Most businesses are driven by delivering shareholder value. You can think of the business as navigating a 3 dimensional space, the business can move in an x-y plane to new markets navigating through known, existing markets to areas uncharted for the business. We can also consider the business moving vertically in a z plane where success is rising higher bringing it into proximity with new competitors even when navigating known markets. It is of course possible to fall since success without change cannot generally be sustained.
This context means businesses have a requirement to navigate and the steps in any navigation are:
a) knowing where you are,
b) knowing where you are headed
c) measuring your progress
Know where you are
Business Information Management (BIM) is a system for the collecting and reporting of business metrics and producing standard cuts of data for regular reporting. Like the dashboard of a car we need to see speed, fuel capacity, direction and these all have their equivalents for the business and these metrics and KPI’s will be tailored to the business type. What is important in any form of BIM is that the data substrate is stable and consistent such that your business does not waste energy cross checking and arguing about data anomalies.
Know where you are going
Strategy is typically targeted at increasing shareholder value, after all this is the basis of investment. However there are many options for strategy and this has been outlined in previous posts on strategy. It is worth repeating here that once the strategy is decided it must be communicated to the workforce such that they are 100% behind it and will give their discretionary contribution to the business.
Measuring Progress to the destination
Once embarked on a strategy it is important to regularly review and communicate progress to the workforce and the shareholders. If your strategy execution plan or ‘chosen route is sound you will hopefully make the expected progress. However it is a dynamic environment that the business navigates and like driving by car you will encounter traffic jams and accidents that are obstacles to intended progress. Don’t be afraid to be open about communicating these setbacks to the workforce and other stakeholders.
Make a U-Turn
We all know when we are driving and miss a turning that the satnav will burst into life and announce “make a U turn” in an attempt to get us back on course. Drivers vary in their response to this, some press on regardless hoping for the next left or right turn. Some will stop and consult a map and a few will actually make the U turn because in general people are reluctant to turn back.
Businesses can be the same, if an opportunity is lost, say a strategic acquisition, pressing on regardless and purchasing the next available company may not be the best option. The sound advice would be to stop, assess and re-evaluate the environment and decide on the next course of action.
So Business Navigation is important and thinking about it in day-to-day terms may just help with the complexities of it!