The Death of the Business Plan and Birth of the Statement of Strategic Modality. Power point version as presented at European Organisation Design Forum, Amsterdam, 17 October 2014. Cases & References Flight Centre - Mandy Johnson Handelsbanken - Jan Wallander's Way Southwest Airlines - Values Based Organisations Kyocera - Kazuo Inamori, Amoeba Management Organize for Complexity, Niels Pflaeging

1. Amsterdam , NL
17 October, 2014
The Death of
the Business
Plan
Birth of the Statement of Strategic
Modality
Chris Catto

2. The Author
The Disconnect
How Does a Leader Create Value?
The Re-connect
Business Model v Business Modality
Modality of Revenue Generation
High Street Retail Modality
Changes in Organisational Design
The Collective
The Critical Mass
The Conclusion
The References
The Content
Chris Catto

3. The Author – The Context
Chris Catto
Misspent Youth – For 7 years from the age of 14 to 20 Chris trained in athletics under the guidance John
Boas OA. John coached Olympic and Commonwealth games medallist and multiple Australian
Champions including Gary honey, David Culbert, Andrew Murphy. Being part of an elite training squad,
Chris had exposure to high performance environments and great athletes such as Olympic Champions
Linford Christie and Cathay Freeman.
The Corporate Years - From 1997 to 2011Chris was employed by global industry leading organisation
such as BBC, Ericsson, Toll and Aviva in reporting and performance management roles.
At the Coalface – In late 2010 Chris founded Putney Breeze Business Advisors and has since
successfully consulted in the most dynamic Business environment (SMEs) to over 60 privately owned
enterprises on strategy and business performance improvement and Consults on Corporate
Performance Management Systems Best Practice.
Director & Chief Performance Partner – Putney Breeze Business Advisors
Author of Premiership Business

4. The Disconnect
Business Plan or
Fanciful Treasure
Map?
PESTAL
SWOT
5 Forces
BSC
Chris Catto

5. The Disconnect
The Construct
 The Business Plan Audience
 Professional Managers v Industry Experts (the consumer inside?)
What about what the customer wants?
Who deals with the customer?
Hierarchy and span of control?
Perception?
Motives?
Chris Catto

6. The Disconnect
The Construct
 The Business Strategy
 Product or Service Profile
 Market overview and Promotional Plan
 Management and operations
 Financial Analysis and Projections
The Audience
 The traditional construct of a business Plan is written for an external Audience, Shareholders and Financiers
The Construct of a business plan often fails to transition into a scheme of actions (the plan itself) with direct measurable
activity required to deliver the strategy
Corporate level strategy focuses on Alliances, Diversification and Vertical integration – Business Level Strategies focus
on Product Differentiation and Cost Leadership (Porter)
 Professional Managers v Industry Experts (the consumer inside?)
Are your managers also consumers of your product, if not why not, are they the right people to be making decisions on
product quality and customer service
“A lot of the time, people don’t know what they want until you show it to them” Steve Jobs
 Perceptions and motives
Deliberate strategy executed as intended v emergent strategy situational influenced by conflicting goals of decision
makers (Mintzberg)
Chris Catto

7. What is his View?
How much does his
view matter?
Chris Catto

8. How does a Leader Create
value?
Facilitator of Strategic Direction, Conductor of Strategic
Action
Leaders create an environment for Individual
performance that enables collective advancement
“give your employees the leaders they want and will
follow, if you want to create an environment within your
organisation where staff can produce their most
capable efforts or as we say, they are the “heroes””
David Parkin* & Paul Bourke
*David Parkin – 4 x Premiership Coach
Australian Football League
Chris Catto

9. The Application
• Budgets &
Forecasts
• Performance
Appraisals
• KPIs & KRAs
• Individual Bonuses
• Salary Bands
• Gaming
The Disconnect
Chris Catto
Reward, Recognition and
Management Control Practices
focus on individual endeavour,
but does Solely individual focus
and control environment
enhance group performance?
As ultimately High performance
Organisations perform as a
collection of teams not a
collection of Individuals.

10. Chris Catto
Self Interest Collective Interest
Autonomy HighLow
Collective
Self
Interest
Choose a
company that has
lost relevance in
their chosen
market place!
The Re-connect
Industry
Leaders

11. Amoeba Management Philosophy
Kazuo inamori – “Management by All… The Company is divided
into small units, orientated around a unit leader, all members take part
in managing the unit”
Family, Tribe, Village
Mandy Johnson “There was a lot of individual autonomy –
consultants set their own goals and targets, had their own clients, did
their own local marketing, paid their own bills and received a share of
the takings”
Jan Wallander’s Way
Decentralisation, regional and branch autonomy, customer focus rather
than Product focus
Values Driven company
Focus on empowerment of all employees “Take whatever action they
deem necessary to meet customer needs” work practices serve to
reinforce self-worth of employees
Chris Catto

12. Business Model v Business Modality
Natural Business State
Solid v Fluid?
Static or Moving Parts?
Chris Catto

13. What is the Modality of your
Industry?
What parts require:
Updating?
Maintenance?
Re-engineering?
Replacing?
Each industry has a particular
tried and tested methods of
revenue generation, product
development, manufacturing,
service delivery and customer
service.
While the fundamental
principles of the business
modality remain constant,
tactics for delivery are
continuously improved,
challenged, refined and
enhanced with the
introduction of new
technology and change in
social norms
Chris Catto

14. Modality of Revenue Generation
B2B Volume
Transactions
Products
ChocolateBar
Infrastructure
Engineering
Projects
Motor
Vehicle
Complexity
interchangeable
with Volume
Price
Discretionary
Non -
Discretionary
Decision
Making - High
Requirement
for Trust,
Personal
Relationship,
History,
Explanation,
Analysis,High
Risk,
Life Time Value
White Goods
Designer
Furniture
House
Family
Holiday
Commercial
Aircraft
Groceries
Ships
Decision
Making- Low
Requirement
for Trust,
Personal
Relationship,
History,
Explanation,
Analysis,Risk
Exposure
Professional
Services
iPad
Volume
interchangeable
with Complexity
Business
Travel
Professional
Short Course
Education
High Personal Selling
Low Personal Selling
The nature of your product
in terms of price, life-time
value, complexity and
volume will predetermine
the buying behaviour of your
market place, influencing the
mix of skills and techniques
required in your Sales and
Marketing model.
Craftsmanship is
unavoidable, what are the
skills and techniques your
business needs to hone?
Pg. 81 Premiership Business, C
Catto
Chris Catto

15. High Street Retail Modality
Chris Catto
Price
Complexity
Life time
Value
Volume
Low Medium High
Meal Family Holiday Home Loan
Low
Low
High
Medium
Medium
Medium
High
High
Low
McDonalds – Discretionary spend - low personal selling, low complexity, high volume product , high reliance on marketing
advertising.
Flight Centre - Medium level, annual/bi-annual spend, reliance on personal selling, matching product availability to customer needs
at the right price. Reliance on Personal selling, complemented with advertising
Handelsbanken – High, infrequent spend, high personal selling and relationship based referrals supported by localised Marketing

16. What is the Modality of your
Industry?
The modality of your industry will determine the skills required and
influence the design of your organisation.
The example provided for Sales and Marketing can extended define
specific requirements in operations, Production, service delivery,
inventory management, Procurement, Supply chain, Risk and Cash flow
management.
The Specific requirements in your industry influence the design of your
organisation.
Capacity requirements influence stages of Redesign
Chris Catto

17. Changes in Organisational Design is in step with
Modality of your Industry and Changes in
Capacity Requirements
Chris Catto
Cash
Revenue
Time
Capacity
Limitations
Change in Organisational
Design
Reinvestment in Assets or
Staff
Premiership Business
1 Day Workshop Content

18. Is your Industry Modality
Changing?
When does the Modality Die? When the
vehicle for servicing the “need” changes
If the Need no longer exists, Then The
need you were servicing was a fad!
How often has your
Modality been reinvented
or even completely
substituted across
History?
Chris Catto

19. The Collective
The Artisans of the 21stCentury
Individuals form Teams within the Business Modality – Modality is formed
of natural overlapping components.
Teams have collective Skill sets that complement the Modality
Components.
Modality Components include: Sales, Marketing, Product development,
engineering, manufacturing, Logistics, service delivery, Administrative
Support
Leaders within the teams are self determined by combination of skill
Mastery and as the facilitators of Collaboration. Ultimately Leaders act as
natural catalyst for problem solving.
Chris Catto

20. The Collective
McGregor: Theory X Theory Y
Maslow: Hierarchy of
Needs
Argyris: Theories of
Action, double loop
learning
Organisational Performance is a
function of Environment
The Collective Mastery of skill in a
favourable Human Environment
Principle for individual Performance is
mirrored
Mastery of required skill placed in a
favourable human Environment
Chris Catto
“Individual mastery is the only viable problem-solving mechanism in
complexity” Niels Pflaeging

21. The Critical mass
Each business has a
tipping point
A critical mass
required to;
first - to break inertia
Second - to
continuously service
the critical mass to
maintain momentum
The momentum in
business is
represented by the
Flow of sustainable
Cash
The Implication for
Organisational design
is to align the collective
skills with the Business
modality;
That generates the
cash flow momentum;
That exceeds the
Sustainable Business
tipping point
Chris Catto

22. The Critical mass
Just as seasonal rains bring life to the
living environment
The Focus of Organisation Design is to
maintain momentum of Cyclical
*Self improvement
*Advancement of Collective knowledge
*Innovation
*Product Development
*Infrastructure reinvestment
*Positive Market Engagement
The Rain that maintains the momentum
of the water wheel

23. The Conclusion
The Business Plan as we know it is as useful
as a message in a bottle
• Designed for Wrong Audience
• Insular,
• hopeful,
• A Limited communication Medium
• Practically direction less,
• beholden to the currents that surround it
Chris Catto
Alternative:
Strategic Modality Statement
1) Define the Goals and destination of
the Organisation
2)Understand the Modality that services
the core Market need
3) Align the Collective
4) Recognise change and Sustain
Critical mass
Implications for Organisational Design
The Artisan Organisation
Designed around Teams of Skill and
mastery optimised in a favourable
Human Environment

24. The References
Niels Pflaeging, Organize for Complexity – How to get life back into work and build the high performance organization, BetaCodex
Publishing, New York, 2014
David Parkin & Paul Bourke, Captain – Coach Leadership – Performance Strategies from Professional Sport, Integro Systems Pty
Ltd, Melbourne, 2011
Mandy Johnson, Katrina Beikoff, Family Village Tribe – The evolution of Flight Centre, William Heinemann Australia, 2013
Kazuo Inamori, Amoeba Management – The Dynamic Management System for Rapid Market Response, CRC Press, Boca Raton, FL
1999
John Milliman, Jeffery Ferguson, David Trickett, Bruce Condemi, Spirit and Community at Southwest Airlines: An investigation of
spiritual values-based model, Journal Of Organizational Change Management, Vol 12, No 3 1999, MCB University Press
R. Murray Lindsay, Theresa Libby, Svenska Handelsbanken: Accomplishing Radical Decentralisation through “Beyond Budgeting”
Beyond budgeting Round Table
Douglas McGregor, The Human Side of Enterprise, McGraw-Hill, USA, 1960
Chris Argyris, Donald A. Schon, Theory in Practice – Increasing Professional Effectiveness, Jossey-Bass Publishing, San Francisco,
1974
Michael Porter, Competitive Advantage of Nations, The Free Press, New York, 1990
Henry Mintzberg, Patterns in Strategy Formulation, Management Science 24(9), 1978
M Christopher Catto. Premiership Business – The Premiership Business Equation, Createspace, Charleston USA, 2013

25. The Author
Chris Catto
Director & Chief Performance Partner –
Putney Breeze Business Advisors
Author of Premiership Business
For more information, strategic facilitation or Speaking engagements contact
info@putneybreeze.com.au

26. Amsterdam
17 October, 2014
The Death of
the Business
Plan
Birth of the Statement of Strategic
Modality
Chris Catto