Accounting for people

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“People are our most important asset” Right! So why don’t we “account” for them like we do for cash? … and the same for other key assets, too, like customers and products? The closest we get to any of these is to occasionally recognise some pseudo-financial value, as in capital assets, but we need to know what is happening to these critical resources in their own terms.

UK Business Secretary Sajid Javid just got in hot water for lamenting that, on a balance sheet ...

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Strategy

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How to clarify adaptive capacity

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There is a ton of academic stuff on this, but our dynamics terminology can be quite exact about it.

To “adapt” implies building specific resources and capabilities that previously did not exist. For example, a current client is trying to move from a hardware-sales focus to a “solution-provider”. They need to design solutions for distinct markets they serve (a solution = the hardware + control systems + ongoing support). Creating these solutions is a capability they currently do not have. Nor ...

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Strategy

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Strategy error by Kraft?

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Kraft foods finally won control of Cadbury with a big £11.9 billion ($19.4b) offer. Warren Buffet, owner of 9% of Kraft, says it’s a bad deal – and he’s rarely wrong. Will Kraft do the usual and try to extract ‘synergies’ by slashing costs, or deliver real value by leveraging the combined resources to drive medium- to long-term growth in cash flows? … and will analysts allow them to do it right?

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Strategy

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Aims – growth, survival …

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I made a strong case in a previous post that strategy research should have been asking how strong firms grow cash flows, not deliver profit ratios. I had two main push-backs – 1. is growth relevant in present conditions? – 2. survival is really all that matters. 

The first is easily dealt with – stronger cash flow ‘growth’ than rivals can of course imply less decline when everyone is going backwards .. would you rather cash-flows fell by ...

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Strategy

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Update on the troubles with strategy

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Here’s my latest msg to the B School academics [remember the point of this is to get some useful strategy methods for executives and consultants]. Will let you all know what response I get.

” …

Have had many useful answers on this. There seems little dissent that:

  • we have a problem with current strategy methods not being valued by the people who are supposed to use them,
  • … which implies we have little useful theory [notably that seeking explanations for profitability is ...
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