TechnologyAccounting SoftwareINFORMATION DIGEST – The research essentials

INFORMATION DIGEST - The research essentials

Each month we mine the most authoritative sources to give you a taste of articles, research and case studies relevant to your practice, and pointing you in the right direction for further information.


[QQ]Patching: restitching business portfolios in dynamic markets[QQ]taste of articles, research and case studies relevant to your practice, and pointing you in the right direction for further information. In turbulent markets, businesses and opportunities are constantly falling out of alignment. New technologies and emerging markets create fresh opportunities. Converging markets produce more. And, of course, some markets fade. In this landscape of continuous flux, it’s more important to build corporate-level strategic processes that enable dynamic repositioning than it is to build any particular defensible position.[QQ] That’s why smart corporate strategists use patching, a process of mapping and remapping business units to create a shifting mix of highly focused, tightly aligned businesses that can respond to changing market opportunities.[QQ] Patching is not just another name for reorganising; patchers have a distinctive mind-set. Traditional managers see structure as stable; patching managers believe structure is inherently temporary. Traditional managers set corporate strategy first, but patching managers keep the organisation focused on the right set of business opportunities and let strategy emerge from individual businesses.[QQ] Changing leaders: the board’s role in CEO succession[QQ] The selection of a CEO is one of the most important – and risky – events in the life of any company. Yet the way CEOs are chosen remains little discussed and little understood. The succession process has traditionally unfolded behind closed doors – some observers have even likened it to the election of a pope.[QQ] To shed light on what works and what doesn’t in CEO succession, the authors lead a roundtable discussion with five distinguished corporate directors: Philip Caldwell, George D Kennedy, GG Michelson, Henry Wendt, and Alfred M Zeien. Collectively, the five directors have participated in dozens of successions, either as board members or as CEOs.[QQ] In a lively and frank exchange of views and experiences, the roundtable participants explore a broad range of questions: What can a company do to ensure a successful succession? How should management-development and succession processes be managed? How should the board work with the sitting chief executive during the process? What makes for a strong CEO candidate? When should outside candidates be considered? How much competition should be encouraged among potential CEO candidates? What role should executive search firms play? What role should former CEOs play after the succession?[QQ] The smart-talk trap[QQ] In today’s business world, there’s no shortage of know-how. When companies get into trouble, their executives have vast resources at their disposal: their own experiences, colleagues’ ideas, reams of computer-generated data, thousands of publications, and consultants armed with the latest managerial concepts and tools.[QQ] But all too often, even with all that knowledge floating around, companies are plagued with an inertia that comes from knowing too much and doing too little – a phenomenon the authors call the knowing-doing gap.[QQ] The gap often can be traced to a basic human propensity: the willingness to let talk substitute for action. When confronted with a problem, people act as though discussing it, formulating decisions, and hashing out plans for action are the same as actually fixing it.[QQ] And after researching organisations of all shapes and sizes, the authors concluded that a particular kind of talk is an especially insidious inhibitor of action: “smart talk”. People who can engage in such talk generally sound confident and articulate; they can spout facts and may even have interesting ideas. But such people often exhibit the less benign aspects of smart talk as well: they focus on the negative, and they favour unnecessarily complex or abstract language. The former lapses into criticism for criticism’s sake; the latter confuses people. Both tendencies can stop action in its tracks.[QQ] How can you shut the smart-talk trap and close the knowing-doing gap?[QQ] The authors lay out five methods that successful companies employ in order to translate the right kind of talk into intelligent action.[QQ] Firing up the front line[QQ] For many organisations, achieving competitive advantage means eliciting superior performance from staff on the front line – the burger flippers, hotel room cleaners and baggage handlers whose work has a huge effect on customers. That’s no easy task. Frontline workers are paid low wages, have scant hope of advancement, and, not surprisingly, often care little about company performance.[QQ] But then how do some companies succeed in engaging the emotional energy of rank-and-file workers? A team of researchers at McKinsey and the Conference Board recently explored that question and discovered that one highly effective route is demonstrated by the US Marine Corps. The Marines’ approach to motivation follows the “mission, values, and pride” path, which researchers say is practical and relevant for the business world.[QQ] More specifically, the authors say the Marines follow five practices: they over-invest in cultivating core value; prepare every person to lead, including frontline supervisors; learn when to create teams and when to create single-leader work groups; attend to all employees, not just the top half; and encourage self-discipline as a way of building pride.[QQ] The authors admit there are critical differences between the Marines and most businesses. But using vivid examples from companies such as KFC and Marriott International, the authors illustrate how the Marines’ approach can be translated for corporate use.[QQ] Sometimes, the authors maintain, minor changes in a company’s standard operating procedure can have a powerful effect on frontline pride and can result in substantial payoffs in company performance.[QQ][QQ] SLOAN MANAGEMENT REVIEW[QQ] Reflecting on the strategy process[QQ] Viewing the evolution of strategic management as 10 “schools” of practice, authors Mintzberg and Lampel explore whether these perspectives represent fundamentally different processes of strategy making or different parts of the same process.[QQ] In cautioning against adopting a pseudoscientific theory of change in strategy formation, Mintzberg and Lampel note with optimism that recent approaches to strategy formation cut across the various schools of practice in eclectic ways. Some of the greatest failings of strategic management, they say, occur when managers take one point of view too seriously. Ideas and practices that originate from collaborative contacts between organisations, from competition and confrontation, from recasting of the old, and from the sheer creativity of managers are driving the evolution of strategic management today.[QQ] A dynamic view of strategy[QQ] Choosing a distinctive strategic position involves making tough choices on three dimensions: who to target as customers, what products to offer, and how to undertake related activities efficiently. The most common source of strategic failure is the inability to make clear, explicit choices on these three dimensions.[QQ] Unfortunately, not only will aggressive competitors imitate attractive positions, but, perhaps more importantly, new strategic positions will be emerging continually. In industry after industry, once formidable companies with seemingly unassailable strategic positions are humbled by relatively unknown companies that base their attacks on creating and exploiting new strategic positions.[QQ] The author describes incursions into established markets by strategic innovators such as Canon and the brokerage firm Edward Jones. The hallmark of their success is strategic innovation – proactively establishing distinctive strategic positions that are critical to shifting market share or creating new markets.[QQ][QQ] [QQ] Knowledge management[QQ] The first question for most companies should be what sort of business problems can knowledge management address? The sweep of activities consultants offer under the KM label is enticingly and frustratingly broad. Systems integrators and the consulting arms of the Big Five accounting firms increasingly offer KM services in conjunction with the IT implementations they are known for, such as ERP. But KM leaders at those firms insist that they too provide clients with a battery of strategic consulting skills, not standalone IT. The traditional strategy firms tend to look askance at KM when it is packaged as a set of technology tools for accessing information.[QQ] They argue that they have long coped with knowledge as a strategic issue and will continue to do so.[QQ]

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