white water management: the key to navigating the 'new business normal
DESCRIPTION
We are looking out on a dramatically altered business world—with little resemblance to life a few short months ago. In this more complex environment, the ability to anticipate and deal with frequent change, even turmoil, determines survival. Some business leaders have yet to grasp this reality; others are rightly daunted by the challenge.Please view this on-demand video webinar presentation in which we discuss the capabilities needed to manage the complexities of the "new business normal."TRANSCRIPT
White Water Management: The Key to
Navigating the „New Business Normal‟
Presented by:
Ron Wince, President & CEO
Guidon Performance Solutions
Michael W. Wright, Co-author
The New Business Normal
NEW GLOBAL REALITIES
change
speed
knowledge
anxiety
innovation
leadership
experience
brand
differentiation
temporary
outsource
competencies
survival
revolution
strategy
balance
technology
stress
integrate
travel
transparency
customers
competition
24/7/365
Change
security
innovation
Dorothy…I don’t think we’re in Kansas anymore!
speed
Good corporate
citizenship
competition
survival
India
anxiety
speed
Those who know
vs. those
who do not
competency
Innovation has
become the Ante.
differentiation
Consumers value
the experience,
not the product.
experience
knowledge worker
chaos
stress
Low-stress family life
is nonexistent.
information
speed
brand
Ignorance can
accelerate
multi-tasking
Mistakes may be
mortal.
competition
engaged
population
revolution
change
speed
knowledge
anxiety
innovation
leadership
experience
brand
differentiation
temporary
outsource
competencies
survival
revolution
strategy
balance
technology
stress
integrate
travel
transparency
customers
competition
The Boundary Conditions of the
New Business Normal
Demographics and Debt: US Citizens >65 ratio to working will increase from an average of 16–
19% over the period from 1965–2009 to ~ 32% by 2030; In Japan it will move from about 37% to 57%;
In the Euro area, the percent will shift from roughly 29% to 45% DEBT: We are in unchartered waters
Speed of Everything
Complexity of Technology
• Primary (single discipline effects ) research done and fully developed
• Secondary effects (single to low multiple discipline) explored and developed
• Tertiary effects (highly multi-discipline) are now the research and development norm
Globally Strategized– Locally Exercised
Rule of Three--- Oligopolies and Boutiques
Matrix Organizational Structures
• Multi-disciplined, multi-level, multi-cultural environments
Dynamic
• Change is accelerating
• Adaptation is critical
• Mistakes can be mortal
Inexorable Trends
Mining university and government technology research sources and
accelerating new product introductions, will continue to be timely and
critical as sovereign capital becomes evermore strategically deployed in
the interests of national economic, energy, and military security.
Collaboratively building technological infrastructure and a culture of
innovation in emerging markets will challenge universities, governments,
financial markets, and businesses.
Utilizing Nano-technology and building physical products that will change
the nature of manufacturing to offset the cost advantages of low-cost labor,
raw material deposits, lax human rights and environmental laws will
emerge as the next wave of technology based competitive advantage.
Information based competition will be pervasive and sustainable advantage
will accrue to those who can access, collate, analyze and act on
information faster than the competition anywhere in the world at anytime.
INTANGIBLE ASSETS OUTSTRIP
PLANT PROPERTY AND EQUIPMENT (PP&E)
AS THE BASIS FOR VALUATION
Goodwill
Brand recognition
Customer relationships
Intellectual property
Systems
Logistics
Those who know
vs. those
who do not
Ignorance can
accelerate
Primacy
of the
Customer
Consumers value
the experience,
not the product.
Innovation has
become the Ante.
TRENDS IN CYCLE TIME
Source: PDMA Foundation CPAS Study 2004
baseline 2010 estimate
Cycle times have been greatly reduced,
especially for new-to-the-world innovations.
1995 to present (in months)
New-to-the-world
Major revisions
Incremental
41.7
18.1
7.6
21.0
13.2
6.4
1995Average
2010Average
Narrowing Organizational Focus:
Faster, Leaner, Smarter
Productivity & Predictability
Supply Chain Rationalization
Rule of Three
Redeployment of Assets
Seamless Coordination of Systems & Processes
EMERGING MARKETS
Taiwan
Korea
India
Japan
Russia
China
A World Bank paper uses simulations to predict
some amazing shifts in the global middle class
Thanks to emerging markets, by 2030, an
estimated 16.1% of the world population will be
categorized as middle class, up from 7.6% in
2000
Over the same period, emerging markets will
account for 750 million new entrants into the
middle class
While in 2000, 13.5% of the global middle class
was Chinese and only a negligible amount Indian,
by 2030 these two groups will account for an
estimated 44% of the global middle class— with
Indians moving from virtually zero to 6%
Source of data: Bussolo, De Hoyos, Medvedev, van der Mensbrugghe, Global Growth and Distribution: Are China and India
Reshaping the World? Policy Research Working Paper 4392,11/1/2007.
What‟s “the China price”?
The 4 most feared words in the
new business normal world
Unrelenting Challenges
for Global Business Leaders
Risk management – clear risk/reward ratios
Intellectual property management (IP) – variation by country
Setting up first-rate information technology (IT) and knowledge management
(KM) systems – the basis of future competition
Managing geometrically slopping cost curves-cost denominated competition,
opportunity management, and rapidly moving market windows
Managing risk through strategic customer relationships and partnerships-seeing
the customer as the primary source of learning
Strategy Execution: human factors – developing and managing cross-functional
and cross-border high performance teams
Working with and through capital markets
Required leadership capabilities in the new business normal include:
Making disciplined (data driven) and knowledge management based
decisions
Communicating effectively internally and externally across multiple
cultures
Working with external resources in the financial, technical, government,
university and business communities
Leading people by influencing behaviors, stimulating creative activity in
others, and successfully managing small and large group dynamics
Innovating, marketing, planning, forecasting, and adjusting to succeed
Anticipating, intercepting, and harnessing technology based growth
opportunities
Effective Leadership in the NBN
A NBN LEADERSHIP REPORT CARD
Strategic customer relationships
Technological health
Market position
Global culture
Process disciplines
Constant innovation
Knowledge management systems
Good corporate
citizenship
Take-Away Principles for Thriving in the
New Business Normal
Performance is the residual of behaviors
Corporate agility and performance hinges on the collective direction of individual
behavior and attitude
People and values count
Speed = The Competitive Advantage: accessing, collating and acting on information faster than
the competition anywhere in the world at anytime
Primacy of the customer
Listening for the functionality
Access & Mobility
Intangible Assets
Brand
IP
Knowledge networks
Innovation
Organization
Processes
Products
Scaling
In the New Business Normal the difference between an opportunity
…and a threat
Is the time horizon in which you see it.
THRIVING IN THE AGE OF
UNCERTAINTY
The Reality...
We are in a White Water World
A White Water World…
Complex
Turbulent
Uncertain
Risky
Unforgiving
Real Time
Thriving in a White Water World
1. Purpose & Core
Values Are The Only
Constants
2. Compete in Dog Years
3. ―HOW‖ Matters More
Than ―WHAT‖
4. People are the
Linchpin
Four Principles for Navigating the New Normal
Principle #1Purpose & Core Values Are The Only
Constant
• Purpose and Core Values are the COMPASS which ―harmonizes‖
individual orientations into an organizational orientation.
• Military organizations build common orientation through their long
basic and advanced training programs and by studying a common
doctrine.
Adapted from Certain to Win
Dr. Chet Richards
The Functions of Purpose
Providing a context for decision-making
Providing a yardstick for performance
A motivator of excellence
Everyone agrees to make his or her actions serve
organization's intent in terms of what is to be
accomplished.
Providing a focus for collaboration and shared
responsibility
From High Performance Teams by Buckholz and Ross
The Functions of Core Values
Emotionally energize people and ―provide a moral
compass for the organization.‖
Guide attitudes and actions
Acts as an immune system which deploys the
corporate antibodies
Principle # 2Compete In Dog Years
A time-compressed company does the same thing as a
pilot in an OODA loop… It’s the competitor who acts
on information faster who is in the best position to win.
George Stalk, Jr. & Tom Hout,
Competing Against Time
Competing in Dog Years
OPERATIONAL LEAD TIME
Wasted Time and Activity
Core Process Value
Excessive Motion
(Walking to Next Task, etc.)
Defective Process
(Identifying, Handling, Fixing)
Missing, Incomplete,
Redundant
Information
Waiting
(Often Result of
Unbalanced Tasks)
Transformation
Complete the
application
process
Excessive
Backlog
Overprocessing
The key is to reduce business processes and effort to
“core value”
“At a time when firms in many industries
offer similar products and use comparable
technologies, business processes are among
the last remaining points of differentiation.”
Tom Davenport, Competing on Analytics
Principle #3How Matters More Than What
Business Processes are the
“HOW”
– Strategic Planning and
Deployment
– Operations
– Talent Development
– Innovation
– Technology Deployment
Strategies, business models
and entire industries change
rapidly today – business
processes are the key to
adaptation and execution
People Linchpin the Process
According to Boyd, a fighter pilot didn’t win by faster
reflexes; he won because his reflexes were connected to
a brain that thought faster than the opponent.
Bing West and MajGen Ray Smith, USMC, Ret.
The March Up, p. 11
Question: What determines the speed of the
organization?
Ultimately, a moral climate/culture/environment
that encourages people to use and harmonize their
initiatives to further the goals of the organization
Under such a climate, people will evolve new
ways to solve the technical (and even
organizational) problems
Competitive Advantage Through People
People are the Linchpin
A corporate culture which can respond quickly to the needs of the
business must encourage people to use initiative and creativity – while
also providing consistency and alignment
Under such a high performing culture, people will solve the technical,
operational and strategic problems
Creating the culture requires a framework for people to ―operate
within‖ – to retain consistency with ―corporate intent‖ (purpose) but the
freedom to act autonomously
Active learning through rapid fire reflection and deliberate practice
helps to increase the desired ―cultural competence‖
From Good to Great by Jim Collins
Abbott recruited entrepreneurial leaders and gave them the
freedom to determine the best path to achieving their
objectives.
On the other hand, individuals had to commit fully to the
Abbott system and were held rigorously accountable for their
objectives.
They had freedom, but freedom within a framework.
“…The two fundamental forces that drive GE…a
common operating system and social architecture…”Jack Welch
GE 1999 Annual Report
How we execute & deliver results
Who we are and what we believe
Social Architecture
Operating System
Navigating the New Normal
Purpose & Core Values
How we behave and interact
Cycl
es o
f U
se
Success in the New Business Normal will depend on the
ability of the organization to rapidly respond to the
external change and complexity while maintaining
consistency with purpose and core values
Navigating the New Business Normal
Purpose & Core Values
Social Architecture
Operating System
Business Processes
• Purpose Statement• Values Statement
Innovation & Problem Solving
Business Intelligence
Technology & MIS
Mission/Strategy
Common language & terminology
Rewards & Recognition
Valued Behaviors
Architecture of the High Performing Enterprise
High Performing Organizations will need a Rosetta Stone to continually and
rapidly recognize external change, understand internal capabilities, focus on the
exceptions & disagreements and deliberate practice to embed changes in an
organization’s DNA.
Cycl
es o
f U
se
Cycles of Use
Tiger Woods regularly practices this shot, although he
may only see it under tournament conditions 2-3
times per year
Cycles of Use is the application of Deliberate
Practice at the Enterprise Level – ongoing reflection
and learning
Learning Cycles of Use
We are in a world of continuous rapids
frequently interrupted by monsoons
Four Principles
Purpose & Core Values provide a
foundation for the world of flux
Speed is life!
How is more critical than What
People enable execution through aligned
behaviors
Every organization needs a Rosetta Stone
Winners in the future will
Read the river
Pick the line and execute the move
Learn from every rapid
Take-Away Principles for A White
Water World
THANK YOU!
White Water Management
Thriving in the Age of Uncertainty
Ron Wince, President & CEO
Guidon Performance Solutions
www.GuidonPS.com
Michael W. Wright, Co-author
The New Business Normal