  • Strategic plans and budgets updated  monthly – as the economy tanked over the last couple of years, baseline assumptions were rendered useless in no time at all.  Budgets updated yearly were no help.  Even budgets that were updated quarterly were subject to significant tracking error.  The only way to survive was to look at your budgets every month and adjust for cost of capital, inventory, and revenue mix.  This way a company could adjust their product mix immediately to best match what was selling and thus, maximize return.
  • Just-in-time decision making – the WSJ used a factory closing example in their article but I prefer to look at the SSD vs HDD product mix.  When to get on the SSD bandwagon is a strategic decision.  One can examine this decision yearly quarterly or monthly to see if it makes sense today or  take the time to identify the trigger points that would make the decision for you.  For SSDs, one could decide what price SLC-NAND memory has to drop to,  say $X/GB,  when SSDs would make sense.  To make this decision, one must determine how long it would take to create and launch SSD product offerings, what SLC-NAND pricing trends look like today and back up the trigger point to take this all in account.  But, after that all one need do is monitor SSD pricing daily and when it hits your trigger point start the product changeover.
  • Wider ranging scenarios – all old strategic planning used economic variables such as cost of capital, revenue growth, and cost of goods sold, many would use a range of +/- 5% on each of these factors to generate operating scenarios that were then fed into the strategic planning process.  The problem with such scenarios is that they didn’t take into account the extreme circumstances of the last couple of years.  By widening the scenarios to something like +/- 15%, they became much more useful and would have reflected actual experience.
F-15 F-16 F86 Sabre Jet Heritage Flight by TMWolf (cc) (from flickr)
F-15 F-16 F86 Sabre Jet Heritage Flight by TMWolf (cc) (from flickr)

But in the end most of this speaks to speed and taking advantage of opportunities that are present.

OODA

All this reminds me of Colonel John R. Boyd (USAF deceased) who came up with a new military and competitive strategic paradigm called OODA or Observation, Orientation, Decision, and Action.  Observe the competition (or market place), orient to (or appreciate what) the market is doing,  decide what the most appropriate action will be, and then do it.  John believed that the fastest OODA cycle always wins in the end.  Any OODA cycle takes time to perform, one that is fastest will change the marketplace such that by the time your (slower) adversary sees what’s happening and reacts, you have already changed the world out from under them.

There was a good book on Col. Boyd’s life by Robert Coram, Boyd: The Fighter Pilot Who Changed the Art of War. Also there was a bio, Genghis John, written by a close friend, Chuck Spinney.  If you are interested in understanding more on his views of conflict and strategy, I suggest starting at the bio but the book was an easy read.

How this all applies to the world with 6-18 month product development cycles, and 3 month marketing campaigns needs to be the subject of a future post…