Kim Warren on Strategy
Strategy insights and living business models
Strategy Dynamics Briefing 14: A "spreadsheet" view of resource accumulation
All this talk about how accumulation is different than the usual way we think of causal relationships may have got you worried…
Is this some mysterious process that needs fancy methods to work?
Although the time-charts and diagram structures we use may see an unfamiliar way of looking at business performance, they simply re-present what could equally be shown in a spreadsheet.Take this figure from the last briefing, where a constant rate of customer gains interacts with a rising loss rate to cause growth and decline in the company’s total number of customers, and hence in its sales.
It is beyond the purpose of these briefings to get into exactly how these kinds of situations are actually modeled in dynamics software. But it is worth mentioning that they enable this kind of complexity to be handled rather easily. You simply set up the causal structure one time, including the customer-resource and its flows, then tell the software that the structure is replicated for the various segments and add the relevant data for each.
[You need a more powerful software than mystrategy for this purpose, however.]
This briefing summarises discussion from chapter 3 of Strategic Management Dynamics,
pages 131-134
Read more about the book on our website

- In month 1, we add 20 customers and lose 12, so end the month with 100 + 20 – 12 = 108.
- In month 2, we add 20 customers and lose 14, so end the month with 108 + 20 – 14 = 114
- … and so on.
- This is no different than what we do to track cash-flow and cash levels from period to period – so if we ‘account’ for cash like this, why would we not account for customers, staff and other valuable resources in the same way?
- Whilst you can do this with a spreadsheet, there’s a big jump in understanding from the visual presentation of the time-paths.
- The resource flow rates — new customers and customers lost per month — are telling us the trajectory on which the business is heading at the start of each period.

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