Playing the game

When an investor is playing the game there are many considerations to make. Which game should be played? Is it a long game or a short game? The player might choose to pick up a Dice ??.

In this short lateral thought-safari, the Dice is a metaphor for a company.

For the investor some factors are more important than others, like current share-price and market-cap, a due-diligence to predict potential Earning Per Share (EPS) and future dividends. What is the potential shareholder’s value? Long story short: It comes down to return on investment (ROI).

When the investor pics up the Dice and become a shareholder, we know that the shareholders execute its power through AGM and select the Board of Directors – face ? of the Dice. The Dice will more or less constitute the following:

? The Board of Directors who is responsible for keeping the dice together by deciding the business purpose supported by a strategy and budget, which will act as the glue for the dice. They also hire the C-level executives to make sure the strategy is executed and to make the dice as strong as possible.

 ? Infrastructure and facilities. The business must have an infrastructure to operate from and in. Examples are the internet, factory, telecom, roads, ports, offices.

 ? Processes and value streams. All parts that support the business purpose. Examples are supply-chain, sales, marketing, storage, work in progress, communication.

 ? Workflow tools and resources. The moving parts that bring the processes into manifestation. Hardware, software, machine tools, ship, cars, robots etc. Anything you use to execute your job and create value.

 ? Product, Services, Delivery. Ideally the value created that customers are prepared to pay for.

 ? Customers and market. The defined target audience from where the business gets its revenue.

 But what about the core of the Dice? Is it hollow?

It is not hollow but can be shallow. Inside the Dice are values and culture which is brought to life by the people operating the 6 sides of the dice. You can also call this the essence of the company’s production system.

 What if the core is liquid?

If the strategy and execution have holes, good people and know-how can seep out. A lot of time and resources will be spent on stopping the draining and to get the holes and cracks fixed. To use another metaphor: firefighting. Is the cause of the liquidity that the Dice is dependent on and built around key people? Do their behaviour and conduct support the values of the company? What about rules, policies, politics, self-serving interests? Are there hierarchies, compartmentalisation and segregation so that the distance between upper management and the shop floor is big and lay fertile grounds for sub-cultures and high rate of attrition? You can make this list longer by adding any leadership issue.  

 But how do we make the core of the Dice more solid and sustainable?

What about filling the Dice with Kaizen and Lean? This will form a continuous improvement and value creation culture. It is independent of specific persons but are kept alive by the type of person – people that wants to make changes for the better. Kaizen and Lean outperforms competition and takes customer relations to a new level. It is a solid but elastic foundation on which to grow the dice from within and to improve its 6 faces and professionally develop its people.

This safari draws to an end and it leaves me with a final thought for investors planning to pick up a Dice:

 Choose carefully which values, culture and people you fill it with before you roll. And if the game is already on, remember that the reason for why traditional strategy planning fails 70% of the time is due to lack of alignment and commitment.

Or as @bobemiliani puts it so eloquently: It is a choice between Progress (Lean Strategy) or Status Quo (Classical Management).