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Tag Archives: Decision Making

3-Phase Flywheel Strategy Approach

10 Oct

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Strategy Development has followed a set path since the last century where a predetermined, rectilinear, and inflexible approach defined the process.

In the 21st century, however, business leaders are devising Strategy by evolving it into a probabilistic, repeated, and multifaceted process.  An approach that can both endure and adapt to the growing pace of Change and Disruption that is manifesting itself in all industries.

Using gaming, AI, unremitting execution, and adjustment, with numerous scenarios to deliberate on, leaders create “Flywheels” that successfully tackle the not so deterministic world where the future is highly uncertain.

Flywheel is a concept originally used in the power industry to explain an origin of stabilization, energy storage, and momentum.  The concept was propagated in the Strategy context by author Jim Collins.  Employing the Flywheel concept, executives are able to validate assumptions through simulations as well as in the real-world scenarios.

Rather than using past assumptions and relying on instincts, using the Flywheel Strategy, decision makers exploit the power of Artificial Intelligence (AI) and Advanced Analytics. They model the multitude of variables and produce a sizable number of simulations that propose many strategic bets, option-value bets, and no regret moves.

Instead of numbing decision-makers with a profusion of options they created, the simulations render elucidative insights.  Also, the AI system is made more capable through learning mechanisms called Reinforcement Learning by selecting from the above strategies.

The collection of strategic choices is increased exponentially and cost of experimentation is diminished by this approach.  Decision-makers are also empowered by this tool to make better decisions.  Likewise, organizations are able to select accurate market approaches, pricing, advertising, and customer strategies for several cities and communities, over a time span.

Strategy Flywheels can be used as a basis for developing Growth Flywheels by organizations.  The Flywheel Strategy approach consists of the following 3 phases: 

  1. Sense: Market Sensing
  2. Think: Strategy Formulation and Investment Planning
  3. Act: Performance Evaluation and Learning

The dynamic and resilient Flywheel Strategy of Sense, Think, Act has 3 parts, which are based on establishing policies, contending with dynamic models within the background of environmental assumptions, and handling randomness.

Let us delve a little deeper into the 3 phases.

Sense: Market Sensing

Environmental assumptions are formulated through this procedure of extraneous Market Sensing.

Uncertainties to which probability assignment is difficult are the target of Market Sensing activity.  Most urgent strategic matters can be detected and senior leaders consistently engaged in devising a response to them by recurrently sensing extraneous market changes.

Improvements in Machine Learning and cutting-edge AI can aid in not only expanding the quantity of information scanned but also enhancing the quality of content evaluated.

Think: Strategy Formulation and Investment Planning

Conventional strategic thinking can be aided in the new way of strategizing by the 3-phase process for Gamification—Design and Build, Simulate, and Evaluate.

A stable strategy consists of a portfolio of investments and projects with diverse risk profiles.  Diverse risk profile of performance is a mix of:

  1. No-regret moves
  2. Strategic bets
  3. Option-value bets

Act: Performance Evaluation and Learning

Performance Evaluation and Learning from the efforts has to be carried out so that improvement in proficiency to sense the market and experiment with new ideas occurs.

Interested in learning more about how Amazon and Uber used Flywheels, how the Gamification approach is used in Flywheel Strategy formulation, and what constitutes a diverse risk profile?  You can download an editable PowerPoint on Flywheel Strategy here on the Flevy documents marketplace.

Editor’s Note:

If you are interested in becoming an expert on Strategy Development, take a look at Flevy’s Strategy Development Frameworks offering here.  This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts.  By learning and applying these concepts, you can you stay ahead of the curve.  Full details here.

Want to Achieve Excellence in Strategy Development?

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“Strategy without Tactics is the slowest route to victory.  Tactics without Strategy is the noise before defeat.” – Sun Tzu 

For effective Strategy Development and Strategic Planning, we must master both Strategy and Tactics.  Our frameworks cover all phases of Strategy, from Strategy Design and Formulation to Strategy Deployment and Execution; as well as all levels of Strategy, from Corporate Strategy to Business Strategy to “Tactical” Strategy.  Many of these methodologies are authored by global strategy consulting firms and have been successfully implemented at their Fortune 100 client organizations.  

These frameworks include Porter’s Five Forces, BCG Growth-Share Matrix, Greiner’s Growth Model, Capabilities-driven Strategy (CDS), Business Model Innovation (BMI), Value Chain Analysis (VCA), Endgame Niche Strategies, Value Patterns, Integrated Strategy Model for Value Creation, Scenario Planning, to name a few.

Learn about our Strategy Development Best Practice Frameworks here.

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– David Coloma, Consulting Area Manager at Cynertia Consulting

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– Roderick Cameron, Founding Partner at SGFE Ltd

4 Traits of Exceptional Leaders

9 Oct

Evaluation and onboarding of outstanding leaders is anything but straightforward.  Almost all organizations have set up testing mechanisms or assessment centers to distinguish senior leadership candidates having traits that make up for Exceptional Leaders.  These assessment centers shortlist leaders based on certain indicators and criteria.

However, these assessments are not always accurate in predicting the best leaders.  At times, the entire evaluation exercise results in drafting mediocre leaders and fails to select top influencers and role models for the organization.  The traditional methods of gauging senior leaders prove inadequate based, typically, on 3 common flaws:

  • Granularity – Gauging the candidates for leadership positions using the profiles of successful leaders from the past. Those profiles are not meaningful considering the pace of change today and the future needs of the organization.
  • Long-term Focus – Assessment of candidates based on the traits required to reap the fruits of Business Strategy in 5 years’ time is another ground for not identifying the right leaders.
  • Emphasis on finding typical leadership traits – Instead of looking for traits that separate exceptional leaders from the pack, most assessments are geared towards finding typical leadership traits.

Research by PwC—spanning over a period of 10 years with a sample size of 2500 senior executives, who remained a part of C-suite successions in large organizations—reveals that the common flaws in leadership assessment methods can be confronted methodically.  To find the best C-level executives, leadership evaluations should focus on identifying candidates possessing the following 4 key traits that are typical only of the top C-level executives:

  1. Simplification & Operationalization of Complexity
  2. Drive Enterprise-wide Ambition & Change
  3. Strong Teamwork
  4. Leader Building

Let’s dive deeper into these traits.

Simplification & Operationalization of Complexity

In today’s world of disruption, organizations face new challenges on a day-to-day basis.  Exceptional leaders have the ability to process tremendous volumes of information and simplify things fairly easily.  Leaders who truly standout are well-versed in tackling confusion and learn promptly.  They are great at:

  • Interpreting complexities and creating simplified operational descriptions around them for others’ understanding.
  • Developing visions to influence people and rally them around the shared objectives.
  • Developing & implementing actionable plans to achieve objectives.
  • Developing functional and dynamic storylines encompassing the agenda that demonstrates how the company will execute its strategy. These storylines consistently remind the people to concentrate on the things that matter most to the company (e.g. customers, products).
  • Creating and disseminating robust communication plans—highlighting how their company is best suited to face the challenges of disruption—that are consistently analyzed and improved upon.

Drive Enterprise-wide Ambition & Change

People in an organization often operate in groups.  These groups consider people outside their circle as competitors or “outsiders.”  This tribal mentality is detrimental for an organization and inculcates individual thinking—focusing only on personal / group targets—and debilitates the ability to operate outside one’s comfort zone.  Exceptional leaders have the skills to:

  • Make people come out of this tribal or siloed mentality and think collectively in terms of realizing organizational objectives.
  • Understand different mindsets and know how to influence them constructively.
  • Make people realize their contribution towards the bigger, organizational perspective and work towards achieving their business unit targets rather than personal performance objectives.

Strong Teamwork

Nobody can undermine or deny the importance of teamwork.  Much has been written on the subject. However, in reality, most teams do not quite understand the spirit and commitment fundamental to develop teamwork.

Exceptional leaders:

  • Are aware of the importance of teamwork and collective leadership. They consistently challenge their people to ponder over ways to achieve not only personal but also the strategic organizational objectives.
  • Work with teams to uncover prioritized initiatives critical for organizational growth.
  • Lead their teams and make informed strategic decisions.
  • Focus more on the strategic planning front than tactical way before they reach the C level.
  • Emphasize to the teams the significance of spending time discussing / developing strategy and devising plans.
  • Focus on maximizing the effectiveness of each individual to benefit the organization.

Interested in learning more about the traits of outstanding leaders?  You can download an editable PowerPoint on Exceptional Leadership here on the Flevy documents marketplace.

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– David Coloma, Consulting Area Manager at Cynertia Consulting

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– Roderick Cameron, Founding Partner at SGFE Ltd

Sustainable Digital Transformation

28 Aug

Accelerated pace of technological disruption has forced organizations to change.  It has triggered leaders to think of the ways they must adopt to survive in these challenging times.

Organizations are confronting this scenario by embracing digital technologies.  Traditionally, the focus of the organizations in these Transformation initiatives has remained on speed of change.  To get the most out of their initiatives, they are making drastic changes, to include:

  • Creating Agile Teams
  • Introducing Mobile Apps
  • Building Big Data and Analytics capabilities
  • Experimenting with creative Digital Business Models.

Digital Transformation programs are launched with huge fanfare, see success early on, but fail to keep the momentum going.  The issues that plague the sustainability of these initiatives are typically:

  • Aging Technology Infrastructure
  • Incompatible Operating Models
  • Archaic ways of doing business
  • Change-agnostic culture.

Drivers of change for the Digital Leadership have changed significantly over the years.  There is an increased focus on building scale when executing Digital Transformation.  Leaders have realized that quick Decision Making is not the only element required for successful Transformation.  To achieve its full potential, they need to create differentiated offerings and scale the most viable initiatives across the organization to create value.

Traditional organizations have started following the footsteps of digital disrupters like Amazon and Tesla.  They are implementing new digital services and adjusting their operations.  However, typical hurdles—e.g., old enterprise systems, bureaucratic red tape, delayed decision making, and segregation between IT and business units—make them slip back into the outdated ways of doing things.

Sustainable Digital Transformation involves building not only the technology infrastructure but also revisiting the operating model.  Successful Digital Transformations essentially involve embracing 4 key strategies to enable an ecosystem that encourages change to stick as well as scale:

  1. Create a strong Digital Foundation
  2. Integrate and consolidate the Digital Ecosystem
  3. Front-end to back-end approach
  4. Create a new Business Model

Let’s delve deeper into these strategies.

Create a Strong Digital Foundation

Manufacturing and pharmaceutical industries are the major sectors that employ this strategy.  The typical state of affairs in organizations implementing this strategy is such that they are in need of developing new digital capabilities from scratch to tackle nimble rivals who are churning out novel value propositions using digital tech.  These companies are burdened by dated tech infrastructure, sluggish decision making, and dated business models.  The risk of disruption to these businesses is growing but it hasn’t challenged them to transform drastically.

To them, building a digital foundation warrants acquiring novel foundational capabilities.  Their approach should be to start implementing and managing small changes one step at a time.  For instance, building a smart technology architecture with advanced Big Data, Analytics, and predictive modeling capabilities.  This should be followed by testing prototypes of the new model to prove their worth before implementing a full-blown execution.

Integrate and Consolidate the Digital Ecosystem

This strategy has gained traction most in organizations from the Consumer Products industry.  These organizations are typically marred by scores of fragmented IT systems running in different parts of the organization.  There is a general inability to prioritize the most viable projects and scale them.  The need to reform and rapid deployment of Digital Infrastructure is critical for survival.

The approach to Digital Transformation in these organization should be to establish a central management position to manage the initiative and streamline dispersed technology landscape.  This entails revising the technology infrastructure and operating model, deploying a unified IT platform for gathering and storing customer data, establishing a common data repository accessible to all units to recognize customers’ needs, and creating a culture that encourages innovation, acts on creative ideas, and refines them through experimentation and advanced tools.

Interested in learning more about the other strategies to enable Digital Transformation?  You can download an editable PowerPoint on Sustainable Digital Transformation here on the Flevy documents marketplace.

Did You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

4 Processes of Sustainable Change

25 Aug

Initiatives aimed at improving performance are often launched with great uproar, costing an organization significant investments.  Such initiatives necessitate extensive changes in the Organizational Culture and the way the enterprise systems and processes function.

However, most initiatives fall short of realizing success.  Decades of scholarly research on Change Management reveals that the issues that contribute the most to the failure of strategic initiatives are:

  • Incompetence in sustaining process improvement.
  • Lack of trust on senior leadership.
  • Failure to embrace new ways of doing business.
  • Performance relapse.
  • Inability of the initiative to produce any positive financial returns.
  • Skepticism towards the desired behaviors and return of impractical employee behaviors.

Researchers have carried out scores of studies to isolate the drivers of lasting change.  Research published in MIT SMR in 2005 discusses how leadership can design and execute Transformation initiatives that bring lasting changes in the organization.The study entailed in-depth analysis of the strategic Customer Service Enhancement (CSE) initiative undertaken by a large clothing retailer, having franchises in multiple geographic locations.

The researchers conducted 20 semi-structured interviews with leaders, in-store operations and support function managers.  Detailed notes of the interviews were shared amongst the researchers alongside an exhaustive literature review.  A case study of the initiative was prepared using independent research to have an unprejudiced viewpoint, free from any bias.  Feedback from the organization’s management was gathered and incorporated throughout the study to seek clarifications or corrections.  Data analysis was carried out employing a coding scheme developed using Atlas.ti tool.  Comparative analysis was conducted and similarities and differences in conclusions were discussed.

The study brought to light 4 key processes necessary for change to stick in an organization.   These key processes assist in laying the foundation for successful institutionalization of change initiatives by creating a company-wide culture that encourages enduring change:

  1. Chartering
  2. Learning
  3. Mobilizing
  4. Realigning

Let’s delve deeper into the first 2 processes.

Chartering

Chartering is a process through which an enterprise classifies the purpose, scope, and the way people interact with each other on a strategic initiative.  Clear delineation of project boundaries, resources, responsibilities, and reporting lines are the elements integral for the success of a change initiative.

The Chartering process entails 2 critical components:

  • Boundary Setting
  • Team Design

Boundary Setting involves the key steps a team takes for accurate definition of change initiative’s scope.

The project team should clearly outline the problem(s) that the project is, and isn’t, going to tackle.  Ideally, while designing and executing a change initiative, the focus of the engagement should be on confronting the most crucial problem area.  The leadership should ensure not to confuse the core team by eyeing too many priorities to deal with through the strategic initiative.

The Team Design element of Chartering involves ascertaining the roles, accountabilities, and guiding principles for team’s collaboration.  Team design entails creating ground rules for team members to interact, devising mechanisms to manage conflicts.  The leadership needs to not only maintain diversity of the project team’s expertise, but also ensure they complement each other, and inculcate a standardized approach to decision making in project teams.  There needs to be fostered a culture of positive discourse and testing ideas amongst the team members.  Incorporating these guidelines helps spark thinking, learning, and decision making.

Learning

Learning aids in anticipating and dealing with hurdles during implementation of Transformation initiatives.  Learning enables the managers to improve the quality of the new processes.  it is a process through which managers develop, test, and refine ideas before full-scale implementation.  The process entails 2 critical components:

  • Discovery
  • Experimentation

For more information on Learning and Development and how to elevate your organization into a Learning Organization, check out the frameworks and tools on Flevy here: https://flevy.com/business-toolkit/learning-organization

The discovery element involves gathering data to identify the objectives of the change initiative and outlining ways to achieve those objectives.  Before rolling out a complete implementation of a change initiative, testing and refining the individual elements of the initiative immensely assists in the success of the initiative.  Gathering adequate information relevant to the initiative, setting up baseline metrics to measure performance, and identifying issues hampering customer satisfactions are the key aspects of this phase.  The team should learn from the failures of prior initiatives, introduce change in a systemic fashion rather than piecemeal, and encourage people to change rationally as well as emotionally.

Interested in learning more about the other processes critical for change to stick?  You can download an editable PowerPoint on 4 Processes of Sustainable Change here on the Flevy documents marketplace.

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You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Strategic Decision Making: 5 Decision Support Tools

15 Jul

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Do people always follow a rational linear process to come to a decision?  Studies have suggested that a combination of Decision Making Models are used by people to reach quality decisions.

Strategic Decision Making is a complex process with a lot riding on those decisions.  Eliminating risk from Decision Making is unthinkable but radically enhancing chances of success is a realistic goal.

In making Strategic Decisions, executives tend to rely only on those Decision Support Tools they know best.  The usage of non-optimal Decision Support Tools is, in part, due to lack of knowledge about which tools work best in a particular scenario and, in part, due to lack of information regarding what tools are available out there.

Having access to a variety of Decision Support Tools increases the likelihood of making a successful decision provided the decision maker has knowledge of which tool to employ or a combination thereof in various scenarios.

The following 5 Decision Support Tools or their combination is applicable in a variety of Decision Making scenarios:

  1. Conventional Capital-Budgeting Tools
  2. Quantitative Multiple Scenario Tools
  3. Qualitative Scenario Analysis
  4. Case-based Decision Analysis
  5. Information Aggregation Tools

 In some cases, just one tool is needed while in others an assortment of tools makes for the best combination.

Let us delve a little deeper into some of these tools.

Conventional Capital Budgeting Tools

Projected Incremental Cash Flows are used from likely investments to ascertain whether a project merits being funded through the firm’s Capitalization Structure.  Included in it are Discounted Cash Flow, Expected Rate of Return, and Net Present Value models.

Quantitative Multiple Scenario Tools

Decisions are analyzed by completely specifying possible outcomes and their probabilities. Mathematical, Statistical, and Simulation methods are employed to distinguish the Risk and Return properties of prospective choices.  The tools include:

>  Monte Carlo Methods

>  Decision Analysis

>  Real Options

Qualitative Scenario Analysis

These techniques are beneficial to decision makers who encounter excessive levels of uncertainty about outcomes because the techniques do not assume a conclusive and entirely specified set of possible outcomes.

Real-life business Decision Making often comprises of judgments that are based on incomplete and uncertain information.  This can be mitigated by using appropriate Decision Support Tools.  However, which tools are appropriate will depend on the answer to the following critical questions:

  1. Do I know what it will take to succeed?
  2. Can I predict the range of possible outcomes?

The Causal Model question—combination of Critical Success Factors (CSFs) and economic conditions leading to success—needs settling before we can proceed to answer the 2nd question regarding Outcome Prediction.

Managers need to ask the following in order to clarify the state of the Causal Model hence the answer to the question:

  1. Do I comprehend what combination of Critical Success Factors will decide if my decision leads to a successful outcome?
  2. Do I recognize what metrics need to be met to guarantee success?
  3. Do I have an accurate understanding of how to attain success?

The other question to answer is: Can I predict the range of possible outcomes?

Managers should ask the following in scenarios predicting various outcomes and probabilities:

  1. Can I outline the range of outcomes that may result as a consequence of my decision, both as a whole and for each Critical Success Factor?
  2. Can I measure the probability of each outcome?

Even where the CSFs and Model for Success are understood, it sometimes becomes difficult to predict range of outcomes and their probabilities due to uncertain conditions.

Interested in learning more about Decision Support Tools?  You can download an editable PowerPoint on Decision Support Tools here on the Flevy documents marketplace.

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1. How to elevate your management skills to becoming a Leader in your organization. 

2. How to elevate your organization to becoming the Leader in your Industry.

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Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.  Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

Metadata Classification and Management

8 Jul

Data and Analytics, today, play a key role in competing with rivals.  Every passing day leads to creation of enormous amounts of data by organizations across the globe.  These huge data lakes often go unused, or are underutilized, by organizations.  This data, if utilized properly, is of great assistance in informed decision making.

Multiple data types and sources generated by discrete systems are often inconsistent, dispersed, and lacking integration, which makes them unworkable.  Such data results in inaccurate analysis and flawed insights.  Reliability and confidentiality of data can be ensured by stipulating rules and processes to govern access to data and its Metadata.

Metadata Definition

Metadata can be defined as “the Data in the context of Who, What, Where, Why, When, and How.” It’s the information pertaining to the data itself, its attributes, and elements.  Metadata provides searchable key attributes of information to the users e.g., Customer ID or Name.  Appropriate identification of Metadata is a major step in uncovering the potential locked in enterprise data assets.

Metadata Management

Metadata Management relates to handling of data, its description, relationships, and lineage within an organization.Metadata enables a user to search and identify information on certain key attributes.  Context of data is of prime importance in managing Metadata.

Metadata isn’t all about identification of data.  With ever-increasing volumes and complexity of data, Metadata management is getting critical to identify informational assets and convert those into enterprise assets of high business value.  This entails setting up policies and ensuring efficient information management.  Metadata Management integrates all data at the enterprise level.

Benefits of Metadata Management

  • An efficient Metadata Management system helps the business users to comprehend the source of the data characteristic and the calculated measure of that characteristic.
  • It supports the technical users in mapping business Metadata with technical Metadata.
  • Metadata Management provides a holistic view of the various data systems in an organization.
  • It enables automated parsing and loading of variety of Metadata types.
  • Building an Enterprise Metadata model based on the data generated from discrete systems—e.g. data warehouse, integration tools, and data modeling tools—is quite efficiently done through Metadata Management.
  • Mitigation of any challenges in data accessibility and utility.
  • Enhancement of data quality.
  • Supporting Digital Transformation by creating data reporting and data analysis experts.

Metadata Classification

People in the same organization perceive Metadata differently. Difference of opinion in the identification of Metadata within the company results in inadequate visibility and access to data.  This is where a broader classification of the types of Metadata is helpful.  A thorough understanding of the different classes or categories of Metadata assists in developing a standardized perception of data across the organization.  These categories include:

Structured Metadata

Structured Metadata provides information on what the data looks like, e.g., data elements names mapped to columns, descriptions of data elements, data types, length of data elements, and the file layout.  This can include tags, primary keys, or foreign keys.

Supplier Metadata

Entails information associated with data origination point, directives, constraints, owners, service level agreements for consumption of data, demographic information about the data asset e.g., size, number of records, date of production, or source of origin of data.

Processing Metadata

Refers to data production processes, including data lineage, any 3rd-party sources of data, derivations of data elements, or the process flows related to data pipelines.

Query Metadata

Describes information on the context and classification of data.  It includes a glossary of business terms, definitions, taxonomies, master data, historical data, types of queries performed etc.

User Metadata

Provides data on Metadata consumers, their roles, data owners, and data stewards responsible for managing the quality and usability of data.

Interested in learning more about the other categories and classifications of Metadata? You can download an editable PowerPoint on Metadata Management here on the Flevy documents marketplace.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

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3 Models of Human Decision Making Process

25 May

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How do people make decisions?  Do they always follow a rational linear process to come to a conclusion? 

Studies have suggested that the traditional Decision Making model—commonly known as the Rational Decision Making Model—does not explain the whole ambit of Decision Making.

People, including managers of organizations, arrive at decisions using a variety of routes.  Experts suggest that there are at least 3 Decision Making Models that work in consonance to make the best decisions.  The 3 Decision Making Models are:

  1. Thinking First – Rational Decision Making
  2. Seeing First – Insight-driven Decision Making
  3. Doing First – Experimentation-based Decision Making

The latter 2 models need to supplement the 1st in order, for people in general and managers in particular, to improve the quality of Decision Making.  Developing a strong understanding of these foundational Decision Making models is recommended for any Business Leader who seeks to make better, more informed, more rational decisions.

Experts have suggested that people have the capacity to use all 3 models for arriving at a decision and so do organizations.

The 3 approaches to Decision Making draw a parallel from science, art, and craft.  People who are partial to Thinking are more into facts, those who favor Seeing appreciate ideas, and people who prefer Doing always value experiences.

Let us delve a little deeper into the details of the 3 Decision Making Models—Thinking, Seeing, Doing.

Thinking First

More commonly known as the Rational Decision Making Model, this model has a clearly identified process.  It is linear, logical, effortless, and iterative—i.e., keeps travelling back and forth with interludes for new events, alterations for opportunities until conclusively arriving at a decision.

Thinking First Model is associated with science and is mainly verbal in nature i.e., comprising of linear words.  People leaning towards the Thinking Model prefer facts.

Usually, the Thinking First Model is used in well-founded production processes.  Thinking First succeeds when:

  • The matter is well-defined.
  • The data is trustworthy.
  • The situation is structured.
  • Thoughts can be restrained.
  • Discipline can be applied.

However real-life Decision Making exposes some limitations in the Thinking First Model as rational Decision Making is uncommon.

Seeing First

Decisions are motivated as much by what is Seen as by what is thought.  Visualization and conceptualization of a problem or situation is the basis for the Seeing First Model.  It is usually used in creative solution finding.  Experts have identified 4 steps in creative discovery:

  1. Preparation
  2. Incubation
  3. Illumination
  4. Verification

An example of Seeing First Model will be Mozart’s allusion to the best part of creating his music; “when I am able to see the whole of it at a single glance in my mind.”

Seeing First Model works ideally in circumstances where:

  • Numerous elements have to be pooled into a creative solution.
  • Commitment to the solution is steadfast.
  • Communication takes place beyond boundaries.

Doing First

When stumped for a solution, diving head first and tinkering with a problem—bringing Problem Solving Mindset characteristics into play—leads to the necessary insights following trial and error.  Attempting various things, discovering which among them functions, finding meaning in that and repeating the productive behaviors while abandoning the rest is the gist of Doing First Model.

Experts have identified 3 stages of this process:

  1. Enactment
  2. Selection
  3. Retention

Doing First Model is ideal, when for example, companies are faced with disruptive technologies or unchartered territories.

Interested in learning more about the 3 Decision Making Models: Thinking, Seeing, Doing?  You can download an editable PowerPoint on Decision Making Models: Thinking, Seeing, Doing here on the Flevy documents marketplace.

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For both the current executives and leaders of tomorrow, our frameworks address 2 facets of Leadership: 

1. How to elevate your management skills to becoming a Leader in your organization. 

2. How to elevate your organization to becoming the Leader in your Industry.

Learn about our Organizational Leadership (OL) Best Practice Frameworks here.

Do You Find Value in This Framework?

You can download in-depth presentations on this and hundreds of similar business frameworks from the FlevyPro Library.  FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives. Here’s what some have to say:

“My FlevyPro subscription provides me with the most popular frameworks and decks in demand in today’s market.  They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.  I strongly recommend FlevyPro to any consultant serious about success.”

– Bill Branson, Founder at Strategic Business Architects

“As a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.  For us, it is an invaluable resource to increase our impact and value.”

– David Coloma, Consulting Area Manager at Cynertia Consulting

“FlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.  In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!  The quality of the decks available allows me to punch way above my weight – it’s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.”

– Roderick Cameron, Founding Partner at SGFE Ltd

How to Understand Consumer Behavior and Undertake Behavioral Transformation? Appreciate the 3 Bs of Behavioral Change

29 Nov

Product managers, marketers, and designers are often confused as to what they should do to increase the chances of customers’ engagement and uptake of their offering.  Changing individuals’ behavior to enhance engagement, productivity, innovation, and happiness isn’t straightforward.

It takes a lot of effort, time, and resources to execute initiatives aimed at transforming behaviors and Organizational Culture.  However, most people aren’t interested in changing and like the status quo to prevail.  This is where Behavioral Economics can help to know how customers behave, interpret their decision-making methods, and create solutions targeting those behaviors.

Product designers and marketers aspiring to drive acceptance of their products can make use of the 3 Bs of Behavioral Change to change understand consumer behavior. The 3 Bs of Behavioral Change classify the 3 elements essential to change behaviors, i.e.:

  1. Behavior
  2. Barriers
  3. Benefits

Understanding and employing these 3 Bs helps the designers and product managers instill change, inspire design and strategy-related decisions, increase the acceptance of new products / features and product engagement levels, and build new behaviors in people.

Let’s discuss the first 2 elements in detail.

Behavior

People have an inherent tendency to maintain the status quo.  Behavioral change necessitates:

  • Identifying individuals’ existing attitudes.
  • Assessing and tackling psychological biases affecting individuals’ decisions.
  • Carefully tracking behaviors that need to be changed.
  • Ascertaining the most important desired behavior and exact action that is imperative to drive results.
  • Getting the buy-in from all stakeholders on the key behavior.
  • Deciding if the behavior should be permanent or transient.

Examples of key actions to change behaviors include spending 30 minutes thrice weekly doing cardio exercises and consuming salad at lunch daily to stay healthy.

Barriers

Understanding the barriers in behavior adoption assists in creating effective solutions to improve uptake of key behavior.  The second step to induce behavioral change is to reduce barriers in its adoption.

  • Every decision that a product user has to make, no matter how negligible, increases resistance in the likelihood of completing a specific behavior.
  • These actions and decisions, that an individual has to take in order to achieve the desired behavior, create points of friction in embracing key behaviors.  For instance, people often find it difficult to decide when presented with complex choices. They tend to procrastinate or become a victim of decision paralysis.
  • Removing the points of friction and resistance from any key behavior necessitates documenting and streamlining all decisions. The path of least resistance leads to desired key behaviors.

Examples of barriers include the thought process involved in the decision to select where to have dinner.  This thought process is, in fact, a psychological barrier in actually going out and having dinner.  Likewise, the decision to walk or drive to a restaurant is a logistical barrier and a point of friction that warrants making a decision.

To eliminate these barriers, we can either remove barriers entirely or just simplify the decision.  For instance, elimination of a non-critical, open text field from a sign-up form—that probed the users about their business, which requires significant time to think and answer—can increase page-over-page conversion.  In case choices are helpful for the users and cannot be eliminated, then it is best to simplify the decision process by giving fewer options instead of many, or by suggesting “recommended option” to the users.

Interested in learning more about the details of the 3 Bs of Behavioral Change?  You can download an editable PowerPoint presentation on 3 Bs of Behavioral Change here on the Flevy documents marketplace.

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Are You Aware of the 3 Obstacles to Overcome while On-boarding Senior Executives?

18 Nov

Mediocre people occupying senior Leadership positions is one of the chief reasons for the fiasco and humiliation that organizations like Enron and WorldCom faced.  The practice of recruiting average people at the top is omnipresent and often goes unnoticed until the results begin to surface, which is typically too late for any intervention.

Smart people decisions matter a lot in achieving profitability.  Research indicates that a return on average human asset of 5% is typical in many industries.  However, a senior executive selection of 2 standard deviations below the average yields -15% return on asset.  An executive selection with 2 standard deviations above average causes 25+% return, which is 5 times the average.  Increased investment in finding and hiring the best senior executives fetches returns to the magnitude of 1000%.

Attracting and selecting the best people for senior leadership positions isn’t a small feat.  The future of organizations depend on it.  However, not too many organizations succeed in getting the right people at the top.  The reason for this failure is attributed predominantly to 3 critical obstacles that hinder in making the right recruitment decisions at such a crucial level.  Wrong Executive Selection decisions due to these 3 obstacles bring about losses and negative returns:

  1. Obstacle of Rarity
  2. Obstacle of the Unknown
  3. Obstacle of Psychological Traps

Let’s talk about these obstacles in a bit of detail.

Obstacle of Rarity

The first barrier to finding outstanding executives for senior positions is their scarcity, as excellent executives are a rare breed.  Sophisticated skills that make an executive standout aren’t common.  They are distributed in a given sample.

Outstanding people perform at a much higher level than that of their peers, particularly at the top positions.  A blue-collar executive with 1 standard deviation above the mean translates to 20% more productive individual than an average executive.  With increasing complexity of job, the difference between the top performer and an average performer increases considerably.

Appointments at the senior positions do not go without assessment errors, which can prove to be extremely costly.  Even an accuracy level of 90% in executive assessment isn’t satisfactory.  This results in a number of mistakenly categorized top performers and rejection of outstanding candidates.

Obstacle of the Unknown

Another barrier to the Executive Selection process is the predictive assessment of candidates on the skills and attributes required and the actual delivery capabilities of the individuals.  It is difficult to assess the unknown.

Competencies at the junior levels are easier to define, but it gets difficult to pinpoint the skills required at the top level.  The skills required at the top keeps on changing due to the evolving political, technological and economic landscape.  The skills required today get obsolete over time.  In case the exact requirements for a position are fully known, it isn’t certain whether a candidate meets the requirements in their entirety.

Accurate assessment of the candidates’ behavior and competencies is difficult but worth investing efforts and resources.  “Soft” skills—e.g., leading people, coaching and developing teams, teamwork, and managing Business Transformation—are what differentiate the senior leaders, but gauging these skills necessitates thorough evaluation and considerable time, which is difficult at senior levels.

Obstacle of Psychological Traps

A number of psychological traps are associated with cognitive biases in humans that hinder the decision making abilities in people and incapacitate the hiring process.  8 types of psychological traps are most common in individuals:

  • Procrastination
  • Assuming incorrectly
  • Impulsive judgment based on first impressions
  • Discounting the warning signs
  • Covering mistakes
  • Bonding with familiarity
  • Emotional anchoring
  • Tendency to follow the majority

For more information on selection and hiring “the best of the best,” take a look at the Fiaccabrino Selection Process (FSP).  Download a free primer on FSP here.

Interested in learning more about the 3 critical obstacles that hinder right Executive Selection?  You can download an editable PowerPoint presentation on Executive Selection here on the Flevy documents marketplace.

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A Startling Fact about Analytics-driven Organizations

27 Mar

Enterprises invest in Analytics to improve Decision Making and outcomes across the business. This is from Product Strategy and Innovation to Supply Chain Management, Customer Experience, and Risk Management. Yet, many executives are not yet seeing the results of their Analytics initiatives and investments.

Every organization putting on investment in Analytics has experienced several stumbling blocks. This differentiates the leaders from the laggards. Analytics-driven Organizations have clearly established processes, practices, and organizational conditions to achieve Operational Excellence. Their commitment to Analytics is creating a major payoff from their investments and a competitive edge.

What It Takes to Be Analytics-driven

The Harvard Business Review Analytic Services conducted a survey of 744 business executives around the world and across a variety of industries. Their focus was on the performance gap between companies that have struggled to get a return on their Analytics investment and those that have effectively leveraged their investment.

The survey showed that Analytics-driven Organizations get sufficient return on investment in Analytics. In fact, they have been highly successful in gaining a return on Analytics investment. This is gainfully achieved as organizations use Analytics consistently in strategic decision making. Executives of Analytics-driven Organizations rely on Analytics insights when it contradicted their gut feel.

Essentially, Analytics-driven Organizations have reduced costs and risks, increased Productivity, Revenue, and Innovation, and have successfully executed their Strategy. Yet, in evolving the organization’s Analytics approach, there can be 4 core obstacles that can affect their drive to getting a greater return on investment in Analytics.

The Core Obstacles to Finding Return on Analytics Investment

There are 4 core obstacles to being an Analytics-driven Organization.

Let’s briefly take a look at the first 2 obstacles:

  1. Communication and Decision-making Integration. The lack of Communication and Decision-making Integration limits the integration of Analytics into workflows and decision processes do not reach decision-makers. As a result of these core obstacles, the use of Analytics is limited in specific areas.
  2.  Skills to Interpret and Apply Analytics. A second core obstacle is the inadequate skills of business staff to interpret and use Analytics. In fact, the survey showed that only one-quarter of frontline employees use Analytics with only 7% using Analytics regularly.

The other two core obstacles are siloed and fragmented Analytics and time delay. These are two equally important core obstacles that can hinder the use of Analytics to maximize return on investment. Further, the 4 core obstacles are barriers to analytic success.

Are You Ready to Be an Analytics Leader?

Leaders use Analytics consistently in decision making. In fact, based on the survey, 83% of executives use it in business planning and forecasting. On the other hand, laggards only use it 67% of the time. Even in various aspects of the organization such as Marketing, Operations, Strategy Development, Sales, Supply Chain, Pricing and Revenue Management, and Information Technology, laggards use Analytics only half the time compared to Analytics Leaders.

Analytics Leaders always ensure that they establish the processes and organizational conditions to allow them to successfully deploy Analytics. In fact, to increase return on Analytics, organizations must undertake the use of four interrelated initiatives that will drive greater return on investment Analytics. These are four initiatives essential to building an Analytics-driven Organization.

One is building an organizational culture around Analytics. To achieve this the organization must have clear, strategic, and operational objectives that are set for Analytics. Second is deploying Analytics throughout all core functions of the business.

Starting with an Analytics-driven Culture can greatly facilitate cross-functional deployment of Analytics.

Interested in gaining more understanding of Analytics-driven Organization? You can learn more and download an editable PowerPoint about Analytics-driven Organization here on the Flevy documents marketplace.

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