THE ENTERPRISE BUSINESS SYSTEM (EBS)

Complete, Connective, Creative

Willy A. Sussland

Start-ups are nifty and nimble. Then, companies add layers, businesses, and more procedures. And so, as BCG’s Yves Morieux pointed out, as companies grow in size the< also grow in complicatedness. (1)

The complicated complexity of the organization is ill suited to confront the chaotic complexity of the business environment. And so, many companies toil and some tumble.

Opportunely the new millennium brought a new method of management to tackle tumultuous times, namely: agile management. Decentralizing, delayering, and delegating responsibilities and resources to self-organizing teams powers a democratization of the leadership and boosts strategic and organizational agility.

Thus, agile management enables companies to shed some of their complicatedness, and to enhance significantly the connectivity, creativity, and celerity of the whole organization. However, Steve Denning, the noted author of “The Age of Agility”, recently estimated that only 20% of the companies have been able to implement agile management company-wide. (2)

Many organizations cling to the traditional separations and they run a collection of separate parts. Their strategic plans or their “business model” often focuses on the enterprise’s external efforts and neglect the internal forces. (3) Facing a fragmented world with a fragmented organization does not bode well. Prof. Probst submitted that a systemic approach is necessary for decision makers to tackle complexity. (4)

An integrative and inspirational Enterprise Business System (EBS), which integrates both the internal as well as the external environments, the present performances and the future prospects is what separates the best form the rest. Prof. Jay Forrester advocated a systemic approach to the management in the 60s, but, as N. Linder & J. Frakers pointed out, systems tend to encompass too many factors and becoming confusing. (5) So, the EBS that I have developed, “The Five Forces of Enterprise”, keeps things simple, shared, and stimulating. To keep it simple, my model features the 5 factors that interact to drive any business activity, namely:

the people, the power of the resources, the practices of management, ?????????the external partners, and the outcome i.e. the products. (6)

Let us see the construct of “The Five Forces of Enterprise”, how it boosts the proficiency of the whole organization, and then the proficiency of the work on assignments, and finally we can envisage the next step.

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THE CONSTRUCT OF THE FIVE FORCES OF ENTERPRISE

“The Five Forces of Enterprise”, the advocated EBS, connects the aforementioned five forces in the pursuit of creating outstanding business-value. All the? five forces of enterprise interact with one another, but it make sense to look at them in the right order. Business is made by people, with people, for people. The people deploy the resources of the enterprise in order to achieve the strategic and the organizational results that have been planned with and for the stakeholders.

The EBS reinforces the links among people at the different levels and in the different functions, and thereby it scales their collaborative creativity, and? power the celerity of time-cycles company-wide.

The aforementioned five forces of enterprise are just headings, and to activate them we need to get to grips with the 5 force-components that form the web that powers each of the five forces of enterprise, which are summarized hereafter.

#1 The personnel’s performance potential

The purpose of the enterprise, the leadership, culture, agility, and? creativity.

#2.The power of the 5 capitals of the enterprise

The 5 capitals of the enterprise include: the organizational capital, the talent capital, the marketing capital, the life and time cycles, and the financial capital. All these tangible and intangible resources interact to power the business plans.

#3. The 5 practices of strategic management: the? SP.I.D.E.R.

Strategy and plans, investments, deployment, the execution, and the reviews.

#4. The external partners

The consumers, the suppliers, the allies and distributors, the authorities, and the shareholders.

#5. The products

The 5 product deliverables, the market recognized value, product economics.

The aforementioned framework of the 5 x 5 force-components provides transparency over the activities that are performed on the links of the 5 value-chains, each of them runs one of the 5 fundamental functions of the enterprise.

Transparency on the interactions at the different levels and in the different functions bring to the fore complex problems, and it helps people to solve them. Looking at the interactions of the sub-components enabled business-leaders to underscore their distinctive features, and to substantially improve their management.

The five forces of enterprise, their force-components, and their sub-components also help people to better understand each other, to better understand the issues, and thusly to be more cooperative,? be more creative, and to get more enjoyment out of their work.

The advocated EBS, “The Five Forces of Enterprise”, also helps business-leaders scale the proficiency of the organization, the proficiency of the work-assignments, and to envisage the next step.

THE PROFICIENCY OF THE ORGANIZATION

To scale the proficiency of the whole organization, “The Five Forces of Enterprise” shape the core of the management-system with the “organizational capital”, one of the five resources of the? enterprise. This force-component features 5 sub-components or the 5 “S”, namely: ?the strategic fundamentals, the spirit and the style of leadership, the systems of management, the structures of the organization, and the system technologies.

° The spirit and the style of leadership ensure the alignment of the 5 “S” at the core of the management-system, and their application throughout the workings of the enterprise. The leadership must also optimize the synergies between the human and the artificial intelligences.

The 5 “S”? that form the core of their management-system are one of the key resources of the enterprise because it shapes the uniqueness of the organization. It was inspired by Peters & Waterman’s 7S, which we have not found widely used. (7)

° The strategic fundamentals provide guidelines for the developing and for deploying the business-strategy. They synergize the culture-agility-creativity of the personnel with the development and with the deployment of the 5 processes that integrate the SP.I.D.E.R., our model of the strategic management.

° The systems of management feature agile management, the SP.I.D.E.R., and the systemic, synergistic, stimulating, simplicity, swiftness global perspectives.

Agile management enhances the whole organization by entrusting simple tasks to small, synergistic, and stimulated teams at the different levels and in the different functions.

The connectivity, the creativity, and the celerity of the organization are scaled by the interactions of the 5 functions of the enterprise, namely: the consumer value-chain, the providers value-chain, the distributors and allies value-chain, the authorities value-chain, and the shareholders. Business-leaders can monitor the value-added by the interactions of the value-chain step-by-step.

THE PROFICIENCY OF THE WORK ON ASSIGNMENTS

At the beginning of a new and important assignment the teams that need to collaborate on it should review together the 5 global perspectives, one of the elements featured by the systems of management, namely: the systemic, synergistic, stimulating, simplicity, and swiftness perspectives. This helps create a broad base of understanding among the participants of the issues and of their plans.

The systemic perspective may lead to ponder over some of the force-components and of their sub-components. Let us take a few examples.

Strategy drives success or just survival. Some of the best books on strategy and Osterwalder & Pigneur’s “Business Model Generation” do not feature culture in their index. (3) The teams working on reimagination and resetting strategy may want to look up “The Five Forces of Enterprise” section on cultures.

Firstly, Drucker has been misquoted as the author of “Culture eats strategy for breakfast”. Actually the culture can impact strategy in two ways. The culture can shape perceptions, and thusly it impact the development and the deployment of the strategy. Dr. Benjamin Tregoe’s “the driving force” can affect the way the leadership sees the enterprise’s powers and the potential of its products. So traditionally BMW focused on the pleasure of driving, Mercedes Benz on high-quality, and Volvo on safety. (8)

Secondly, if the purpose of the enterprise and if the strategy and plans are not consonant with the culture of the people, they may not identify with the top-leadership’s views and values, and they will just follow orders but without getting really involved in the process. As a result, the enterprise will miss the creativity of the crowds.

Let us take another example, the teams are looking at a closer cooperation with a key supplier. The agility of men, of management-systems, and of the means are key issue at times of sudden systemic shifts. So, they may want to compare the enterprise’s agility with the ones of the chosen external partner.

Last but not least, the customer satisfaction is the proof of the pudding. A systemic perspective underscores the interactions of the ?5 product-deliverables, and the discrepancies that may exist between the market-recognized value and the customer-recognized value.

THE NEXT STEP

The French philosopher René Descartes posted: “Too often we do not take our? train of thoughts to the terminal station, we stop way before”. And so, people often narrowly focus on the most striking issue or they envisage the business system in broad generalities, and they stop their train of thoughts before envisaging the complexity of the whole system.

“The Five Forces of Enterprise” is an EBS that helps business-leaders to take the organization to the next step, i.e. from a collection of separate parts to a complete and cohesive management-system. To this effect, rather than lecturing theories, the senior-leadership involves the people in implementing a set of actions such as outlined hereafter.

(a)? Agile management’s small teams synergize with other teams and such interactions can be very stimulating.

(b)? Agile teams interact with other teams in the same functional value-chain as well as with teams in other value-chains. This ?broadens people’s perspectives and performances, The company-wide utilization of new tools such as artificial intelligence can improve the commitment, the collaboration, and the creativity of the teams.

(c)? As outlined earlier, to improve the proficiency of the assigned work, teams finetune their thinking and their actions by looking into the interactions of the sub-components.

(d)? Strategic management requires systemic thinking, and the sequence of the 5 processes of the SP.I.D.E.R. get people at the different levels and in the different functions to interact and to contribute. Should new situations call for changes to the strategy and to the established plans, the people that participated in the planning process will be well equipped to contribute to required changes. In the book the table # 10 lays out the different factors that interact to create the business system.

(e)? The proficiency of the five forces of enterprise and their force-components can be periodically evaluated, and the progress needed to tackle new opportunities and threats can be planned. At the different levels and in the different functions their connectivity, their creativity, and their celerity can be evaluated by the business-leaders.

“The Five Forces of Enterprise”, the advocated EBS helps business-leaders to reflect, to reimagine, and to reset the five forces of enterprise in order to scale present performances, and to ensure that the enterprise’s fitness for a fast and fickle future.

BIBLIOGRAPHY

(1) Y. Morieux & P. Tollman ??Smart Simplicity?? 2016??????????????????????????????????

(2) S. Denning “Why Agile Needs to Take Over Management Itself” Forbes, 2022????????????????????????????????????????????????????????????????????????????????????????????????????????????????? ???????????????????????????????

(3) Osterwalder & Pigneur “Business Model Generation” Wiley 2010?????????????

(4) G. Probst A. Bassi “Tackling Complexity “? Greenleaf 2014??????????????????????????????????? ???????????????????????

(5) N. Linder & J. Frakers “A New Path to Understand Systems’ Thinking” SystemsThinker2022?????????????????????????????????????????????????????????????????????????????????? ???????

(6) W. A. Sussland “The Five Forces of Enterprise” Kindle 2023 (short link here: https://rb.gy/zxahxk)?????????????????? ?

(7) T. J. Peters & R. H. Waterman In Search of Excellence” Harper Row 1982??????????????????????????????????????????????????????????????????????????????????????????????????????????? ??????????????????????????????????

(8) B. Tregoe & J. W Zimmermann “Top Management Strategy” PRP 2008

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