5/16/2023 0 Comments Kiss principle![]() Now in each of these buckets there are only a few levers to pull. It's just not relevant to this discussion. I'm just wanting to avoid the folks who want to write in and tell me that I missed this financial strategy piece. Now if this sounds like MBA gobbledygook to you Don't worry about it. ![]() That's true but that becomes about what's known as financial strategy for this course we're focused on operational strategy in other words how do we maximize value through how we run the operations of the business. They will tell you that this isn't the complete story as there are what they will call balance sheet items that also affect valuation. So let me take a detour for folks who are accountants or business evaluators or acquisition folks or that kind of thing. So that yearly value divided by risk is what creates your valuation right. So what you're trying to do is determine what is the likelihood that that yearly value will continue or grow into the future. ![]() The strategies you use to deploy that you deploy to get them to pay and the strategies or tactics you deploy to control your costs should create this gap of yearly value and then you have to think OK so what is the likelihood that that value will continue or grow into the future. Now there's a gap between those two things. Then there's another bucket which is to control our costs. So you start with the first bucket which is get them to pay. So what we're trying to do is create value or valuation. Now you're going to overcomplicate it but again this is this is a very simple model that allows you to focus your thinking now. There are only three buckets of activity that will produce this value. Now sometimes you'll hear people talk about this as valuation and we'll talk more about that in a second. For the purposes of doing this in a business contacts we're focusing on the financial value. Remember I said at the beginning that business is about you know your personal success which comprises both personal value and financial value. We're trying to decide how your business will use its resources to create capture and sustain enduring financial value. Now the model of how to answer that question is also fairly simple. So for us the strategy is nothing more than the answer to the following question How do I deploy my scarce resources of Time Team and money to achieve a particular objective. Now for the purposes of this course we assume you have a business model and that you're operating. Now there are lots of definitions and the word is used at different levels of complexity from what is the fundamental business model you have down to what's the strategy to just find good people. So let's just start at a really basic level what is strategy. Now too many strategic plans go off the rails because they're just far too complicated. Therefore it is critical to keep it simple. See if strategy isn't executed it's really easy to blame the people and in fact that's what a lot of leaders do but really it's likely the strategy itself is the problem to be executed strategy must be understood. Here we're going to learn a little bit about what strategy actually means and we're going to use the guiding principle of Keep It Simple or the KISS principle. This video too in the high performance strategic planning course.
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