20/20 Foresight: The Origins Of Pattern Based Strategy?

Pattern Based Strategy is the new Gartner’s framework to exploit patterns in the marketplace for competitive advantage. Hugh Courtney in 2001 introduced  “Strategic Evolution Principles” which in essence could represent the foundations of Pattern Based Strategy.

The intention of this post is not to dispute the ownership of a concept but rather to point out how the management discipline evolves and adapts according to the context.

In his book, “20/20 foresight – Crafting Strategy in an Uncertain World”, Hugh Courtney highlighted:

Strategic evolution principles … enable companies to evolve successfully … through ambiguous business environments. Sucessful evolution requires companies to be: (a) quick and precise in identifying new threats and opportunities as they emerge, and (b) ready with a set of business principles and organizational norms that will help them make fast decisions and even aggressive commitments despite the high level of residual uncertainty.

Moreover H. Courtney stated that:

Companies can meet these requirements if they follow best practices in four key areas: scanning, experimenting, monitoring and committing.

We can notice, whilst comparing with the Gartner’s model of proactively seeking, modeling and adapting, that  a strong correlation in the approach to deal with decision making in uncertain environments exists.

There are some obvious similarities in the two frameworks in (1) the for search of significant signals, (2) the timely commitment of the organization, and eventually (3) the capacity of a company to embrace such models:

• Gartner promotes the critical organizational disciplines to succeed: Pattern seeking, Optempo Advantage (Gartner definition: “Optempo Advantage” represents the set of coherent guidelines and actions necessary for maximizing the alloctaion and utilization of enterprise resources (people, processes and information) , Performance Driven Culture, and Transparency;

• H. Courtney enforces the three vital areas of strategic management: market-and-time based decision making, focused competitive and market intelligence and efficient internal capital allocation.

The transparency attribute is something new and is certainly a conscequence of the serie of events that occured in the financial markets since 2001. What is new as well is the increased maturity of information technologies that are now more prone to probe market signals, to share critical insights at the speed of light, and to develop more than ever the concept of collaborative intelligence. In a way, we might say that gartner used the “Optempo Advantage”.

I always found interresting to see how the business management discipline is evolving by cycles, and its ability to recycle older concepts and ideas; however at each step in the process we are getting smarter.

The important matter is to understand where we come from and how we are adapting to changing conditions in our pursuit of knowledge excellence.

You are welcome to use  the comment section to share other models evolution that you have witnessed in the marketplace.

Reference: 20/20 Foresight – Crafting Strategy in an Uncertain World – Hugh Courtney, 2001

CIOS – 2010 Predictions That Could Change Your Life…or Not

1 – With the raise of social media and the illimited access to people information, “CIO” will stand for Chief Investigation Officer.

Pete Cashmore in October 2009 made social media holding the smoking gun of Privacy and concluded his post by “Twitter, Facebook, Flickr, Foursquare, Fitbit and the SenseCam give us a simple choice: participate or fade into a lonely obscurity.” Not sure I fully agree with this. Internet memory is certainly the biggest danger of individual’s privacy and everybody has the right to oblivion. Don’t you think?

2 – Someone smart will say “Free is too Expensive” …. if it is not already done.

[add on] – We do not need to wait anymore, 6 hours after publishing this post we could find on Google “Newspaper publishers told “Free is too Expensive”“.

3 – The accronym D.I.Y. (Do It Yourself) will be a standard answer in corporate emails.

See the “2010 Consumer Trend Video“, you will find interresting insights that should be understood even by B2B Businesses.

4 – Jim Collins will publish his new book “From Fall to Greatness“

It might be followed by “From Fall to Greatness – For Public Sector”

5 – The first clinic program for Twitter’s Addicts will be proposed….

Not sure about the country yet. But Netherlands could be a good candidate as Dutch already opened a detox clinic for video game addicts in 2006.

6 – IBM will still be there.

7  – Steve Ballmer & Eric Schmidt will tweet on their personal iPhone

I recommend the article “The Great Iphone Death Watch” which gathers numerous statements about the predicted failure of the iPhone in 2007 by the big Guys.

8 – CIO inner Voice will still be around for you…

Let me finish by a video I particulary enjoyed.

more about “What might the world look like after …“, posted with vodpod

The Digital Competitive Advantage Of Organizations

Positioning strategically IT within the Enterprise is at the heart of many CIOs concerns. In these turbulent times, it is not uncommon to see  IT relegated to its sole cost element. Conversely, strong signals exist to prepare companies for growth. Here is the opportunity for CIOs to reap the benefits from the situation and identify the Digital Competitive Advantage for their organizations.

Making a board acknowledge the value of IT has always been a difficult exercise for CIOs. Current economic pressures and global uncertainty makes it even harder. The current cash flow focus challenges any investment with a short term view, potentially exposing  the company to future risks. Conversely, we need to admit that this systematic questioning of where we spend has value and lead to a critical Quest : “What are these Strategic/Core Resources we should be protecting?”

Time To Change

For many reasons, most of IT organizations elude this question and focus on the cost/quality service ratio. It is now time to challenge our approach and offer our business different perspectives. “What are our core IT resources that will provide a sustainable competitive advantage? ” – “What type of resources should we leverage: Organizational, Process, Technology” – “How do we define Core?” These issues should be fully integrated in the screening process of any IT related investment process and spend analysis.

Defining Core/Strategic Resources

It fits in with the “Resource Based View of the Firm” introduced by Wernerfelt B. in 1984 and how Valuable, Rare, Inimitable and Organized (VRIO) a resource can be. A core resource should meet all of these criteria.

A resource is Valuable if it helps the organization to address an external threat or exploit an opportunity. Rare if it is not widely owned by other competitors. Inimitable if it is difficult for another firm to acquire it or a substitute something else in its place. Organized if the firm is able to actually use it.

What is it about IT?

Most IT organizations have articulated their strategy (see “Is There Such Thing as IT Strategy Anymore?“)around the value of IT which fulfill the first criteria of (V)RIO, but let the others on the side. Value is driven at the pace of economics, and objectives like efficiency, quality, customer responsiveness, and innovation are inevitably calibrate on the expected Return on Investment. However criteria like Rare & Inimitable required a focus on long term.

The Digital Competitive Advantage (DCA)

DCA is the ability of organization to grow and exploit the IT resources that fulfill the CRIO criteria. Think about your next strategic workshop and identify what part of your IT culture, leadership, solution portfolio, reputation, organizational expertise make you deliver this Digital Competitive Advantage and make your business outperform the competition.

Access Gartner Market Researches For Free

Gartner is the leading information technology research and advisory company. They

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publish well known reports such as Market Scope and Magic Quadrants. Here is a simple way at no cost for you to get these documents.

When technology providers are mentioned in these famous reports they pay a right to reprint and allow people or companies that let their contact information to access the publication. Gartner is providing a hosted environment for these suppliers and their related customers to obtain their researches.

The Hint

The IP address of this site is http://mediaproducts.gartner.com/reprints. I found out for instance the “Magic Quadrant for IT Project and Portfolio Management” (2 June 2009) @ http://mediaproducts.gartner.com/reprints/ca/article3/article3.html.

The Tip

Looking at this URL, it was tempting to test if by increasing or decreasing the article number, I could access other reports. And guess what it works. You can use this technique and replace “ca” by “bmc” or “oracle” for instance.

Other like “Microsoft” and “sas” are important consumer of Gartner and they have volume like “http://mediaproducts.gartner.com/reprints/microsoft/vol6/article15/article15.html” or ”http://mediaproducts.gartner.com/reprints/sas/vol5/article15/article15.html”.

Don’t forget to have a look at the great comments and let me know what you found.

Investment Strategy: Seed or Leverage

I always felt that the way companies are looking at their investment portfolio was somewhat missing perspectives. Focusing their needs on the current year, without any red flag mechanism (See “Confronting the Brutal Facts“) showing the limit of their investment strategy.

There is a good practice that could enable Enterprise to understand when the tipping point is reached, and when return on investments could only decrease.

Whilst investing in new performance businesses are either using past investments to grow further their return (“Leverage”) or either setting up a new platform on which future investments can easily deliver incremental benefits (“Seed”). The S-Curve theory concurs to this approach. (See “The dark Art of IT investment“)

For example following the implementation of an integrated package (such as an ERP); which will streamline the processes and improve data management, a quality department can then tackle with uniform management dashboards across business units which will trigger additional benefits. Investment in such ERP platform (“Seed”) enabled a future investment in quality dashboard (“Leverage”).

Whilst considering a balanced investment strategy, leaders should focus on which part of their investments is related to “seed” future performance and which part is to reap benefits and leverage. “Seed” investments should always be measured and control over a long period, and challenged by  new opportunities that could deliver better incremental benefits.

During your next annual plan try this practice by identifying “Seed” and “Leverage” investments related to new performance. You might get signals that might change your approach of investment.

CIOs – Manage your S-Curve

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The S-Curve is the graphical representation of the complex relationship between Performance and level of effort (or investment level). I have highlighted the critical importance of this concept in a previous post: “The Dark Art of IT investment“.

Businesses are adapting Organizations, Processes and Technologies (OPT) to deliver superior performance in a specific context. Adapting them means managing their investments, which could be done by changing any possible combination of OPT.

It will be interresting for any leader to understand the full potential of an OPT capability toward its potential performance limit. Driving therefore to design the best approach in managing his/her investment in changes. When this limit is reached, it is recommended to revisit the fundamental of the OPT combination, leading to an important paradigm shift in the business model (Often called the “Inflection Point”).

Let see some practical examples.

For Start-Ups, Entrepreneurs are assuming light organizations with cross responsabilities in term of execution and can implement rapid decision cycle. Processes are not clearly designed up front but tend to impose themselves as the organisation grows. Information Technology is introduced sporadically, delivering non measured benefits. It comes a time when the owner has to overhaul the fundamentals of its business model to ensure future performance. Bringing new people, structuring the organization in distinctive responsabilities, and one of them is IT. This new changes in OPT capability will drive performance according to this new context of growth.

For Corporations, we can observe effort to rationalize their processes by leveraging automation, introducing quality insurrance, and refining their go to market model. Acquisitions campaigns can lead to harmonization of technologies and applications or simple integration of common infrastructure. Continuous Improvement Program focused on the introduction of best practices in a particular industry using benchmarking.

At this point, let try to summarize some basic facts that we can all relate with our personal experiences:

Investment in changes can be done incrementally, introducing progressive adjustment of the OPT set, but there is a performance limit  established by the industry itself. The question becomes how to reach as fast as possible this performance.

We observe different business phases as the organization grows, and context changes that required important investment in changes and will ultimatly drive the company performance to the industry standard. The question here is when to launch this critical steps (Inflection Points) if they are following the S-Curve model and generating disruption and drop in performance.

Last but not least, going beyond Performance of Industry Standards required radical innovations.

Structuring an OPT capability lead to an optimization of number of steps, a business can take to reach a specific performance. It is obvious that successive steps could create less risks for a company but will go with a much bigger effort in term of investment.

It is leaders’ responsability to establish the right path to reach ultimate performance according to the business context. Here are some examples of this context:

• Volume of process output, such as number of customer invoices to handle, number of products to manufacture, number of customers, markets to support, number of employees to manage, lead to adapt OPT to improve or sustain performance.
• Time is critical in term of ability of organization to change. Practicing on a regular basis changes lead to a more flexible and adaptable organization.
• Constraint – The current crisis is one example on how market condition can change the way we are investing in changes.
• Expectations in term of structure of value creation (Shareholder, customer, employee, communities…) can lead to focus our investment in specific value segment. Change in expectations for gross margin can lead to focus on low cost sourcing  separating this function from engineering and leading to high Escape Rate.

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Leaders should seek the optimization of their S-Curves. When and how to invest in OPT should be driven by the perceived change in context, the potential of an OPT Capability  and the company appetite for risk.

Leading Ideas … About Changes

“The acceleration of this phenomenon means that children today ask their grand parents – and soon it will be their parents – what the world was like in their days. This has not always been the case, but we tend to forget it.” Extract from: “Sharing knowledge – Francois Dupuy – 2004″

“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

“The only person who likes to change is a baby in a wet diaper” – Business School Professor