Michael Eugene Porter—a Professor at the Institute for Strategy and Competitiveness, Harvard Business School—is widely acclaimed for his unmatched prowess in competitive strategy, strategic planning, global economic development, and the application of competitive principles and strategic approaches. Renowned as the father of modern day strategy, Dr. Porter is an author of 18 books and a [...]
Michael Eugene Porter—a Professor at the Institute for Strategy and Competitiveness, Harvard Business School—is widely acclaimed for his unmatched prowess in competitive strategy, strategic planning, global economic development, and the application of competitive principles and strategic approaches. Renowned as the father of modern day strategy, Dr. Porter is an author of 18 books and a number of articles.
His scholarly writings on management and competitiveness are ranked as the most influential pieces of work till date. Dr. Michael Porter is widely known for his Porter’s Five Forces framework, which is a useful tool to evaluate the competitiveness of an organization with respect to its rivals. Competition is part and parcel of every industry, and for the existence of an enterprise it is important to know its rivals and how their product / service offerings and marketing strategies affect the market. It is a common foundational framework used in Strategy Development.
The Five Forces framework emphasizes on 5 critical elements that determine the attractiveness of a business against its rivals in the industry:
- Threat of New Entrants
- Supplier Power
- Buyer Power
- Threat of Substitution
- Competitive Rivalry
Threat of New Entrants
This element examines the simplicity or complexity of an industry for the competitors to jump in. High-return industries are more appealing to new entrants. A market with easy access for new entrants poses greater risk—of market share diminishing—for established businesses. New entrants in an industry are able to dent the profitability of established players unless the incumbents retaliate strongly and make the entry of new firms challenging.
A serious threat to entry also relies on the existing barriers in the industry. If the market entry barriers are high and there is an expected sharp response from the entrenched competitors, the newcomers will think twice before entering the market. Another important factor for new entrants is the requirement for large capital for branding, advertising and creating product demand, which limits their entry in a niche market. Aspiring market entrants should thoroughly analyze and understand all the critical barriers to entry before entering an industry—such as economies of scale, product differentiation, capital investment, access to distribution channels, and government policies and regulations.
There 6 prevalent types of barriers to entry:
- Economics of scale
- Product differentiation
- Capital requirements
- Cost disadvantages (independent of size)
- Access to distribution channels
- Government / regulatory policy
Suppliers are a powerful force that influences the competitiveness of an industry. They create immense pressure on market players by slashing the quality of goods and by increasing prices, thereby squeezing the margins of manufacturers. For instance, by jacking up the price of soft drink concentrate, suppliers erode profitability of bottling companies. The bottlers, in turn, don’t have much leverage to raise their own prices because of intense competition from fruit drinks, powdered mixes, and other beverages.
The power of a supplier group amplifies if it’s dominated by a few firm, has differentiated and unique products; and has built up switching costs that buyers face when changing suppliers, for making investments in specialized equipment, or in learning how to operate a supplier’s equipment. The supplier group also thrives when there isn’t much competition for sale to the industry, or when the industry is not its major customer, as this saves the supplier from selling at a bargain and investing in R&D and lobbying for the industry.
Buyer or customer groups also impact the competitiveness of an industry landscape by exercising their power to bring the prices down, insist on higher quality, or demand more service. A buyer group is powerful if it buys in large volumes in an industry characterized by heavy fixed costs and buys undifferentiated or standard products. Buyers have the ability to put one supplier against another and find alternative suppliers.
The power of a buyer group increases if it’s a low profit business—providing it the reason to be price sensitive and insist on lower purchasing costs—, if the industry’s product is insignificant to the quality of the buyers’ products or services, or if the product that suppliers provide does not save much for the buyer. Buyers can also use the threat of self-manufacturing as a bargaining lever against the suppliers.
Threat of Substitution
Substitute product or service offerings restrict the capacity of an industry by placing an upper limit on prices it can charge. The industry’s earnings and profits will continue to suffer lest it can enhance the quality of products or create differentiation through, for instance, aggressive marketing.
If substitute products offer more competitive price-performance trade-off, then the industry’s profitability gets limited or goes down. For instance, the erosion of profits for the sugar industry due to substitution of sugar with commercialized high-fructose corn syrup.
Internal Rivalry, existing at the center of Porter’s Five Forces framework, represents the competition between existing players often leads to rivals using manipulative tactics like price competition, new product launch, and advertising wars. Companies can use strategic shifts to improve their competitive position—e.g., raising buyers’ switching costs, increasing differentiation, and focusing on low fixed costs areas.
Interested in learning more about the other critical elements of the Porter’s Five Forces and their role in in determining the state of competition and profit potential of an industry? You can download an editable PowerPoint on Porter’s Five Forces here on the Flevy documents marketplace.
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Technology, Internet, growth, and globalization have metamorphosed the way we work, play, and live. They have even changed the fundamental laws of economics. We are living in an economy that is quite different from the old manufacturing-based economy of the 1980s. Fewer people are now employed in the manufacturing sector, who are anxious about the [...]
Technology, Internet, growth, and globalization have metamorphosed the way we work, play, and live. They have even changed the fundamental laws of economics. We are living in an economy that is quite different from the old manufacturing-based economy of the 1980s. Fewer people are now employed in the manufacturing sector, who are anxious about the prospects of being replaced by machines soon.
The “New Economy” is a term economists started using in the 1990s to describe new, high-tech, high-growth industries that have been the driving force of economic growth since that period. The new economy is also heralded as the Digital Economy, the Knowledge Economy, the Data Economy, or the eCommerce Economy. Top technology enterprises—including Google, Facebook and Apple—have outpaced traditional firms around the globe by taking advantage of the new economy.
Leadership Development in this age of Digital Economy is a key challenge for most organizations. More and more organizations, today, are revisiting what they are about and the meaning of leadership for them. It’s not about one person or even those residing at the top anymore.
MIT Sloan Management Review conducted a study of 4,000 executives from 120 geographies around the world to understand what defines a great leader in this changing world. The study revealed striking results with most executives believed that their leaders lacked the mindset needed to produce the strategic changes essential for leading in the Digital Economy. Enterprise-level transformation is what majority of leaders feared to embark on.
Mindsets are established set of attitudes held by someone that shape how a person interprets and responds to experiences. A mindset arises out of a person’s view of the world or philosophy of life. To know about the Digital Economy leadership mindsets (i.e. leadership mindsets critical to survive in this new economy), the MIT Sloan Management Review’s global study identifies 4 critical mindsets—based on in-depth interviews from executives worldwide and detailed analysis of data:
- The Producer
- The Investor
- The Connector
- The Explorer
Let’s define these first 2 leadership mindsets.
Leaders with a producer mindset evaluate each of their customer touch points painstakingly. These leaders exhibit a passion for producing customer value. Producers concentrate on analytics, digital know-how, implementation, results, and customer satisfaction. They focus on analytics to fast-track creativity. The resulting innovation helps them tackle shifting customer preferences and enhance customer experiences. The Producers strive to create all the customer journeys enjoyable.
The leaders with an investor mindset make people appreciate the higher purpose they serve by their work. They constantly struggle to instill motivation and teamwork among their teams in order to achieve their overall organizational goals. The leaders with an investor mindset are concerned about the communities that surround them. They look after the well-being and constant advancement of their employees, and devote their efforts to improve value for their customers.
Fostering these types of mindsets is critical to building the right Organizational Culture for an organization to be successful in the Digital Economy.
Interested in learning more about the leadership mindsets required to win in the new economy? You can download an editable PowerPoint on Leadership Mindsets Critical to Succeed in the Digital Economy here on the Flevy documents marketplace.
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Technological innovation and intensifying competition are forcing leaders to rethink how they use Key Performance Indicators (KPIs) to manage and direct organizations. Digitization has reinforced the importance of Key Performance Indicators not only in enhancing employee performance but driving the overall organizational productivity. The role of KPIs is becoming more dynamic. KPIs are getting demonstrably [...]
Technological innovation and intensifying competition are forcing leaders to rethink how they use Key Performance Indicators (KPIs) to manage and direct organizations. Digitization has reinforced the importance of Key Performance Indicators not only in enhancing employee performance but driving the overall organizational productivity.
The role of KPIs is becoming more dynamic. KPIs are getting demonstrably flexible, smarter, and valuable in achieving strategic advantage. Leading technology-driven organizations—including Amazon, Airbnb, and Uber—rely on metrics considerably and utilize KPIs to steer their strategy and evaluate success. They perceive KPIs quite differently than traditional-focused organizations, and employ them as an input for automation, and to guide, regulate, and improve their machine learning tools.
To make the most out of these dynamic and strategic KPIs of this Digital Age, leaders need to be more insightful and knowledgeable. They should be able to thoroughly determine which KPIs to analyze, how to measure them, and how to effectively improve them. Understanding the value of selected KPIs and their optimization is key to aligning strategies; making the right decision to invest in data, analytics, and automation capabilities; and create a link between people and machines.
KPI Virtuous Cycle
The relationships and dependencies that clarify, educate, and enhance KPI investment are demonstrated by “KPI Virtuous Cycle.” By digitally linking KPIs, data, and decision-making into virtuous cycles, companies can align their immediate situational requirements with long-term strategic planning. The KPI Virtuous Cycle has 3 key components, and it demands active cross-functional collaboration:
- Data Governance
- Decision Rights
The way these 3 components impact—and support each other—keeps changing. Organizations aspiring to become digital-savvy should embrace, value, and relentlessly invest in the KPI Virtuous Cycle.
The first component of the KPI Virtuous Cycle is about employing authority and control (planning, monitoring, and enforcement) through a set of practices and processes to manage organizational data assets. Leading digital organizations consider data as a strategic resource, a valuable tool for measurement and accountability, and a mechanism to facilitate meeting strategic KPIs. Data Governance frameworks are guided by strategic KPIs. Organizations should know what data sets would be ideal to predict and rank—for instance, customers’ lifetime value and their propensity to leave—to prioritize preemptive and preventive action. Data and Analytics serve as a component of Data Governance.
Strategic KPIs shape and govern enterprise Data Governance models. These KPIs include financial, customer, supplier, channel, and partner performance parameters. For instance, Data Governance initiatives in customer-centric organizations are prioritized to facilitate in realizing customer-focused KPIs—e.g., Net Promoter Score (NPS) and Customer Lifetime Value (CLV). Enterprise Data Governance frameworks are strongly influenced and informed by strategic KPIs.
Decision Rights ascertain the decision-making authority required to drive the business and strategic alignment. Making decisions in such a way that it boosts organizational performance involves identifying the individuals explicitly involved in making decisions, charting an outline on how decisions will be made, reinforcing with appropriate processes and tools, and defining various decision rights scenarios to facilitate in automation. It is, however, quite tricky to determine and assign decision rights when an enterprise is aspiring to empower its people and making machines function better.
Imperatives for Creating Dynamic and Strategic KPIs
For the KPIs to be strategically defined and become truly dynamic, the leadership needs to provide the required support by getting thorough data sets compiled and meaningful analytics performed. At the same time, there is a need to:
- Decide whether the decision rights needs to be assigned to individuals (rather than machines or vice versa.
- Enhance the capabilities of people and machines.
- Apply decision rights to generate data to identify and gauge productivity.
- Identify the delays and bottlenecks between KPIs, data, and decisions.
- Verify the diligence in the way KPIs, data, and decisions are mapped and monitored.
Interested in learning more about the components of KPI Virtuous Cycle, its applications, and Strategic KPIs? You can download an editable PowerPoint on Strategic Key Performance Indicators (KPIs) here on the Flevy documents marketplace.
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Creating a culture that measures productivity objectively is a sensitive matter. Key Performance Indicators (KPIs) are being employed extensively by organizations across the globe to monitor and track performance. KPIs provide valuable metadata to improve top-down and bottom-up vertical efficiency. Analytics-driven firms are aware that KPIs are much more than a tool to evaluate performance. [...]
Creating a culture that measures productivity objectively is a sensitive matter. Key Performance Indicators (KPIs) are being employed extensively by organizations across the globe to monitor and track performance. KPIs provide valuable metadata to improve top-down and bottom-up vertical efficiency.
Analytics-driven firms are aware that KPIs are much more than a tool to evaluate performance. Utilizing KPIs, they gather valuable insights, create enterprise-wide accountability, and develop a goal-oriented culture.
However, most executives typically fall short of utilizing KPIs to their full potential. They have to realize that the effectiveness of KPIs depends on two distinct yet important elements: KPI transparency for the entire workforce—making the core metrics available across the board at all levels—and alignment of KPIs—determining the KPIs most relevant to the people and organizational purpose, and taking action based on the results of performance monitoring. Leading organizations share KPIs with all stakeholders and use algorithms to gauge the contribution of KPIs to critical functions, e.g., Marketing and Customer Experience.
To create an objective-driven culture, the senior leadership should work on developing capabilities to outline key performance and putting in place accurate metrics to measure it. The selection and prioritization of most relevant indicators is something that the leadership needs to carefully think about.
When defining KPIs, there are 5 KPI focus areas. Each focus area is unique and critical, but collectively they have a profound impact on each other and on the organizations that are aiming to undergo Digital Transformation. Leading Data and Analytics-driven organizations devise KPIs that cover all 5 of these focus areas:
- Enterprise KPIs
- Customer KPIs
- Workplace Analytics
- Partner and Supplier KPIs
- Quantified-self KPIs
Let’s discuss the first 3 focus areas in detail, for now.
The Enterprise KPIs benchmark the effectiveness of core functions of an organization. These indicators are important to determine the accountability of the leadership and workforce, and are vital for strategic as well as routine decision-making and investment. Examples of these indicators include Risk-Adjusted Return On Capital (RAROC) and Net Promoter Score (NPS).
The Customer KPIs facilitate in measuring the knowledge and impact of all leads, prospects, and customers. These metrics are used to calculate the actual and likely financial contributions of business prospects and clients. The Customer KPIs assist in analyzing and ranking the relationships that organizations aspire to develop with the customers and better understanding each segment and sales funnel the customers belong. Customer lifetime value is an example of these indicators.
The Workplace Analytics pertain to quantifying the efficiency and commitment level of organizational people. These analytics are used to isolate leadership tools and methodologies helpful in enhancing customer focus, and capture and quantify process outcomes and outputs feeding organizational KPIs. These metrics are valuable in measuring collaboration across the organization, gauging the proficiency of managers in motivating their teams, and highlighting the elements that demoralize people.
Interested in learning more about the 5 KPI areas of focus? You can download an editable PowerPoint on Key Performance Indicators (KPIs): 5 Areas of Focus here on the Flevy documents marketplace.
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In the age of rapid technological progress, where Digital Transformation has become pervasive, business applications are getting increasingly complex and interconnected. The advancement in technology has also helped attackers get more aggressive and inflict more damage to IT systems and applications. Application security tools and techniques are evolving too, yet most organizations still fall prey [...]
In the age of rapid technological progress, where Digital Transformation has become pervasive, business applications are getting increasingly complex and interconnected. The advancement in technology has also helped attackers get more aggressive and inflict more damage to IT systems and applications. Application security tools and techniques are evolving too, yet most organizations still fall prey to vulnerabilities. Cybersecurity has become a bigger threat than ever before.
The current application security methodologies mainly count on detecting weaknesses and correcting them. Most organizations, primarily, rely on utilizing penetration testing or automated tools, at the most. They ignore to concentrate on establishing strong defenses against threats, merely do patch work, and leave the weaknesses unguarded. A small fraction implement threat modeling, security architecture, secure coding techniques, and security testing—but even they are typically unsure of how these approaches link with their strategic business objectives.
A few weaknesses constitute majority of break-ins–e.g., SQL injections and buffer overflows. Major security threats and application vulnerabilities include compromised credentials, failure to patch promptly, SQL injections, and cross-site scripting. A large number of security threats can be neutralized just by taking care of security hygiene.
Secure Software Development
State-of-the-art technology and best practices available today offer effective yet economical methods to prevent security breaches and threats. These tools and practices work well without affecting the pace of delivery or straining the users unnecessarily.
Secure software development not only warrants analyzing the technology but also looking at the entire organization that creates the software—people, processes, tools, and culture. Secure software development culture inspires security by promoting and improving communication, collaboration, and competition on security topics and rapidly evolving the competence to create available, survivable, defensible, secure, and resilient software.
Rugged Software and a Culture of Security
Rugged software, or Rugged DevOps, promotes developing secure and resilient software by embedding this practice into the culture of an organization. A Rugged culture of security is more than just secure—secure is a state of affairs at a specific time whereas Rugged means staying ahead of threats over time. The rugged code aligns with the organizational objectives and can cope with any challenges. Rugged enterprises constantly tweak their code and their internal organization—including governance, architecture, infrastructure, and operations—to stay ahead of attacks. All applications developed by “Rugged” organizations are well-secured against threats, are able to self-evaluate and distinguish ongoing attacks, report security statuses, and take action aptly.
Rugged software is a consequence of the efforts to rationalize and fortify security. This is achieved by communicating the lessons learnt from experimentation, setting up stringent lines of defense, and adopting and sharing rigid safety procedures across the board. Adopting Rugged software development practices across the enterprise help execute more applications promptly, improve security, and achieve cost savings across the software development life-cycle. Rugged software development is cost efficient because of fewer labor and time requisites during the requirements, design, execution, testing, iteration, and training phases of the development life-cycle.
The following 10 guiding principles apply to all organizations aiming to develop a Rugged culture of security:
- Perpetual Attacks Anticipation
- Staying Informed
- Security Hygiene
- Continuous Improvement
- Zero-defect Approach
- Reusable Tools
- One Team
- Comprehensive Testing
- Threat Modeling
- Peer Reviews
Let’s discuss the first 5 principles for now.
Perpetual Attacks Anticipation
A Rugged software development organization anticipates nonstop vulnerabilities and attacks—deliberate or accidental.
Rugged organizations appreciate staying informed about security issues and potential threats, seek recommendations from security specialists, and identify and update security policies and rules.
Rugged organizations take good care of their security hygiene by limiting the sharing of user accounts, carefully guarding the passwords and sensitive personal information. They employ secure software practices.
Continuous Improvement is the management principle foundational to Lean Management that should be embraced by all areas of an organization. In case sensitive information is left lying on somebody’s desk at night, Rugged organizations ensure that this does not recur in future and gather feedback from the people who happen to notice it.
Rugged organizations leave no room to tolerate any known weaknesses. An issue is resolved as soon as it is detected.
Interested in learning more about the guiding principles to develop a Rugged culture of security? You can download an editable PowerPoint on the Culture of Security here on the Flevy documents marketplace.
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With startups ready to disrupt traditional players, established firms need to form an even stronger bond with their customers instead of waiting for customers to reach out to them. The traditional Customer Experience model—referred to as the “acquire what we make” model—is characterized by occasional interaction between the companies and the customers, once a customer [...]
With startups ready to disrupt traditional players, established firms need to form an even stronger bond with their customers instead of waiting for customers to reach out to them.
The traditional Customer Experience model—referred to as the “acquire what we make” model—is characterized by occasional interaction between the companies and the customers, once a customer ascertains her/his needs and looks for products or services to fulfill them. In this model, companies do all they can to offer quality products or services at a competitive price, while their marketing and operations are based only on brief engagement with the customers. Because of the occasional connection with the customer in this approach, the vendor has little knowledge of the difficulties a customer faces to procure a product or service.
With each passing day the tactics that organizations use to connect with their customers are undergoing rapid transformation. Technology and customized digital interactions provide companies the means to build deeper relationships with customers. Organizations pursuing Customer-centric Design, today, are addressing customers’ needs the moment they occur—or even before that by virtue of “Connected Customer Strategies.”
Connected Customer Strategies call for the companies to maintain customer relationships round the clock (24×7). These strategies demand from the organizations to develop an assortment of new capabilities (e.g., invest in Big data and Analytics), connect with the customers on a regular basis, track their activities, and offer customized experiences and offerings. These strategies are not about using modern technology, rather the methods companies should adopt by using technology in creating delightful experiences and long-standing associations with the customers.
There are 4 distinct Connected Customer Strategies that are instrumental in developing exceptional Customer Journeys:
- Fast Response
- Personalized Recommendations
- Proactive Recommendations
- Automatic Execution
Let’s discuss the first 2 strategies in detail now.
Organizational Leadership needs to carefully consider adopting the most suitable connected customer strategy. The Fast Response strategy, as the name suggests, is about prompt and flawless delivery of required services and products to the customers. To adopt Fast Response strategy, organizations need to ascertain the customer requirements carefully and simplify their purchasing process.
The core capabilities needed to implement this strategy include prompt delivery, minimal friction, flexibility, and precise execution. This strategy is appropriate for knowledgeable yet authoritative customers who dislike disclosing their personal information. Using this strategy, a prompt response to a customer needing replacement of a product should be a simple yet accurate, couple-of-click online ordering process and the order should be delivered a few hours later. The aim of the Fast Response strategy is to reduce the amount of time and energy the customers spend on procurement as much as possible.
Organizations using Personalized Recommendations strategy help customers identify their needs by presenting various options to them. The strategy involves active involvement of firms in assisting their customers by offering a menu of customized offerings—as soon as the customers have finalized their requirement but before their decision on how to fulfill it.
This strategy is suitable for customers who are willing to share their data with the company and value advice but still hold the final say. With the Personalized Recommendations strategy at work, the journey for a customer needing a product replacement could simply involve the customer’s visiting a company’s website, automatic suggestions to customer about the correct product based on her/his prior shopping history, the customer ordering the suggested product, and receiving the delivery a few hours later.
Interested in learning more about the other Connected Customer Strategies? You can download an editable PowerPoint on Customer Experience: Connected Customer Strategies here on the Flevy documents marketplace.
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Businesses are getting increasingly complex and so are customers’ expectations. Digital organizations are digitizing their critical Customer Journeys at scale to outperform competition. These organizations are using Digitization to create streamlined journeys, which result in more agile IT units, quick delivery of new products, and improved Customer Experiences and Engagement. But before embarking on digitization and streamlining [...]
Businesses are getting increasingly complex and so are customers’ expectations. Digital organizations are digitizing their critical Customer Journeys at scale to outperform competition. These organizations are using Digitization to create streamlined journeys, which result in more agile IT units, quick delivery of new products, and improved Customer Experiences and Engagement.
But before embarking on digitization and streamlining Customer Journeys, organizations need to transform their products, processes, legacy systems and technology, and culture to become truly digital businesses.
Streamlining multiple Customer Journeys concurrently requires integration of existing systems, building new capabilities, and deploying existing competences in a different way. Specifically, it entails embracing the following 5-phase Omni-channel Customer Journey Design approach that is critical for improving Customer Experiences and accomplishing higher Customer Engagement:
- Develop Enterprise Customer Experience Story
- Prioritize Technology Transformation Projects
- Develop a Flexible Ecosystem of Technologies and Platforms
- Adapt Principles of Strong, Agile, and Lean
- Be Adaptive in Performance Management
Now, let’s talk about the first 3 phases of the Omni-channel Customer Journey Design approach.
Phase 1 – Develop Enterprise Customer Experience Story
Creating a Customer Experience Story calls for setting up a Customer Experience team. The Customer Experience team begins by identifying the critical factors and main concerns in their customer relationships. Around these themes, they, then, carefully outline the experiences customers may come across during each and every interaction they have with the company in the form of a story. The Enterprise Customer Experience Story is unique to every company and provides a summary of the strategy, brand, and positioning in workable terms.
Next, the team identifies the journeys that are able to effectively deliver the factors and features critical for the customers utilizing digitization. Each journey should be critically analyzed to assess its significance, cost advantages associated with scaling it, the governance and technical impediments, and the availability of adequate financial and leadership resources to manage it. Thorough analysis of Customer Journeys yields a plan of action that aids in creating prioritized journeys.
Phase 2 – Prioritize Technology Transformation Projects
IT Transformation is typically the most challenging and resource hungry among other change initiatives. For instance, designing a mobile app is simple, however, it’s the linkage of the app to all the channels customers use and its integration with the back-end systems that is complicated.
To undertake Digitization, companies should avoid digitizing each journey separately—as it fosters internal silos—and investing heavily in Internet or mobile-channel IT. A better approach for the organizations is to rather prioritize the IT initiatives to enable smooth transformation of IT architecture with the addition of more customer journeys. Standard IT components are reusable across different journeys.
Phase 3 – Develop a Flexible Ecosystem of Technologies and Platforms
An important consideration for digitizing core journeys and scaling digitization is to link your IT systems with the technologies and platforms working outside the firm. These external systems provide the organization several advantages, including quick access to new customers, data pools, and capabilities.
Next-generation integration architecture should be designed in such a way that it should support open standards, dynamic interaction models, and curtail security threats. Progress in cloud computing and technology infrastructure has made quick and easy access, management, and operations of infrastructure resources possible—including networks, servers, databases, programs, and services. The skills needed to manage these technology ecosystems include DevOps experts to supervise integration of development and operations, enterprise architects, cloud engineers to manage software and cloud-computing, data scientists, and automation engineers.
Interested in learning more about the other key phases of the Customer Journey Design approach? You can download an editable PowerPoint on Omni-channel Customer Journey here on the Flevy documents marketplace.
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Going into a Merger and Acquisition (M&A) is never an easy task. The process of M&A is like trying to complete a large puzzle when your right hand and your left hand have never worked together. In fact, Mergers and Acquisitions revolve around a plethora of moving parts. Going into this direction can be complicated. Suddenly, [...]
Going into a Merger and Acquisition (M&A) is never an easy task. The process of M&A is like trying to complete a large puzzle when your right hand and your left hand have never worked together. In fact, Mergers and Acquisitions revolve around a plethora of moving parts. Going into this direction can be complicated. Suddenly, there are two companies and additional stakeholders that now need to fairly and seamlessly work and communicate together in order to bring the deal to completion.
But what happens after the deal has seemingly crossed the finish line. When this happens, there is the Post Merger Integration or M&A Integration. After the financial transaction, Post-merger Integration (PMI) is the process of bringing 2 or more companies together with the aim of maximizing synergies to ensure that the deal lives up to its predicted value. However, easy as it may seem, there are problems in Mergers and Acquisitions that can often cause deals to fail. Companies do not want a deal that only looks good on paper or results in a semi-integrated company.
To be able to live up to predicted value, a Post-merger Integration Planning must start right at the beginning of the deal.
Understanding Post-merger Integration
Post-merger Integration (PMI) or M&A Integration is the process of bringing 2 or more companies together.
It is what happens after the deal has crossed the finish line. In the PMI, our objective is to maximize synergies to ensure that the deal lives up to its predicted value.
In starting the PMI, Post-merger Planning should be done at the beginning of the deal and must be established before the deal closes. Any problems that may arise in Mergers and Acquisitions must be dealt with immediately since failure to properly address them can cause deals to fail or unable to extract true value from deals.
The 4 Types of Post Acquisition Integration
It helps a lot if we have a good understanding of the different types of Post Acquisition Integration to better manage deals.
Understanding the different types of Post Acquisition Integration will give the organization a better idea of what direction to take when it comes to Mergers and Acquisitions. It is best for companies to have a good hold of where they want to go and want to achieve taking into consideration current conditions and business considerations. When these are all laid out, greater are the chances that the right type of Post Acquisition Integration is undertaken.
Taking the Right Step Forward to Mergers and Acquisitions
Taking the road to Mergers and Acquisitions requires organizations to keep away from common mistakes. This is possible with the use of M&A Integrated Solutions.
The use of M&A Integrated Solutions and Post-merger Integration Tool allows organizations to increase the chance of a successful Post-merger Integration. With the use of these tools, users are enabled to plan properly from day one and the very beginning of the diligence process. Teams have access to all files and data prior to the deal closing to spot areas of concern and plan accordingly. Further, users can set cross-stream dependencies across multiple functions.
With M&A Integrated Solutions, it facilitates the use of a better process that maximizes deal value. Organizations just need to have a good understanding of the Post-merger (M & A) Integration Process to get the greatest value.
Interested in gaining more understanding of Post-merger Integration? You can learn more and download an editable PowerPoint about Post-merger Integration (PMI) Primer here on the Flevy documents marketplace.
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Organizations struggle to develop a simple set of guidelines that makes it easier for employees, regardless of position or level, to be confident of their decisions to meet competing standards of organizations for effective and ethical decision making. The traditional decision making model taught in most business ethics programs is often beyond the reading comprehension [...]
Organizations struggle to develop a simple set of guidelines that makes it easier for employees, regardless of position or level, to be confident of their decisions to meet competing standards of organizations for effective and ethical decision making.
The traditional decision making model taught in most business ethics programs is often beyond the reading comprehension of 25% of the employees’ population. Hence, an alternative model is necessary.
Employees are called upon to make decisions in the normal course of their job. Organizations cannot function effectively if employees are not empowered to make decisions consistent with their positions and responsibilities.
Further, the decision maker has to be confident in the soundness of his decisions. Every decision should be tested against the organization’s policies and values, applicable laws and regulations, as well as the individual employee’s definition of what is right, fair, good, and acceptable.
With these realities, an alternative decision-making model is imperative to address current realities.
The Rise of the Ethical Decision Making Model
To become an Ethical Organization, having a decision making model grounded on foundational ethical decision making is paramount. An Ethical Decision Making Model ensures that the ethical issues inherent in a routine business situation could effectively be surfaced while making it easy for people in the organization to understand and use. To make it more effective, PLUS filters must be embedded within the process.
The ethical component of the decision making takes the form of a set of filters. At key steps in the process, considerations are run through the filters and separate the ethical conations from the remainder of the decision.
The PLUS Filters: What Really Are They?
PLUS Filters are ethics filters that have adapted to mnemonic word PLUS. PLUS is the mnemonic of Policies, Legal, Universal, and Self. The integration of PLUS Filters in the decision making process is best achieved when there are effective communication and formal mechanism in place.
The PLUS Filters are applied in each of the steps in the decision making process.
P = Policies
- Is it consistent with my organization’s policies, procedures, and guidelines?
L = Legal
- Is it acceptable under the applicable laws and regulations?
U = Universal
- Does it conform to the universal principles/values my organization has adopted?
S = Self
- Does it satisfy my personal definition of right, good, and fair?
The PLUS Filters and Its Application
Integration of PLUS Filters in decision making is best achieved with effective communication and formal mechanism in place.
Let us look at the first step: Defining the Problem.
In defining the problem, we aim to define the difference between the expected and/or desired outcomes and actual outcomes. With the PLUS application, PLUS surfaced the ethical issues and ask the question, “Does the existing situation violate any of the PLUS considerations?”
When the PLUS Filters are applied, this determines if the ethical components of the decision are being surfaced or satisfied.
The use of PLUS Filters in the decision making process can be your barometer in determining if decisions made are within accepted ethical boundaries agreed upon by your company and the environment that the company revolves in.
Interested in gaining more understanding of creating an Ethical Organization through the PLUS Decision Making Model? You can learn more and download an editable PowerPoint about Ethical Organization: PLUS Decision Making Model here on the Flevy documents marketplace.
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In today’s business environment, management consulting firms must be ready to address client challenges and needs that will transform their business by 10 or 100 times. Tools and methods must be scaled up to ensure applicability to the widest possible audience globally. The Consulting Workshop Series provides a good understanding of the 10 Methods of [...]
In today’s business environment, management consulting firms must be ready to address client challenges and needs that will transform their business by 10 or 100 times. Tools and methods must be scaled up to ensure applicability to the widest possible audience globally.
The Consulting Workshop Series provides a good understanding of the 10 Methods of conducting Workshops that are custom designed to fit specific workshop objectives. Different methods are developed for the purpose of providing organizations the most appropriate tool necessary to support organizations to achieve their strategic goals and targets.
If it is the management’s goal to facilitate collaborative dialogue and the sharing of knowledge and ideas to create a living network of conversation and action, then the World Cafe is the perfect method to undertake.
Discovering World Café
World Café is a creative process for facilitating collaborative dialogue and the sharing of knowledge and ideas to create a living network of conversation and action. Its primary objective is for ideation and to share ideas.
World Café is a simple, effective, and flexible format for hosting large group dialogue. By using World Café, organizations can plan meetings and gatherings where a unique environment is created with surprising and useful outcomes occurring.
In a nutshell, World Café is a process of helping people to remember what they already know how to do: to convene conversations that matter.
The Approach to World Café
World Café can easily be organized as it just needs one person to put all preparations together: the Café Facilitator.
- Preparation. As in every event, preparation is the most critical. In World Café, everything hinges on Café Facilitator. Hence, it is important that enough time is spent in the selection of Café Facilitator. A Café Facilitator sees to it that the guidelines for dialogue and engagement are put into action. He/she is responsible in so many ways. There is a need to work with the Planning Team to determine the purpose of the Café, the name of the Café, and framing the invitations. When everything is organized, the Café Facilitator is the one in charge in posing the questions or themes for rounds of conversation and make sure that the question is visible to everyone on the overhead, flipchart, or on cards at each table. Playing a vital role in World Café preparation and actual event, the Café Facilitator can make the difference between an interesting conversation and a breakthrough thinking.
- The World Café Event. This is your main event. The World Café is focused on facilitating collaborative dialogue. Conducted in several rounds, it makes sure that sufficient ideas are generated and shared.
World Café can even deepen relationships and mutual ownership of outcomes in an existing group. It can create meaningful interaction between a speaker and the audience. In fact, it can effectively engage people in authentic conversation whether they are meeting for the first time or have established relationships with each other.
Like any other approaches and methods, World Café is also most suitable for specific conditions and less in selected conditions. When you are already driving toward an already determined solution or answer, World Café may not be one for you.
Interested in gaining more understanding of the World Café workshop technique? You can learn more and download an editable PowerPoint about Consulting Workshop Series: World Cafe here on the Flevy documents marketplace.
Are you a management consultant?