The for-profit firm should indeed compete to be unique and not the best. As usual, I think Dr. Porter is correct, even though I was at first skeptical. I poured over all of my prior strategy engagements (about seventy-five that lasted six or more months) plus looked really closely at my most recent engagements while in progress. Sure enough, I think the desire and energy to compete to be the best have more pitfalls than good things.
Pundits tell us we are in the “new normal”. Not a new normal but the new normal. And they write in tones that suggest the amount of change that is on us is unprecedented in human history. This article will explore this premise for ideas that hopefully can help with the context for making competitive strategy for for-profit firms and the growth of the market value of those firms in today’s times in 2019.
In today’s world of lightning-fast change and disruption, plus only being able to secure temporary competitive advantages, as we are told, can’t OE tackle all of this? I don’t believe OE can subsume the work of good strategy, but this recent engagement has forced me to rethink and recommit to the value proposition of completing competitive strategy alongside OE work.
OK so here is another of my articles with Figures and one formula. Please don’t let this deter you from considering the message here. I think this article, while a little longer than most, is worth your attention. It picks up where my last article “The Age of Agile – The New Management Paradigm and Nasty Old Shareholder Value Strikes Again” ends.
The recent book The Age of Agile by Stephen Denning, 2018) is the presenter of the (not a) new management paradigm. Whether it will be replaced with another the new management paradigm will remain to be seen. And while there are many frustrating “red herring” arguments throughout the book, mostly against the activist hedge fund view of shareholder value, top management teams extracting value instead of creating value and the toxicity of top-down command and control bureaucracies, I think this is a very good and an important book.
I think the management of strategic initiatives at established for-profit firms is still the classic “Gordian Knot”. This phrase comes from Greek mythology and today means an intractable problem. With so much published on this over the last fifteen or so years, why is this the case?
Synthesizing Customer Value, People Value and Financial Valuation Through Formulas – Yes Formulas Part 2
In Part 2 we will present the notion of Robust Business Strategy (RBS) and how it can synthesize Customer Value and Satisfaction, People Value and Financial Value in the mid to long term to grow the market value of the firm.
Synthesizing Customer Value, People Value and Financial Value Through Formulas – Yes Formulas Part 1
OK, I admit it I love formulas. Formulas are instructive, as they force a laser-like focus as to cause and effect, or at least a parsimonious description of a complex system. They cut to the “have-to-haves” and omit the “nice-to-haves”. The work to achieve the derived resultant from each formula demands facts and not opinions and aspirations. Formulas also can provide a check and balance on faulty thinking. Checking what goes in the numerators and denominators of a simple ratio and how a denominator in another ratio can nullify the numerator of one ratio is a great check and balance and thinking tool.
I have been wanting to write this piece for a long time. As readers of this series know, the articles are about what causes the for-profit firm’s valuation to increase. Here I want to write about how true professionals think and behave. To the extent that firms need and want true professionals as executives or consultants, the article should serve to foster the theme of these articles of increasing firm valuation.
It is now July 2018 and in our current period of tariffs, sanctions, and other global issues, business growth is once again a hot but perhaps a perplexing topic, if only because growth might become constrained. However, the stock market is again approaching all-time highs so why worry about further rounds of profitable revenue growth?
Even “excellent companies” go through periods of problems with sustained business performance. Amazon caught traction in the marketplace after almost going bankrupt in the 1999-2000 time period and became a runaway success and value-creating machine. I have read nowhere in the business press of any current problems with business performance at Amazon. Everything they do seems to become a hit. But I can almost guarantee that Jeff Bezos worries about some aspects of business performance at Amazon. For most for-profit firms, there is always some aspect of business performance that can at least be improved.