White Water Management: The Key to

Navigating the „New Business Normal‟

Presented by:

Ron Wince, President & CEO

Guidon Performance Solutions

Michael W. Wright, Co-author

The New Business Normal

NEW GLOBAL REALITIES

change

speed

knowledge

anxiety

innovation

leadership

experience

brand

differentiation

temporary

outsource

competencies

survival

revolution

strategy

balance

technology

stress

integrate

travel

transparency

customers

competition

24/7/365

Change

security

innovation

Dorothy…I don’t think we’re in Kansas anymore!

speed

Good corporate

citizenship

competition

survival

India

anxiety

speed

Those who know

vs. those

who do not

competency

Innovation has

become the Ante.

differentiation

Consumers value

the experience,

not the product.

experience

knowledge worker

chaos

stress

Low-stress family life

is nonexistent.

information

speed

brand

Ignorance can

accelerate

multi-tasking

Mistakes may be

mortal.

competition

engaged

population

revolution

change

speed

knowledge

anxiety

innovation

leadership

experience

brand

differentiation

temporary

outsource

competencies

survival

revolution

strategy

balance

technology

stress

integrate

travel

transparency

customers

competition

The Boundary Conditions of the

New Business Normal

Demographics and Debt: US Citizens >65 ratio to working will increase from an average of 16–

19% over the period from 1965–2009 to ~ 32% by 2030; In Japan it will move from about 37% to 57%;

In the Euro area, the percent will shift from roughly 29% to 45% DEBT: We are in unchartered waters

Speed of Everything

Complexity of Technology

• Primary (single discipline effects ) research done and fully developed

• Secondary effects (single to low multiple discipline) explored and developed

• Tertiary effects (highly multi-discipline) are now the research and development norm

Globally Strategized– Locally Exercised

Rule of Three--- Oligopolies and Boutiques

Matrix Organizational Structures

• Multi-disciplined, multi-level, multi-cultural environments

Dynamic

• Change is accelerating

• Adaptation is critical

• Mistakes can be mortal

Inexorable Trends

Mining university and government technology research sources and

accelerating new product introductions, will continue to be timely and

critical as sovereign capital becomes evermore strategically deployed in

the interests of national economic, energy, and military security.

Collaboratively building technological infrastructure and a culture of

innovation in emerging markets will challenge universities, governments,

financial markets, and businesses.

Utilizing Nano-technology and building physical products that will change

the nature of manufacturing to offset the cost advantages of low-cost labor,

raw material deposits, lax human rights and environmental laws will

emerge as the next wave of technology based competitive advantage.

Information based competition will be pervasive and sustainable advantage

will accrue to those who can access, collate, analyze and act on

information faster than the competition anywhere in the world at anytime.

INTANGIBLE ASSETS OUTSTRIP

PLANT PROPERTY AND EQUIPMENT (PP&E)

AS THE BASIS FOR VALUATION

Goodwill

Brand recognition

Customer relationships

Intellectual property

Systems

Logistics

Those who know

vs. those

who do not

Ignorance can

accelerate

Primacy

of the

Customer

Consumers value

the experience,

not the product.

Innovation has

become the Ante.

TRENDS IN CYCLE TIME

Source: PDMA Foundation CPAS Study 2004

baseline 2010 estimate

Cycle times have been greatly reduced,

especially for new-to-the-world innovations.

1995 to present (in months)

New-to-the-world

Major revisions

Incremental

41.7

18.1

7.6

21.0

13.2

6.4

1995Average

2010Average

Narrowing Organizational Focus:

Faster, Leaner, Smarter

Productivity & Predictability

Supply Chain Rationalization

Rule of Three

Redeployment of Assets

Seamless Coordination of Systems & Processes

EMERGING MARKETS

Taiwan

Korea

India

Japan

Russia

China

A World Bank paper uses simulations to predict

some amazing shifts in the global middle class

Thanks to emerging markets, by 2030, an

estimated 16.1% of the world population will be

categorized as middle class, up from 7.6% in

2000

Over the same period, emerging markets will

account for 750 million new entrants into the

middle class

While in 2000, 13.5% of the global middle class

was Chinese and only a negligible amount Indian,

by 2030 these two groups will account for an

estimated 44% of the global middle class— with

Indians moving from virtually zero to 6%

Source of data: Bussolo, De Hoyos, Medvedev, van der Mensbrugghe, Global Growth and Distribution: Are China and India

Reshaping the World? Policy Research Working Paper 4392,11/1/2007.

What‟s “the China price”?

The 4 most feared words in the

new business normal world

Unrelenting Challenges

for Global Business Leaders

Risk management – clear risk/reward ratios

Intellectual property management (IP) – variation by country

Setting up first-rate information technology (IT) and knowledge management

(KM) systems – the basis of future competition

Managing geometrically slopping cost curves-cost denominated competition,

opportunity management, and rapidly moving market windows

Managing risk through strategic customer relationships and partnerships-seeing

the customer as the primary source of learning

Strategy Execution: human factors – developing and managing cross-functional

and cross-border high performance teams

Working with and through capital markets

Required leadership capabilities in the new business normal include:

Making disciplined (data driven) and knowledge management based

decisions

Communicating effectively internally and externally across multiple

cultures

Working with external resources in the financial, technical, government,

university and business communities

Leading people by influencing behaviors, stimulating creative activity in

others, and successfully managing small and large group dynamics

Innovating, marketing, planning, forecasting, and adjusting to succeed

Anticipating, intercepting, and harnessing technology based growth

opportunities

Effective Leadership in the NBN

A NBN LEADERSHIP REPORT CARD

Strategic customer relationships

Technological health

Market position

Global culture

Process disciplines

Constant innovation

Knowledge management systems

Good corporate

citizenship

Take-Away Principles for Thriving in the

New Business Normal

Performance is the residual of behaviors

Corporate agility and performance hinges on the collective direction of individual

behavior and attitude

People and values count

Speed = The Competitive Advantage: accessing, collating and acting on information faster than

the competition anywhere in the world at anytime

Primacy of the customer

Listening for the functionality

Access & Mobility

Intangible Assets

Brand

IP

Knowledge networks

Innovation

Organization

Processes

Products

Scaling

In the New Business Normal the difference between an opportunity

…and a threat

Is the time horizon in which you see it.

THRIVING IN THE AGE OF

UNCERTAINTY

The Reality...

We are in a White Water World

A White Water World…

Complex

Turbulent

Uncertain

Risky

Unforgiving

Real Time

Thriving in a White Water World

1. Purpose & Core

Values Are The Only

Constants

2. Compete in Dog Years

3. ―HOW‖ Matters More

Than ―WHAT‖

4. People are the

Linchpin

Four Principles for Navigating the New Normal

Principle #1Purpose & Core Values Are The Only

Constant

• Purpose and Core Values are the COMPASS which ―harmonizes‖

individual orientations into an organizational orientation.

• Military organizations build common orientation through their long

basic and advanced training programs and by studying a common

doctrine.

Adapted from Certain to Win

Dr. Chet Richards

The Functions of Purpose

Providing a context for decision-making

Providing a yardstick for performance

A motivator of excellence

Everyone agrees to make his or her actions serve

organization's intent in terms of what is to be

accomplished.

Providing a focus for collaboration and shared

responsibility

From High Performance Teams by Buckholz and Ross

The Functions of Core Values

Emotionally energize people and ―provide a moral

compass for the organization.‖

Guide attitudes and actions

Acts as an immune system which deploys the

corporate antibodies

Principle # 2Compete In Dog Years

A time-compressed company does the same thing as a

pilot in an OODA loop… It’s the competitor who acts

on information faster who is in the best position to win.

George Stalk, Jr. & Tom Hout,

Competing Against Time

Competing in Dog Years

OPERATIONAL LEAD TIME

Wasted Time and Activity

Core Process Value

Excessive Motion

(Walking to Next Task, etc.)

Defective Process

(Identifying, Handling, Fixing)

Missing, Incomplete,

Redundant

Information

Waiting

(Often Result of

Unbalanced Tasks)

Transformation

Complete the

application

process

Excessive

Backlog

Overprocessing

The key is to reduce business processes and effort to

“core value”

“At a time when firms in many industries

offer similar products and use comparable

technologies, business processes are among

the last remaining points of differentiation.”

Tom Davenport, Competing on Analytics

Principle #3How Matters More Than What

Business Processes are the

“HOW”

– Strategic Planning and

Deployment

– Operations

– Talent Development

– Innovation

– Technology Deployment

Strategies, business models

and entire industries change

rapidly today – business

processes are the key to

adaptation and execution

People Linchpin the Process

According to Boyd, a fighter pilot didn’t win by faster

reflexes; he won because his reflexes were connected to

a brain that thought faster than the opponent.

Bing West and MajGen Ray Smith, USMC, Ret.

The March Up, p. 11

Question: What determines the speed of the

organization?

Ultimately, a moral climate/culture/environment

that encourages people to use and harmonize their

initiatives to further the goals of the organization

Under such a climate, people will evolve new

ways to solve the technical (and even

organizational) problems

Competitive Advantage Through People

People are the Linchpin

A corporate culture which can respond quickly to the needs of the

business must encourage people to use initiative and creativity – while

also providing consistency and alignment

Under such a high performing culture, people will solve the technical,

operational and strategic problems

Creating the culture requires a framework for people to ―operate

within‖ – to retain consistency with ―corporate intent‖ (purpose) but the

freedom to act autonomously

Active learning through rapid fire reflection and deliberate practice

helps to increase the desired ―cultural competence‖

From Good to Great by Jim Collins

Abbott recruited entrepreneurial leaders and gave them the

freedom to determine the best path to achieving their

objectives.

On the other hand, individuals had to commit fully to the

Abbott system and were held rigorously accountable for their

objectives.

They had freedom, but freedom within a framework.

“…The two fundamental forces that drive GE…a

common operating system and social architecture…”Jack Welch

GE 1999 Annual Report

How we execute & deliver results

Who we are and what we believe

Social Architecture

Operating System

Navigating the New Normal

Purpose & Core Values

How we behave and interact

Cycl

es o

f U

se

Success in the New Business Normal will depend on the

ability of the organization to rapidly respond to the

external change and complexity while maintaining

consistency with purpose and core values

Navigating the New Business Normal

Purpose & Core Values

Social Architecture

Operating System

Business Processes

• Purpose Statement• Values Statement

Innovation & Problem Solving

Business Intelligence

Technology & MIS

Mission/Strategy

Common language & terminology

Rewards & Recognition

Valued Behaviors

Architecture of the High Performing Enterprise

High Performing Organizations will need a Rosetta Stone to continually and

rapidly recognize external change, understand internal capabilities, focus on the

exceptions & disagreements and deliberate practice to embed changes in an

organization’s DNA.

Cycl

es o

f U

se

Cycles of Use

Tiger Woods regularly practices this shot, although he

may only see it under tournament conditions 2-3

times per year

Cycles of Use is the application of Deliberate

Practice at the Enterprise Level – ongoing reflection

and learning

Learning Cycles of Use

We are in a world of continuous rapids

frequently interrupted by monsoons

Four Principles

Purpose & Core Values provide a

foundation for the world of flux

Speed is life!

How is more critical than What

People enable execution through aligned

behaviors

Every organization needs a Rosetta Stone

Winners in the future will

Read the river

Pick the line and execute the move

Learn from every rapid

Take-Away Principles for A White

Water World

THANK YOU!

White Water Management

Thriving in the Age of Uncertainty

Ron Wince, President & CEO

Guidon Performance Solutions

www.GuidonPS.com

Michael W. Wright, Co-author

The New Business Normal

michael@appliedglobalstrategies.com