Dave Lash on "Recessioneering"

Dave pointed out that the American and world economies remain in a very fragile state and the boundaries of the current recession have not yet been identified. "This is the end of the post-WWII economy. We are in a situation that is similar to that of a smoker who has finally had a heart attack: we are paying attention. We're in for a long, slow recovery. The good news is that the smaller you are, the better you are positioned to make the pivot to a successful strategy."

Dave laid out five recession strategies, differentiated by margins desired and organizational focus

• Retrench, if you're a high margin firm that is used to being professionally managed
• Prepare for hypercompetition, if you've got low margins and a managerial approach to your market
• Merge, if you're an entrepreneur in a low margin marketplace
• Pivot, if you're entrepreneurial and offer a value proposition that yields high margins
• Liquidate, if none of the other options are viable
  

Drawing on the concept of looking for "pattern language," Dave cited some fascinating research shows about successful versus unsuccessful entrepreneurial action, demonstrating how much the amoeba can show us all about surviving and thriving:

• Upstreaming, i.e., swimming toward turbulence, and all of the new opportunities, trends and technologies contained in it
• Having a sensitive skin or membrane, i.e., exerting entrepreneurial authority and testing out new ideas, approaches and services at the margins of your efforts
• Leveraging, i.e., maximizing the strategic advantages of your particular DNA , execute new ideas with adaptive enterprising, and burnishing your operational effectiveness.

A fuller development of these ideas can be found on one of Dave's websites, The Enterprise Project as a source of some of his thinking.
Dave Lash is founder of Dave Lash & Company, located in Hamilton, Massachusetts. For the past decade, he has been part of a national research-based initiative to identify and disseminate patterns of entrepreneurial success to entrepreneurs and business leaders throughout the country. In this capacity, Dave has worked with some of the country's leading entrepreneurs, researchers, and educators. In 2006, Dave co-authored a research study of entrepreneurship and innovation for the United Kingdom's HM Treasury.

Sustainability by Design

John Ehrenfeld, Executive Director of the International Society for Industrial Ecology, gave us some key points from his new book, Sustainability by Design, published by Yale University Press and led a lively discussion on sustainability from an organizational perspective. John describes himself as a technologist turned sociologist. Until eight years ago, John was the Director of the Technology, Business and Environment Program at MIT. John believe that the concept of sustainability has to go far beyond remedying existing harm. This view lacks a vision of the future. We need a clear vision of a sustainable world; a systems perspective. Unsustainability is an unintended consequence of our modern culture. We've just seen the collapse of an unsustainable system (in the financial markets). John defines sustainability as "the possibility that human and other life will exist on this planet forever." A sense of possibility is missing in much of our activities.
The word "flourishing" come from "flower." A flourishing environment is constantly emerging; not fixed or measurable. It can be attained and sustained but not managed. Complex systems are beyond comprehension. So, how do we get there? Our current view of reality, based on scientific "enlightenment," is that we are external to our environment; we are outside of and separate from nature. We don't see nature as something that we need to care about. Science and technology are seen as perfecting nature for humans; therefor, we neglect nature. We need to recover responsibility for the world we live in. Technology has the effect of separating us from our environment (example: commodified, packaged, frozen meals separate us from the communal, loving act of cooking). See John's book for more details.

A Strategy for Designing and Nurturing Creativity

The Boston Chapter of the Association for Strategic Planning delights in bringing distinguished thinkers and speakers to our monthly networking coffees in Burlington, and our meeting on October 7th with author, professor, consultant and--best of all--wit Dr. Barton Kunstler was a standout example of the talent we bring to our audience.

Barton's book, The Hothouse Effect, surveys and integrates creativity in history and modern organizations, including such high performing historical contexts as Florence during the Renaissance, the US Jazz Community, artists and painters in Paris, politics and the arts in Athens, and the early 20th century physicists in Europe. "Why them? What made them so incredibly creative? Is it an accident of birth?"

Barton discussed the five distinguishing characteristics of each of these "scenes" and then applied them to specific currently active organizations, such as LoopDesigns in Bologna Italy or Sequent Computing in the US (sold to IBM in 1999):

"1. High level of creativity for a significant amount of time, e.g., 200 years in Athens

"2. Drawing on a broad cultural zone that a particular community distills and brings to a higher level. It is as if the system talks to itself. If we really want to tap the potential of what is going on here, we’ve got to pick one focus and siphon all of our energy into it. Odds on Athens becoming that community were like 100:1.

"3. Having a disproportionate number of genius and brilliants. That raises the bar of general population is raised as well. More involved in the general activity. Think of Florence in the Medici era. Leonardo and Machiavelli were good friends. No other place has those type of names associated with it. In our society we’re still stuck with pointing toward a single brilliant person. Society creates its own geniuses and brilliants. Athens came up with the perfect type of guy to face the threat of the day.

"4. Create a whole new way of thinking, new disciplines entirely. New standards, procedures, principles.

"5. Everyone, all of the contemporaries of these great creative contexts knew of what was going on. The Greeks looked at the Athenians and said, “These are a new type of people.” They’re weird. They become a reference frame for later generations. The 60s were like that. I’m happier now than I was in 1968, but that’s not the point. Something amazing was happening in the collective mind.

"We live in disintegrative times; creativity is integrative and counter-entropic. How do we think as a collective on a level that will meet these challenges that we have? Listen to highly charged quality of creativity and analytical thought. That’s what the hothouse groups have. It's amazing how much bureaucracy screws up. This anchors us in something else. It's like the difference between the metaphor of a mountain where someone is supposed to be sitting on top knowing what is going on versus a volcano where the energy is spilling up, out and all over the place."

ASP Boston is bringing some great energy, thought and experience to those tables at Panera in Burlington. Join us!

Ken Sawka, Competitive Intelligence Guru

Ken Sawka, managing partner of Outward Insights, led a stimulating conversation on the relationship between the disciplines of Competitive Intelligence and Strategic Planning at our last coffee.

Ken is a nationally recognized competitive intelligence, early warning system, strategy development expert.  He has had a long and acclaimed career as both and intelligence practitioner and consultant, having developed competitive intelligence programs with numerous Fortune 500 corporations.  He is a regular contributor to the Kiplinger.com Business Resource Center, and he has appeared on CNBC's Squawk Box.  

Ken's talk concentrated on the importance of "structural signposts" as the point of connection between strategy and competitive intelligence:

"Speculative analysis has a relationship to signposts.  Signposts are indicative of future conditions that have impacts. They come from Indications and Warnings, which is a way of thinking that was originally invented by the military.  Competitive intelligence professionals work with strategists to compare information to indicators.  When there's a match, action networks should be activated immediately.  When linked to signposts and warnings, future events that occur are not only significant by themselves, but they are pointing to a high level set of events that will affect our whole strategy and, therefore, need our attention.

"This shifts the conversation to 'Okay, we knew this was likely to happen, and we know what the course of action is that we should take.'  We can't predict the future, but we can speculate on the evolution of activity that will be significant to our strategy.

"Seeing events from this perspective leads the strategy professional to understand that the CI function 'isn't here to serve me once a year before going to my board meeting, but, rather, it's here to give me input on when something important that I should be watching for is occurring."   

Relationships are Critical to the Success of Strategy

We were delighted to have Monitor Group partner and top selling author, Diana Smith, speak at our Fall Seminar, co-sponsored with the Palladium Group at the new InterContinental Hotel in Boston. Diana spoke on an important, and all too familiar topic, "When Good Strategies Go Bad Strategically Critical Relationship are Usually at Fault."

Using engaging slides, examples and an engaging style that frequently tickles, Diana reminded us all how easy it is to slip into the "either/or" thinking that is so polarizing when dealing with hot topics like:disputed data

• insufficient data
• uncertainty
• conflicting values

Once locked in that spiral of "either I'm right or you're wrong," it is very difficult for the parties to a strategic disagreement to emerge with anything that looks like a sincere "yes" that moves an organization ahead toward a strategic direction. Instead, we are all vulnerable to the prospect of falling into the "he-said/she-said" playing field that focuses on character and motives.

Breaking free of toxicity in relationships requires an ability to see into the "anatomy of relationships" that can be discovered by using the data of conversations to find the patterns of interaction that people create and continuously reinforce:

"By becoming 'behavioral geneticists' we can get at the underlying structure of relationships which are rarely seen...[seeing the DNA of a relationship allows us to understand] how relationships amplify certain proclivities and modify others."

In other words, once a pattern of a relational system is in place, the people in it are good at seeing, thinking and acting in certain ways and lousy at others. If we're regularly in relationships where there is little inquiry and lots of blaming, we're likely to get very good at defending ourselves and lousy at learning from others. Not great chemistry for strategic insight.

The anatomy of a relationship can be discovered by experimenting with the "frames" that we use to understand one another. A frame is a stable interpretation of the meaning of someone else's behavior. Leaders using Diana's approach learn how to suspend their disbelief about someone they think they know when they "reframe" what has always looked like anger into vulnerability and anxiety.

A full exposition of Diana's thinking can be found in her excellent new book, Divide or Conquer: How Great Teams Turn Conflict into Strength.

The Strategic Connection between Transportation, Public Policy, Land-Use, Energy, and the Environment

Transportation policy expert, Dr. Karla Karash Senior Vice President at TranSystems, provided a terrific set of practitioner insights into the intersection of transit policy and organizational strategy at her ASP Networking Coffee talk last month. Referring to her current work and research in places such as Cleveland, Rio, Harford, Portland OR, Atlanta, Zurich, New York City, Chicago, Cairo, Boston etc., Karla emphasized the importance of a holistic approach to transportation in cities that integrates structural forces such as crime rates, designing urban parks that bring people close to nature, insuring water supplies by reducing run off created by asphalt, and reusing gray water on community gardens. As described in seminal and inspiring works such as Sustainability of Cities: Overcoming Automobile Dependence understanding how these various ingredients are related systemically will lead to the comprehensive, planful accumulation of resources needed for success in the future.

"Good transit helps cities be more environmentally sustainable. Transportation is providing 30% of our greenhouse gases; we have to change this to win the fight against global warming. However, our mental models about cities create the context for our transportation policies. Are cities a good or bad place to be? Many Americans have a rural ideal. Being in densely populated areas isn't part of the American dream. This way of thinking doesn't characterize the Asian world. You can see that in the statistics: Tokyo has captured 50% of the folks taking public transit to work versus NYC where it was only 27% in 1999. But, in 1992 the Rio Earth Summit concluded that cities may be environmentally positive places to be, and that point of view may well affect American thinking over time.

"Natural Step is a whole movement to get businesses to think about what they are using in terms of resources and how to reduce waste. Cities are more sustainable than less compact areas. Cities are important to sustainability. The denser the better. Denser are better and cities with better transit are better overall, in terms of energy use.

"Public transportation facilitates density, yet it is in very difficult position: ridership is going up but they are losing money on each passenger. Deficits are increasing. Agencies are having to cut services at the same time when more mass transit is needed. Since public transportation hasn't been approached with a long term perspective, they are going to be in a panic.

"The stars are some of the European cities and New York and Chicago here in the US. The highest quality transit is electrically powered, because they can allow more livable cities around them. Zurich's system is particularly conducive to living and walking. Commuter rail isn't as attractive to have around you as the trolley. In N. America we have a cities that are bus systems, but they get stuck in traffic and are no better than having cars. Those cities with better rail and denser have a higher percentage of people taking the tram to work. They also have lower subsidies.

"Which comes first: Putting the transit there, will they come? You need good land use to make transportation work, but you also need good transit to get the land use policies. In the communities that have been successful in bringing in new transportation solutions, businesses and major civic institutions have been very influential. Corporations based in Dallas and community businesses based in Dallas promote the creation and expansion of that city's light rail system. In Salt Lake City, the LDS church got very involved.

"There is huge demand now for goods to be run on freight, but the freight yards have all been developed. Harvard has bought all the land that is currently the big freight yard near the Alston toll booths. We could lose that valuable resource close to the cities. We need efficient ways to move goods. These transportation and distribution costs are important strategic factors.

"The only transit that can be successful is that which cares for people who are transportation dependent and it has people who have resources. Atlanta succeeded by having both of those populations. To have even a basic level, you've got to have both. Transit agencies aren't active politically. They don't have a seat at the table. Organizations with a strategic perspective on transportation issues would help them get one."

Valuing the Intangible

Mary Adams, CMC, principal at Trek Consulting spoke on the Intangible Knowledge Economy at our July networking coffee. Having spent many years in the banking business engaged in high risk lending, Mary realized that, in most cases, the intangible assets of firms are being incorrectly analyzed, if they are understood at all: “The material inputs to the economy have been going down, but intangibles, i.e., something of value that cannot be physically touched, such as a brand, franchise, trademark, or patent, have been exploding” accounting for something like 80% of corporate value. There is a strong relationship between intangibles and reputation: “Reputation is the new bottom line. Your ability to move forward is determined by your reputation.”

Reputation rests on three types of intangibles:

1. Human capital, including the competencies and knowledge of the workforce
2. Structural capital, such as the knowledge that has been captured and is being used by an organization and its distinctive processes
3. Relationship capital, such as the quality of its networks, its ties to major vendors, the degree to which customers are identified with it, and the status of its links with a whole range of external stakeholders.

None of these intangible ingredients are captured on most balance sheets, yet they make an enormous contribution to organizational viability and future prospects. Therefore, the value of any investment or decision should be considered from the perspective of the contribution it will make across all three of these intangible domains.

A full range of Mary’s views on the value of intangible assets, how to assess them and their meaning for a broad range of issues (e.g., the future of the CFO) can be found at the Intellectual Capital Knowledge Center’s blog.