Archive for 'Business plans and mission statements.'
Michael D. Moberly May 18, 2012
We all know about the increasingly competitive business terrain in which intangible assets, e.g., intellectual, structural, and relationship capital have become the dominant drivers (producers) of most company’s value and sources of revenue. This economic reality is influencing, as well it should in my view, entrepreneurially-minded management teams to re-examine the relevance and applicability of a conventionally structured business plan.
Let’s be clear, I am not suggesting business plans are irrelevant because they can serve as useful and descriptive (projective) roadmaps of what one wants a business to eventually look like and how to get there!
The issue, in my judgment, is that there is an inclination on the part of many management teams, c-suites, boards, and other stakeholders to symbolize a business plan in somewhat of a constitutional law context as if Justice Scalia was debating whether it is a living document that’s malleable and flexible as circumstances warrant or a more static (stationary) document that should only be interpreted relative to its original intent.
Personally, I am finding more management teams, at least those which I have the pleasure of engaging, exhibiting a greater sense of responsiveness, adaptivity, and preparedness to rapidly execute to accommodate the immediacy which business opportunities are, with more regularity, being framed. Put simply, there appears to be less interest in – necessity for being bound to the rigidity associated with a conventional business plan. In other words, there appears to be more emphasis on the tactical, while not overlooking or neglecting the strategic!
Let me be clear though, most of my engagements, by choice, are with small, mid-size, and early stage companies where assembling a structured and strategically focused business plan may be subordinate to merely trying to remain viable in this this extended economic downturn (recession).
Respectfully, business plan development and construction is still portrayed in many college (business) textbooks and curricula, as being the very first step one should take toward starting a business. Interestingly, in an MBA (business management) course I’ve taught numerous times, this somewhat alternative view about business plans was purposefully presented to classes in which there were numerous ‘entrepreneurial spirited’ students who aspired to start their own business, with some already in the early stages.
For many, my (alternative) view prompted numerous, but generally opposing reactions, particularly from individuals who had already toiled over writing a business plan and now felt wedded to it. Such reactions are understandable and respected. Some types of businesses, whether large, midsize, or small may require more structure than others, thus a strong and detailed business plan may be necessary.
But again, it’s simply not uncommon to find myself visiting companies which, at first blush, appear to be, for lack of a better term, somewhat ‘rudderless’ in that they are continually evolving, emerging, and even, what appears to some I’m sure, as being in a perpetual state of ’re-inventing themselves’. The reason or rationale for this still, rather un-conventional management style is that it works for some firms, pure and simple! This translates to the necessity to retain sufficient flexibility and maneuverability internally to accommodate their particular transaction – business space as quickly and effectively as circumstances warrant.
Of course, I attribute much of this change to company management teams that have achieved confidence in identifying and using their intangible assets which don’t always mesh well, in my view, with conventional, highly structured, and inflexible ‘roadmap’ perspectives found in a business plan. Admittedly too, a substantial portion of the lending community finds little, if anything, to be enamored with this alternative view. For them, a well-developed and practical business plan serves as the starting (focal) point for most any lending discussion.
All that said, this alternative view does require, in most instances, much more attention and oversight from a management team and board. That is, they need to literally epitomize (embrace) flexibility, intellectually and conceptually, by being prepared to adapt, change, and have the necessary information, at the ready, to make sound decisions as rapidly as a new deal, proposal, or circumstance warrants.
There should be little question now that intangible assets have become the key and irreversible underlier to the success and profitability of most companies, that is, if the intangible assets being produced are recognized, developed, and used (exploited) effectively. An important marker for demonstrating the effective use of intangible assets, in my view, occurs when management teams…
- recognize intangibles as being very maneuverable, flexible, adaptable, and ‘bundable’ to accommodate the development and execution of a new product, service, or transaction.
- know when, where, and how to use them best to achieve particular objectives, i.e., the wisdom, timing, and sense of foreseeability.
In other words, there should be a ‘company culture’ in place that, among other things, includes consistent stewardship, oversight, and management of intangible assets!
While visiting my blog, you are respectfully encouraged to browse other topics/subjects (left column, below photograph) . Should you find particular topics of interest or relevant to your circumstance, I would welcome your inquiry at 314-440-3593 or email@example.com
Will Conventional Business Plans and Missions Statements Remain Relevant In Intangible Asset Driven Economies?
Michael D. Moberly February 1, 2011
The increasingly competive business terrain in which know how and other intangible assets have become the overwhelmingly dominant drivers and producers of value and revenue, is, in my view, prompting many companies to re-examine the relevance of their often times, conventional and even static business plans and mission statements.
I am not suggesting there is anything inherently wrong with continuing to write business plans and mission statements, because they frequently do serve as a descriptive (Gannt Chart type) of roadmap of what one wants his or her business to eventually look like and how to get there!
But, for analogous purposes, some (management teams, boards) are inclined to view business plans and mission statements in a ’constitutional’ like fashion, i.e., either as a ’living’ document that’s malleable and subject to flexible interpretations to reflect an evolving global business environment, or a more static document that can only be interpreted on the basis of its ’original intent’.
I am finding however, more companies, at least some of those that I come in contact with, positioning themselves to become more responsive, more adaptive, and more prepared to execute relatively rapid internal changes, absent being bound to any particular conventional or structured sets of processes associated with traditional business plans.
Let’s be clear though, my engagements, by choice, are primarily with the small, mid-size, and early stage arena from which its easy to surmise that the standard or conventional business plan or mission statement is becoming less relevant. I find this particularly evident when I advise company’s about the necessity to ensure the intangible assets they produce and/or acquire are effectively aligned with their company’s strategic planning, hence, its mission statement and business plan.
Business plan construction is still routinely portrayed in many college (business management) textbooks as being one, if not the very first step one should engage toward developing a new business. Interestingly, in an MBA course I taught several several semesters ago, I presented this alternative view to the class, in which there were numerous ‘entrepreneurial spirited’ individuals who aspired to start their own businesses, with some already in the early stages.
For them, my (alternative) view, prompted numerous opposing reactions, particularly from those students who had toiled over writing a business plan and now were clearly wedded to it.
But again, its simply not uncommon to find myself visiting companies which, at first blush, appear to be, for lack of a better term, almost ‘rudderless’ in that they are continually evolving, emerging, and even, what appears to some I’m sure, as being in a perpetual state of ’re-inventing themselves’. The reason or rationale for this rather un-conventional management style, according to the management team leaders of those firms, is the necessity to retain sufficient internal flexibility and maneuverability to be able to accommodate their particular transaction space as quickly and effectively as is warranted, which again, is increasingly being dominated by intangible assets which, I am arguing, do not always mesh well with conventional, highly structured or inflexible business plans or mission statements. Admittedly, lenders are not always enamored with this alternative view.
And also, admittedly, this alternative view (management styles) does require, in most instances, more attention and oversight from the management team and board. They need to epitomize (embrace) flexibility, intellectually and conceptually, by being prepared to adapt, change, and have the necessary information, at the ready, to make sound decisions as rapidly as a new deal, proposal, or circumstance warrants.
There’s little question now that ntangible assets have become the key and irreversible underlier to business success and profitability, that is, if they’re recognized, developed, and used effectively. But, those assets must also be very maneuverable, flexible, adaptable, and ‘bundable’ in order to serve as preludes to accommodating the development and execution of a new product, service, or transaction.
With respect to company mission statements I see some being replaced by (a.) more broad and generally worded statements drawing attention to customer service, supply and value chains, and regulatory compliance issues, or (b.) perhaps a series of what I refer to as ‘mini-mission statements’ inter-twined with tactical-strategic planning language geared toward the development and execution of a particular product or service.
Of course, an inextricable and underlying key to all of this, in my view, is for decision makers to have a firm grasp of the intangible assets their company and its employees are producing even for early stage firms, which have come to be so integral, again, when recognized and applied effectively.
A point worth noting is that is only the producers of intangibles, i.e., employees, who possess the intelligence, wisdom, timing, and sense of foreseeability to recognize when and how to adapt, modify, or change those assets to accommodate a new or different company initiative. In other words, there must be a ‘company culture’ in place that, among other things, includes the stewardship, oversight, and management of intangible assets.
The ‘Business IP and Intangible Asset Blog’ is researched and written by Michael D. Moberly, president and founder of Knowledge Protection Strategies – http://kpstrat.com. The intent of Mr. Moberly’s blog is to provide insights and perspective to aid in a cross-disciplinary approach for identifying, assessing, valuing, protecting, utilizing, and extracting value from intangible assets. Your comments regarding my blog posts are welcome at firstname.lastname@example.org.
While visiting my blog, you are encouraged to browse other topics/subjects (left column, below photograph) . Should you find particular topics of interest or relevant to your circumstance, I would welcome your inquiry about consulting, conducting an assessment, training program, or speaking engagement to your company or professional association at 314-440-3593.