Posts Tagged ‘adaptive strategy’

ProfitPATH’s Top Ten Blogs – First Quarter 2015

Tuesday, April 7th, 2015

Lessons about successful business growth1.  3 Lessons About Successful Business Growth

Two books, published 19 years apart, yet saying similar things about a key aspect of successful business growth:
‘Built To Last’ was published in 1994. In it, Jim Collins analyzed 18 companies that he called visionary because they were the best in their industries – and had been that way for decades. Collins argued that the core values and enduring purpose of all 18 could be separated from their operating practices and business strategies. And that, while the former never changed, the latter changed constantly in response to a changing world.
In her book ‘The End Of Competitive Advantage’, published in 2013, Rita Gunther McGrath studied the performance of large, publicly-traded companies from 2000-2009. She found that only 10 of them grew their net income by at least 5% every year. All 10 had found ways to combine tremendous internal stability with tremendous external flexibility. McGrath argues that to win in volatile and uncertain times, companies must learn to exploit short-lived opportunities quickly and decisively. more

time for a change in the direction you are heading, focus on center of compass...2.  3 Times When You May Need To Change Your Strategy

Changes to a well thought-out, well-crafted strategy shouldn’t be driven simply because it’s been in place 1, 3 or 5 years. A strategy shouldn’t necessarily be changed even if it isn’t producing results. In this situation I always look at how well (or badly) the strategy is being executed before I look at the strategy itself. So when should a company review its strategy? And what makes that review and any subsequent adaptation, revision or re-creation necessary? Here are three occasions. more

10 Commandments of Business Development3.  10 Commandments of Business Development

I’m not enjoying the after-effects of the 2007/2008 financial crisis. And I’m certainly not a fan of the banks, investment and other, which I believe were a significant contributor to the mess. But, while my wife may disagree, I like to think I keep an open mind. So when I saw an article talking about how Goldman Sachs grew from mid-tier firm to global player in a few decades I had to peek. John Whitehead, a co-head of the firm in 1970, wrote the following 10 commandments that guided their business development efforts. I love them. They’re full of common sense and they’re very practical. Written in 1970, these 10 commandments add to my belief that the basic, common sense principles of business never change. Here are 4 things that business owners today can take from them: more

4.  Adaptive Strategy – A Way To Profits In The New Normal?

Adaptive Strategy is an alternative developed by The Boston Consulting Group (BCG)¹. Here’s how I think it applies to owner managed businesses. Adaptive strategy is built on the 3 R’s required in a changing environment². Can adaptive strategy be applied in owner managed businesses? more

5.  6 Ways A Business Owner Can Influence Culture

I wrote last week about the relationship between Strategy, Culture and Leadership. As a result we’ve had some questions about how a business owner can influence the culture in his/her company. Here, in no particular priority, are 6 ways that it can be done. more

6.  The Difference Between A Strategy And A Plan

I want to talk briefly about what I think is one of the worst mistakes – confusing strategy and planning. Roger Martin wrote a post for the HBR last month in which he dealt with this very topic. I frequently hear business owners talk about the need to do “strategic planning” in order to create a “strategic plan”. Some talk – every year – about holding a “strategic planning meeting”. more

7.  6 Challenges Fast Growing Companies Face

I’ve mentioned Inc. magazine www.inc.com several times before. It’s a great resource. There’s a well-researched article in the current issue about 6 challenges fast growing companies face. They’re all about execution – and if the owner doesn’t deal with them well any one of them can be fatal. more

8.  6 Tips For Growing Your Business in 2015 – How to Use Them

I was asked a good question last week. “Loved your last blog post, Jim – but how do companies like mine do those things?” So here are some ways any business owner can implement the 6 tips in his/her company. more

9.  6 Tips For Growing Your Business in 2015

January is the month for New Year’s resolutions, freezing cold and, for many, a new fiscal year. Everyone wants to ‘do better’ in 2015 than in 2014 and, for business owners, ‘doing better’ is shorthand for growing. I don’t know how often, in the last couple of weeks, I’ve been asked something like “What are your top 6 tips for growing successfully”. The answer depends on a number of things. Here’s the rub. All 6 are much easier to talk about than do. But if you start on them now you can make some progress this year. more

10. 3 Reasons Why Strategy Isn’t Dead In The Water

I hate sweeping generalizations. Strategy is dead is one that I particularly dislike. To say that, it seems to me, is to say that it’s a complete waste of time for every company, regardless of size or industry, to have a strategy.
An article appeared in the Globe and Mail late last year, headline “Why Strategy is Dead In The Water.” It was based on an earlier article in Forbes magazine, headline “Is Strategy Dead? 7 Reasons The Answer May Be Yes.” We’d gone from strategy might be dead to signing its death certificate – in the space of two headlines. more

 

Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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ProfitPATH’s Top Ten Blogs – First Half 2014

Tuesday, July 15th, 2014

 

1.   6 Challenges Fast Growing Companies Face

I’ve mentioned Inc. magazine www.inc.com several times before. It’s a great resource. There’s a well-researched article in the current issue about 6 challenges fast growing companies face. They’re all about execution – and if the owner doesn’t deal with them well any one of them can be fatal. more

 

 

Strategy is not planning and the importance of knowing the difference2.   The Difference Between A Strategy And A Plan

I want to talk briefly about what I think is one of the worst mistakes – confusing strategy and planning. Roger Martin wrote a post for the HBR last month in which he dealt with this very topic. I frequently hear business owners talk about the need to do “strategic planning” in order to create a “strategic plan”. Some talk – every year – about holding a “strategic planning meeting”. more

 

3time for a change in the direction you are heading, focus on center of compass....   3 Times When You May Need To Change Your Strategy

Changes to a well thought-out, well-crafted strategy shouldn’t be driven simply because it’s been in place 1, 3 or 5 years. A strategy shouldn’t necessarily be changed even if it isn’t producing results. In this situation I always look at how well (or badly) the strategy is being executed before I look at the strategy itself. So when should a company review its strategy? And what makes that review and any subsequent adaptation, revision or recreation necessary? Here are three occasions. more

4.   Adaptive Strategy – A Way To Profits In The New Normal?

Adaptive Strategy is an alternative developed by The Boston Consulting Group (BCG)1. Here’s how I think it applies to owner managed businesses. Adaptive strategy is built on the 3 R’s required in a changing environment2. Can adaptive strategy be applied in owner managed businesses? more

5.   6 Ways A Business Owner Can Influence Culture

I wrote last week about the relationship between Strategy, Culture and Leadership. As a result we’ve had some questions about how a business owner can influence the culture in his/her company. Here, in no particular priority, are 6 ways that it can be done. more

6.   6 Things We Can All Learn From Family-Owned Businesses

The 6 things I’m going to talk about come from a study of 149 large, publicly-traded, family-controlled businesses. However, stay with me because we’ve seen the same characteristics in the successful family-owned businesses we’ve dealt with – and none of them are publicly traded. Another thing – the study looked at 1997 – 2009, covering some good and some very tough times. Guess what? The family-controlled businesses, on average, turned in better long-term financial performance than non-family businesses – in multiple countries. So what are the 6 things we can learn? more

7.   6 Tips For Finding The Right Buyer

Last week I was one of three speakers at the Toronto Star’s Small Business Club event, “Exit and Succession Planning”. My talk included 6 things a business owner can do to ensure she/he finds the right buyer or successor. more

8.   3 Ways Human Nature Sabotages Strategy

Ask 10 people how long it will take them to complete a task and I’d guess 7 or 8 of them will underestimate the time required. That proportion might increase if the 10 are all type A personalities – i.e. business owners or entrepreneurs. We see this when we take teams through our strategy and business planning processes. For example, at a specific point, we prioritize the things they need to do to close the gap between their company’s current state and where they want it in 3 years’ time. Typically the teams want to tackle more items than is humanly possible given their resources. There’s no ideal number of items – the complexity of each item is only 1 of the variables – but we’ve seen time and again that completing a few key tasks produces better results than taking on too many. more

9.   5 Traits Effective Business Owners Share

I believe the single biggest thing that separates companies that grow from those that don’t is the owner’s awareness of the need for change and their willingness to do so. So, I was interested in a recent post about traits that effective entrepreneurs share. Sure enough, it contained a quote saying that if owners commit to learning more about themselves and becoming the best that they can be, they’ll find that challenges are really opportunities. But what other traits, according to the post, do effective entrepreneurs have? more

10.  Strategic Planning – 3 Things That Are Wrong With It

We all know that picking a strategy means making choices. But that means making guesses about that great unknown, the future. What happens then if we make the wrong choice? Could we destroy a company? That’s why, according to Roger Martin¹, we turn choosing a strategy into a problem that can be solved using tools we are comfortable with. And we call that strategic planning. But, Martin says, companies make 3 mistakes when they confuse strategy and strategic planning. more

 

 

Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Adaptive Strategy – A Way To Profits In The New Normal?

Monday, February 28th, 2011

The types of strategy required to be successful in an economy and society, in which there is more uncertainty and a faster pace of change than ever before, is generating a lot of discussion. (See Why Strategy Is Still Worth A Business Owner’s Time.)

Adaptive Strategy is an alternative developed by The Boston Consulting Group (BCG)1. Here’s how I think it applies to owner managed businesses.

Adaptive strategy is built on the 3 R’s required in a changing environment2.

1. Responsiveness (or agility). Means a company can respond quickly to changes in the market and begin to act while plans are still being finalized; is flexible in process and structure; and can deal with short cycle times. This should be an advantage for small to mid-size owner managed businesses which, by nature, can react to change more quickly than corporations.

2. Resilience (or robustness). Is a characteristic of owner managed companies which have strong balance sheets and good cash flow. They also must be good at thinking through all of the alternatives, having contingency plans and hedging bets. This gives them the ability to withstand any surprises.

3. Readiness (or anticipation). Is a result of how well a company stays in touch with its market – the quantity and quality of information it obtains from customers, suppliers and other industry players. This can’t be left to front line people. The owners and managers must get out there – they are the ones who use the information to think through different scenarios and improve forecasts.

An adaptive approach is applied using a 4 step closed loop process.

An adaptive strategy is a dynamic approach in which better-fitting strategies continuously evolve in response to change. It is applied via a 4 step process.

Step 1 – Variation (or innovation). A company continually looks to vary the status quo by targeted innovation; natural or proactive modification of internal practices; responding to signals from the economy, customers, competitors; and by leveraging the innovative capabilities of external resources e.g. suppliers.

Step 2 – Selection. The most promising variations/innovations are selected by e.g. pilot projects, limited and full-scale tests conducted directly in the marketplace.

Step 3 – Amplification (or scaling up). Those which show the greatest potential are quickly scaled up. They become a permanent part of the company’s routines and offerings by e.g. allocating resources to them.

Step 4 – Modulation. Modulation is simply fine tuning the application of the first 3 steps in response to what is happening in the marketplace and the company’s goals.

You may feel that you’ve seen each of the steps before. But BCG argues that the way in which they’re combined and applied is what makes adaptive strategy unlike classical strategy in a number of respects.

Practically, the most important difference is that the adaptive approach largely removes the distinction between planning and implementation, since successful strategies emerge from practice rather than from analysis and design.

It’s almost an extreme form of strategy by evolution.

Last words.

Can adaptive strategy be applied in owner managed businesses?

BCG has identified 4 situations in which adaptive strategy can be applied and well-known corporations which fit those situations. I’m not sure if the corporations pro-actively employed adaptive advantage or if BCG is fitting their actions to the model.

I’m waiting for more evidence.

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1 Kilian Berz, Managing Director of The Boston Consulting Group (BCG) Canada  – presentation to the Canadian Association of Management Consultants (CAMC) and Cost and Management Accountants (CMA) in Toronto on 16 Feb 11.

2 https://www.bcgperspectives.com/content/articles/adaptive_advantage/ 

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