The Essence of Global Strategy

By M. Isi Eromosele

The essence of global strategy is an expansive world vision that considers the possibilities of every location as a market and as a source of competitive advantage, both alone and when integrated with the rest of the firm.

Global enterprises must craft strategies for international expansion, diversification and integration to develop, protect and exploit their resources and capabilities.

Determinations of geographical scope and degree of coordination must be taken with respect to a world-wide competitive environment. Concerns for both strategy processes and strategic goals and objectives are deepened in the transnational setting.

How has global strategy co-evolved with an emerging global marketplace? To what extent have the drivers of global growth and diversification changed in today’s “new normal” of increased uncertainty and rapid change? How are multinational sourcing strategies driving ongoing internationalization and globalization?

Assembling The Global Enterprise

In order to pursue their strategic objectives, global enterprises must access a wide range of resources, capabilities, brands, markets and technologies from world-wide locations.

This process of building a resource base for the enterprise may involve cross-border mergers and acquisitions, international alliances and joint ventures, formal and informal networking, internal development and offshore/outsourced value-adding activities.

Determinations of the breadth of international dispersion and the degree of global integration of resources and activities are increasingly essential to competitive success, but standard models of transactional governance seem to have limits in an interactive, integrated environment.

How do multinational firms identify and access location-specific resources in a diverse global environment? How have the roles of assembly strategies such as acquisitions, alliances or licensing changed in response to global sourcing opportunities and market demands? How do dynamic capabilities for organizational assembly both drive and delimit the structure and performance of global firms?

Global Strategy Networks

While multinational enterprises may be network organizations, they are also widely seen as entities functioning within larger networks of affiliated, but not internalized firms, institutions and activities.

Collaboration at all stages of the value chain across organizational as well as national boundaries has become an essential feature of global strategic management, as has cooperation with partners on a smaller scale within many local host settings.

The global firm may function as the leader or flagship of its network, but it must do so through communication and collaboration mechanisms rather than the command and control relationships of internalized hierarchy.

Does ownership matter, or is access to resources and capabilities a more efficient position in a changing world? How can inter-organizational supply and distribution network relationships be managed to generate competitive advantage for global enterprises?

Strategic Management Of The Global Enterprise

An important aspect of international strategic management involves selecting and developing the governance structures and functions of global firms and their component organizations, including organizational architecture, management systems, managing resources and capabilities, networking of subsidiary organizations and managing operational strategies and information sharing in organizations engaged in substantial operations across national borders or located in multiple national environments.

Managing the internationally dispersed and often deeply integrated activities of global multi-business enterprises is a complex, evolving, but essential capability of such firms.

Non-market strategies of pursuing corporate social responsibilities and working with critical stakeholders in host nations or on a global basis are increasingly important to pursuing competitive advantage and reducing environmental and competitive risks for global organizations.

What strategic imperatives will drive new forms of global organization in the 21st Century? Global enterprises are described as network organizations – what does this mean for internal management processes, innovation and collaboration across borders? How will the sources of stability and growth of global organizations be redefined in a hyper-competitive global market?

Global Strategy And Performance

Consistently relating the activities of the organization to its performance is essential to a strategic perspective. Performance is a broad concept with many manifestations, made even more complex by operations in multiple markets with varying degrees of global integration.

Defining and measuring the many aspects of performance for global organizations, and establishing their limits, are constant and evolving challenges. Strategic performance must consider the risks and uncertainties involved in most actions, considerations that again are more complicated in the global environment.

Are the drivers of performance for global organizations in a rapidly evolving world strategic or managerial in nature? How is performance best defined, measured and delimited for different actions in the international setting? How do widely dispersed organizations balance local and global performance levels?

Global Innovations And Knowledge Strategies

Managing innovation and knowledge transfer is clearly an aspect of strategic management in any setting, but the importance of these activities to the modern multinational, transnational or global multi-business firm suggests that such strategies merit specific emphasis.

Current models see the global enterprise primarily as an arbitrageur and combiner of knowledge derived from multiple sites and brought together in some centralized process.

Concerns for intellectual property development and protection, multinational and global R&D, moving knowledge across borders and distance and the global architecture of innovation and application of knowledge are core concerns.

How do global firms access knowledge held in multiple locations? How can unique knowledge be moved effectively and efficiently through intra- and extra-organizational networks of alliances? What is the function of the headquarters in a global knowledge-driven strategy?

Global Strategy And Location

The overall global business environment affects enterprise-level strategies, but the specific characteristics of local environments are equally important to choosing locations for expanding markets or resource bases, setting up offshore operations and diversifying operating risks.

Concerns about cultural, institutional, geographical, economic, technological and development distance affect decisions about where and how to sell products, source inputs and resources and establish operations.

Avoiding the hazards and exploiting the benefits of differences between locations is the essence of global strategy.

How are sovereign risk factors manifested and managed in an integrated global environment? How do distance effects and the liabilities of foreignness impact entry strategies, subsidiary governance and performance outcomes? When and how do locational differences limit integration strategies?

Global Strategy And Emerging Economies

The importance of the global environment and of specific locations to global and international strategies has been established. However, the rapid emergence of new market economies has profound implications for the world economy and for the practice and study of global strategy.

Doubling the size of global consumer markets has begun a fundamental revision of the “relevant global market” far beyond the concept of the Industrial Triad, whether looking at emerging middle classes or the “bottom of the pyramid”.

Offshore production of goods and services in emerging nations has energized international political discussion, brought new focus to the non-governmental social welfare sector and redefined the concept of relevant stakeholders as well as expanding the scope of global sourcing strategies.

Multinational enterprises from emerging economies are absorbing established firms in industrial nations and may well dominate international merger and acquisition activities in the near future while traditional global enterprises are facing fundamental changes in their non-market strategies.

How must global strategy adapt to emerging markets with their large numbers and large income disparities? Is offshoring value adding activities to emerging economies a strategic benefit or an existential threat to the industrial world? How will “reverse foreign direct investment” through acquisition and startup from these countries into the established industrial economies engender fundamental change and force development of new strategies in these countries? How will enterprise-level strategic positioning be affected by newly emerging patterns in international capital markets and

national financial assets?

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2013 Oseme Group

Global Business Model Innovation

By M. Isi Eromosele

The greater frequency of disruption and dislocation in many industries is shortening business model lifecycles. New global competitors are emerging. Assets and activities are migrating to low-cost countries.

Systemic risk is growing as global business becomes increasingly interconnected. Social and ecological constraints on corporate action are emerging. All these factors require businesses to bolster and accelerate innovation.

Business Model Innovation offers a fresh way for companies to think about renewing competitive advantage and reigniting growth in the current global market environment. For a company to achieve a reliable competitive advantage, Business Model Innovation (BMI) must be systematically implemented, sufficiently supported and openly managed.

Defining Business Model Innovation

A business model consists of two essential elements; the value proposition and the operating model, each of which has three sub-elements.

The value proposition answers the question, “What are your offerings and who is your target audience? It reflects explicit choices along the following three dimensions:

Target Segment(s). Which customers have you chosen to serve? Which of their needs are you seeking to meet?

Product or Service Offering. What are you offering the customers to satisfy their needs.

Revenue Model. What is your pricing model for your offerings?

The operating model answers the question; How do you profitably deliver your offerings. It captures the business’s choices in the following three critical areas:

Value Chain. Operationally, how are you structured to deliver on customer demand?

Cost Model. How have you structured your assets and costs to deliver on your value proposition profitably?

Organization. How do you deploy and develop your staff to sustain and enhance your competitive advantage?

Innovation in a business model is more than a mere product, service or technological innovation. It goes beyond single-function strategies, such as enhancing the sourcing approach or the sales model.

Innovation becomes BMI when two or more elements of a business model are reinvented to deliver value in a new way. Because it involves a multidimensional and coordinated set of activities, BMI is both challenging to execute and difficult to imitate.

Today’s Relevancy Of Business Model Innovation

Business model innovation is especially valuable in times of economic instability, as is the case today. BMI can provide companies with a way to break out of intense competition, under which product or process innovations are easily imitated, competitors’strategies are converging and sustained advantage is elusive.

It can help address disruptions such as regulatory or technological shifts that demand fundamentally new competitive approaches. BMI can also help address downturn specific opportunities, for example, enabling companies to lower prices or reduce the risks and costs of ownership for customers.

The companies that flourish during economic downturns frequently do so by leveraging the crisis to reinvent themselves, rather than by simply deploying defensive financial and operational tactics.

Implementing Business Model Innovation

Becoming good at BMI is much like developing any other competitive capability. Companies should assess the opportunities open to them and identify the most promising projects, prepare the organization to pilot the projects and select the best one for scaling up.

Within these steps however, a few activities are particularly important when striving for BMI.

Uncovering Opportunities

Before looking for new opportunities, it is important for a company to analyze its current business model to understand its limitations. They should look closely at each element of their business model and test how the choice aligns with industry trends, evolving customer preferences and its relative advantage or disadvantage over competitors.

Once a company understands its business model choice, it is better positioned to brainstorm new opportunities. To give momentum and depth to this exercise, it useful to apply successful BMI patterns from other industries.

An important choice that incumbent companies must make is whether to embed a new business model in the core business or establish it separately. The benefits of common assets, customers and capabilities argue in favor of integration. But a significant disruption to the current model argues for a separate approach.

Most new business models are inherently disruptive and can incur significant internal resistance. Business Model Innovation requires a distinct set of processes and capabilities to overcome an organization’s short-term focus and also to sustain a BMI advantage on a

continuous basis.

Implementing Business Model Innovation

A company should begin BMI implementation by assessing its current business context, the needs of its customers and the models of its competitors. These steps should be completed with sufficient clarity and honesty to reveal what is currently working, what is not and what might constitute a better value proposition.

To that end, finding answers to the following questions is imperative in seeking to create a shared awareness of threats and opportunities.

• What compromises does your current business model force customers to make?
• Why are nonusers or defectors dissatisfied with your offering?
• Do you offer customers a better value proposition than that of the competition?
• What alternative models are gaining share at the edges of your industry?
• If you were an industry outsider, what would you do to take advantage of the gaps or weaknesses in your business model?
• Do you have a plan for identifying potential business models, implementing them, and embedding BMI capabilities within the organization?
• What do you need to change in our organization and operations to implement a new business model?
• What information would you need to make a commitment to a new business model?
• How urgent is the perceived need for change in your organization?
• How would your ideas should be championed?

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2012 Oseme Group

The Most Common Strategy Mistakes In Global Business

By M. Isi Eromosele

One of the biggest mistakes a manager can make is to assume the best results come from competing to be the best. Competing to be unique is a much more effective strategy.

Other common mistakes include confusing marketing with strategy, overestimating strengths and misunderstanding the definition of business.

The worst mistake but the most common one, is not to have a strategy at all.

Competing To Be The Best

The biggest of all mistakes is competing to be the best, going down the same path as everybody else and thinking that somehow you can achieve better results. This is a hard race to win. Why? So many managers confuse operational effectiveness with strategy.

Overestimation of Strength

Another mistake is to overestimate strengths. There's an inward-looking bias in many organizations. You might perceive customer service as a strong area. So that becomes the "strength" on which you attempt to build strategy.

But real strength for strategy purposes has to be something the company can do better than any of its rivals. And "better” because you are performing different activities than they perform, because you've chosen a different iteration than they have.

Confusing Marketing With Strategy

Another common mistake is confusing marketing with strategy.  It's natural for strategy to arise from a focus on customers and their needs. So in many companies, strategy is built around the value proposition, which is the demand side of the equation.

But a robust strategy requires a tailored value chain; it's about the supply side as well, the unique configuration of activities that delivers value.

Strategy links choices on the demand side with the unique choices about the value chain (the supply side). You can't have competitive advantage without both.

Wrong Definition of Business

Another common mistake is getting the definition of the business wrong, or getting the geographic scope wrong. There has been a tendency to define industries too broadly.

Wrong Industry Definitions

There has been a tendency to define industries as global when they are national or encompass only groups of neighboring countries. Companies, mindful of the drumbeat about globalization, internationalize without understanding the true economics of their business.

The value chain is the principal tool to delineate the geographic boundaries of competition, to determine how local or how global that business is.

The Worst Mistake

The worst mistake and the most common one is not having a strategy at all. Most executives think they have a strategy when they really don't, at least not a strategy that meets any kind of rigorous, economically grounded definition.

There are so many barriers that distract, deter, and divert managers from making clear strategic choices. Some of the most significant barriers come from the many hidden biases embedded in internal systems, organizational structures, and decision-making processes.

The need for trade-offs is a huge barrier. Most Managers hate to make trade-offs; they hate to accept limits. They'd almost always rather try to serve more customers and offer more features. They can't resist believing that this will lead to more growth and more profit.

Many companies undermine their own strategies. Nobody does it to them. They do it themselves. Their strategies fail from within. If you listen to every customer and do what they ask you to do, you can't have a strategy. Like so many ideas that get sold to managers, there is some truth to it, but the nuances get lost.

Strategy is not about making every customer happy. When you've got your strategist's hat on, you want to decide which customers and which needs you want to meet. As to the other customers and the other needs, well, you just have to get over the fact that you will disappoint them, because that's actually a good thing.

The single-minded pursuit of shareholder value, measured over the short term, has been enormously destructive for strategy and value creation. Managers are chasing the wrong goal.

Having a strategy in the first place is hard. Maintaining a strategy is even harder. 

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2012 Oseme Group

The New Paradigm In Global Strategy Development

By M. Isi Eromosele

Most growth opportunities share a common feature: uncertainty. In today’s economy, strategic investments must be made without a pinpoint forecast of the future. Managing in the face of uncertainty is different. It requires two important skills: the ability to identify valuable opportunities and the ability to adapt to marketplace changes.

Managers must be able to capitalize on good outcomes of uncertainty; they must be adaptive and flexible. Is there a project in your company that went exactly as planned? Or were the best projects one that adapted to changing conditions?

Traditional valuation and strategic planning tools are not effective well in a world of uncertainty because they don’t fully capture the options or opportunities that managers have to respond to in unfolding events.

A better option is the real options approach that “sees” these opportunities and values them, creating an integrated strategy and valuation framework.

Valuing the New Growth Opportunities

Internet companies typify the current valuation dilemma, but the same issues are present in growth opportunities throughout high as well as low-tech industries.

Why are we having such a hard time valuing Internet companies? Because the traditional valuation tools used by Wall Street are from another era - they are based on accounting systems for manufacturing companies in stable industries and are focused on current and near-term cash flow.

The valuation problem for modern growth opportunities, Internet companies included is hugely different: How do you value an immature, fast growing company in a young industry with rapidly changing boundaries and business models?

In the Internet world, today’s successful strategy does not guarantee future profits; often the company must morph to the next thing. None of these features fit the traditional cash flow-based approach.

A successful Internet company recognizes that reaching maturity requires it to invest in a sequence of options. The final set of options leads to a mature company status and cash flow.

The next one back creates the opportunity to invest in the final set of options; the second one back creates the opportunity to invest and so on. Between now and maturity, the company’s value is driven by its ability to identify and execute the sequence of options.

Valuing an Internet company presents many of the same issues as valuing corporate growth opportunities, particularly in how strategy and valuation are intertwined. The real options approach helps to identify the most valuable strategies for a world of uncertainty.

The New Rules

In a fast-moving world of uncertainty, managers must be ready to respond. Here are 7 rules for finding the options in your strategic investments.

1. Make no assumptions: What is your market?

Technology and deregulation are rapidly blurring conventional industry definitions. Rethink your market boundaries and competitors through today’s customer-centric lens. Include sources of uncertainty and how industry players will respond.

2. You already have some answers: Use the insights from durable economics

A good part of the New Economy can be well understood using durable economic principles - concepts and frameworks that are well known, but often skipped over.

3.  Identify your options

Greater uncertainty creates the need for greater flexibility. Where are the options for future flexibility in your current projects? For example, your company expansion plan comes with an option to wait - you can start it now or later.  

4. Nurture your options

Nothing is free, including the options identified above. What will it take to keep these alive as viable investment opportunities? And sometimes, the value of the option is not worth it’s cost.

For example, continuing an R&D project creates the option to turn it into a commercial product. You don’t know if you will, but you might

5. Decision Making Options

Can you really cancel a project in your company? Can you make this decision objectively? Can you make it in time to limit losses? Flexibility cuts both ways - it captures upside potential and saves you from sinkholes.

6. Create options

On the first pass of an investment review, you can add significant value over conventional valuation approaches by identifying the options. On the second pass, you can get a similar step up in value by creating options. For example, create the option to change course, re-focus or even abandon a particular project.

7.  Too many options, too few resources:   You can’t do it all.

Options change the meaning of focus. Identifying, nurturing, and creating options takes substantial time and energy. Meanwhile your industry pace is picking up, technology is becoming more complex and it’s hard to hire key people in your core business area.

Hence you need to focus on your core capabilities, and all the associated options, partnering for the rest.

With standard approaches and tools, it’s going to feel like you’re on a lifeboat in a sea of chaos. Change your thinking. Explore how you can create value out of uncertainty, and how to remain a nimble competitor, always afloat, as the waves of change roll by.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2012 Oseme Group

Global Business Growth Strategies

By M. Isi Eromosele

Companies often approach growth in one of two extreme ways: Execute better and deliver more from the existing business |  Charter a team of big thinkers to look deep into the future.

Neither of the above approaches to growth stimulation will ensure complete success for most companies. A new perspective of growth can enable companies to set better growth targets, identify new opportunities, balance investments and risk and carry strategies into action with a clear view toward expectations.

The dual nature of growth requires that companies consolidate as well as expand their businesses as they exist now, even as they go about recreating the businesses as they will exist in the future. A certain level of uncertainty exists within the businesses of today as well as those of tomorrow. A major component of this uncertainty is business risk, which can be disruptive as well as interfere with the appropriate formulation and implementation of the growth strategy.

The following are the key questions that need to be answered as a company formulates a growth strategy:

• Where and how do we look for growth?
• What appropriate level of growth are we looking for?
• How should the growth portfolio be aligned with the company’s business objectives?
• Which approach will be used to implement the growth strategy?

Clarity and Bold Leadership

To implement a growth strategy requires bold leadership as well as clear business objectives. These business objectives should be very specific and attainable within the capabilities of the organization. The use of industry averages and benchmarks should be avoided. To be realistic and workable, a growth strategy should emerge from the interplay between internal and external factors, events and expectations. External factors may include the state of the market economy, the company’s market share, shareholder expectations and demands as well as  industry and government regulations.

Internally, the company would have to consider its competencies, as exemplified by its talent and staff, its corporate culture, available resources and risk tolerance, among others.

Level of Sophistication

A well designed and sophisticated growth strategy would explore well beyond the industry standard of core, adjacent and new. While these classifications may be useful, they are insufficient in building a strong global growth strategy because they do not account for business uncertainty on a wholesome basis. Additionally, they not completely address the complexity involved in creating growth in the globally interconnected business world that exist today.

The critical success factor here is for the company to excel at figuring out how to integrate the promise of tomorrow’s potential business into today’s existing operations.

A company should comprehensively look at factors that would drive business growth along a continuum.  In building the business of today, companies will typically focus on key areas such as customer retention, pricing optimization and improvements to existing offerings.

Moving along the scale toward choices that carry higher uncertainty and lie farther from existing operations, companies would need to start building the business of tomorrow by designing new offerings, expanding into new markets and geographies and creating entirely new business lines for new target customers.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2011 Oseme Group

Why Global Businesses Fail

By M. Isi Eromosele

In the globally connected world we live in today, marketplace environments are constantly changing and evolving. Global companies must resolve to adapt to the changes going on in their respective marketplaces in order to continue to grow.

When successful companies face big changes in their market environment, they often fail to respond effectively. The result is that their businesses often fail as they are unable to compete with more nimble rivals who bring new strategies, products and technologies into the market.

They watch as their stock evaluations decline, their best staff leave and their market shares as well as stock valuations decline. Some of these global companies manage to recover, but many fail and go under.

Why do good companies fail?

Besieged by new challenges in their business environment, many global companies do respond early enough. However, overwhelmingly, many more respond with inappropriate actions.

Active inertia is an organization’s tendency to follow established patterns of behavior, even in response to dramatic and new business environmental shifts. Stuck in the modes of thinking and working in the now outmoded ways that brought them success in the past, these companies simply refuse to face new realties.

To understand why successful companies fail, it is necessary to examine the origins of their success. Many global companies owe their success to a unique combination of strategies, processes and values they devised that originally differentiated them from their competitors.

As the success continued, it emboldened them to refocus their energies on refining their winning systems, rather than innovate to discover new ideas that would enable them to realign their strategies towards being able to adapt to changes within their respective marketplaces.

As the years go by, the fresh thinking that originally propelled these companies to success is replaced by rigid devotion to maintaining the status quo which they already know and are comfortable with.

As changes occur in their respective markets, the old strategies that had brought them success now result in failure.

One or combinations of four things happen:

Strategic frames become blinders. Strategic frames are the mental models that mold how companies see their marketplaces. These business frames provide the answers to key strategic questions such as:

What business are we in? How do we create value? Who are our competitors? Which customers are crucial, and which can we safely ignore?

Transitionary processes harden into permanent routines. Companies lock themselves into a chosen way of implementing strategies and refuse to look at alternatives. Established processes often take on a life of their own.

They cease to be means to an end and become ends in themselves.

Relationships grow into being shackles. Many companies let their relationships turn into shackles, limiting their flexibility and leading them into active inertia.

The need to maintain existing relationships with customers can hinder companies in developing new products or refocusing on new markets.

Values harden into dogmas. A company’s values are the set of deeply held beliefs that unify and inspire its people. Values define how employees see both themselves and their employers.

As companies mature, however, their values often harden into rigid rules and regulations that have legitimacy simply because they’re enshrined in precedent.

Success breeds active inertia, and active inertia breeds failure. But is failure an inevitable consequence of success? In business, the answer is No.

Active inertia exists because the pull of the past is so strong. Trying to break that pull through a radical act of organizational revolution leaves people disoriented and disenfranchised, cut off from the past but unprepared to enter the future.

Companies should build on the foundations of the past even as they teach employees that old strategic frames, processes, relationships and values need to be recast to meet new challenges.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2011 Oseme Group

Global Business Strategy Defined

By M. Isi Eromosele

Strategy attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company.

Strategy is the creation of a unique and valuable market position, involving a different set of activities. Strategic position emerges from three distinct sources:

• serving few needs of many customers
• serving broad needs of few customers
• serving broad needs of many customers in a narrow market

Strategy requires a company to make trade-offs in competing - to choose what not to do.

Some competitive activities are incompatible; thus, gains in one area can be achieved only at the expense of another area. For example, Neutrogena soap is positioned more as a medicinal product than as a cleansing agent.

Strategy involves creating fit among a company’s activities. Fit has to do with the ways a company’s activities interact and reinforce one another. Fit drives both competitive advantage and sustainability: when activities mutually reinforce each other, competitors can’t easily imitate them.

Employees need guidance about how to deepen a company’s strategic position rather than broaden or compromise it. The goal is to extend the company’s uniqueness while strengthening the fit among its activities.

This process of deciding which target group of customers and needs to serve requires discipline, the ability to set limits, and forthright communication. Clearly, strategy and leadership are inextricably linked.

Today, positioning, once the heart of strategy is rejected as too static for today’s dynamic markets and changing technologies. According to the new paradigm, rivals can quickly copy any market position and competitive advantage is, at best, temporary.

The root of the problem is the failure to distinguish between operational effectiveness and strategy. In their quest for productivity gains, quality and speed, many companies have resorted to utilizing diverse management tools.

Although the resulting operational improvements have often been dramatic, many companies have been frustrated by their inability to translate those gains into sustainable profitability. Why?

This is because these implementations have not been based on a strong underpinning strategy. As such, these companies have not been able to develop viable, sustainable and profitable market positions.

Operational effectiveness and strategy are both essential to superior performance, which, after all, is the primary goal of any enterprise. But they work in very different ways.

A company can outperform rivals only if it can establish a difference that it can preserve. It must deliver greater value to customers or create comparable value at a lower cost, or do both.

Operational effectiveness (OE) means performing similar activities better than rivals perform them. Operational effectiveness includes but is not limited to efficiency.

In contrast, strategic positioning means performing activities differently from rivals’ or performing similar activities in different ways.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2011 Oseme Group

Managing Information Resources For Business Success

By M. Isi Eromosele

Great business strategies can easily be sabotaged by poor execution. And even great business strategies with great execution can fall short, particularly if the information isn’t delivered in a way that facilitates intelligence.

No one would dispute the fact that data is important and management of data across its life-cycle, as well as refining data from collection to useful business intelligence, are critical to the business success of today’s intertwined global economy.

Businesses are in an increasing highly competitive global marketplace. To win in this environment, they must constantly adapt to changing market dynamics often influenced by local marketplace events and must place the change in the context of global market dynamics in order to meet overall profit and market penetration objectives. The forces at work driving this paradigm include:

Globalization

As markets saturate at the local level, pressure to expand market share and decrease costs is driving more companies to expand outside their traditional boundaries, often to other countries.

Because of this, decision making is becoming increasingly distributed across geographies, thereby spotlighting the criticality of delivering relevant information concurrently to widely diverse locations.

Technology Innovation

The accelerating pace of innovation, especially in communications and computing, is providing seamless data ubiquity and changing the basic rules of business.

The rise of miniaturization and integration is delivering wireless devices capable of serving a plethora of business and personal needs, ranging from computing to communications.

Wireless devices are becoming increasingly important in a decision-making process that increasingly occurs at the edge of the enterprise.

Business Convergence

We are living in an era of increasing convergence. This is the convergence of business relationships, technologies, geographies, and cultures.

It is this convergence that is driving the concurrent decentralization of decision making and forcing the migration of data and the corresponding intelligence it engenders from central repositories to diverse locations.

Companies are spending millions of dollars on executive time and consulting fees to

develop strategies to cope with these and other lesser factors, often with little success.

Why are these companies failing at executing their strategies? Strategy is formulated at the center, but executed at the edge.

Companies need to practice a dynamic and proactive strategy for the management of information across their life-cycles, rooted in business requirements, while optimizing the physical infrastructure to match the business value of the data.

A successful information life-cycle management strategy should be:

• Business-centric: by tying closely with key processes, applications, and initiatives of the business

• Policy-based: anchored in enterprise-wide information management policies that span all processes, applications, and resources

• Centrally managed: providing an integrated view into all information assets of the business, both structured and unstructured

• Heterogeneous: encompassing all types of data, platforms, and operating systems

• Aligned with the value of data: matching storage resources to the value of the data to the business at any given point in time.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2011 Oseme Group

Designing An Effective Model For Business Strategy

By M. Isi Eromosele

All global businesses have the imperative need to make strategic decisions that lead to taking specific market actions. These decisions frequently require commitment of the company’s valuable resources as well as capital. Without an appropriate framework for making strategic decisions in place, key investments in human and financial capital are placed at risk.

A strategic architecture represents how the values, purpose and operating principles in an organization are connected to its vision and strategy. To avoid a misalignment between the planning and reality, strategic objectives must be tied to the everyday operating environment. Performance measurement systems, including economic value measures, financial measures, such as cash flow from return on investment and a combination of methods for linking non-financial and financial measures, must be put in place. This will tie or translate the strategic objectives of an organization to performance measure. Performance measurement allows an organization to express the intent of its strategy and how that strategy connects with its operations.

Companies need to better understand the basic strategic decision making process itself. This process should address three key questions:

• How should the fundamental questions and hypothesis in the strategic planning process be framed?
• On which information intelligence will key strategic planning decisions be based?
• What processes are going to be applied to ensure that sound judgments are made in the planning process?
• How will the company monitor its strategic decisions over time to ensure their effectiveness?

The following are cognitive factors that limit organizations’ ability to fully answer the above questions.

• Lack of understanding of business drivers and outcomes. This involves the whole issue of understanding cause and effect relationships such as ‘What are the key business drivers and the desired outcomes and how they correlate is a critical dimension of strategy.”
• The wrong business intelligence serving as the informational basis. Frequently, much of the knowledge collected does not focus on the real strategic needs of the organization. It is imperative that the knowledge collected is channeled appropriately.
• Inability to connect strategic objectives to operating activities. This occurs when management cannot translate the grand strategic themes into business reality at the operating level of the organization. Performance measurement management systems provide the capability of ensuring that strategies and performance are closely linked.
• Poor analytical tools to support strategic decisions. Frequently, organizations do not possess adequate analytical tools to apply the information it has as a knowledge enhancement. This could be resolved through effective use of scenario planning and simulation techniques.
• Narrow organizational and human capital utilization. Strategic decisions are often impaired because firms fail to appreciate the value of inputs from a wide variety of employees in favor of a top down approach. This leads to a vast number of employees becoming underleveraged resources.
• Failure to emphasize differentiation. In exploring desired competitive differentiation, one of the most critical elements of strategic decision making, organizations fail to answer the question, “How are we truly different from other organizations in our industry?”

Improving Strategic Decisions

In order to correct the above cognitive factors, companies would have to do the following:

• Succinctly identify the fundamental logic of the strategic planning process they have defined. Is it comprehensive, objective, timely and broad-based, with input from various parts of the organization?
• Closely link the strategic plan to business operations to ensure effective implementation
• Support the whole implementation of the process through learning and informational activities that are focused on the strategic objectives and their benefits to the organization

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2011 Oseme Group

Optimizing Your Business For Higher Performance

By M. Isi Eromosele

The marketplace imperatives facing companies today has evolved with volatility, brand visibility and value at the forefront. Global economic uncertainty is driving the need to find smarter and more insightful ways to address risk and position organizations for future growth. Optimization of critical aspects of business such as product flows, development cycles, information distribution and utilization, capital structure and corporate strategy planning will help companies create the specific capabilities needed to make their business strategies succeed. The goal would be to drive excellence throughout the organization, improve efficiency and sustainability and optimize the way the business works. This optimization process would help companies build lean operational models that drive business value, effectively manage risks and exploit opportunities.

Financial Management

In an uncertain global business environment, financial rigor is as important as operational excellence. For true business transformation to be successful, finance must be an integral part of business strategy implementation, taking into account everything from performance to compliance and risk management. Optimizing your financial practices can translate into greater operational efficiency, improved transparency and faster decision making processes. With the implementation of a finance transformation strategy and operational improvement optimization, you can manage your cash with treasury management precision.

A key area of tighter financial management is the achievement of commonality across your data and your processes. You can reach this goal with key planning and accountability activities, enabling you to gain a clearer view of your finances by embedding Extensible Business Reporting Language into your processes.

Risk And Compliance Management

As a result of increased economic volatility, unprecedented security concerns and stricter global regulations, business operational risk is on the rise. Companies of all sizes are struggling to identify, assess and manage risk, even as they try to minimize its effect of their businesses.

Risk needs to be understood in order to be well managed. Companies need to better evaluate and manage both financial crime and operational risk, as well as define and implement a risk management strategy. They can also target specific regulatory mandates with risk modeling and capital management activities.

Better governance, oversight and compliance can be achieved through data-driven solutions, such as leveraging standard business systems controls by integrating them into your processes to ensure predictable, optimized outcomes in application security and data integrity.

Organizational Change Management

In an age of intense global business competitiveness, major corporate transformation and growing organizational complexity, change is inevitable and continuous. Businesses need to carefully prepare for the change associated with a constantly evolving global marketplace by addressing the very important issue of proper redesign of organizational structures. Organizational redesign aligns the reality of business structure with new strategies to clarify work roles and responsibilities, establish governance and drive behavior that supports positive business results.

This ensures that your company is able to proactively and systematically address the impact of transformation, ensuring that those affected, understand, accept and commit to its success.

In a world growing more complex and interconnected, your advantage rest on the new possibilities most relevant to your strategic priorities and ways of doing business.

 

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

Copyright Control © 2011 Oseme Group