Business initiatives don’t fail for lack of financial analysis

When a major business initiative – launching a new product, acquisition/merger, entering a new market, starting a new branding/positioning campaign, mounting a competitive response, etc. – fails it is rarely because the numbers didn’t work or financial risk wasn’t properly assessed.

If education, training and professional certifications are a guide, we can assume that financial analysis is a reasonably robust skill set among all medium-to-large companies (and even a lot of smaller ones). According to the National Center for Education Statistics (NCES), American universities have cranked out well over 100,000 new MBAs per year every year since 2000. Every company of any size has one, two, six, or a hundred MBAs peppered throughout the organization, and each of these MBAs has been thoroughly schooled in basic financial analysis. Add in the accountants, CPAs, business analysts, risk managers and, in some cases, mathematics and statistics specialists and you have a solid base for testing and validating the numbers before any new project, initiative or campaign is launched.

Yet the success rate for new initiatives, across industries and markets, remains between 25% and 35% — only slightly better than random luck. Let’s look at some statistics:Read More »Business initiatives don’t fail for lack of financial analysis

An interview with attorney Ty Beard

Ty Beard is a practicing attorney with a very different approach to deal-making, negotiations and the practice of business law. He’s a former history teacher and a military history buff, and came to war gaming as a youth in the 1970s. In this discussion he shares his insight and perspective on how war gaming as a hobby has shaped his strategic approach to business and how the simple techniques he learned as a youth have created significant advantage for his clients. It’s a different perspective on war gaming – one that is very interesting for those pursuing business war games, – and one I think you will find useful.

In this 25-minute conversation you will find:Read More »An interview with attorney Ty Beard

Decision Management – Is knowing that you’re right or wrong enough?

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No. 3 in the Getting Started series.
This article is a transcript (with slides) of the video.

If you’re a manager or executive then you earn your paycheck by making decisions. Most of us believe we’re good, if not excellent, decision makers. We base this assessment on several things, most of which equate to some measure of how often we’re right vs. wrong. Today I want to show you a different way of looking at decisions, one that I believe can help you assess what’s going on in your business.

Understanding Decisions intro slideDecision making is an important part of Competitive Thinking, and over time we will look at them from several different perspectives. Today I’d like to show you a framework that breaks business decisions into four major types and illustrates why they are important. I believe you can use this model to assess your decision-making and gain some valuable insight into what’s happening in your business.

Before we start keep in mind that this framework applies equally from line managers all the way up to senior executives. The details and scope of decisions may vary, but the underlying structure is the same.Read More »Decision Management – Is knowing that you’re right or wrong enough?

Should you be monitoring external forces for your business?

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No. 2 in the Getting Started Series.
This article is a transcript (with slides) of the video.

One of the fundamentals of Competitive Thinking is to only spend resources – time, effort, money – on things that are relevant to your business. This may seem like common sense but it’s surprising how much effort is expended on things that are no longer relevant, just because they’ve always been done.

So Rule No. 1 is Focus on what is relevant.Read More »Should you be monitoring external forces for your business?

Is it Complex or Complicated?

The words complex and complicated are often used interchangeably. Both refer to things with lots of parts, and both can refer to things that are difficult to understand. But in Competitive Thinking we use the words differently, and the different meanings are important.

Complicated

We rely on complicated systems every day, for some of our most basic needs. Think of a mechanical clock or analog wristwatch, or the engine in your fuel-efficient hybrid car, or maybe the hard disk drive in your laptop.Read More »Is it Complex or Complicated?