Archiv der Kategorie: Strategy

Strategy consists of vision, mission, SWOT, Critical success factors, Value disciplines, strategic direction, strategic goals and strategic core.

Human – Machine – Business model

The main task of the strategy, the plan or the own initiatives, is to keep all aspects in line. It concerns the seizable products, facilities, storages, transport equipment, material as well as the immaterial, mental factors such as convictions and cultures. These mental aspects are very stable and prepared for long-term use. They change almost unnoticed in individual areas, so that there is sufficient time available to adapt to the new conditions. The life cycles of the physical aspects however shortened so that the development of a plan is nowadays a complex venture. What does this mean for humans, machines and business models?

komplexitaet

We learned that everything follows lifecycles – starting with the Kondratiev cycles that divide the last two hundred years into waves. The Gartner Group finally introduced the Hype Cycle for IT- solutions. Thus, we have a tool for a long time that arranges the elements of the business. The purpose of such curves is to make the business complexity manageable, in order to better justify decisions. Since nowadays all aspects can be described in such a way, we again have a complexity of lifecycles that can only be overlooked with difficulties. They function at the same time and affect decisions. Gary Hamel already predicted in 2000 that leading enterprises of the future are characterized by fast development and replacement of business models. Additionally, however, the interrelationships of humans, machines and business models must be considered.

  • Human
    Despite all the technological developments, people become more and more important for the alignment and control of business procedures. As soon as you have to make decisions outside of the routine, it requires people with their convictions, creative abilities and their sense of duty. The advancement of these attitudes is an essential task of everybody. For smart deployment, it is important to know the ways of thinking and the talents of the employees. Skill profiles and the understanding of the mental states are the basis, in order to be able to assign the suitable employees to the tasks.
  • Machine
    The machine includes today not only the physical cogs that keep production moving, but also digital aspects that represent the physical and contentual parts in the virtual space. This covers all equipment, including the computers with their programs, databases and networks as well as all interconnected sender-receiver-systems. Together they represent the machines that keep today the momentum of the business. Each individual component has thereby its own life cycle that does not only result from the technical advancement, but also from the economic interests of the manufacturers. Unfortunately all components are in another phase of the life cycle. As soon as fundamental technologies begin a new cycle, they also carry away dependent components, which again drag others along and so on. The simplest example is the operating system of the computer. A new version of Windows requires new printer drivers, requires new printers, requires new ink cartridges … For this reason today the Enterprise Architecture management (EAM) is an important IT-task to illustrate the current and the future IT-landscape in a model and to create a framework for decision making with a roadmap.
  • Business model
    The business model bundles the business components. This includes the following elements. The deliverable concept contains the extended business idea. The earning model describes the prepared income sources. The value creation determines the procedure of delivering the products and services. The organization is the internal network. The partners extend the internal network to the outwards. The customers are the target groups, which give the cash-flow to the enterprise, in order to act. Resources are the means that the employees need for producing the deliverables. Communication covers the channels to all involved parties. The coordination specifies the control mechanisms.
    The complexity of the business model results from the different life cycles of its components and their mutual dependency. At the same time the feasibility is determined by humans and the machines. The competition takes place on the level of the business model. Customers buy the deliverables that cover their needs best. For this reason it is an important task of the leaders to develop a business model as viable and competitive as possible that is not only attractive to the customers, but also to employees and partners.

The art of the strategizing coordinates the asynchronous life cycles of humans, machines and business models. The joint initiative only succeeds, if planning is accomplished holistically and the components are manageable. It is not enough to develop visions for the machines, or social ones, or economical. The viable conception of the future evolves, if all areas are considered with their interactions. The development of the various elements requires at the same time the overarching expansion of the company. The purpose of the company should lead and not the general, technological development.

Bottom line: The business delivers the desired results, if it is based on a holistic plan that considers people, machines and the business model. Humans are thereby the mobile, formative variable that makes the machines and the business model to become real. You only have to create the appropriate conditions – capable humans, effective functions of the machines and a viable business model.

Leadership nightmare

If it is sometimes not going in the direction that you desire as a boss, in the first place the others are responsible. We assume that the ideas of the superiors are thoughtful, and meaningful in a consistent and beneficial way. The feedbacks of the colleagues create the impression that it is the right way. For any reason, however, the employees do not move in the desired direction. Actually, a nightmare for the boss.

overlap

The nightmare begins not immediately, since one explains oneself the missing momentum with lack of commitment. At a closer look you find three aspects that contribute crucially, that the forces of all unite into a common direction.

  • Expectations
    The expectations of the executives determine, above all, how strongly they are satisfied with the outcomes. Depending on character, they have negative fears or positive hopes. The expectations include the actions that should be done, the results that you eventually hold in your hands, or the consequences that result in the following. The management of expectations is difficult, since rarely, if at all, only a few people take care of documenting them comprehensibly for everybody.
  • Strategy
    The long-term initiatives describe the direction of the enterprise. The individual aspects create the crash barriers for all employees, partners and even the customers. Here you find the vision that offers a conclusive snapshot of the future. It is supported by the mission that supplies the Raison d’être. During the management of everyday tasks the critical success factors, the weighted value disciplines as well as the descriptions of the strengths, the weaknesses, the opportunities and the risks help. The long-term direction needs clear messages, so that the enterprise builds upon it. The easily understandable and well documented strategy is the steering wheel that gives the enterprise the direction.
  • Activities
    The many actions that are accomplished on all enterprise levels can only be collected and listed with very, very much effort. In larger companies, they understood that this collection is not economical. The efforts of all appear in the common results. It is only important to find the right level of detail for the description of the positions and processes.

A crucial executive task is the controlling and coordination of the interests of all involved people.

It becomes a nightmare, if the three aspects mentioned do not overlap. This minus scenario means that the leadership team formulates their strategy outside of their expectations and nobody accomplishes the expectations or the future picture. The employees make something that does not go into the desired direction. The good news is that the staff orientates themselves on each other and moves them jointly in a common direction. In this case you can forego the leaders, since their contribution does not impact at all.

The plus scenario provides in any case a way out by taking consciously care of the three aspects.

  • This starts with the attitude. Should the employees only do, what they are told? Hopefully not, since otherwise the enterprise moves into a dead end. The creative ideas of the staff are what improve the enterprise. The minimum requirement is that they act into the general direction, however with enough free space for the new things.
  • The same is valid for the expectations of the executive team. A broad positioning increases the opportunities of the company. On the one hand that comes from the different functions of work (e.g. development, production, sales). On the other hand there are the personal interests and the ambitions of the protagonists.
  • The strategy should reflect as clearly as possible the results of the alignment of all involved people.

Bottom line: The executive nightmare that results from missing adjustment can be avoided. Clearly formulated expectations make the conceptions transparent. The sophisticated plan determines the general direction. The employees develop the actual implementation of the plans and realize the new operational sequences, the flat structures and a fruitful culture.