Survival?:: distinguish between opportunities and threats

Benoit Mandelbrot introduced us to the world of fractals and, low-and-behold, it transpires that, when it comes to dealing with complex systems such as the human body, the smaller the scale of our investigation the closer we get to the root cause of a problem. Our success-rate when it comes to dealing with diseases that, unseen, attack and erode the system from within, has increased exponentially.

Why, then, does the “business world” chose to ignore such lessons? Preferring instead to try to estimate what the future might hold based upon a fuzzy image of the present and a black & white image of the past. Our technology has evolved whilst much our thinking is mired in a, now past, era.

Whether you believe that business is war (and vice versa) or not you cannot help but be aware that it is the same in the Animal Kingdom as it is in business: those who would do you harm have evolved camouflage that enables them to merge into their surroundings and get as close to their intended victim as they can.

If your vision or other senses are impaired or the predator uses the environment to their advantage you are easy prey…THINK ABOUT IT AND ACT!!! Lose the blinkers.

Question what you know, how you know it, who you trust, their motives, the basis of their knowledge. If they can’t provide you with a High Definition image of that which you seek to observe, you may have been fooled their camouflage OR be sleepwalking toward oblivion with your only comfort being that you will be far from alone!

Ontonix don’t do sleepwalking: Rate-A-Business

How can you become a reframer and continuously practice mental model innovation? As Nooyi and Immelt did, you first need to change the lens through which you observe and interpret the business world — a world that’s getting increasingly complex. To use a metaphor from photography, you can’t capture nor appreciate the full richness and complexity of the physical world if you only take snapshots using a still camera with a fixed 2D lens — and do it only during the daytime. Rather, you need to train your mind to act as a sophisticated “mental camera”…

See Innovation Opportunities with an Upgraded Mental Camera – Navi Radjou, Jaideep Prabhu, Prasad Kaipa, Simone Ahuja – Harvard Business Review.

Build Community for a Resilient future:: M3 Planning

M3 Planning wade-in on one of my favourite topics: business resilience and use another, family business, to illustrate the power of a common bond or purpose. Interdependence is a feature of the most resilient natural or man-made systems…whether local, global or glocal!

Thanks to the vision and drive of Martin Stepek, Scotland has the Scottish Family Business Association to help develop and promote resilience in Scotland through our numerous family businesses.

Everyday we see the ripple effect that healthy organizations have on their internal and external communities. Their power to attract and retain engaged staff that create vibrant communities can lead to a successful nation and world.

For those who might not know it, M3 Planning is a company established by a mother, father and daughter team. Beyond DNA, the three shared another bond – to make long-term planning a more straightforward and beneficial process that could be accessible to thousands of businesses instead of just the Fortune 500s of the world.

The business started nine years ago, and like the rest of the country, M3 Planning has weathered economic crises and been honoured to witness how hundreds of companies have done the same by keeping long-term strategy in mind.

Family-run companies, according to Harvard Business Review’s November edition, weather hard economic times better than companies with more dispersed ownership. The article’s key point – family businesses focus on resilience more than performance.

Though the study found family-owned businesses did not make as much money during good economic times, consistently the average long-term financial performance was higher than non-family businesses in all seven countries examined.

Certainly being resilient is not relegated to family operations, and can be tied to management practices that invest in their people, encourage retention and result in fiscal stability.

  1. They’re frugal in good times and bad. This behaviour also is keeping debt low, deciding not to spend more than they make, choosing projects that show a good return on their own merits, and acquiring fewer companies.
  2. They are highly diversified and are more international, with a higher percentage of their revenues coming from outside their home region than nonfamily firms.
  3. They retain talent better than their competitors. In part, that can be attributed to greater financial stability, which reduces the need for layoffs. But these organizations also spend more on training their people: $1,172 a year per employee on average versus an average of $445 at non-family firms.
    Most families have this hardwired to some degree, but beyond the boundaries of families, we have the capacity to establish resilience when we allow ourselves to care and prioritize in favour of the same things. Be it family businesses, healthy organizations, tight-knit communities or groups with common interests, these are all places in which we all live together.

We all have witnessed the power of community in 2012: strength, support, and caring are points where humanity shines through. In 2013, we will continue to honour and support groups who are driving toward improving their communities.

When all the metrics are met and goals checked off, there is no better strategic outcome that can be created than to positively impact the lives of those in your world. Blessings to everyone during this sacred season, we hope you see great things on your horizon personally, professionally and for your communities.

Five Reasons Companies Fail at Business Model Innovation – HBR

Several years ago when I first read these words from Clay Shirky they really resonated as far as my own industry [insurance] was concerned.

“It is easier to understand that you face competition than obsolescence”

In the intervening period a great deal has changed…not necessarily for the better. But too much has remained the same. As I read recently “Nowadays, competition is mainly taking place between business models rather than just between products and services…”. It is true.

Business models that are unsustainable but still function in the current environment, are now showing the outward signs of frailty. Fragile businesses lack the agility to adapt for survival in a post-critical financial landscape.

Read more of this post

Rick Bookstaber: Human Complexity – The Strategic Game of ? and ?

It is so much easier when someone else…particularly someone with such a high profile…puts their mind to something about which you have thought and written so much. Especially when the vast majority of Mr Bookstaber’s writing echoes what you have been “SCREAMING!” to try to get such an important message heard.

What is Complexity?

Complexity can be either an annoyance or a boon, depending on one’s enthusiasm for tricky problems. We all know intuitively that complexity makes accidents both more likely and more severe. After all, any machine with many parts has more risk of having something go wrong, and with more interconnected mechanisms there is more risk that a single failure will propagate to cause the entire machine to fail. For markets, the accidents are market crises

via Rick Bookstaber: Human Complexity: The Strategic Game of ? and ?.

The C-Level Job for Everyone: Reducing Complexity [Harvard Business Review]

Ron regularly writes on this topic but he, like IBM, have very little in the way of practical solutions…perhaps not too surprising when one considers that a clear definition is as hard to come by as a means of measuring (and therefore) managing what is, quite correctly, identified as a threat to business profitability, stability and resilience.

Managing complexity has always been part of the leader’s job — be it sorting out the variables involved in strategic decisions, orchestrating the interaction of different functions or responding to unanticipated events. But today, coping with complexity is an even bigger part of the manager’s responsibilities. In fact, a 2010 study of over 1,500 chief executive officers by IBM’s Institute for Business Value identified “the rapid escalation of complexity” as the number one challenge facing CEOs. Furthermore, while 80% of those interviewed predicted even greater complexity ahead, less than 50% felt adequately prepared to deal with it.

Ron Ashkenas: The C-Level Job for Everyone: Reducing Complexity.