There is a ton of academic stuff on this, but our dynamics terminology can be quite exact about it.

To “adapt” implies building specific resources and capabilities that previously did not exist. For example, a current client is trying to move from a hardware-sales focus to a “solution-provider”. They need to design solutions for distinct markets they serve (a solution = the hardware + control systems + ongoing support). Creating these solutions is a capability they currently do not have. Nor do they have the people (in sales, design, project mgmt) to start developing that capability.

We can specify not only the numbers of such people needed, but also the rate at which they can be hired or developed, the rate at which *they* can then build solutions, the numbers of potential customers those solutions can be sold to, the rate at which those potential customers can be developed, and thus how costs, sales and profits can grow over time – to get to a cash-flow forecast from this strategic initiative.

Kraft foods finally won control of Cadbury with a big £11.9 billion ($19.4b) offer. Warren Buffet, owner of 9% of Kraft, says it’s a bad deal – and he’s rarely wrong. Will Kraft do the usual and try to extract ‘synergies’ by slashing costs, or deliver real value by leveraging the combined resources to drive medium- to long-term growth in cash flows? … and will analysts allow them to do it right?

I made a strong case in a previous post that strategy research should have been asking how strong firms grow cash flows, not deliver profit ratios. I had two main push-backs – 1. is growth relevant in present conditions? – 2. survival is really all that matters.  Continue reading »

Here’s my latest msg to the B School academics [remember the point of this is to get some useful strategy methods for executives and consultants]. Will let you all know what response I get. Continue reading »

© 2012 Talking about strategy Suffusion theme by Sayontan Sinha