By John Howard
“Breaking Thru Business Boundaries for Profitable Growth” means removing barriers (fears) to progress or a shift in thinking, standards or perceptions to arrive at a new idea – a strategic move that changes the current market position or operating model – the way that the business is run.
It’s about doing the comprehensive research and becoming preoccupied with combinations, connections, and details. We want to break thru the limitations of a firms’ history or limiting beliefs and change how it thinks and works in the world, perhaps a new local or global view. It starts with just an idea, concept or goal and turns into a transformation. This psychological (it starts subconsciously) shift or moment-of-truth allows you to close the gap between where you are and where you want to be. We also need to be aware of our expertise. Often times, we don’t know exactly where the “expertise” boundaries are, i.e. there is knowledge and anti-knowledge, what you don’t know!
However, you can’t always FORCE it to happen. Sometimes, you just have to let go and allow it to happen as the research and new perspectives percolate in the business mind. This is called bringing innovation inside. And it will come to you when you are unsuspecting…usually when you’re totally absorbed in something totally unrelated to your problem or project.
“Big ideas come from the unconscious. This is true in art, in science, and in advertising. But your unconscious has to be well informed, or your idea will be irrelevant. Stuff your conscious mind with information, then unhook your rational thought process” ~Ogilvy.
When you’re completely absorbed in something else and your breakthrough idea hits you, THEN you can go back to work. Ultimately, we want to scream “let’s do this!”
Drilling down we need to ask, “What are the boundaries of the business?” Are the underlying assumptions still valid? How do we turn assumptions into facts or real knowledge? What are the limiting constraints or bottlenecks surrounding the business? What is and is not contributing to the top or bottom lines?
We want to know…
- if a business may be developing new products or resources but they are late or under-contributing to intended results,
- whether capacity is under development but is slow in generating output
- if former customers are no longer active and not contributing to revenue
- perhaps certain functions are over-staffed or not needed and have become unproductive
- is cash fully being productive
- are assets and liabilities being properly managed to optimize the Balance Sheet and provide the best capital structure. And the Balance Sheet determines what we need from the Income Statement!
Strategic management is about creating an action plan, around the market position, and delivering on that plan…leading and managing it. And by reviewing and optimizing the tangible and intangible resources and capabilities that effect current performance, it allows us to navigate into a more focused future. It is responsible for positioning what is inside and outside the organization, thinking about “inside-the-box” and “outside-the-box” activities.
Organizations may also choose to place certain resources outside their own boundaries by outsourcing business functions and systems such as IT, HR, external sales channels, manufacturing capacity, or even storage facilities that accumulate inventories. Their contribution margins and fixed costs must be managed as distinct components of the value chain.
Strategic management is about understanding and influencing all of these resources and capabilities, because some are in development towards being an active part of the business system and some have left it. We can also be sure that they are always changing as resource levels and flows move up and down.
Our objective is to gain traction and that requires three things: a change in focus, a market position and strategy to get you there and the elimination of limiting mindsets and processes. It requires courage to persist and go through it rather than do nothing and avoid it. Time is also the opponent and it is not afraid to wipe you out along the way if indecision becomes an obstacle. It is critical to understand how to create a sensible market position, business strategy (your control panel) and a strong tactical plan for profitable growth.