Tags

  • Published on

    On matching strategy to the competitive environment...

    Management Research Strategy
    How well do you understand the competitive environment your business operates in? Most strategic planners and executives know that matching their strategies to their environment is crucial. Further, most claim to have a good understanding of their environment. However, recent research conducted by BCG and published in HBR indicates that the majority of firms misread their environment. Consequently, they run the very real risk of adopting an inappropriate strategic style and/or developing flawed strategies.

    Helpfully, there are many good tools available (a quick Google search will get you started) to help planners and executives read their environment more accurately. It is my experience that firms that use these tools, and engage a skilled facilitator to challenge assumptions, tend to create strategies that are more well suited to their environments. And that's got to be good for business in these tough economic times, don't you think?
  • Published on

    Ethical governance on the rise?

    Governance Management Societal Wellbeing
    Against a backdrop of greed, examples of New Zealand companies taking a strong ethical stand and "doing the right thing" are starting to emerge. This week, Keith Turner, Chair of publicly-listed company Fisher & Paykel Appliances was reported as saying that his approach was to resist trading (in FPA shares) while the Board was debating and commercially analysing ideas that could have material value implications. This strong ethical stance—based on what is best for the company—bodes well for the somewhat sullied reputation that governance boards have suffered recently. 

    Well done FPA Board, your ethical stance is an example that others should follow.
  • Published on

    Why should we establish a board anyway?

    Governance Management
    I get asked this question two or three times most months. Like any social institution, companies are complex and their success is subject to many variables. As far as I am aware, there are no cookie-cutter models that reliably deliver "point and shoot" type results. However, there are things company owners can do to increase the chance that their company will be successful. One of these is to establish a governance board. I'd like to suggest that a first board (or any board for that matter) can offer considerable value in three areas:
    • First: strategy. Strategy is now widely (but not universally) accepted as a major role of the board. Owners are typically very busy, and they often can't see the wood for the trees. Also, many are not that good at generating or considering strategic options. A couple of carefully selected board members with well-developed strategy and critical thinking expertise can be really helpful to help understand the environment and set an appropriate course to navigate.
    • Second: monitoring. Again, owners/shareholders are very busy! A board will help determine whether the company is performing to plan or not, and help sort out any remedial actions that may be required.
    • Third: connections. Gaining access to resources (capital, skills, customers) can be a real challenge for smaller business owners. Directors can help in this regard, because most have a wide network of contacts and are happy to make introductions to secure access to much-needed resources.

    These comments are offered in the context of owners of smaller companies becoming comfortable to "let go"—to open the financial records, to reveal the inner workings of the company, and to invite others to contribute to the generation of ideas and strategic options. These are all big hurdles for many owners. Yet they are hurdles which, if vaulted, can have big payoffs, through increased performance and a more sustainable future.

    How does one get started down this path? Talking to people with experience is the best option in my opinion.  I am a strong advocate of professional bodies and organised networking groups. They are a good source of information, real-life stories, and, importantly, potential directors. Many of these groups schedule events where more experienced directors, researchers, business owners and CEOs to share case studies (good and bad), to help inform owners that might be considering an external board.

    One final point. As an owner or shareholder you hold the control! You decide whether to establish a board or not, and you appoint the directors. And if things don't work as expected, you can (and should!) make changes.
  • Published on

    Reading: Punctuating your way toward your goals

    Management Readings Societal Wellbeing
    How confident are you when it comes to grammar?
    • Do you think an apostrophe was one of the 12 disciples of Jesus?
    • Or a semicolon is a regular colon with an identity crisis?
    • Do you scatter commas into a sentence with all the discrimination of a shotgun?

    If you struggle with grammar, you may well be doing yourself a gross disservice. Kyle Wiens, lays it on the line in this article. He won't hire people with sloppy grammar. Whether you are looking for a job, working on a report, or simply tapping out an email communique, poor grammar may see your goal missed or your message overlooked. 
  • Published on

    Making smart decisions: act fast, not necessarily first

    Management Time Management
    Frank Partnoy posted a great article on the HBR Blog Network today.

    I've heard it said many times in business circles that "velocity wins"—meaning the faster we move and the faster we make decisions, the better. Partnoy disagrees. He argues that speed is killing our decisions. If we get caught up in a fast decision cycle, where speed (of decision-making) is everything, we risk making poor decisions and suffering the consequences as a result. Partnoy commended the decision-making framework developed by John Boyd, fighter pilot and military strategist, as a means of improving decision quality. The framework is called OODA (Observe, Orient, Decide, Act).

    In my opinion, OODA has considerable applicability in business. Boyd asserted that the ultimate goal is to act fast, but not necessarily first. I agree. Making smart decisions is more important than outright speed.
  • Published on

    Gender reporting...coming to a company near you

    Governance Management
    The New Zealand Stock Exchange has just decided to implement a gender diversity reporting rule for all publicly listed companies. The NZX announcement has been reported in several business papers today including NZHerald and DominionPost. The decision requires companies to report the gender composition of their board and senior executive and, subject to FMA approval, will become effective on 31 December 2012.