The diversity of events in the present is so great that no manager is able to maintain an overview of everything that happens in the company and its environment and its interactions. Products and services are constantly being modified, conflicts and coordination problems between department and employee arise, customer and supplier contacts bring with them new requirements, uncoordinated decisions are made in many places, organizational processes and structures change step-by-step or abruptly. The variety of events and the complexity of their interaction can become a problem. But how can the important be distinguished from the unimportant? In addition, the same events are perceived and interpreted differently by people. There are different points of view for a problem that arises. This leads to diverging solution strategies. Of course, this is also connected with other interests that the participants have.
Shaping the business model
The positioning of a company is closely linked to its business model, i.e. the way it organises its value creation. Among other things, this involves shaping internal relationships, i.e. defining activities and resources in order to implement the positioning strategy as strongly and effectively as possible, as well as establishing interaction with the environment. They cover their resource requirements through the services of their suppliers, compete with their competitors for customers, sell them products and services, develop or adapt new revenue drivers and pay taxes and levies, and hire employees. Stakeholders are very diverse and demanding in their nature.
The companions
Companies are constantly confronted with uncertainties and questions. Central questions help us to make the right assumptions and models:
- How do companies behave?
Rationally, do their decisions aim to optimize use? Or is their behaviour distorted and irrational and if so, which assumptions and models can clarify this attitude? - Why do companies differ from each other?
What leads them to maintain their heterogeneity in terms of resources and success despite competition and imitation efforts on the part of their competitors? - What determines success and failure in national and international competition?
What are the causes of entrepreneurial success and how do they manifest themselves in the competitive environment? Why do some companies succeed in achieving above-average results and why are some companies able to renew themselves fundamentally while others withdraw from the market?
Let's reach for the broom! General Management Navigator
In business practice, there is an increasing need for rapid intervention and new strategies. However, many plans are being implemented at a low level and the question is why so many strategies fail. An analysis of the traditional approach - which involves separate treatment of strategy and change in management - concludes that strategic interventions should be linked to the organizational change process. This is referred to as integrated strategy and change work. The concepts of strategic management and change management must be interlinked.
The GMN is a concept developed for the comprehensive design of entrepreneurial units. It enables the required integrated consideration of strategy and change work. The tasks that the company faces in this context are presented in the form of five interlinked fields of work.
Field of work Initiation
"How to prepare, organize and get the design work going?"
The question arises of:
- the persons involved (top management and as many employees as possible) and according to their skills profile (specialists and/or generalists),
- the temporal component
- the instruments used (e.g. benchmarking), Balanced Scorecard) and resources
- the procedure, the working method (analytical or intuitive),
- Behaviour, whereby points such as conflict potential, decision-making behaviour and transparency must be questioned
Field of work Positioning
"How should the business unit position itself vis-à-vis its environmental stakeholders?"
First you need to get a picture of the current situation and clarify in which business fields one wants to be active and how one can organize the processing. Subsequently, an environmental and company analysis needs to be carried out. The company must also be subdivided into its tangible and intangible resources. If one wants to improve the position of the enterprise, strategies are to be generated in a way-goal-description.
Field of work Value creation
"How should value be added to stakeholders?"
With reference to the internal relationship of the company, it must be established which value-added performance is required, or how a company should organize its activities.
Field of work Changes
"How can the individual change measures be 'directed' to a coherent change design?"
The strategies have to be coordinated with the social system of the company, the meaning of the "human dimension" must not be overlooked. Social processes must also be designed in the same way as value creation processes.
Field of work Performance measurement
"How can the quality of the design work be observed and measured?"
Traditionally, the results of economic activities were measured using operational and financial metrics (internal and external accounting). The current scorecard approaches correspond to another, second stage of development. Here the feedback cycle was shortened, therefore it is possible to intervene much earlier. This means that the implementation of the strategies is measured, supplemented by an observation of non-financial metrics such as "intellectual capital". However, scorecard approaches only measure the implementation of strategies, but not whether these strategies have been developed professionally and make sense in terms of content. Implementing something correctly does not necessarily mean doing the right thing.
Conclusion
The fact is that every entrepreneur is confronted with large and complex challenges. Fast and networked markets, legal changes and other unpredictable factors force the entrepreneur to plan well, to calculate correctly and this using various measurements. True to the motto of Robert Kaplan: "If you can't measure it, you can't manage it."
Sources
- Strategic Management, Günter Müller-Stewens & Christoph Lechner
- Company management, 4th edition, Ralf Dillerup & Roman Stoi
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