The uncertainty advantage presents a chance to go well beyond the typical meaning of risk management -- that is, seeking ways to achieve the best of the worst outcomes -- to create new and sustainable value out of confusion.
The relationship between politics and business growth has long been a flashpoint between competing political ideologies. Reinforcing the idea that growth is essentially a function of politics, terms like sequestration, quantitative easing and austerity are now being viewed as the determining factors in whether companies can grow in the future.
This is, of course, a myth.
Companies that are inherently growth-focused replace political ideology with the pragmatism needed to achieve and sustain growth. These companies acknowledge that they have virtually no control over political outcomes, and that some level of political volatility will always be present in the business environment. From this understanding, rather than be transfixed or even paralyzed by these factors, they look to convert the ever- changing political winds into opportunities for growth and expansion.
The myth that growth is political is one of many myths that can inhibit the ambition and future growth prospects of companies. As the pursuit of business growth becomes even more urgent, companies must overcome these myths.
Making Strategy Work for Entrepreneurssohailgondal
Challenge: Traditional strategic planning approach fails to handle the ambiguity, uncertainty and complexity prevailing in entrepreneurial environments. Consequently, these barriers become the reason for entrepreneurs to jettison robust strategic thinking or management
Way Forward: An effective strategic planning capability can do more than address the common and predictable issues that cause a new ventures demise. This paper defines an agile approach to strategy that balances the rigor and speed entrepreneurs need.
Get a jump on your competition by understanding the strategic marketing framework process and produce a Growth Playbook to keep your marketing effort on track. Download our whitepaper, Growing Strategically for all the details.
Six Mistakes Companies Are Making Today And How You Can Avoid ThemFindWhitePapers
"Look for additional opportunities to use business intelligence to uncover value and drive
improvements. Consider advanced planning tools that can help close the gap between
strategy and execution. Expand the use of sophisticated what-if analyses to model the
operational and financial impact of multiple scenarios on revenue, costs, and cash flow."
The relationship between politics and business growth has long been a flashpoint between competing political ideologies. Reinforcing the idea that growth is essentially a function of politics, terms like sequestration, quantitative easing and austerity are now being viewed as the determining factors in whether companies can grow in the future.
This is, of course, a myth.
Companies that are inherently growth-focused replace political ideology with the pragmatism needed to achieve and sustain growth. These companies acknowledge that they have virtually no control over political outcomes, and that some level of political volatility will always be present in the business environment. From this understanding, rather than be transfixed or even paralyzed by these factors, they look to convert the ever- changing political winds into opportunities for growth and expansion.
The myth that growth is political is one of many myths that can inhibit the ambition and future growth prospects of companies. As the pursuit of business growth becomes even more urgent, companies must overcome these myths.
Making Strategy Work for Entrepreneurssohailgondal
Challenge: Traditional strategic planning approach fails to handle the ambiguity, uncertainty and complexity prevailing in entrepreneurial environments. Consequently, these barriers become the reason for entrepreneurs to jettison robust strategic thinking or management
Way Forward: An effective strategic planning capability can do more than address the common and predictable issues that cause a new ventures demise. This paper defines an agile approach to strategy that balances the rigor and speed entrepreneurs need.
Get a jump on your competition by understanding the strategic marketing framework process and produce a Growth Playbook to keep your marketing effort on track. Download our whitepaper, Growing Strategically for all the details.
Six Mistakes Companies Are Making Today And How You Can Avoid ThemFindWhitePapers
"Look for additional opportunities to use business intelligence to uncover value and drive
improvements. Consider advanced planning tools that can help close the gap between
strategy and execution. Expand the use of sophisticated what-if analyses to model the
operational and financial impact of multiple scenarios on revenue, costs, and cash flow."
7 Dimensions of Agile Analytics by Ken Collier Thoughtworks
We are in the midst of an exciting time. There is an explosion of very interesting data, and emergence of powerful new technologies for harnessing data, and devices that enable humans to receive tremendous benefits from it. What is required are innovative processes that enable the creation and delivery of value from all of that data. More often than not, it is the predictive (what will happen?) and prescriptive (how to make it happen!) analytics that produces this value, not the raw data itself. Agile software teams are continuously involved in projects that involve rich, complex, and messy data. Often this data represents innovative analytics opportunities. Being analytics-aware gives these teams the opportunity to collaborate with stakeholders to innovate by creating additional value from the data. This session is aimed at making Agile software teams more analytics-aware so that they will recognize these innovation opportunities. The trouble with conventional analytics (like conventional software development) is that it involves long, phased, sequential steps that take too long and fail to deliver actionable results. This deck will examine the convergence of the following elements of an exciting emerging field called Agile Analytics:
sophisticated analytics techniques, plus
lean learning principles, plus
agile delivery methods, plus
so-called "big data" technologies
Learn:
The analytical modeling process and techniques
How analytical models are deployed using modern technologies
The complexities of data discovery, harvesting, and preparation
How to apply agile techniques to shorten the analytics development cycle
How to apply lean learning principles to develop actionable and valuable analytics.
The technologies and people we are designing experiences for are constantly changing, in most cases they are changing at a rate that is difficult keep up with. When we think about how our teams are structured and the design processes we use in light of this challenge, a new design problem (or problem space) emerges, one that requires us to focus inward. How do we structure our teams and processes to be resilient? What would happen if we looked at our teams and design process as IA’s, Designers, Researchers? What strategies would we put in place to help them be successful? This talk will look at challenges we face leading, supporting, or simply being a part of design teams creating experiences for user groups with changing technological needs.
In a Fit for Growth transformation -- one that starts with the premise that all spending is investment and every cost is a choice -- the three phases of change are managed in such a way that people understand the strategic rationale for the decisions handed down, even when they are tough, and their role in shaping the new organization is clear. They are able to forge ahead, confident that choices were made for the good of the company's future. When trust prevails, so does the company's vision, helping to ensure that the effects of the transformation can be sustained.
From adjusting the mind-set of leadership to creating more appropriately sized teams, there are many ways companies can improve the excellence within their organization.
Here, Robert Sutton, a Stanford professor of management science and engineering and co-founder of Stanford’s Institute of Design, discusses the mind-set and strategies of companies that are most adept at building and spreading high standards.
Fail fast Fail cheap - Agile Development, Testing & Deliveryltebbens
Zo snel mogelijk fouten maken, dat is waar het om draait bij moderne software ontwikkeling. Of beter gezegd: zo snel mogelijk fouten ontdekken, door snelle feedback, niet wachten tot het testtraject.
Dat is de essentie van Continuous Delivery, de methode om op elk moment werkende software live te kunnen zetten. In 10 minunten. Met één druk op de knop.
Een flinke omschakeling voor iedereen, zeker voor de analist en de tester. Bij Alliander is dat gelukt en deze ervaringen deel ik graag met jullie!
Business for Punks - Agile Business Day 2016 Venezia - ABD16Marco Dussin
--
Businesses fail. Businesses die. Businesses fade into oblivion.
Revolutions never die.
So start a revolution, not a business.
--
James Watt, cofondatore di Brewdog, ha riassunto nel suo libro "Business for Punks" il distillato (ok, trattandosi di birra, sarebbe più corretto dire "il fermentato") della sua esperienza, alla continua ricerca del miglioramento continuo e di prodotti unici, passando attraverso le campagne di crowdfunding e scelte radicali, controcorrente, ciniche e spericolate. Scelte che lo hanno portato in pochi anni di finanza e marketing anarcici ad essere degno rappresentante dell'"estemistan" del mondo birraio. La sua azienda conta oggi più di 500 dipendenti, clienti in oltre 50 paesi e 40 bar sparsi per il mondo, da San Paolo, Bologna, Firenze e Roma, sino a Tokio.
PLAYLIST:
1. Build a kick-ass agile team [Ramones]
2. Fail fast [M. McLaren]
3. Do it yourself [Sex Pistols]
4. Create a customized UX [The Clash]
5. Don’t start a business, start a crusade [J. Watt]
6. Your brand is not yours (or about branded interactions) [Brewdog]
7. Fans, not customers [me]
8. Don’t be cool, be yourself [you]
The past five years have been good to the auto industry. Following a cyclical downturn and a series of bankruptcies and harsh restructurings in the wake of the 2008–09 financial crisis, U.S. vehicle sales have been strong, especially for highly profitable trucks and SUVs. Globally, automobiles have grown more attractive than ever, with all kinds of exciting new technologies — impressive powertrain systems, mobile connectivity, advanced driver-assistance systems, maintenance monitoring, and the like — further exciting car buyers.
In the eyes of many in the industry, the future looks equally bright. Oil and gas prices appear likely to remain reasonably low for some time, encouraging big-margin SUV sales. The technology inside autos will continue to grow more sophisticated and affordable.
Automakers feel confident investing large sums of money in developing new features for their cars, particularly advanced safety and navigation options. Many suspect that they can make fully autonomous vehicles (AVs), machines that can drive themselves anywhere, under any traffic and weather conditions, without a human ever having to take the wheel, a reality within a relatively short time, as little as five or 10 years. That, in turn, would open huge new markets, it is hoped, as buyers — large fleets as well as individuals — flock to driverless vehicles and associated services.
There is much truth in the vision of fully autonomous vehicles. Certainly, there will come a time when commuters can relax, eat breakfast, and write emails on the way to work as their robotic taxis transport them on algorithmically chosen routes in perfect safety. But as the recent fatal crash of a Tesla in semi-autonomous mode sadly made clear, it will probably take decades, not years, for this vision to become a common reality.
The specialist leaders of HR, IT, finance, and other functions have had their time, attention, and (in some cases) money freed up by more efficient practices. They now have the ability--and the mandate--to play a more influential role, especially when building capabilities. Instead of balancing services among all business units equally, or striving to be best in class in everything, they can become increasingly "fit for purpose," thinking and acting in line with the enterprise strategy.
There is a great deal of discussion about the potential of “big data,” the high-volume, high-variety information assets that require new forms of data processing to enable companies to make better decisions and operate more efficiently. There is, however, one important caveat. Many companies—probably most—work in relatively sparse data environments, without access to the abundant information needed for advanced analytics and data mining. Companies that only have access to “little data” can still use that information to improve their business.
The immense uncertainty that today’s business leaders face is something truly unique. In its scale, ferocity of impact, and ubiquity, it is different — by orders of magnitude — from anything I’ve seen before. We’ve been living with uncertainties forever, of course. What’s new is structural uncertainty. It is structural because the long-term, irresistible forces now at work can explode the existing structure of your market space or your industry, putting it at risk of being drastically diminished or completely eliminated. If you are unprepared, the massive changes these forces bring are like sudden bends in the road. They appear, seemingly without warning, to convey you away from the future you envisioned for your business. But in a world that is projected to add a minimum of US$30 trillion of GDP in the next decade, where human needs and wants are both multiplying and changing, structural uncertainty also creates myriad new needs, new industries, new businesses, new business models, and new market segments.
Taking control of uncertainty and successfully steering your organization through frequent bends in the road is the fundamental leadership challenge of our time. And it will call for a distinctly different type of leadership than the one you were trained for and are likely currently exercising. The advantage now goes to those who don’t just learn to live with change, but who create change. I call these people catalysts.
Your company's identity (what you do) and implementation (how you do it) should be closely linked. Here are the precepts to keep in mind as you bring them together: Aim high. Build on your strengths. Be ambidextrous (sophisticated at both strategy and execution). Clarify everyone's strategic role. Align structures to strategy. Transcend functional barriers. Become a fully digital enterprise. Keep it simple, sometimes. Shape your value chain. And cultivate collective mastery. Do all those things, and your company will be on its way to effectively executing its strategy.
Digital fabrication devices (such as 3-D printers) are doing to manufacturing what the Internet has done to information-based goods and services. For example, a 3-D printer generated a bust of Beethoven in less than two hours, using a design uploaded to Thingiverse.com by a contributor identified only as “dino-girl.” Here are the changes to consider before this innovation takes hold.
This white paper discusses how organizations can proactively manage operational risk in order to explore opportunities and free up resources to focus on long-term, strategic objectives.
7 Dimensions of Agile Analytics by Ken Collier Thoughtworks
We are in the midst of an exciting time. There is an explosion of very interesting data, and emergence of powerful new technologies for harnessing data, and devices that enable humans to receive tremendous benefits from it. What is required are innovative processes that enable the creation and delivery of value from all of that data. More often than not, it is the predictive (what will happen?) and prescriptive (how to make it happen!) analytics that produces this value, not the raw data itself. Agile software teams are continuously involved in projects that involve rich, complex, and messy data. Often this data represents innovative analytics opportunities. Being analytics-aware gives these teams the opportunity to collaborate with stakeholders to innovate by creating additional value from the data. This session is aimed at making Agile software teams more analytics-aware so that they will recognize these innovation opportunities. The trouble with conventional analytics (like conventional software development) is that it involves long, phased, sequential steps that take too long and fail to deliver actionable results. This deck will examine the convergence of the following elements of an exciting emerging field called Agile Analytics:
sophisticated analytics techniques, plus
lean learning principles, plus
agile delivery methods, plus
so-called "big data" technologies
Learn:
The analytical modeling process and techniques
How analytical models are deployed using modern technologies
The complexities of data discovery, harvesting, and preparation
How to apply agile techniques to shorten the analytics development cycle
How to apply lean learning principles to develop actionable and valuable analytics.
The technologies and people we are designing experiences for are constantly changing, in most cases they are changing at a rate that is difficult keep up with. When we think about how our teams are structured and the design processes we use in light of this challenge, a new design problem (or problem space) emerges, one that requires us to focus inward. How do we structure our teams and processes to be resilient? What would happen if we looked at our teams and design process as IA’s, Designers, Researchers? What strategies would we put in place to help them be successful? This talk will look at challenges we face leading, supporting, or simply being a part of design teams creating experiences for user groups with changing technological needs.
In a Fit for Growth transformation -- one that starts with the premise that all spending is investment and every cost is a choice -- the three phases of change are managed in such a way that people understand the strategic rationale for the decisions handed down, even when they are tough, and their role in shaping the new organization is clear. They are able to forge ahead, confident that choices were made for the good of the company's future. When trust prevails, so does the company's vision, helping to ensure that the effects of the transformation can be sustained.
From adjusting the mind-set of leadership to creating more appropriately sized teams, there are many ways companies can improve the excellence within their organization.
Here, Robert Sutton, a Stanford professor of management science and engineering and co-founder of Stanford’s Institute of Design, discusses the mind-set and strategies of companies that are most adept at building and spreading high standards.
Fail fast Fail cheap - Agile Development, Testing & Deliveryltebbens
Zo snel mogelijk fouten maken, dat is waar het om draait bij moderne software ontwikkeling. Of beter gezegd: zo snel mogelijk fouten ontdekken, door snelle feedback, niet wachten tot het testtraject.
Dat is de essentie van Continuous Delivery, de methode om op elk moment werkende software live te kunnen zetten. In 10 minunten. Met één druk op de knop.
Een flinke omschakeling voor iedereen, zeker voor de analist en de tester. Bij Alliander is dat gelukt en deze ervaringen deel ik graag met jullie!
Business for Punks - Agile Business Day 2016 Venezia - ABD16Marco Dussin
--
Businesses fail. Businesses die. Businesses fade into oblivion.
Revolutions never die.
So start a revolution, not a business.
--
James Watt, cofondatore di Brewdog, ha riassunto nel suo libro "Business for Punks" il distillato (ok, trattandosi di birra, sarebbe più corretto dire "il fermentato") della sua esperienza, alla continua ricerca del miglioramento continuo e di prodotti unici, passando attraverso le campagne di crowdfunding e scelte radicali, controcorrente, ciniche e spericolate. Scelte che lo hanno portato in pochi anni di finanza e marketing anarcici ad essere degno rappresentante dell'"estemistan" del mondo birraio. La sua azienda conta oggi più di 500 dipendenti, clienti in oltre 50 paesi e 40 bar sparsi per il mondo, da San Paolo, Bologna, Firenze e Roma, sino a Tokio.
PLAYLIST:
1. Build a kick-ass agile team [Ramones]
2. Fail fast [M. McLaren]
3. Do it yourself [Sex Pistols]
4. Create a customized UX [The Clash]
5. Don’t start a business, start a crusade [J. Watt]
6. Your brand is not yours (or about branded interactions) [Brewdog]
7. Fans, not customers [me]
8. Don’t be cool, be yourself [you]
The past five years have been good to the auto industry. Following a cyclical downturn and a series of bankruptcies and harsh restructurings in the wake of the 2008–09 financial crisis, U.S. vehicle sales have been strong, especially for highly profitable trucks and SUVs. Globally, automobiles have grown more attractive than ever, with all kinds of exciting new technologies — impressive powertrain systems, mobile connectivity, advanced driver-assistance systems, maintenance monitoring, and the like — further exciting car buyers.
In the eyes of many in the industry, the future looks equally bright. Oil and gas prices appear likely to remain reasonably low for some time, encouraging big-margin SUV sales. The technology inside autos will continue to grow more sophisticated and affordable.
Automakers feel confident investing large sums of money in developing new features for their cars, particularly advanced safety and navigation options. Many suspect that they can make fully autonomous vehicles (AVs), machines that can drive themselves anywhere, under any traffic and weather conditions, without a human ever having to take the wheel, a reality within a relatively short time, as little as five or 10 years. That, in turn, would open huge new markets, it is hoped, as buyers — large fleets as well as individuals — flock to driverless vehicles and associated services.
There is much truth in the vision of fully autonomous vehicles. Certainly, there will come a time when commuters can relax, eat breakfast, and write emails on the way to work as their robotic taxis transport them on algorithmically chosen routes in perfect safety. But as the recent fatal crash of a Tesla in semi-autonomous mode sadly made clear, it will probably take decades, not years, for this vision to become a common reality.
The specialist leaders of HR, IT, finance, and other functions have had their time, attention, and (in some cases) money freed up by more efficient practices. They now have the ability--and the mandate--to play a more influential role, especially when building capabilities. Instead of balancing services among all business units equally, or striving to be best in class in everything, they can become increasingly "fit for purpose," thinking and acting in line with the enterprise strategy.
There is a great deal of discussion about the potential of “big data,” the high-volume, high-variety information assets that require new forms of data processing to enable companies to make better decisions and operate more efficiently. There is, however, one important caveat. Many companies—probably most—work in relatively sparse data environments, without access to the abundant information needed for advanced analytics and data mining. Companies that only have access to “little data” can still use that information to improve their business.
The immense uncertainty that today’s business leaders face is something truly unique. In its scale, ferocity of impact, and ubiquity, it is different — by orders of magnitude — from anything I’ve seen before. We’ve been living with uncertainties forever, of course. What’s new is structural uncertainty. It is structural because the long-term, irresistible forces now at work can explode the existing structure of your market space or your industry, putting it at risk of being drastically diminished or completely eliminated. If you are unprepared, the massive changes these forces bring are like sudden bends in the road. They appear, seemingly without warning, to convey you away from the future you envisioned for your business. But in a world that is projected to add a minimum of US$30 trillion of GDP in the next decade, where human needs and wants are both multiplying and changing, structural uncertainty also creates myriad new needs, new industries, new businesses, new business models, and new market segments.
Taking control of uncertainty and successfully steering your organization through frequent bends in the road is the fundamental leadership challenge of our time. And it will call for a distinctly different type of leadership than the one you were trained for and are likely currently exercising. The advantage now goes to those who don’t just learn to live with change, but who create change. I call these people catalysts.
Your company's identity (what you do) and implementation (how you do it) should be closely linked. Here are the precepts to keep in mind as you bring them together: Aim high. Build on your strengths. Be ambidextrous (sophisticated at both strategy and execution). Clarify everyone's strategic role. Align structures to strategy. Transcend functional barriers. Become a fully digital enterprise. Keep it simple, sometimes. Shape your value chain. And cultivate collective mastery. Do all those things, and your company will be on its way to effectively executing its strategy.
Digital fabrication devices (such as 3-D printers) are doing to manufacturing what the Internet has done to information-based goods and services. For example, a 3-D printer generated a bust of Beethoven in less than two hours, using a design uploaded to Thingiverse.com by a contributor identified only as “dino-girl.” Here are the changes to consider before this innovation takes hold.
This white paper discusses how organizations can proactively manage operational risk in order to explore opportunities and free up resources to focus on long-term, strategic objectives.
One of the fastest growing concerns on insurers’ enterprise risk agenda is model risk
management. From being a phrase that primarily actuaries and other modelers used, “model risk” has become a major focus of regulators and the subject of intense activity and debate at insurers. How model risk management has evolved from ad hoc efforts to its currentproactive stage is an interesting story. But more interesting still is
what we believe could be its next stage – generating measurable business value.
Based on everything you know then, what is Bezos singular grand s.docxikirkton
Based on everything you know then, what is Bezos' singular grand strategy out of the list I sent you all below. Well developed ideas, by the way! Well done.
A simplified and concise definition of grand strategies is that they direct the organizations to the available paths open to them which would allow the achievement of their longterm objectives.
CONCENTRATION
The first strategy and the simplest is that of CONCENTRATION. The organization directs its efforts and resources to the profitable growth in the market and technology in which it is currently operating. The reason for this approach is the low additional resources required as well as low risk, since by their known competency they have prospered in the past. The negative side to this is the trends of industries in some cases have been shown to alter performance and the organization is then left with an outdated product. Also, the company may incur slow profitability and growth with this strategy. This is THE market penetration approach. You just have to aware of market conditions that help or may hinder prosperity using this approach. Having a corner on the market of the buggy whip business is not a good idea.
MARKET AND PRODUCT DEVELOPMENT
I will combine, in a fashion, the MARKET DEVELOPMENT (the second) and PRODUCT DEVELOPMENT (the third) strategies in the interest of space. Market development requires some modification in the product and in channels of distribution as a way to seek new markets. Also, variations in model and product size constitute an approach in this strategy. The product development factor is normally chosen to prolong the life cycle of currently sold products or to take advantage of a favorable reputation or brand name. Both of these involve moderate risk and cost.
INNOVATION
INNOVATION is our fourth strategy. Many industries have gone out of business because they refused to place due resources in R&D efforts. With the rapid turnover of technology, it is foolhardy not to place capital into the future of the business through innovation. This strategy differs from the product development in the extent to which products come out as brand new or fundamentally new though innovation. Innovation will make other products obsolete. The negative in this approach is in the failure rate: innovation is fraught with risk and uncertainty.
HORIZONTAL AND VERTICAL INTEGRATION
In the interest of brevity I will combine our two integration strategies; namely, HORIZONTAL INTEGRATION (HI) and VERTICAL INTEGRATION (VI). Both of these strategies allow growth through the acquisition route, but HI uses the purchase of a the organization in a similar
business in the same stage of the productionmarketing chain. VI permits growth through the acquisition of the organization which is a supplier of inputs to the acquirer and is known as BACKWARD INTEGRATION while the union with the organization closer to the ultimate consumer would be known as FORWARD INTEGRATION. HI allo ...
Setting Up a Successful Insurance VentureCognizant
Precise business and operating model definitions can help insurers spin off ventures that stay ahead of customer needs and market requirements. Here are some lessons we’ve acquired by helping our clients establish winning ventures.
Enterprise Risk Management: Minimizing Exposure, Fostering Innovation and Acc...Cognizant
Formal policies and processes for enterprise risk management (ERM) are common among large corporations, such as those in finance and healthcare. However, most technology-focused companies consider ERM an obstacle to innovation. When properly implemented and maintained, an enterprise risk management program can lessen risk, accelerate strategic development, drive innovation and bolster bottom-line growth.
STRATEGIC PLANNINGManaging Risks A NewFrameworkby Rob.docxsusanschei
STRATEGIC PLANNING
Managing Risks: A New
Framework
by Robert S. Kaplan and Anette Mikes
FROM THE JUNE 2012 ISSUE
W
Editors’ Note: Since this issue of HBR went to press, JP Morgan, whose risk management practices are
highlighted in this article, revealed significant trading losses at one of its units. The authors provide
their commentary on this turn of events in their contribution to HBR’s Insight Center on Managing
Risky Behavior.
hen Tony Hayward became CEO of BP, in 2007, he vowed to make safety his top
priority. Among the new rules he instituted were the requirements that all
employees use lids on coffee cups while walking and refrain from texting while
driving. Three years later, on Hayward’s watch, the Deepwater Horizon oil rig exploded in the Gulf
of Mexico, causing one of the worst man-made disasters in history. A U.S. investigation commission
attributed the disaster to management failures that crippled “the ability of individuals involved to
identify the risks they faced and to properly evaluate, communicate, and address them.” Hayward’s
story reflects a common problem. Despite all the rhetoric and money invested in it, risk
management is too often treated as a compliance issue that can be solved by drawing up lots of rules
and making sure that all employees follow them. Many such rules, of course, are sensible and do
reduce some risks that could severely damage a company. But rules-based risk management will not
diminish either the likelihood or the impact of a disaster such as Deepwater Horizon, just as it did
not prevent the failure of many financial institutions during the 2007–2008 credit crisis.
Identifying and Managing
Preventable Risks
In this article, we present a new categorization of risk that allows executives to tell which risks can
be managed through a rules-based model and which require alternative approaches. We examine
the individual and organizational challenges inherent in generating open, constructive discussions
about managing the risks related to strategic choices and argue that companies need to anchor these
discussions in their strategy formulation and implementation processes. We conclude by looking at
how organizations can identify and prepare for nonpreventable risks that arise externally to their
strategy and operations.
Managing Risk: Rules or Dialogue?
The first step in creating an effective risk-management system is to understand the qualitative
distinctions among the types of risks that organizations face. Our field research shows that risks fall
into one of three categories. Risk events from any category can be fatal to a company’s strategy and
even to its survival.
Category I: Preventable risks.
These are internal risks, arising from within the organization, that are controllable and ought to be
eliminated or avoided. Examples are the risks from employees’ and managers’ unauthorized, illegal,
unethical, incorrect, or inappropriate actions and the risks from br.
Four Steps to Making Economic Capital Calculations an Engine for Business GrowthSecondFloor
Economic capital calculation is not only a journey to Solvency II compliance
This paper looks at why economic capital (EC) calculations are frequently under-used as a tool to drive business strategy, and why that amounts to a huge missed opportunity for insurance businesses of all sizes. It explores the barriers that prevent insurance businesses from using EC as a strategic tool to shape, strengthen and improve the business, and suggests a four-step process to ensuring that economic capital calculations become a vital planning resource for all areas of the business, including risk managenet, finance, underwritingm risk analysis.
Economic Capital Calculations for Insurances whitepaper refers to
The challenge for Risk Officers
Barrier # 1 No Common Language
Barrier # 2 Poorly Understood Risk Models
Barrier # 3 The Wrong Risk Models - Or Not Enough
The Trouble with Value at Risk (VaR): example
Four Steps to Meaningful Economic Capital Calculations
STEP 1: Sing from the same balance sheet
STEP 2: Speak English: bad karaoke is preferable to good silence
STEP 3: Agree on own funds and SCR and create a common risk dashboard
STEP 4: Build a chorale
Look to the Future: the challenge for insurance risk professionals.
In summary, the challenge for insurance risk professionals is to create an environment in which Economic Capital Calculations can be used by all lines of business to drive good decisions that protect policyholders and investors while enabling safe and profitable growth (the essence of Pillar II of Solvency II). While few risk departments are fully capable of this today, some innovative firms share this vision and are working towards achieving it.
Breakthrough the traditional way of planing. Read Venture Care’s “Corporate Digest” December, 2017 .
Here are some insights of the magazine :
– What are your company strategies in this new Economy?
– Rewritten Risks and Entrepreneurship
– Valuation: A Modern Art
– Financial Modeling A practical view &
– Starting a Producer Company in India.
1
Lockheed Martin Corporation
Abdussamet Akca
Lockheed Martin Corporation
To: Jack Harris
From: vice president governmental affairs
Date:15 February 2021
Sub: under Lockheed Martin Corporation (overview)
2
I am here to state that this is the overview of Lockheed Martin Corporation and Jack
Harris is the CEO of the consulting firm consulted by the CEO of Lockheed Martin Corporation,
crisis consulting.
Business profile
In the contemporary world, there are many challenges facing companies in different
industries in both developed countries and undeveloped countries. There is a great need to
understand the potential risks that may face the business to take care of the shareholder interests,
meet the legitimate consistency, and secure the required resources such as human resources
scholarly and reputational resources. Customers are helped with data by the shareholder value-
added. It also helps in another backup and preparation so that people in the organization are
ready to distinguish risk and so that they can quickly react to crisis consulting (Dove et al.,
2018). The SVAs problem consulting can work with customer administration to identify the
potential turmoil that Lockheed martin corporation is likely to face. The understanding of using
fitting systems and methodologies and the advancement of the same make it possible to oversee
and relieve emergencies through computerized systems. It is possible to utilize and outline
recreations by testing setups and arrangements. Through the operational reviews and the
preparation of potential crises in the Lockheed Martin Corporation, one’s status is also protected.
If the problem exceeds, then the SVAs group can react to the expansive scope of the crisis to
develop the best action to solve these crises.
Crisis consulting international has supplied security and crisis administration to different
organizations such as the Christian evangelist. The concern consulting international has been
helping these groups evaluate risk, improve policy creations, site overviews, and arrange training
staff, crisis administration group, meetings management of occasions, among others. Other
3
activities include risk assessment, prioritization of risks, evaluation, and comprehension of
corporate risk profile. Crisis consulting international uses scientific procedures to prepare
customers in perceiving and measuring risks to understand the effect of these risks so that they
can use the available methodologies to oversee risk and avoid it (Davies, 2019). SVA is used in
the business impact assessment process to break down the business with the end goal in mind.
That builds up top to bottom comprehension of recognizing the primary regions primarily
dependent on the company. This audit aims to establish more extensive deterrent ways of risk
arrangements and prepare programs. SVA can also be incorporated with working wit ...
1 Lockheed Martin Corporation Abdussamet Akca SilvaGraf83
1
Lockheed Martin Corporation
Abdussamet Akca
Lockheed Martin Corporation
To: Jack Harris
From: vice president governmental affairs
Date:15 February 2021
Sub: under Lockheed Martin Corporation (overview)
2
I am here to state that this is the overview of Lockheed Martin Corporation and Jack
Harris is the CEO of the consulting firm consulted by the CEO of Lockheed Martin Corporation,
crisis consulting.
Business profile
In the contemporary world, there are many challenges facing companies in different
industries in both developed countries and undeveloped countries. There is a great need to
understand the potential risks that may face the business to take care of the shareholder interests,
meet the legitimate consistency, and secure the required resources such as human resources
scholarly and reputational resources. Customers are helped with data by the shareholder value-
added. It also helps in another backup and preparation so that people in the organization are
ready to distinguish risk and so that they can quickly react to crisis consulting (Dove et al.,
2018). The SVAs problem consulting can work with customer administration to identify the
potential turmoil that Lockheed martin corporation is likely to face. The understanding of using
fitting systems and methodologies and the advancement of the same make it possible to oversee
and relieve emergencies through computerized systems. It is possible to utilize and outline
recreations by testing setups and arrangements. Through the operational reviews and the
preparation of potential crises in the Lockheed Martin Corporation, one’s status is also protected.
If the problem exceeds, then the SVAs group can react to the expansive scope of the crisis to
develop the best action to solve these crises.
Crisis consulting international has supplied security and crisis administration to different
organizations such as the Christian evangelist. The concern consulting international has been
helping these groups evaluate risk, improve policy creations, site overviews, and arrange training
staff, crisis administration group, meetings management of occasions, among others. Other
3
activities include risk assessment, prioritization of risks, evaluation, and comprehension of
corporate risk profile. Crisis consulting international uses scientific procedures to prepare
customers in perceiving and measuring risks to understand the effect of these risks so that they
can use the available methodologies to oversee risk and avoid it (Davies, 2019). SVA is used in
the business impact assessment process to break down the business with the end goal in mind.
That builds up top to bottom comprehension of recognizing the primary regions primarily
dependent on the company. This audit aims to establish more extensive deterrent ways of risk
arrangements and prepare programs. SVA can also be incorporated with working wit ...
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Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
Forward-thinking leaders and business managers understand the impact that discipline has on organisational success. A disciplined workforce operates with clarity, focus, and a shared understanding of expectations, ultimately driving better results, optimising productivity, and facilitating seamless collaboration.
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2. www.strategy-business.com
1
ing car program, Hyundai “leaned into market anxiety.”
Hyundai was able to navigate this difficult period
because it confronted risk in a unique way. Rather than
merely managing the risk of losing business in a down-
turn by reducing inventory, idling production lines,
and laying off workers, the automaker designed a sales
strategy that took direct aim at the volatility that risk
produces.
We call this strategy the uncertainty advantage. It’s
an approach in which corporate leaders leverage disrup-
tive change by making targeted, bold moves toward
new market opportunities. Many companies confront
risk with a tactical framework based on mitigating and
managing the potential consequences (as in the com-
mon expression of passivity, “We’ll manage”), but that
approach might build bigger protective walls without
guarding against the greatest risks — the ones that are
unknown. The uncertainty advantage is something dif-
ferent: a strategy that compels managers to perceive the
unknown as a market differentiator and an opportunity
to unleash innovative solutions that appeal to custom-
ers, investors, strategic partners, regulators, and com-
petitors. In short, it is a chance to go well beyond the
typical meaning of risk management — that is, seeking
ways to achieve the best of the worst outcomes — to
create new and sustainable value out of confusion.
The idea that you can turn uncertainty to advan-
I
n 2008, at the height of the global recession,
Hyundai Motor Company, like all other auto com-
panies, was reeling from the sharp drop-off in vehi-
cle sales. Fearful of losing their jobs and dismayed by
the sudden plunge in the value of their homes, consum-
ers were in no mood to consider big-ticket purchases
that would take years to pay off. Most auto companies
took on a defensive mind-set, reacting to the economic
crisis by curtailing production and reducing future
growth plans; some even filed for Chapter 11 bankrupt-
cy protection.
Hyundai, however, had a different idea. After a
probing analysis of what was motivating potential cus-
tomers and what was holding them back, the automak-
er’s management team came up with a program called
Hyundai Assurance, which had a simple, compelling
pitch: Buy a car from us and if you lose your job, we will
buy it back with no negative effects on your credit score.
Within weeks of developing the idea, Hyundai had
an ad ready to broadcast during an NFL championship
game — and with that, the program took off. With a
singular bit of creativity, Hyundai had demonstrated to
potential customers that it had enough confidence, in
spite of the uncertain economy, to offer consumers a
hedge against hazard. Rather than succumbing to the
recession, said John Krafcik, former Hyundai Motor
America chief and currently CEO of Google’s self-driv-
The Uncertainty Advantage
Creative leaders don’t fear risk — they turn it into a money-making strategy.
by Karen Avery and Gary Lynch
3. www.strategy-business.com
2
trophes, accidents, environmental disasters, regulator
activism, and market collapses, it’s understandable that
companies tend to focus not on embracing the unex-
pected, but on setting up safeguards against it. Typi-
cally, putting safeguards in place means empowering
internal risk management departments to oversee large,
expensive programs that use bureaucratic procedures
and checklists aimed at avoiding the worst effects of un-
foreseen threats, complying with regulations designed
to guard against undue risk taking, and fending off fi-
nancial risk. All of these risk management strategies,
which are intended to minimize losses, are easily repli-
cated from one company to the next, and offer virtually
no competitive upside.
Indeed, organizational risk management fails as a
strategic weapon because it ignores the most pivotal
facet of the business landscape: the market. Oriented as
it is around compliance and rigid performance goals, a
risk management program makes it more difficult to
identify the unique opportunities offered by disarray
and tumult.
In this environment, are your investments in
managing risk primarily pointed inward, toward pre-
serving organizational value? Or are they directed out-
ward, toward the market? If you answered yes to the
first question, then your company is neglecting the op-
portunities inherent in uncertainty. You can find a bet-
ter way to differentiate yourself through the risks your
company takes.
One of the authors of this article, Gary Lynch, saw
firsthand how a company can develop habits of thought
and action that enable it to benefit from the uncertainty
advantage. He worked in the operations, technology,
and risk strategy group at Chase Manhattan Bank from
tage has been around at least as long as Frank Knight’s
1921 book Risk, Uncertainty and Profit, which estab-
lished a theoretical framework. Knight, one of the
founders of the neoclassical Chicago school of econom-
ics, defined uncertainty as the state of facing risks that
can’t be measured or foreseen. In other words, not only
are you placing your assets at risk, but it’s impossible to
tell in advance how much risk you might be facing. He
was, to be sure, describing the strategic terrain that ev-
ery business occupies.
But according to Knight, this type of uncertainty is
necessary for profit to exist. If you could know in ad-
vance how much risk you were facing, then so could
your competitors. Any time you gained a competitive
advantage, someone else could find a way to compete on
the same ground. Thus, if you are a CEO or other cre-
ative leader seeking to put uncertainty to work as a strat-
egy, you have to embrace a perspective like Knight’s.
There is no better source of profit than your ability to
first identify the opportunity hidden in disruptive forces
and then use it to differentiate your company from its
competitors.
The specific uncertainty you face might come from
turmoil in the market, as it did for Hyundai, or from a
sudden crisis. Or it might simply be a potential peril
that is considered part of the cost of doing business in
your industry — until some insightful entrepreneur
does a better job than competitors of finding out what’s
behind the uncertainty. In such cases, uncertainty be-
comes a precious asset instead of a liability.
Turning Uncertainty into Value
At a time when all businesses must be prepared for ter-
rorism, cyber-attacks, failures of partners, natural catas-
Karen Avery
karen.avery@.pwc.com
is a thought leader for
Strategy&, PwC’s strategy
consulting business. She is a
principal with PwC US and is
based in Florham Park, N.J.
In addition to working with
healthcare clients, she has
designed and implemented risk
strategies for companies in
the chemical, manufacturing,
retail, and technology sectors.
Gary Lynch
gary.lynch@theriskproject.com
is the author of Uncertainty
Advantage: Leadership Lessons
for Turning Risk Outside-In,
is CEO and founder of the
Risk Project in New York, a
risk-analysis, research, and
consulting firm that helps busi-
nesses leverage uncertainty to
accelerate growth and financial
performance.
4. www.strategy-business.com
3
some way. In response, Western pharmaceutical com-
panies in China began to, at best, proceed cautiously or,
at worst, retreat. Assets were sold, layoffs were an-
nounced, full-scale reorganizations began, and forecasts
were restated.
AstraZeneca took a different approach. It em-
barked on a strategic campaign to see what advantage
could be gained from the uncertainty sown by the Chi-
nese action.
To do this, AstraZeneca hired the best talent that
its rivals had let go during the retrenchment, and used
this brain trust of experts on the China market to ana-
lyze potential ways to profit from what lay ahead. In
part as a result of this assessment, the company sought
out channels through which it could cement stronger
relationships with the Chinese government. In particu-
lar, it expanded a strategic alliance with the Chinese
pharma manufacturer WuXi AppTec, investing more
than $150 million in new facilities that would support
research in advanced biologic medicine, made from liv-
ing cells. Biologics are the basis for many blockbuster
drugs, and the Chinese government wanted to pursue
this lucrative field more energetically.
The outcome of AstraZeneca’s investments in such
partnerships will be more evident as the Chinese phar-
ma market matures. Like most other pharma compa-
nies doing business in China, it suffered a revenue de-
cline in 2015 when the government-run health insurance
funds in China lowered the prices they were willing to
pay for drugs — but in the third quarter of 2016, Astra-
Zeneca’s sales in China were up about 10 percent, ac-
cording to the company’s earnings statement. Moreover,
the company is on target to be a key player in the lucra-
tive biologics sector as it grows.
Greater return in the allocation of risk-focused re-
sources, primarily derived from more effective targeting
of time, management attention, and capital at uncertain-
ties that could directly impact the business model. Be-
cause risk management teams in most organizations
serve as operational functionaries and not strategic fa-
cilitators, the onus is on business-side executives to rede-
fine what risk analysis means. This idea was at the heart
of a supplier evaluation that Rockwell Automation, an
1991 to 1995, just a few years after the savings and loan
crisis in which more than a thousand banks had failed.
A number of major banks were applying a new lens to
risk, and Chase’s leaders studied the uncertainties asso-
ciated with various banking activities, including whole-
sale electronic banking and funds movement. Armed
with stronger knowledge, they could introduce new
products. The bank also built a platform through which
sales, product development, and innovation staff could
easily present management with information about risks
in such areas as emerging markets, wholesale and pri-
vate banking, and real estate, so that everyone involved
could learn from one another and improve their invest-
ment or service strategies.
In more recent years, the banking industry has
been preoccupied with keeping the financial system
stable. Paradoxically, the havoc of the financial crisis
was partly caused by the trading of derivative securities
— a business originally developed as a hedge against
market uncertainties. Derivative trading can add bal-
ance-sheet value, except when excessive trading creates a
valuation bubble that eventually bursts. The uncertain-
ty advantage is different; when pursuing it, you add
value not through a steroid-like financial injection, but
by using uncertainties to pump up the capabilities your
company already has.
Our experiences with companies that use uncer-
tainty to create an edge have shown us that the gains
can be broken down into three broad categories.
New revenue and growth opportunities. Hyundai’s
no-risk automobile returns program demonstrated the
sales potential in betting on uncertainty, but an even
more ambitious gambit is still unfolding in the case of
AstraZeneca in China. The past few years have been
difficult for foreign pharmaceutical companies that do
business in the world’s largest market. The U.S. govern-
ment has charged a number of companies with bribing
doctors in violation of the U.S. Foreign Corrupt Prac-
tices Act. But when the Chinese government began a
crackdown of its own, imposing a record penalty of
nearly US$500 million on GlaxoSmithKline in 2014, it
looked like a clear sign to industry players that the
ground rules for doing business there were shifting in
5. www.strategy-business.com
4
ical semiconductor components. Although Honda
prides itself on the transparency of its supply chain and
just-in-time inventory systems, company managers had
overlooked the risks of losing access to these minute
components. The interruption forced Honda to shut
down close to 50 percent of its North American produc-
tion for almost a full year.
Often, however, the catalyst in bringing this ap-
proach to life is a simple inquiry by a CEO or other se-
nior executive — which then leads to a new awareness
of potential profit. One example is the Trumpf Group, a
large German machine tools manufacturer. The story
began with a fire in a semiconductor plant owned by
Philips Electronics in 2001, set off by a lightning bolt.
The fire crippled production of computer chips for mo-
bile phones — and although Ericsson, which relied on
Philips for most of its chips, lost hundreds of millions in
potential revenue and ended up getting out of the hand-
set production business, competitor Nokia noticed the
slowdown in supply even before it heard from Philips,
and decided to speed up production from its other sup-
pliers around the world.
Peter Leibinger, the CEO of Trumpf’s laser tech-
nology and electronics unit, had that cautionary tale in
mind in 2011 when he studied the potential threats sur-
rounding the production of the laser diode. This inex-
pensive part was, and remains, the centerpiece of
Trumpf’s equipment. Continuously manufacturing it,
with high-quality output, was a market differentiator
for the firm. Any disruption in laser diode production
would allow rivals to pick away at Trumpf’s market
share.
The immediate lesson from Nokia would have been
to rely on multiple, redundant plants in different re-
gions — but for Trumpf, which operates its own plants,
that was a costly and inefficient solution that would im-
pact profit margins. Another option would have been a
backup plan to purchase laser diodes from a rival or
third-party supplier. That, however, would diminish
quality and Trumpf’s reputation.
Leibinger, rather than simply accepting risk as a
price of doing business, decided to look into the causes
of uncertainty in laser diode production. It turned out
industrial equipment manufacturer, began around
2007. To a degree, the firm’s risk management efforts
had always considered the possibility that suppliers of
components or raw materials would be compromised by
some unexpected event. But with thousands of compa-
nies in its network, Rockwell had made very little dis-
tinction between indispensable partners and lesser ones.
Nor did management have a good grip on which part-
ners carried the most risk and which were relatively safe
from disruption — for example, from a natural catas-
trophe or a political or economic incident.
The company’s leaders decided to change the situa-
tion by performing a thorough analysis. After identify-
ing its most essential suppliers and rating them on a risk
scale, Rockwell crafted a strategy to benefit from the
volatility associated with some of these companies. Af-
ter all, if the suppliers failed, Rockwell’s whole value
chain would suffer. Thus, Rockwell dedicated extensive
resources — human and financial — to support these
critical suppliers, forming close bonds with them for the
first time.
The result was an unexpected advantage: an inno-
vation loop. Frequent meetings and discussions about
ways to improve operations and designs generated new
ideas for products and components, efficiency, and
scale. These ultimately enhanced both sides of the
OEM/supplier equation. The effort ultimately trans-
formed a fearful approach to risk into an open network
of collaborative companies.
Better, faster, and more accurate decision making,
which results in more precise anticipation and response
to market conditions and greater confidence and trust on
the part of customers, investors, and regulators. The
third advantage that accrues to companies that use un-
certainty to their benefit has to do with making deci-
sions. To navigate uncertainty, leaders need deep insight
into where the company’s vulnerabilities are most se-
vere. Often this information is hidden somewhere in the
day-to-day operations that few CEOs take time to ex-
amine from their perch 5,000 feet above. For example,
Honda Motors was taken by surprise in 2011 when the
devastating tsunami in Japan and floods in Thailand
interrupted the production of an inexpensive set of crit-
6. www.strategy-business.com
5
that, as is the case with many other senior executives, he
was overlooking a basic risk near the bottom of the sup-
ply chain: A devastating electrical fire is the most likely
reason for production in the laser diode factory to be
interrupted. Hence, electricians with inadequate safety
training represented the gravest risk to output. And in
probing deeper, it became painfully clear to him that
the staff in Trumpf’s own laser diode factory lacked the
critical skills needed to prevent a fire.
Once he learned where the uncertainty lay, Leibin-
ger established a program to improve the training and
recruiting procedures for electricians in the factories.
This generated a series of benefits. Trumpf avoided ty-
ing up capital in redundant facilities or cutting into its
margins with additional laser diode inventory. Mean-
while, Leibinger and other executives could turn their
attention to growth strategies — expanding into China,
for one thing — without fear of a production crisis, thus
gaining a leg up on competitors.
From Theory to Practice
If you want to do something similar in your own orga-
nization, you can start by conveying, through your ac-
tions and words, a clear and concise message to everyone
in the organization. That message is that you are facing
your uncertainties and using them to inspire innovation.
People at every level of the organization, instead of fear-
ing management reaction if they report a potential prob-
lem, need to believe they’ll be rewarded if they let their
managers know what might cause problems and con-
tribute ideas for solutions or tactical alternatives. This
demand for insights and ideas provides opportunities for
the subject matter experts within the company. They be-
come part of the growth agenda, and they offer their
best expertise because this is a practice that appeals to
human nature; everyone wants to be included.
After you have settled on a growth path, the chal-
lenges continue. People throughout your company will
need to work together to use the business’s deepest capa-
bilities, including knowledge and diverse talent, and its
greatest competencies — such as data management and
analytics, sensors, visualizing tools, product develop-
ment, and branding skills — to bring your new ap-
proach to fruition. Promoting this kind of corporate
culture isn’t easy, but it can be done. It takes innovative
leaders in senior positions who can steer their compa-
nies in creative, unorthodox directions.
This approach runs contrary to the mind-set of
most risk managers, who have generally been charged
with preserving the status quo. They will appreciate
that the uncertainty advantage offers them a way to en-
hance their importance in the organization. But they
may also be concerned about becoming marginalized if
they don’t think in terms of the strategic opportunities
a risk might present. You will need to show them that
they can only benefit by being more willing to think
strategically.
In short, if you’re a senior manager, you can’t fully
control risk within the parameters of competitive re-
sources. It’s a mistake to try. Rather, you should explore
and make use of uncertainty. If you can take what is
unforeseeable in the markets or unknown to your com-
petitors and make it central to your strategic growth
agenda, you will succeed at the expense of competitors
who still regard risk and uncertainty as threats. +