10 Corporate Check-up Questions - Management Questions

Are we fit to fight? Before even thinking about engaging in war, it is safe to wonder whether one is fit to fight. Companies faring worst in the boom-bust of the 1990s were those with high debt levels and/or over-capacity. So, the first question is: have we cleaned our house sufficiently structurally to be fit to fight—no more overweight soldiers, no more obsolete gear, so to speak. As highlighted by the often-quoted General Carl von Clausewitz (1780–1831), a commander’s knowledge of the strengths, characters and capabilities of the people as well as the resources at his disposal is of utmost importance. Only by knowing this will he be able to understand how they will perform in various conditions. In business terms, this is about factors such as the health of the balance sheet, the efficient use of capital, the leanness of overheads and the complexity of the product and brand portfolio. In modern business, as in war, there seem to be times to fight and times to consolidate.
Are we fighting in the right arena? The fundamental strategic question is whether we are fighting in the right arena. Only when we have defined where we will fight can we know whether we are fighting against the right enemy, for the right cause and with the right strategy. This holds true for business as for war. Among the most prominent battlefield leaders to have understood this to its full extent was Alexander the Great (356–323 BC). He showed a remarkable understanding of the two most critical elements of success by always trying to determine the place and time of the battles he had to fight, thus altering the odds to his benefit well before he went into combat.
Which new fronts shall we open? Standing still is rarely an option, since competitors are all too eager to encroach on your terrain. Even though one may have achieved an important victory on one battlefield, one should not yield to the temptation of assuming that the final battle has been fought. As Napoleon Bonaparte (1769–1821) is quoted as saying: “The most dangerous moment comes with victory.” Continuously breaking out and capturing new ground is imperative to winning the war. This is where innovation strategy comes into play. Innovation is about being sustainably smarter and faster than competitors in chosen areas. It is about using the right weapons to hit the target, time after time.

The key question is: how can we pull these moves off profitably? What it takes is to understand how customer demands along the value chain are likely to evolve or can be influenced; to define a development path for product and technology platforms from which a multitude of new value propositions can be drawn economically; and to make a plan that dynamically synchronizes potential technology developments with emerging market opportunities.
With which allies shall we go into combat? Alliances are as old as war itself. From the early days of mankind, gathering coalition partners has had a strong influence on the progress of a war. Indeed, as illustrated by such examples as the conflicts of the Athenian and Spartan coalitions in 460 BC, war often has not been one party against another but a combat between coalitions. Parties have joined forces for a variety of reasons: to combine sheer manpower, leverage the other’s infrastructure, discourage a strike against one of them by a third party, preempt one of the parties from joining the enemy, co-finance the effort, obtain privileged access to the enemy’s citizens, demonstrate the war’s good cause, set up a joint weapons program, etc.

What’s new, however, is that partnering is evolving from announcing strategic partnerships to pursuing a partnering strategy. Partnering becomes a competence in its own right.
How do we win the peace? Winning the war is one thing. Winning the peace afterwards is another – and ultimately the only thing that counts. Again, one may draw on Alexander the Great to illustrate this point in a historical context. Alexander, being taught by Aristotle, clearly understood that, in order to build an empire, it is necessary to demonstrate respect to former enemies and to convince the population that the new reign is just by showing nobility rather than vindictiveness.

In business terms, it’s about customer strategy and management. It’s about convincing customers to abandon old loyalties and buy your product or service instead. It’s about knowing your customers so that you understand their desires and frustrations, creating emotional bonds so that customers will spread the word and convince others to do as they do: buy your product. It’s about broadcasting consistent messages and capturing the largest share-of-voice, and about creating a unique combination of features and pricing it such that your product is irresistible—without losing your shirt.
Do we have the right intelligence? Deploying intelligence agents, both before and during hostilities, in hot as well as in cold wars, is a practice of all times: putting the pieces together, seeing patterns, interpreting the signals and acting upon them. Battlefield control relies heavily on the adequacy and timeliness of information concerning the status of the actions demanded as well as the level of their execution. Most of the great battlefield strategists, including Napoleon Bonaparte, understood that the success of one tactical move ultimately depends on the correct and timely execution of the ones previously ordered.

In business terms, we talk not only about well-known practices such as market and competitor intelligence but also about timely identification of topics of strategic relevance to the firm and about adequate knowledge-management support. The strategic value of knowledge management lies in the ability to respond to future events through the availability of appropriate knowledge. An effective knowledge-management approach copes with four dimensions. First, it establishes what is business-critical to know and defines a meaningful structure for the knowledge. Second, it puts into place a systematic process for creating, capturing, codifying, storing, distributing and using knowledge. Third, it overcomes behavioral barriers to knowledge transfer and sharing. Fourth, it provides for effective media and IT for knowledge transfer.
Do we have real-time control of the battlefield? War pigeons have long been replaced as a vehicle for sending information back and forth from one level of command to the next over long distances. What has not changed, however, are more subtle forms of control such as: sensing and influencing the mood of the folks back home; keeping the anti-war pressure groups at bay; using embedded journalists to shape media coverage; detecting and counteracting risks of desertion; preventing and punishing abuse of citizens and war crimes by soldiers or commanders; holding out the prospect of medals and promotions; etc.

In business-speak, the above translates as follows: corporate governance and contented shareholders; corporate social responsibility; public affairs; preventing poaching of prized staff by competitors; preventing dishonest sales practices and corporate fraud; maintaining balanced scorecards and performance management systems; etc. Indeed, especially in large companies, the psychological and social distances between different stakeholders and units can be great.
Do we have well organized and motivated troops? In the Middle Ages iron discipline and unswerving loyalty may have been sufficient to keep the soldiers marching in unison but, as Niccolò Machiavelli (1469–1527) pointed out, when there is a substantial deployment of mercenaries who have joined up for monetary reasons, achieving that unison is a task not to be underestimated. These days, both organizing and motivating the troops has become even more challenging. In today’s companies, the challenge is to reconcile the potentially conflicting objectives of “innovate and grow” and “improve efficiency and perform”. A smartly designed organization succeeds in doing so.

Smart organization design considers four elements. First, there is governance, which addresses the overall organizational architecture, the management councils, the key decision processes and the senior positions. Second, there are the stable structures: the formal hierarchical tree (be it organized by product, customer segment, function, or geography) and the corporate center. Third, there are the lateral linkages to integrate the branches of the stable structures and make them more flexible (shared service centers, communities of practice, etc.), whether internally within the company or with outside partners. Fourth, there is the sustainability of the organization as fashioned by its people, their competencies and their behavior.
Do we have effective sustenance processes? One aspect of warfare that may not be spectacular but can decide its outcome is the effectiveness of the sustenance processes: feeding the soldiers, supplying the kerosene, treating the wounded, etc. These processes often occur behind the scenes—and are sometimes outsourced—but are an essential requirement to keep the organism going. As Frederick the Great (1712–1786) instructed his generals: “Without supplies no army is brave”.

The same applies to companies. Paying customers visits, replenishing stocks, assembling widgets, handling customer complaints: these may be routine tasks, but flawless execution is crucial. No one notices when everything works as it should, but lo and behold when the slightest error occurs.
Can we afford to fight financially? Sufficient financing of campaigns has always proven to be of central importance to the chances of success. More than once history has proven that the one best able to find the funds to pay his army is surest of success. Likewise, taking account of the unexpected in the planning process has proven to be wise: as many a besieger had to learn the hard way, a siege is far less resource intensive for the defender than for the besieger.

Obviously, business is not just about managing cash flows but also about creating value. And that brings us back to the first question—are we fit to fight?—and the subsequent ones about strategy and organization. To ensure smart growth, all 10 questions should be addressed in parallel. And some of the answers to one question may also apply to others.