Bechtel Consulting Group

Vol. 8, Issue 2
                                                                                                                                    May, 2018 

The Competitive Edge

Strategies for Success in Today's Markets 

 

 
   I'm pleased to bring you the April, 2018 issue of " The Competitive Edge," a monthly newsletter geared to helping you boost your strategic, organi-zational and marketing performance. 
   My aim is to stimulate your own thinking, perhaps causing you to see things in a different light. If you do find the content helpful, please feel free to  you think will also benefit.
   I always welcome a two-way dialog because I stand to learn as much as I share. So please feel free to share your reactions, ideas or suggestions. You can email me at rick@bechtelconsulting.net or call 206-351-8604.  
 
Are Your Orphans Accountable? 
How Network Analysis Boosts M&A Success
 

   The threats and challenges to succeeding with a merger or acquisition are no secret to M&A practitioners. In fact, according to a recent Harvard Business Review report, the failure rate is estimated at between 70 and 90 percent.
   While explanations abound, the entrenchment and/or emergence of silos is considered one of the most pernicious threats to any merger or acquisition. Members of pre-existing silos in both organizations have a natural tendency to "circle the wagons," mostly out of uncertainty, distrust and a dedication to preserving the status quo. Moreover, new silos can emerge from a natural banding-together of employees with little previous pro¬≠fessional affinity. 
   Wherever silos in the two prior organizations have overlapping functionality, this entrenchment can lead to what are termed "accountability orphans" - silos pointing at one another, each shuttling accountability off onto others. 
   However they manifest, the persistence of silos impedes the flow of communication, reduces efficiency and productivity, and freezes progress in integrating the two cultures - to which, according to a recent McKinsey survey on the subject, 70% of respondents admitted that too little attention was paid.
   In this context, organizational network analysis has shown itself to be an enormously powerful tool.  By mapping interrelationships among these siloed groups, it enables Management to discover where communication is existent and/or impeded.  From there, they can move to capitalize on existing relationships and create important connections where they are lacking. Communities of Practice (CoPs) can be formed to discover exactly where accountability lies on an organizational level and address related issues. Such groups also can be tasked with designing cross-functional programs or processes to respond to issues that are giving rise to the accountability orphans.
   On another level, considering that a merger or acquisition is, by definition, an organizational change initiative, network analysis can be employed to identify each network's key influencers - the opinion leaders, the culture carriers and the relationship brokers. These critical employees can then be formed into a Community of Practice tasked with conveying the benefits of the merger, winning support, and accelerating the adoption process in an organized, coordinated manner.
   Wherever network analysis has been employed in this way, the success rate of the merger or acquisition has been significantly higher. Moreover, once cultural integration is achieved, the resources and structure formed in the process can continue to be employed to strengthen performance and productivity on an ongoing basis, helping to assure long-term organizational success.
  
 
The Seven Key Analytic Models 
 One Expert's Take


   The role of planning, according to Michael Coveney, co-author of "Budgeting, Planning, and Forecasting in Uncertain Times", is "to help manage what can be controlled, to produce outcomes that will achieve organizational objectives, within an uncontrollable and unknowable external environment." OK, a mouthful, to be sure. In any case, he argues that an organization's business processes are central to its performance.
   To plan and monitor these processes effectively, Coveney offers these "7 Key Analytic Models," which he says can be employed all or in part, depending on the size and nature of the business.

  1.
The Operational Activity Model (OAM): How efficient and effective are your business processes? Looks at relationships among process activities, resources and outcomes.
  2.
The Detailed History Model: What trends may be hidden in historic detail? Aim is to reveal trends that can be used to predict future performance & how they can be utilized.
  3.
The Target-Setting Model: What long-range targets should be set based on where the market is heading? Allows senior management to set medium to long-term aspirational goals.
  4.
The Detailed Forecast Model: Where are we heading if we continue with our current business model? Reveals details behind forecasts, and is meant to be a truer reflection of current prospects.
  5.
The Strategy Improvement Model: What can we do differently to better meet our long-range targets, and what would it cost? Permits managers to run a variety of scenarios for potential changes in the way the organization operates - in effect, to play "What if?"
  6.
The Scenario / Optimization Model: What choices or risks do we face, and what would their impact be on corporate goals? More big-picture than the Strategy Improvement Model, it allows management to stagger strategic initiatives to optimize the use of resources.
  7.
The Cash / Funding Model: Looks at cash flow implications; allows management to assess how needed or desired capital items are to be resourced.

   Coveney notes that each of these models will have different content and structures, and would be used by different people at different times. He argues that none of them can really be omitted or ignored, and they need to be integrated into a single data-driven system.

 

The Competitive Edge is a monthly newsletter published by the Bechtel Consulting Group for the interest and enlightenment of our clients, colleagues and friends.  You can reach us at 6505 NE 182nd St, Suite 101, Kenmore, WA 98028; by calling (206) 351-8604, or by emailing rick@bechtelconsulting.net.  For more information about the Bechtel Consulting Group, visit our website, www.bechtelconsulting.net

 

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In This Issue
How Network Analysis can greatly enhance cultural integration and avoid accountability orphans.   
     

Plus, here are what one expert considers the 7 key analytic models that every organization should be employing. 

  

 

If you find the content of our newsletter useful, please feel free to forward it to colleagues who might also benefit.

 

Did You Know....
 
The Marketing Executive Roundtable is comprised of the senior-most marketing executives from leading organizations in the greater Seattle area. The group meets monthly to exchange ideas and seek one another's counsel on the important issues facing marketing leaders today. It has proven an invaluable resource for marketing leaders to stay abreast of best practices in today's turbulent waters. If you or someone you know fits these qualifications and is interested in learning more, please visit www.merseattle.orgWe would be happy to have you or them join us as our guest at an upcoming session.


FOOD FOR THOUGHT:    

" Anyone who says business [people] deal in facts, not fiction, has never read old five-year projections."

Malcolm Forbes 
   
 
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Bechtel Consulting Group

6505 NE 182nd St

Suite 101

Kenmore, WA 98028

Phone:(206) 351-8604

Email: rbechtel@bechtelconsulting.net 

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