Succeeding in a Complex World by Understanding the Connectivity Behind it

"While the amateurs concentrate on their side of the game board, the professionals are focused on building the connectivity of the entire board." - Anonymous

"Go is essentially a form of harmony. Go in the 21st century will have to be go of the 'harmony of the six points - the four quarters, the above and the below.' As in life we will need to view the whole rather than the part. Japanese go has focused too heavily on the local (joseki) rather than the whole for 300 years. The reason the Chinese and Koreans are overtaking the Japanese is that they are closer to achieving this whole-board view.  
- Go Seigen, 9p, 1994  http://gobase.org/reading/proverbs/

Achieving the whole-board view in the game of Go (Weiqi) is tasking enough. Performing it proficiently in our complex business world is the real challenge. 

Comments From The Compass Desk 
Understanding this unique quality of connectivity in any situation means having the actual skillset to recognize what sets of individual factors that are in play.

“These are the ways that successful strategists are victorious. They cannot be spoken or transmitted in advance. ... Before the confrontation, they resolve in their conference room that they will be victorious, have determined that the majority of factors are in their favor. Before the confrontation they resolve in their conference room that they will not be victorious, have determined a few factors are in their favor.

If those who find that the majority of factors favor them, will be victorious while those who have found few factors favor them will be defeated, what about someone who finds no factors in their favor?

When observing from this viewpoint, victory and defeat will be apparent.”

- Art of War 1 (Paraphrased from the Sawyer's translation

Some of those factors could be found in Sunzi's Art of War. Do you know each of those factors?  ... 

We will discuss the "importance of connectivity" in understanding the current situation and the next situation in a future post.  

A Perspective to Why U.S. Businesses are Being Destroyed Faster than They’re Being Created (Economist 05/14)

(Photo via Flickr user Boegh, used under a Creative Commons license)

Many weeks ago, an associate saw this article from  Economist.com on why U.S. businesses were being destroyed faster than they’re being created.  The report originated from the Brookings Institution.

There are many reasons why each business have failed.   Since no one has reported on it, we decided to do a script of questions.

Our initial script begins with these five questions:

• Did they ever assess their situation before starting the business?  
• Did they ever understand the number of quality competitors in their terrain?
• Did they ever compare and contrast the technical differences between them and the number of quality competitors?
• Did they ever presumed that the situation was going to be static?
• Were they ever prepared for any adjustments?

It is so easy to be distracted.  Magical thinking could only go far.  ... 

The graphics are from Washington Post.

A Question From the Compass Desk 
Based on your answers of the above questions, are you able to script a gameplan that would give you the advantage that is needed to thrive?   ... Before you can do that. you have to assess your situation.   ...   The essence of this practice is knowing what to assess in a daily base and what to assess in a weekly/monthly base.  

There is a process to it.  ... Do you  know it?  Before you can assess, you have to know your goals and your objectives? ...  It is that simple. 

Profiteering in the Competitive Economy: The Small Players Innovate. The Large Players Copy

Following is a post on Amazon that we forgot to post in 2012.  ... I decided to update it with a English twist to it

Jeff Bezo  of Amazon understood the connectivity behind the configuration of his targeted marketplace from different perspectives while being mindfully aware of the constant motion of the five competitive forces. 

By viewing the PESTO factors (and other strategic factors) behind each competitive force, one could determine the TOWS of each group.  We presumed that you do know how to do that.

Before Amazon and Walmart delivered their concept of the locker, Buffer Box originated the idea. This was not much of a innovation for Buffer Box, if they cannot patent it.  

Being the leading edge in any market terrain does not mean that one has the advantage of maintaining the market lead. The ultra specifics of a complex  situation determine what are the chances of succeeding.

Copyright: 2008-2013 © Compass360 Consulting

Copying, posting and reproduction in any form (without prior consent) is an infringement of copyright.
The Compass Chart 

By viewing the Big Tangible Picture (BTP) in reference to its configuration the connections of the various situations that is embedded with the Big Tangible Picture, the adjustment points by connecting the leadership level and the operational level to it, Bezo's mindfully knew what target to focus on and how to profit through various adjustment points.  

By connecting the operational factors of his competitive dispositions and the operational factors of the market terrain, he knew where was the opportunity!?  .. 

Beside having one of the largest web emporium, he connected his "Amazon Locker" concept to the possibility of improving the "Amazon" service.  Click here for the latest info on the Amazon's locker.  They are now available in the United Kingdom. 


Reflections From The Compass Desk
Those who are competing against some of these "new  generation" companies, must remember how aggressively smart and resourceful they are.  

Creating a leading edge means building an actual intellectual property that could be legally protected.  Owning a tangible patent is how one thrives in the information economy. .

Minor Jottings 
To those who compete against "old school" companies, these people are so paper-driven that innovation becomes a rarity.  They sit and wait for the other competitive forces to err in a macro way, before pursuing that niche.

Interestingly some of the people in their market research department barely do any valid research. While collecting data from other sources, they barely verify and validate the information. It is so pathetic. 

In a future post, we will review the other Amazon moves through the Compass Chart. 

Gone Fishing (from the View of Jiang Tai Gong)

From our observations, the successful fishermen (or strategists) have regularly decided on what bodies of water to fish from and what categories of fishes that they wanted to catch while knowing the risk benefits and the risk consequences of their strategic choices before ever making their next move. 

This unique skill can be achieved by knowing the configuration of their Big Tangible Picture (BTP). The possession of this strategic advantage enables one to get to the projected endpoint with minimum resistance (i.e., near-zero emotional inertia, minimal encounter with any on-coming entropy, etc.) .  ... 

You do know how to read the configuration of your Big Tangible Picture (BTP). Do you?

To really understand the configuration of their Big Tangible Picture, click here to understand who is Jiang Tai Gong. In China, he was known as "The Father of Strategic Studies."

Other Thoughts
If you are burned out and looking for a new view,then leave your desk. Visit a local fishing hole and do the obvious.  ...  Relax and center yourself.   ... You can also practice your Baguazhang set.  Once "centerness" is achieved, scripting your gameplan is the next step.

Comments From the Compass Desk
We have been busy with our various Compass projects and our Compass Scripting project.  Thanks for coming by.  We will be updating the blog soon.   Have a good Wednesday.

# # #

Strategizing From The View of Lloyd Blankfein

updated at 18:18 hrs

It is always interesting to listen and learn how other strategists manage their major strategic decisions.

Lloyd Blankfein, Goldman’s current chief executive, loves to tell people that he spends “98 percent of my time thinking about 2 percent probabilities."   ... It becomes the alpha priority especially in the area of managing risk in different situations. 

In your competitive terrain, where do you think that 2% is located at ?

Do you think that you can capitalize on the 2% before your competition can?

• Source: Dao of Strategy

###

Q: Why do you think the 2% is focused on?
A: The 2% depicts whether the best case or the worst case scenario would happen at all.

                                                             ###

The Charlie Rose View
This past Tuesday night, I saw a superb Charlie Rose interview with Lloyd Blankfein.   It revealed the strategic mindset of Mr. Blankfein in regards to how he strategizes from a top-bottom view..

# From Businessinsider.com

Lloyd Blankfein called himself "a highly functional paranoid" on Charlie Rose last night.   

"...when the phone rings too late at night or too early in the morning I'm going, "Oh, my God, what happened?"

He continued: "...I spend about -- I have the unhappy life of having to spend about 98 percent of my time worried about the 2 percent worst contingencies." 

Here's a partial transcript: 

...

Lloyd Blankfein: Well, I'm in the risk management business, so I don't take it for granted that I can see behind -- I don't think I can see four inches into the future.  I'd say that most of my --

Charlie Rose: [laughs] Yeah, but your firm has a reputation of being pretty good at understanding the future and being able to make some analysis as to about what risks to take.

Lloyd Blankfein: Well, I'll confess to you that what I think we aspire to is less foresee the future and more be a great contingency planner because -- and sometimes you contingency plan really well and you can respond very fast to what's happening because you thought through all the possibilities, you can get off the mark so quickly it looks like you false started, it looks like you anticipated the start when all you've really done was listen so closely and knew what you were going to do that you got off the mark quickly.  I think it's hard enough to -- I think it's hard enough to predict the present.  You know, think about it, perspective, it's very hard to step out of your context and see what is happening.  I have views about the future but I will tell you we're not in the – you wouldn't be a very good risk manager if you let what you think was going to happen have too great an influence on what you plan for and protect it against.  What we really do is we really contingency plan, what might happen, what could happen.

Charlie Rose: What is your core competence?

Lloyd Blankfein: Personally?

Charlie Rose: Yes.

Lloyd Blankfein: You know, I think I am -- I think I have -- I am a highly functional paranoid.

Charlie Rose:[laughs]

Lloyd Blankfein: And if I'm -- if I've taken some -- if I've overstated [unintelligible] highly functional part, I'm sure I'm a paranoid.

Charlie Rose: [laughs] Paranoid about what?

Lloyd Blankfein: Well, I have to worry about stuff, you know, every -- listen, when the phone rings too late at night or too early in the morning I'm going, "Oh, my God, what happened?"

Charlie Rose: "I don't want to answer it."

Lloyd Blankfein: "What is somebody --" no, I have to answer. And, in fact, if it stopped ringing I'd call everybody I knew at work to find out what I missed.

Charlie Rose: [laughs]

Lloyd Blankfein: No, I'm -- you know, I spend about -- I have the unhappy life of having to spend about 98 percent of my time worried about the 2 percent worst contingencies.

Perhaps that's why sometimes he prays for a rainy weekend so he can just lie on the couch.

• Source: Businessinsider.com...

Comments From The Compass Desk
There are many ways to perform scenario modeling. I preferred to use the "Temple Victory" process.

“Before the contest, the successful strategists resolve in their operations room (temple) that they will be victorious, have determined that the majority of factors are in their favor. … If those who find that the majority of factors favor them, will be victorious.  … When observing from this viewpoint, victory and defeat will be apparent.” 

- Art of War 1 (Paraphrased from the Sawyer's translation) 

Is it that simple?

The real challenge is knowing what factors are in play and the mathematics behind it.  ...

The Li Quan Perspective

"Those who excel in warfare contend for advantage with others only after determining through temple calculations that they will be successful. Attacking the rebellious and embracing the distant, toppling the lost and solidifying the extant and uniting the weak and attacking the benighted are all manifestations.  The interior and exterior becoming estranged, as in the case of the Shang and Chou armies, is what is referred to as having determined victory through temple calculations before engaging  in combat.  
According to T'ai-yi Tun-chia assessment method, anything above sixty a majority, anything below sixty is  a minority.  ... In all these  cases, victory and defeat are easily seen. "   
- Li Quan's  T'ai-pai Yin-ching

Based on the "completeness" of one's assessment, the successful strategists determined the strategic efficiency of their situation and decides whether it is possible to prevail in any specific contest.

#  #  #

Succeeding Through Mindful Assessing

updated at 10:10

About a week ago, an associate of ours did a presentation on the importance of assessing at a local MBA school.

The presentation covered an assortment of points while discussing the basics of assessing a situation from the perspective of Sunzi's Art of War.


Following is an abridged listing of those points

• The Basics of Assess, Position and Influence 
• Why Strategy Fails
• The Fundamental of Strategy
• Strategizing from the Perspective of Sunzi
• How to Read the Big Tangible Picture in terms of the Global Information Economy
• The Misunderstanding of One's Goal and their Surroundings
• Assessing the Competition
• Recognizing the Influences
• Knowing the Degree of Influences
• Identifying the Positive and Negative Opportunities
• The Outcome of a Good Assessment
• Assessing Strategically
• Lead Strategically
• What is Strategic Power
• Strategic Power = Strategic Effectiveness
• Strategic Effectiveness: First Move Advantage
• The Abstract of the Means
• The Compass Advantage
• The Probable Weaknesses
• The Probable Solutions
• The Compass Trifecta.

Because of the expansiveness and the complexity of this subject, our associate had to briefly cover the numerous particulars within 60 minutes.  

Side Note: One day, he will upload his presentation cache to this blog.

Throughout the presentation, the importance of mindful assessment was emphasized. 

The Significance of Mindful Assessment in Competition
In a situation where a unknown competitor (aka. the Dark Horse) who has minimum amount of resources, competes against well-positioned competitors who has greater resources.  He has a "longshot" in securing a comfortable competing position in that marketplace.

Theoretically, the favored might occasionally take things for granted, decided to stay efficient and wait for the competition to make the first err before capitalizing on it.

In some circumstances, the Dark Horse might only get one opportunity to gain momentum and prevail. 

Regardless of his goal and objectives, he must do more than to produce a product and sell.

The Goal and the Process
He/she has to mindfully decide whether to surpass the competition through the choice of strategic efficiency or innovation by estimating their chances of prevailing through the weighting and the balancing of the various strategic and tactical factors.

To profit from this sole opportunity, he/she has to mindfully assess diligently, position properly and influence with a greater focus on precision.

Whether the class completely learned something from the gist of that point, is a different story.  

Mindful Assessment 
This skill begins by knowing how to center oneself. Once that is achieved, the budding strategist might start to look at things in terms of pacing, obvious/non-obvious, order/disorder and so forth.

This strategic phrase enables one to viewed their terrain and beyond in terms of opportunity and timing.

At some point of time, we will discuss more on this crucial matter. Those who are martial art players, we highly suggested them to visit Cook Ding's Kitchen web site. They specialized in the training of that unique skill.

Afterthoughts 
He wished to thank the school and that class for the opportunity to offer his strategic view on the importance of assessing.

Comments From the Compass Desk
In a society of "displayed predictability", one must understand the significance of learning the approach to assess change and having the foundation to capitalize on it. 

Learning how to take time to assess "The Big Tangible Picture" and position oneself in an equal advantage situation is always the difficult challenge for most people.

Those who could mindfully assess their terrain and beyond while staying focused on their current objective, has a strategic advantage of staying ahead of the curve.

# # # 

Non-American Software Companies Profiting and Succeeding in the Global Information Economy

Presently, there are many non-american companies who are profiting and succeeding in the information economy.

Following are some of these companies:

• Kaspersky Labs (a Russia-based anti-virus software company);
• AVG (an anti-virus software company that is located in the Netherlands); 
• TrendMicro (an anti-virus software company that is located in Japan);
• Opera Software (a multi-facet web browser company that is located in Norway);  
• Startmail (a e-mail company that is located in Netherlands); and 
• Spotify (A web music company that is located in Sweden and United Kingdom)

Click here on an interesting item where Zendesk, a U.S. cloud software company purchases Zopim, an Asian company for their live chat platform.

No Monopoly on Innovation
The above list of companies do not possess an absolute monopoly in brains and innovation. Creativity originates within the political-social culture of the project terrain and the experience of the implementers.  

While the performers and the producers within each project terrain come and go, the maintaining of the culture of strategic innovation is the principal challenge for most companies. 

The Focus Point
In our ever-evolving global economy, the only color that counts is the color of money or whatever the hot commodity becomes the flavor of the day.

Comments From the Compass Desk
We should always mindfully practice the art of assessing a situation while never underestimate anyone or any group in the information economy. 

The possession of "The Will to Grind and Persist" usually enables someone or some group could succeed, especially in a chaotic and grueling interval. 

In the fast game of product development, doing it now and optimizing later is the way how of these start up companies survive. (The listed companies are not start ups)

While technology is a great democratizer in the information economy, the resources sector (the energy companies, the banks and the basic commodities companies) still rule the grand order of our global information economy.

Dr. Covey's Perspective on Moral Compassing

Moral Compassing 

When managing in the wilderness of the changing times, a map is of limited worth. What's needed is a moral compass. When I was in New York recently, I witnessed a mugging skillfully executed by a street gang. I'm sure that the members of this gang have their street maps, their common values - the highest value being, don't fink or squeal on each other, be true and loyal to each other-but this value, as it's interpreted and practiced by this gang, does not represent "true north" - the magnetic principle of respect for people and property. They lacked an internal moral compass. Principles are like a compass. A compass has a true north that is objective and external, that reflects natural laws or principles, as opposed to values which are subjective and internal. Because the compass represents the eternal verities of life, we must develop our value system with deep respect for "true north" principles.

As Cecil B. deMille said about the principles in his movie, The Ten Commandments, "It is impossible for us to break the law. We can only break ourselves against the law."

Principles are proven, enduring guidelines for human conduct. Certain principles govern human effectiveness. The six major world religions all teach the same basic core beliefs - such principles as "you reap what you sow" and "actions are more important than words." I find global consensus around what "true north" principles are. These are not difficult to detect. They are objective, basic, unarguable: "You can't have trust without being trustworthy" and "You can't talk yourself out of a problem you behave yourself into."

There is little disagreement in what the constitutional principles of a company should be when enough people get together. I find a universal belief in: fairness, kindness, dignity, charity, integrity, honesty, quality, service, and patience.

Consider the absurdity of trying to live a life or run a business based on the opposites. I doubt that anyone would seriously consider unfairness, deceit, baseness, uselessness, mediocrity, or degradation to be a solid foundation for lasting happiness and success.

People may argue about how these principles are to be defined, interpreted and applied in real-life situations, but they generally agree about their intrinsic merit. They may not live in total harmony with them, but they believe in them. And, they want to be managed by them. They want to be evaluated by "laws" in the social and economic dimensions that are just as real, just as unchanging and unarguable, as laws such as gravity are in the physical dimension.

In any serious study of history - be it national or corporate - the reality and verity of such principles become obvious. These principles surface time and again, and the degree to which people in a society recognize and live in harmony with them moves them toward either survival and stability or disintegration and destruction.

In a talk show interview, I was once asked if Hitler was principal-centered. "No," I said, "but he was value-driven. One of his governing values was to unify Germany. But he violated compass principles and suffered the natural consequences. And the consequences were momentous - the dislocation of the entire world for years."

In dealing with self-evident, natural laws, we can choose either to manage in harmony with them or to challenge them by working some other way. Just as the laws are fixed, so too are the consequences. In my seminars, I ask audiences, "When you think of your personal values, how do you think?" Typically, people focus on what they want. I then ask them, "When you think of principles, how do you think?" They are more oriented toward objective law - listening to conscious, tapping into eternal verities. Principles are not values. The German Nazis, like the street gang members, shared values, but these violated basic principles.

Values are maps. Principles are territories. And the maps are not the territories; they are only subjective attempts to describe or represent the territory. The more closely our maps are aligned with correct principles - with the realties of the territory, with things as they are - the more accurate and useful they will be. Correct maps will impact our effectiveness far more than our efforts to change attitudes and behaviors. However, when the territory is constantly changing, when the markets are constantly shifting, any map is soon obsolete.

A Compass for the Times:
In today's world, what's needed is a compass. A compass consists of a magnetic needle swinging freely and pointing to magnetic north. It's also a mariner's instrument for directing or ascertaining the course of ships at sea as well as an instrument for drawing circles and taking measurements. The word compass may also refer to the reach, extent, limit or boundary of a space or time; a course, circuit or range; an intent, purpose or design; an understanding or comprehension. All of these connotations enrich the meaning of the metaphor.

Why is a compass better than a map in today's business world? I see several compelling reasons why the compass is so invaluable to corporate leaders:  The compass orients people to the coordinates and indicates a course or direction even in forests, deserts, seas and open, unsettled terrain. As the territory changes, the map becomes obsolete; in times of rapid change, a map may be dated and inaccurate by the time it's printed. Inaccurate maps are a frustration for people who are trying to find their way or navigate territory.

Many executives are pioneering, managing in uncharted waters or wilderness, and no existing map accurately describes the territory. To get anywhere very fast, we need refined processes and clear channels of production and distribution (freeways), and to find or create freeways in the map provides description, but the compass provides more vision and direction.

An accurate map is a good management tool, but a compass is a leadership and an empowerment tool. People who have been using maps for many years to find their way and maintain a sense of perspective and direction should realize that their maps may be useless in the current maze and wilderness of management. My recommendation is that you exchange your map for a compass and train yourself and your people how to navigate by a compass calibrated to a set of fixed, true north principles and natural laws.

Strategic Orientation:
Map vs. compass orientation is an important strategic issue, as reflected in the statement by Mr. Matsushitu, president of the Japan's giant consumer electronic company: "We are going to win and the industrial West is going to lose because the reasons for your failure are within yourselves: for you, the essence of management is to get the ideas out of the heads of the bosses into the hands of labor." The important thing here is the stated reason for our "failure." We are locked into certain mindsets or paradigms, locked into management by maps, locked into an old model of leadership where the experts at the top decide the objectives, methods, and means.

This old strategic planning model is obsolete. It's a road map. It calls for people at the top to exercise their experience, expertise, wisdom and judgment and set 10-year strategic plans - only to find that the plans are worthless within 18 months. In the new environment, with speed to market timetables of 18 months instead of five years, plans become obsolete fast.

Peter Drucker has said: "Plans are worthless, but planning is invaluable." And if our planning is centered on an overall purpose or vision and on a commitment to a set of principles, then the people who are closest to the action in the wilderness can use that compass and their own expertise and judgment to make decisions and take actions. In effect, each person may have his or her own compass; each may be empowered to decide objectives and make plans that reflect the realities of the new market.

Principles are not practices. Practices are specific activities or actions that work in one circumstance but not necessarily in another. If you manage by practices and lead by policies, your people don't have to be the experts; they don't have to exercise judgment, because all of the judgment and wisdom is provided them in the form of rules and regulations.

If you focus on principles, you empower everyone who understands those principles to act without constant monitoring, evaluating, correcting or controlling. Principles have universal application. And when these are internalized into habits, they empower people to create a wide variety of practices to deal with different situation.

Leading by principles, as opposed to practices, requires a different kind of training, perhaps even more training, but the payoff is more expertise, creativity, and shared responsibility at all levels of the organization.

If you train people in the practices of customer service, you will get a degree of customer service, but the service will break down whenever customers present a special case or problem because in doing so they short-circuit the Standard Operating Procedure system.

Before people will consistently act on the principle of customer service, they need to adopt a new mindset. In most cases, they need to be trained - using cases, role plays, simulations and some on-the-job coaching - to be sure they understand the principle and how it is applied on the job.

With the Compass, We Can Win:
"A compass in every pocket" is better than "a chicken in every pot" or a car in every garage.

The president of a major corporation recently asked me to meet with him and his management team. He said that they were all too concerned with reserving their own management style. He said that the corporate mission statement had no impact on their style. These executives felt that the mission was for the people "out there" who were subject to the law, but that they were above the law. The idea of moral compassing is unsettling to people who think they are above the law. Because the constitution, based on principles, is the law - it governs everybody, including the president. It places responsibility on individuals to examine their lives and determine if they are willing to live by it.

All Are Accountable to the Laws and Principles:
I'm familiar with several poignant examples of major U.S. corporations telling their consultants, "We can't continue to do market feasibility studies and strategic studies independent of our culture and people." These executives understand what Michael Porter has said: "A implementation with B strategy is better than A strategy with B implementation.

We must deal with people/culture issues to improve the implementation of strategy and to achieve corporate integrity. We must be willing to go through a constitutional convention, if not a revolutionary war, to get the issues out on the table, deal with them, and get deep buy-in on the decisions. That won't happen without some blood, sweat, and tears.

Ultimately, the successful implementation of any strategy hinges on the integrity people have to the governing principles and on their ability to apply those principles in any situation using their own moral compass.

Dr. Stephen R. Covey

Source: Between the Radials