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Archive for August 2011

What strategic planning is not

What Strategic Planning Is Not! (with thanks to the Pakistan Institute of Management)

Strategic planning is about fundamental decisions and actions, but it does not attempt to make future decisions (Steiner, 1979). Strategic planning involves anticipating the future environment, but the decisions are made in the present. This means that over time, the organization must stay abreast of changes in order to make the best decisions it can at any given point – it must manage, as well as plan, strategically. Strategic planning has also been described as a tool – but it is not a substitute for the exercise of judgment by leadership. Ultimately, the leaders of any enterprise need to sit back and ask, and answer, “What are the most important issues to respond to?” and “How shall we respond?” Just as the hammer does not create the bookshelf, so the data analysis and decision-making tools of strategic planning do not make the organization work – they can only support the intuition, reasoning skills, and judgment that people bring to their organization. Finally, strategic planning, though described as disciplined, does not typically flow smoothly from one step to the next. It is a creative process, and the fresh insight arrived at today might very well alter the decision made yesterday. Inevitably the process moves forward and back several times before arriving at the final set of decisions. Therefore, no one should be surprised if the process feels less like a comfortable trip on a commuter train, but rather like a ride on a roller coaster. But even roller coaster cars arrive at their destination, as long as they stay on track!

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Social impact bonds – coming to a public sector commissioner near you

Social Impact Bonds Social Impact Bonds are a form of outcomes-based contract in which public sector commissioners commit to pay for significant improvement in social outcomes (such as a reduction in offending rates, or in the number of people being admitted to hospital) for a defined population. Social Impact Bonds are an innovative way of attracting new investment around such outcomes-based contracts that benefit individuals and communities. Through a Social Impact Bond, private investment is used to pay for interventions, which are delivered by service providers with a proven track record. Financial returns to investors are made by the public sector on the basis of improved social outcomes. If outcomes do not improve, then investors do not recover their investment. Social Impact Bonds provide up front funding for prevention and early intervention services, and remove the risk that interventions do not deliver outcomes from the public sector. The public sector pays if (and only if) the intervention is successful. In this way, Social Impact Bonds enable a re-allocation of risk between the two sectors.

Call Steve on 07825-189263 to discuss your options here or e-mail steve@targetmanagementadvisory.co.uk  In the meantime, check out this video:

video on social impact bonds

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Leadership and Management Development Grant

The government has set up a new Leadership and Management Advisory Service (LMAS) to help eligible employers identify and fund development opportunities for their senior leaders.

The aim of the service is to foster the leadership and management skills of senior staff so they can make full use of their workforce and accelerate the growth of their business.

To be eligible, your business must be in England and have:

  • two to 249 full-time equivalent employees
  • the potential for high or fast growth

If eligible, you will receive:

  • A free skills diagnostic from a skills adviser. This will identify the leadership and management development required by the nominated leader. This is so they can optimise the contribution of staff and grow the business. The adviser will then agree on a development plan with the leader.
  • A government grant of up to £1,000 for use on management and leadership development activity, such as any training agreed with the skills adviser. You will have to match-fund this grant – e.g. to receive a grant of £500 your business will have to contribute £500 of its own money.

When the development activity is complete, the skills adviser will discuss the impact with you and see if there are opportunities for further skills development that would benefit your business.

The LMAS will operate on a regional basis and full contact details of the service providers, and the regions they cover, are listed below:

East of England, East Midlands and West Midlands
Find out about LMAS services on the EMB Ltd website.
Tel: 0845 894 8969
Email: lmas@embltd.co.uk

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LOST ALL FAITH IN THE STRAIGHTFORWARD OPERATION OF CAUSE AND EFFECT?

Do you ever feel like Arthur Dent?

He lost all faith in the  straightforward operation of cause and effect the day he got up intending to catch up with some reading and ended up on a prehistoric earth with a man from Betelgeuse and a spaceship-load of alien telephone sanitisers…

Some business days can make you feel just like this – what happened to the relative certainties we used to deal with. It can’t all be chaos or too complicated to comprehend? Why, the buzz phrase was all about decision making under uncertainty, when at least we knew what we didn’t know. Now, there’s an internal Donald Rumsfeld telling us there are unknown unknowns, so how on earth are we to make judgements and come to conclusions?

You’ll have heard me say before that the best you can do is come up with something that works for you AND THAT YOU ARE ACTUALLY CAPABLE OF IMPLEMENTING rather than reaching for the text book answer that should apply to a business of your “type”. Oh, and preferably an approach that doesn’t bet the whole farm, as they say.

Remember, you only have to be the least foolish of the fools to have a fair shot at surviving.

 

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Not quite what Darwin said…

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

 Charles Darwin – or perhaps not quite

 A further version of this is etched into the floor at the California Academy of Science:

It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change.”

In fact, as Nicholas J. Matzke, has discovered, (as you can read on Nick’s blog), the source is one Dr Leon C. Megginson at Louisana State University in Baton Rouge, Louisiana, in 1963. Megginson actually wrote:

According to Darwin’s Origin of Species, it is not the most intellectual of the species that survives; it is not the strongest that survives; but the species that survives is the one that is able best to adapt and adjust to the changing environment in which it finds itself.’ (Megginson, ‘Lessons from Europe for American Business’, Southwestern Social Science Quarterly (1963) 44(1): 3-13, at p. 4.)

Does this matter? After all, we all know what Darwin meant, don’t we? And for organizational studies and mangement science, an apt quotation is just what is needed.

Well, it really does matter. The first quotation suggests that adaptability is beneficial and the more responsive you are the better, whereas the full Megginson paraphrase makes it clear that it is not adaptability per se that makes the difference but the ability to adapt to the specific changes in the environment in which the organization operates.

Just because you have established a way of dealing with a variety of changing circumstances (routines for changing routines in the jargon) does not mean that you will automatically perceive the exact nature of change and successfully adapt to it. Indeed, it’s more likely that, when a significant change comes along, rather than a version of somethingyou have seen before, you and your firm will likely finds yourself trapped in your habits and dispositions for making change – a sort of routines prison.

Can’t happen to you? Well just consider just how much ‘groupthink’ already goes on in your business.  You have never made a faulty decision because group pressures led to a deterioration of reality testing and judgment?  A management team in which its members are similar in background, insulated from outside opinions and when there are no clear rules for decision making is especially vulnerable.

And I am sure you have never heard anyone on the team say something like “we’ve never done that before”, words almost guaranteed to kill an innovative idea stone dead. Further more, whether you like it or not, too many on the team are probably scared to say what they really think, deferring to the senior person or the owner or the one who argues with vigorous assertion.

Indeed, firms can fail not because of bad management but because managers have been successful in the past and so managing the inertia in the prison of routines involves trade-offs to the key survivability markers of accountability and reliability in a way that better management cannot actually deal with the structural problem.

But there must be a straight, textbook or best-seller management handbook way out of the dilemma? Again, not necessarily. But you’ll have a better chance of survival if you recognise the genuine realities of your internal situation as well as the external changes. Doing what the book says could be a recipe for certain death.  

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Optimizing visible competencies for survival in a recession may be a losing strategy

A good deal of industry-wide change is likely to come about as a result of elements beyond the control of an individual firm or entrepreneur through new entrants or bankruptcies. The effect of this is significantly magnified through a recession.

Managers and owners need to understand the real capabilities of their firms in terms of underlying dispositions or propensities to act rather than just managing and reconfiguring observable internal and external competences. Trying to optimise these visible  competencies for survival in a recession may be a losing strategy.

Firms should first understand and develop what they already do relatively well. Planned change in firms should be piecemeal, experimental and cautious. Leadership and entrepreneurship are important, but leaders and entrepreneurs have to learn much from others and from other employees. Consequently, business leaders and policy makers should concentrate on developing and enhancing existing skills and capacities in the workforce.

Potential potential new business owners need to be more realistic and conscious about the venture they plan, their own (path dependent) dispositions for action and the need to remain open to learning from others and from the employees the take on.

There is also a need to recognise the power of institutional entrepreneurship, the role of the entrepreneurial manager or management team within the firm. Leadership and entrepreneurship are important, but leaders and entrepreneurs have to learn much from other employees.

 

 

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Great video on the power of adaptability

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