"Warm-up" Blogs

In some respects, the art and science of non military life cycle costing see here has advanced since the pioneering work undertaken for the Kingdom of Saudi Arabia's Royal Commission for Jubail and Yanbu in the early 1980's.

A Google search for life-cycle costing or whole life costing will now yield a tranche of standards and synthetic values for project designers.

However, a significant stumbling block to their intelligent application in the UK was the silo'd devolution of budget responsibility between:

• development of facilities and
• operations

For organisations still struggling with this artificial division perpetuated by blinkered adoption of 19th century management principles, is now an opportune time to explore how business models built on traditional thinking can be adjusted to reveal where the true value lies in organisations and their built environment?

As usual, the value exchange system (VES)  "lens" allows participants to introduce this innovation and simultaneously engage participants / stakeholders in intelligent conversation about "sustainability," promoting growth and success.

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Identifying and formulating projects that fit coherently with the national "will" is a complex affair. Even if a formal process be established, implementing it is complicated.

To illustrate, in the 1980's, a major kingdom in the Middle East used over 5,500 information elements in the preparation of its five year plan, where a single information element could consist of many tables of subject data or accompanying reports.  

The corresponding information flows (developed by this author and approved by the Client)  were as shown in the following diagrams.

a) Overview:-

b) More detailed view of Five year "Development Plan Preparation" in above diagram

Having developed the above diagrams with the planning Ministry then, it would be interesting to learn, now, what process the UK government uses to formulate the National Infrastructure Plan and the types of models and simulations used, if any.

It may also be instructive to appreciate the frequency and nature of the internal communication between relevant departments and agencies and other stakeholders. The following chart shows how that could be represented - an early version, perhaps, of Social Network Analysis (SNA). Interesting that it was criticized as being more of a sociogram rather than an exchange of information / ideas about National Planning issues!

Fast forward 25 years and new systems approaches could illuminate the process further and reveal the otherwise hidden connections that support and empower participants to achieve, together, growth and success. Recommended as a primary candidate systems approach is our co-evolved Value Exchange System (VES), a diagnostic and leadership tool for use at every level within the value network space.

You are at http://tinyurl.com/c974xef

In the late 1980's, strategic planning was the new replacement for the moribund corporate planning of earlier decades.

In 1988, the then Business Development Director of Y J Lovell Holdings PLC sanctioned a review for the Group of key information needs, resulting in a report and recommendations for the "Cultivation of use by staff of information of strategic value." This was undertaken on condition its findings could be made public to the industry when appropriate.

The purpose of the report was to set out the issues which drove the need to develop throughout the Group an outward perspective, to identify information of strategic value and its potential use, and to suggest tentative action plans.

The scale of the changes taking place in the external environment in which businesses operated could be illustrated by long term trends. For example, a trace of the variations in economic growth in the UK displayed intervals of some 50 years between the repeating cycles of peaks and troughs. These suggested that the 80's and 90's were set for another peak of innovative activity and change.

Although the Group was performing well within its sectors, to sustain that performance, entrepreneurship was required to exploit sources of opportunity through systematic innovation. The new age skill to be developed was "insight."

Longer term, changes in Group behaviour could be achieved by changing mindsets to develop an outward entrepreneurial attitude. This was expressed in traditional consulting methodology at the time as "unfreezing current attitudes and then refreezing them after an outward entrepreneurial attitude has been developed." (1)

A key challenge was to develop information flows that support thinking and analysis of strategic issues. Such a task required an understanding of:

• The processes involved in formulating business unit strategy.
• The pivotal role performed by the concept of competitive advantage in sustaining corporate performance. 
• The potential role of scenario variables and related causal factors as focal points for gathering market and business intelligence.

Further, a powerful diagram technique for representing how information could be used was proposed and a draft prepared that could be developed internally to reflect the Group's strategic planning needs.

To develop an outward business perspective, a four phase implementation programme was envisaged consisting of:

Phase 1 - Initiation. With centre staff, the development, use, testing, and agreement to an approach for achieving the programme objectives, to be conducted in two parts, Part 1, development; Part 2, use, testing and agreement.
Phase 2 - Critical Mass. Through a prototype project with a specified Division, the development of a critical mass of interest by implementing the approach agreed in Phase 1: - "Unfreezing of attitudes."
Phase 3 - Implementation. Group-wide implementation of new procedures: - "Changing of attitudes."
Phase 4 - Consolidation. Group consolidation of new administrative systems: - "Refreezing of attitudes."

It was recommended that:-

a) A diagram be developed showing strategic information flows, see following draft:

b) The implementation programme be adopted and action plans developed, using a Goal Directed Project Management approach.

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In parallel, specific recommendations were made in conversation with the then Managing Director of the Clugsten Group to cultivate services of high value to project commissioning agencies prior to their formulation of civil engineering projects.

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Fast forward to 2012, now.  Consider, how to represent business models that neatly span the divide between the, understandably, sanitized versions of business models that appear in audited annual reports and the somewhat messy reality at the coalface.

Note that the value network approach is ideal for underpinning the representation of business models, understood to be a description of the structure of product, service and information flows and the roles of participating parties. (2)

Notes:

(1) Now, more participative methods using a mix of focused conversation, powerful questions and Appreciative Inquiry are recommended when time permits. Try, for example a new form of questionnaire that incorporates these methods ..... http://tinyurl.com/ccgsclo

(2) Defined in "Exploring corporate strategy," by Johnson et al, 7th edition, Prentice Hall, UK, 2005.

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