Decisive Business Risk Taking

“Stepping outside of your comfort zone can trigger the pump. The natural response to being on unfamiliar ground is to expect the worst. However, consider data you have to hand to help you determine just how much you need to be concerned.

If it is disaster you anticipate, just imagine the event as one that simply challenges this concern and as something your cautious side tells you to consider?

Weighing up the evidence will either support conservative steps you really should take, or it give you a view that shows the usual dips and flows you might reasonably expect”.

This is an excerpt from a contribution by Nada Mills, a notable Australian organizational behavior management specialist and clinical psychologist, living in Perth. Recently retired from full time practice and devoting time to writing, she says “gathering evidence is vital to keeping your eye on the prize’

We are facing a world where the traditional organisation structures and boundaries of control, as we know them  are light speeding to new paradigms. Unprecedented business intelligence power and band width means it is inevitable we will see a multilevel approach. With economics pressures so high, the concept to reality time compression crunch may be sooner rather than later. In Gary Cokins insights in his What is the Best Organization Chart for Performance Management? it is clear already business leaders see systems able to allow the customer to become the “Boss.” And ultimately being accountable for performance decisions that threatens traditional supply chain management processes as the very concept of today’s middle management evaporates.

Nada Mills now plans a series of discussion papers on Decision Making in the un-relenting high risky change of these new paradigms. The decisions and changes ahead are far reaching and may be way beyond the vision or capability of many who will sadly be caught in the fall out of the change this heralds. The obligation as advisors, is to move to cover that gap.

These will be published in this forum and will focus on the decision environment where supply and demand and business processes are reincarnating in ever shorter and shorter cycles. Aimed at understanding the likely fall out of major shifts in behaviors they will frame discussion and thought around best practice approaches on understanding the problem and effective handling of the constant of change itself.

To downloaded her papers ongoing I recommend you subscribe to the RSS feed at www.PerformanceController.com If you would like to contribute, please submit/register or make request via the comments on this section in this web page.

Caviar and only salt water to drink.

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Like no other time in history we have, arguably, the best capability for performance management with the systems and bandwidth at hand to quickly digest and react to change. The paradigm shift in world markets means options and challenges to re-claim the good times may also be quite different.

 

The common ingredient for good planning is ready access and confidence in the market and business intelligence information we have in our systems. Business generally and especially at the big end has well invested in good systems for planning, control, client and supply chain management, to tell them where they are and give them a way to chart a course through  the uncertainty.

 

With the world prosperity loss and business scared of more to come, those able are looking closely at options to re-position. Banks and demand services first hit certainly are, as they rationalize services and consolidate to carve out their excesses. Without doubt the good ones could do this because of their systems as they moved quickly to re-position as much leaner organizations and be ready when markets recover.

 

Those using their planning and business intelligence capability are protecting their core services and battening down for more changes ahead. Equally so they are maintaining “in command” status on service and client activity and have shifted their control systems focus to leaner services and tighter financial control.

 

Those with good planning and performance control systems and skill to use them can likewise do well in the volatile reactive environment ahead. The folly and downfall for many, however, may yet be a failure to understand and use this power as customer demand continues to fall.

  

Vital for business now is to gauge and understand the smaller market, the new playing fields and those likely to emerge and survive in them. The real choice for this is to use these rich planning and control investments for the real benefit they bring : Plan Defend and Grow.

 

Operational Risk Management – III: Dashboards

This series of short articles about risk management aims to provide high level insights about risk reduction. This item adds an update on the use, relevance underlying power of Dashboards.

 

From the incident report, for monitoring problems, we can use dashboards to great effect to convey messages simply. Summary statistics are usually enough to provide relevant view of the situation.

 

Reporting items with an evolution over time and comparison to targets and similar activities may include such things as:

 

number of events,

sum of losses,

max, min,

average amount of losses.

 

A views of losses and their cause, with comparison with either similar or related activities, is also easier to understand when shown in graph, chart or bar. But without a stable publishing format like a dashboard to relate things together, key issues may still be overlooked.

 

The power of the dashboard is also in the designing. In the first place it requires full co-operation and ownership of operational teams to understand the related business process they manage. And then define the risks in measured  terms. The dashboard is an effective way to assemble and focus this key risk information for consistent awareness communication and active responsiveness throughout the organization.

 

Using a Dashboard, Managers can not only easily identify risk but have a greater likelihood of reacting to its impact.  

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Is your thinking in the clouds?

The prerequisite to investing and creating wealth is quality in business and process management so we can achieve previously unequalled level of customer quality. Those not in good shape, especially SME’s, have an imperative to upgrade their management planning and performance control systems to survive.  The “no excuse” customer and investor attitudes on performance failures demand this.

A colleague of 20 years past Ian Curry once told me once “quality costs nothing”. Ian was then General Manager at Colonial Mutual Life in my days as a finance executive. His vision for quality, under that tag, stuck with me as I become an evangelist of total quality management, or TQM. Under his leadership at the time, we embraced that prophecy and began invoking continuous improvement quality programs such as Deming’s PDCA in what became a watershed era of change. Since, we have all seen those visions come to fusion in a revolution that has changed completely, across the world, the way we work.

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