Wednesday, March 28, 2018

Fresh Perspective


Developing a winning strategy is a difficult, often unintuitive task. One of the primary factors complicating strategy development in modern corporations is scale. Simply put, corporations are often too large for any one person, or even business group, to have a complete understanding of a corporations' interests, strengths, and goals, or the market (or markets!) the corporation finds it self in. 

This dynamic is all the more pernicious because it's very easy for an executive or business section to think they have a complete or effective understanding of the picture without actually doing so. Such assumptions are common in traditional strategy development paradigms. From "The Balanced Scorecard" by Kaplan and Norton: 
As the controllers and finance vice presidents involved in the research project took the concept back to their organizations, the project participants found that they were not able to implement the balanced scorecard without the involvement of the senior managers who had the most complete picture of the company’s vision and priorities. This was revealing, because most existing performance measurement systems have been designed and overseen by financial experts. 
Kaplan and Norton billed The Balanced Scorecard as a revolutionary development in corporate strategy, and it is essentially just four questions:
 How do customers see us? (customer perspective)
What must we excel at? (internal business perspective)
Can we continue to improve and create value? (innovation and learning perspective)
How do we look to shareholders? (financial perspective)
The key component of all four of these questions is that they attempt to force strategists to consider their business from a (sometimes radically) different perspective. Avoiding settling into established paradigms is a main thrust of "The Real Value of Strategic Planning" as well. It advocates deliberately staging strategy planning in contexts that minimize standard corporate constructs- small meetings to avoid hierarchical effects dominating discussion of strategy, meeting in branch offices to avoid the impression groups are being "called to the principal's office", etc.

And fresh perspectives, properly cultivated, can reap significant rewards. When the City of Charlotte's PD reevaluated its objectives in response to crime reports, they found that fast response times were irrelevant in most cases, and not even important to the citizens making the reports! An anecdote from "The Balanced Scorecard" details how a relatively low level manager used what had previously been a deluge of unused reporting data and parsed it into useful real-time maintenance data for his workers, allowing for targeted response to incidents and a significant increase in productivity.



No comments:

Post a Comment

Note: Only a member of this blog may post a comment.