American Ingenuity Consulting LLC

Creating Profitable Strategic Business Growth & ChangeĀ 

Strategic Case Blog

"The Business Growth Matrix" Revealed!

Posted on June 30, 2017 at 6:10 PM Comments comments (2)

Attention... IT Buyers and Sellers!

Posted on September 9, 2016 at 2:20 PM Comments comments (0)

Attention IT Buyers and Sellers!

How do Buyers know which tech options are best for their company? There are so many considerations to sort through. Scalability, mobility, cloud migration, security, collaboration, compatibility, capital costs, operating costs, technical risks, pros and cons of tech maturity. It can really make your head spin!


How do Sellers justify expenses to buyers? Typically, by stating a value proposition. But the value proposition rarely goes beyond the IT related goals. Realistically, there are far greater positive and potentially negative ramifications to the larger business.


When these larger business pros and cons are not analyzed, the CIO can be missing opportunities to help the company grow. The CIO can also be missing critical issues that may directly cause harm to the business. That’s when CIO morphs into “Career Is Over”.


So what is a responsible CIO to do? The decisions are already complex. So how do you add in top level business considerations without muddying the waters? Use a process. Use a process that will quantify strategic business implications both positive and negative. The process for this is not unlike existing technical assessments that are routinely performed for technical implementation considerations. Except that the format and objectives are structured to address the top level business risks and opportunities.


Making the right decisions can change a career ending project into a significant prosperity event. You may even justify a larger budget if the benefits are there. After all, IT has to be a strategic asset.


Ingenuity Risk AssessmentTM is based on the “9 Pillars” of Business Strategy. No business risk or opportunity exists outside of the "9-Pillar" confines. A well-crafted strategy assessment can highlight fatal issues or great benefits to the top or bottom line of the business. The assessment can also include the typical technical factors required for a solid implementation program. Two birds, one stone.


The business strategy assessment also looks at far more than just “Value”, “Value” is only one of the 9 strategic pillars for business success. There are 8 other strategic measurements that need to be done to drive top and bottom line improvement.


The takeaways here are to:


1.) Integrate the needs of the IT group with the needs of the larger business with a comprehensive strategic assessment.


2.) Collaborate strategically with a process to drive growth and profits, this will propel your success.


For more on Strategic Assessments contact [email protected] or visit www.ai-strategy.com

 


Why SWOT is Dead

Posted on June 27, 2016 at 10:50 PM Comments comments (0)


In the immortal words of Kevin O’Leary a.k.a. “Mr. Wonderful”, of the hit TV series Shark Tank, “Your dead to me.” captures our sentiment of SWOT and after a few “aha” discussions, our clients seem to agree.

"Strengths may have waning demand in the market, and Opportunities may be fraught with costs and risks."


The GOOD- Simple, Easy to build consensus

When I first heard of SWOT in the 80’s, it sounded great. What a simple and succinct way to organize and galvanize random thoughts in a board room about significant factors and traits of a business and it’s environment. I still hear company leaders many of whom are very intelligent discussing SWOT as part of their strategic planning efforts. I can’t blame them, I used SWOT extensively through the 90’s.


When I engage executives about SWOT, they quickly admit that “it’s a tool that helps us organize the basics then we fine tune our plans afterwards”. But why use a tool at all that can unilaterally generate pitfalls that need to be shored up afterwards if they are spotted at all?


The BAD- Random, Sets up hidden hazards within your strategy

Strengths, Weaknesses, Opportunities, and Threats form nice neat quadrant cells that tend to oversimplify and trap anything placed in each respective box. I don’t take issue with Weaknesses and Threats so much. I take issue with the misleading coronation of Strengths and Opportunities. Strengths are immediately assumed as something we need to run with, same goes for Opportunities. But Strengths may have waning demand in the market, and Opportunities may be fraught with costs and risks.


Perception can set up an organization to be blind-sided by business risks that they didn’t explore because their strategic planning efforts were flawed with over-confidence in their Strength and Opportunity boxes.


If a process is random and rife with hazards then use a better process.


The UGLY- Overconfidence, Hidden hazards hurt your business

So here’s what happens. Optimism reigns for Strengths and Opportunities, meanwhile there are overlooked risks that aren’t considered deeply. Tactical problems that were never contemplated bubble up when the strategic plan is executed.


It happens all the time. Problems surface. People get frustrated, embarrassed, productivity tanks and business takes a hit. Time for damage control, hopefully customers and significant stakeholders aren’t impacted. Distractions from productive activities are everywhere. The SWOT based strategy is looked at as a failing strategy and possibly for the wrong reasons. There may have been some great parts of the strategy that will be cast out with the bath water. Time for a new strategy, let’s pull out SWOT again!


A Better Way 

SWOT never clearly calls out risks, only Weaknesses (things you don’t do well), and Threats (presumably attacks by outside sources). A SWOT analysis never even examines why customers like your products or services. So don’t use it, its’s dead because newer and better strategic planning technology is available.


IRA investigates and quantifies why your business is successful, what makes it tick, why it’s appealing and what a great acquisition might look like. It examines how customers behave and what they value. Then it systematically seeks risks that can undermine your business, by challenging the 9 essential parameters of a successful business. It highlights and scores those aspects of your business that can go wrong, that are not well understood, or that can generally inhibit growth.


The 9-point score that results clearly shows where improvements and innovation are needed and the path for growth. Your strategic plan comes to life.


It’s fundamentally a different approach from SWOT, it’s not just a tool it’s a system. It’s been in practice for over a decade creating high value offerings that the market needs while identifying and reducing hazards to achieve goals.


For more information please visit www.ai-strategy.com

 

See a Sample Case: Organic Growth Vs. Acquisition

Posted on June 21, 2016 at 7:30 AM Comments comments (0)

The Wedoit Company has been growing steadily at about 7% per year  bringing on 5-8 new customers annually. It has been growing because it has quick response times and competitive pricin for its custom metal products. But the market growth potential is limited and margins are narrowing. Management is considering various options for new growth direction.

They can:

A.) Add in new types of products for their existing customer base.

B.) Acquire a company with a standard product line that fits with their existing mfg operations.

C.) Acquire a company that is focused on rapid prototyping services.


 Which path should the executives of Wedoit choose?

The revenues of Options B and C are similar as are the current profitability. Option A requires very little investment, so the initial thought is that Option A has the lowest risk but after conducting an IRA planning project we see that’s clearly not the case.

 This scenario happens every day in the US as companies wrestle with growth and change. Using the IRA strategic planning process, we can evaluate the entire business scenario of each option and deliver a 9 point score that will quickly highlight the most successful option for Wedoit.

 


 The Issues become very clear.

A. If Wedoit Offers new and different products (Option A) , they would be choosing the highest risk option. This is the least likely success path. Although their organization is familiar with the approach the market demand is not great.

B. Acquisition of a product that fits into their existing operations (Option B). In this scenario their organization is geared up for the work they would just have to adjust their sales and marketing structure. But the target acquisition is selling out because the product line is no longer the front runner in their space. Wedoit can remove some overhead costs after the acquisition to improve operating profit, but that doesn’t change market and competitive conditions.

C. The best choice, (Option C) has growing demand in the market and is a service that requires similar skillsets to their existing organization. The slightly lower score for the organization is due to the learning curve with the new markets and technology. But most importantly, Option C represents a stronger market where differentiation is rewarded. This option also helps the company to sell its existing products by being more responsive and opens new market segments to Wedoit.