Saturday, November 17, 2012

Connecting the Dots within the Business

We’ve played it before while growing up, connecting the dots. Searching for direct value for the organization applies the same principles, the business has to work out which business activity directly impacts another activity whilst being enhanced or weakened by the ones prior.
Figure 1 - Simple Connect the Dot

Unfortunately, the realities of most organizations are highly complex interchanging inputs and outputs which can only be described by the figure below.
Figure 2 - Reality of Connecting the Dot within the Organization

Like all puzzles, one needs to begin, well, from the beginning and identify the end in sight. This is where business philosophy takes several stands.
  • The Vision first
  • The People and Values first
  • Customer first

These are all well and good, but businesses by its very nature is a production engine, to create either products or services. So I take an extremely practical approach of working out how the organization’s value chain works from production to ultimately customer consumption. Porter (1985) worked it out as Value Chain, and it was soon focused towards the left -> supply side, where we have a series of findings under Supply Chain Management. More focus also occurred on the right of the Value Chain and we have Customer Demand Management and Customer Relationship Management. In the middle, there’s a litany of literature on operations efficiency, management and quality principles.

Needless to say, because of the vast array of knowledge, the company or rather the people within the organization struggle to avoid reinventing the tacit knowledge of running a great company.

Therefore, like all manner of problems that are too large, we have to break them out into chunks. But more importantly, create an immediate feedback loop to understand how one department’s actions create positive or negative karma throughout the organization. Especially those sowed by individualized performance indicators that result in a zero sum outcome. 

An overarching intelligence needs to exist in order to coalesce the corporation’s tacit knowledge and ensure its perpetuity, and this lies within the organization’s leadership and the efficiency in cascading and reinforcing findings. 

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