Blue Monarch Management

Author: Jeff Peterson

  • Policy Change in Transformation Initiatives

    Policy Change in Transformation Initiatives

    Driving an Aligned Organization

    Aligning an organization’s people, processes, and technologies is an essential principle to driving the highest sustainable value from the goods and services provided by that organization in the marketplace.

    We believe most rational companies know this.

    So where does good policy fit with this necessary alignment? And when a company decides to grow, evolve, or transform itself as part of its enterprise strategy, how could obsolete policies stall the transformation?

    Using a transformation as a catalyst for policy upgrades can yield potential benefits to an organization.

    What is Policy?

    Policies are part of a set of governing statements that define the principles, values, and intent of the organization as a foundation from decision-making and the allocation of resources. Policies are informed by a company’s strategy, by its risks, and by externally-imposed laws, regulations, standards, and social norms. Policies are most effective when they are:

    • Clear, accurate, and relevant.
    • Actively and consistently used as part of an effective governance and decision-making framework.
    • Understood and accessible by those who need to follow them.

    Common Issues

    From time to time, we review and develop policy for clients of various sizes and levels of maturity in private, public, and not-for-profit industries. Even before a company begins a transformational project, there are often issues with the policy environment. Here are some of the common ones.

    Policy Governance is Not mature

    The procedures to identify the need for new policies or changes to policies, develop annual work plans, research and develop policies, align them, and have them approved are often not well-established, leading to conflicting policies, siloes and fragmentation in the policy environment, and misalignment from the organization’s strategies and changes in outside environment.

    Not Effective – Not Followed – Lots of Exceptions

    Policies that do not reflect the needs and direction of the organization, or are not consistently applied, or are ignored without checks and balances can contribute to poor delivery of the organization’s core mission and drive other risks and potential penalties.

    Riddled with Procedural Language

    Often policies are written too prescriptively without room for interpretation and flexibility. Authors of policy are often tempted to include detailed procedural steps and standards which should be covered in other more tactical governance documents.

    Written in Legal-Speak / Language is too Heavy

    Lewis Eisen, lawyer, and author of Rules, (lewiseisen.com) is an emerging business partner of Blue Monarch Management. He is an international speaker and trains organizations in how to write respectful, progressive, clear, and useful policies. We had an opportunity to attend one of his training sessions at an information governance conference in San Diego late 2023, where he shared his best practices in removing ambiguity in policy language for organizations trying to drive improvements in acceptance and adoption of policies.  He upgraded our own thinking to separate policy development from policy communication. Previously, we had worked with our clients to develop simple, clear policies without ambiguity, legal speak, and passive language. He coached around separating the policy development work, which should be accurate, factual, and often tailored towards specialists in a particular topic (read: may be inherently complex) and the communication work to make policy direction accessible and understood by those who need to follow them.

    Policy Drift

    Thriving organizations are dynamic and may be working in hot industries that experience constant change and disruption from competitive pressures, investment, and regulations. It is natural for policies to drive out of alignment from the strategic direction a company is taking or needs to take. A strong policy governance capability or any company should include ongoing surveillance of drivers that might influence a need for new or changed policies. Many companies do not have this mature practice of ongoing policy review and surveillance, resulting in policies that do not reflect their current direction.

    Business Transformation: a Trigger for Policy Review

    When an organization plans a transformation initiative, the impacts from the changes will most certainly drive a need to review and upgrade policies.

    The Essence of a Business Transformation

    The essence of a business transformation is to change ‘what works needs to be done and why’. A transformational initiative is a strategic investment by an organization to build capacity, introduce new capabilities, drive out cost, reposition the company into new markets, manage an acquisition, or to take advantage of emerging technologies. Transformation initiatives are not always enterprise-wide, but they are, by design, intended to have a significant impact. When companies invest time, energy, funds, and skill into changing how work is done, those initiatives will create ripples across the company…and policies will certainly need to be changed.

    Benefits from Upgraded Policies

    When policies are upgraded during a transformational change initiative, companies may benefit from:

    • Easier and more complete adoption of the changes.
    • Better return on investment from the transformation initiative.
    • Sustained change without reverting back to ‘the old ways’.
    • Higher productivity and lower costs (by removing churn from policy related decisions)
    • Greater potential for the company to achieve its strategic goals.
    • Improved risk profile for the company.

    Jeff Peterson is the Founder and CEO of Blue Monarch Management and is a professional Management Consultant specializing in Strategy and Organizational Development for companies designing and driving transformational investments.

  • Painting Pictures, Telling Stories with Data

    Painting Pictures, Telling Stories with Data

    “Over the next two years, enterprise data is projected to increase at a 42.2% annual growth rate. Only 32% of data available to enterprises is put to work. The remaining 68% goes unleveraged.”

    These were critical findings in a seminal market report prepared by Seagate Technologies in 2020. Consider key global developments since the article was published. A global pandemic, prompting an acceleration in the development of technologies that change where and how people work and create value. Heightened focus on how products and services reach the market with disruptive investment in supply chains. Far more aggressive development in cyber security technologies to combat the exponentially increased threat of cyber attacks. And now, disruptive releases of world-changing artificial intelligence capabilities that are usable by everyday users. Political and sociocultural trends that have challenged basic definitions of ‘truth’, ‘facts’, and ‘evidence’ have heightened the importance of strong information governance and ‘informed decision-making’.

    To a Management Consulting firm deeply embedded in a Management Consulting industry, our livelihood is at risk because so much of what we do for our clients depends on the reliable and insightful interpretation and critical thought developed from data, reading, and research.  Colleagues in our industry have staunchly defended the relevance of Management Consultants as being relatively safe and inimitable because of our ability to develop critical assessment.

    But we are not so sure.

    In April of this year, Noor Gillani from Science Alert, summarized the opinions of five AI experts around whether AI could ever become as intelligent as humans. The consensus across the experts was that AI will achieve human level intelligence, reaching ‘artificial general intelligence’, and that much of what we once believed machines incapable of doing has been proven to be false. There are still significant questions around the potential capacity for creativity and emotional intelligence, but this year interestingly and to illustrate the point, AI and robots have been tapped for companionship to combat loneliness and mental health issues. In other emerging articles looking at the evolving ‘intelligence’ of AI, current models could meet or exceed average human IQ, with future generations potentially reaching much higher. What does this mean? In short, it means we are open to the possibility that everything we think we know or believe about ‘what AI can or will be able to do’ may be wrong. It also means we need to move quickly to build new pathways forward.

    How do we help?

    Significant global investment, inquiry, and early conversation are driving new regulations across parts of the world. We have an obligation to know the arguments, understand the ethics discussion, and to become comfortable with how to manage the technology-driven transformational changes that our clients take on as part of their pursuits for growth and development.

    As an advisory firm working with professional clients, we have long since understood the power and potential of data – but that data needs to be accessible, structured, managed, protected, interpreted, and developed for the company – and people yet have a significant role to play. Thriving businesses need to tap into the data they have and reimagine the data they need to accelerate the path to demonstrated wisdom. “Data is fairly worthless to most of us; it is the product of research or creation (such as writing), but it is not an adequate product for communicating. To have informational value, it must be organized, transformed, and presented in a way that gives it meaning.” (Shedroff, 1994).

    Our data and business analysis work powers the strategy development work and storytelling used by our advisors to drive complex change. Blue Monarch Management continues to pivot and invest in growth and development of professionals, partnerships, and capabilities along three intelligence dimensions: Business intelligence, Business Analytics, and Market Research & Competitive Intelligence.

    As one of our business analysts remarked, “BAs transform raw data into useful and actionable insights. We can transform numbers into images. But to get to there we first must work with our advisory team to understand the KPIs and metrics that will be meaningful to our clients. On that basis we extract the data and “clean” the data using such tools as PowerBi or Tableau. At all times, we recognize data’s intrinsic (face value and structured) and extrinsic (functionally useful) nature. This duality closely mirrors the business analyst’s approach to the client need vs that of the advisor – and both are required to shape a useful client deliverable.”

    The introduction of the Business Analyst role was a strategic move for us that goes back to our earliest planning days. The industry of management consulting has shifted such that large companies have brought strategists in-house – something that used to be the Consultant’s bread and butter offering. The dimensions of competition on which good strategy is developed have changed as well. To boost the quality, depth, and insight of our strategic advisory work, we have had to bolster our ability to conduct research and understand analytics and data. Management Consultants tell stories and use those stories to shape the business transformation narrative. Our BA team brings to our client work real depth and quality. And while it’s still early, our BAs have begun to strengthen our work in strategy and change by introducing data modeling, advanced analytics, and data visualization to our toolbox.

    Want to know more about how the power of information and automation can integrate with your organizational and leadership development? Why not contact us to start a conversation.

  • Tactical Cost Management

    Tactical Cost Management

    Effective management of total costs should be a top priority for any company, whether during periods with recessionary pressures or during times of growth and prosperity. When facing a crisis, companies can face hard decisions about how to manage through an emergency and set up for recovery, and often have little time to consider choices and develop options. In the months following the Covid-19 pandemic, global interest rates have risen at an alarming rate in response to inflationary pressures – impacting such elements as:

    • The ability to service debt.
    • The ease of acquiring, operating, and maintaining assets.
    • Access to stable and qualified labour.
    • Other resources required to operate a business.
    • A company’s free cash and access to working capital.

    Inflation and Market Uncertainty

    The Canadian monthly inflation rate peaked at 8.13% in June 2022 and has come down to 3.12% by October 2023 (ycharts.com, October 2023). In early October 2023, Bank of Canada Governor Nicolas Vincent noted the trend of businesses raising their pricing more frequently was likely contributing to higher-than-expected inflation and has the potential to drive a self-fulfilling prophecy of continued high inflation (CBC.ca, October 2023). The consequence – continued interest rate hikes by the Bank of Canada to combat inflation and drive towards a target of 2%. Current world events, the pandemic and recovery, and a period of heightened inflation and interest rates have influenced significant market disruption, which has impacted many businesses over the last few years.

    The Relationship Between Costs And Solvency

    How would you answer these questions?.

    1. What kind of business do you operate and how are your costs structured? Are they largely fixed, or do they fluctuate in response to your business activities?
    2. Do you feel your costs are high? How do they impact your cash outflows?
    3. What could you do if you had more free cash at the end of each month? How would you use it?

    While these questions may seem elementary, they are (or should be) part of a fundamental practice for companies of all sizes and levels of maturity. Smaller organizations often struggle because they don’t have the size or clout to negotiate favorable terms on agreements, and many have leaders who have not yet faced cost management decisions and pressures. Large, established enterprises often struggle with cost management – due to inefficiencies that have built up over time and deeply rooted inertia that prevent any easy fix.

    Cost Management and Competitive Advantage

    Understanding and effectively managing costs can create significant competitive advantages for companies of all sizes. Companies might:

    • Gain market share by offering their goods and services at a lower price than competitors.
    • Improve profitability and free cash by retaining more margin on each sale, allowing for reinvestment in the business.
    • Create the capacity for faster recovery from an emergent crisis.

    Minimizing vs. Optimizing costs

    While reducing costs may be advantageous for any business, we prefer a more nuanced optimization strategy rather than seeking the lowest cost position. Costs are required to generate value for a business and its customers. Driving out costs that lead to erosion of service or quality may impact growth potential, while optimizing a cost position for a given set of business requirements, risk appetite, and strategic goals may help a company to gain advantage.

    Tactics for Cost Management

    There are (cost effective) tactics any business can apply to better understand and reduce (or optimize) their costs. While not a complete list, these cost management tactics have proven to help organizations get a handle on their costs during times of crisis and improve profitability even during times of growth and stability. These tactics can be developed into programs, standard operating procedures, policies, and stand-alone projects without necessarily requiring expensive technology solutions.

    Our advisors can help you develop a better understanding of your total costs, how to manage them, and how to drive your business towards a more competitive and sustainable future.