Almost everyone desires security, the natural reaction is to forecast and plan. Still, even with the best laid plans “shit will still happen”! We live in a chaotic World and might as well get used to it. The question is how to deal with uncertainty – is it better forecasts, budgets and plans, or is it better strategies, tactics, procedures and algorithms to deal with “shit” when it does happen.
I choose better strategies and tactics to deal with the consequences of “shit”. I do not have a crystal ball so I know that I cannot forecast with any accuracy – so why waste my time fine tuning forecasts and plans?
About Cause and Effect analysis to gain competitive advantage (the beginning!)
What does all this mean for our Business?
Every business has many policies, rules, common practices (the way we do business around here), culture and key performance indicators that are the things that should result in good positive bottom line results, hopefully better than our competitors’ results. Look around the business World – in many industries (maybe yours too) market shares are almost ‘locked in’ (they barely change from year to year) indicating (this is a cause and effect supposition) that all competitors are more or less the equal … why should your competitors suffer the hassle of switching to your product … they would gain no advantage by working with you.
In most industries it is difficult to gain a product advantage. If you do achieve an advantage competitors will soon copy with something very much the equivalent. If competitors generally copy any product innovation very quickly then, the way we do business is a possible source of significant advantage possibly even with advantages competitors find difficult to copy. Could the way we do business within an industry be a profitable area for a company to seek a significant or decisive competitive advantage?
Given your business and the situation in your industry might a rigorous cause and effect analysis lead to the direction of a solution – the direction to growth, market share gains and (much) better profitability? Could we build solutions, validated with rigorous cause and effect analysis, that we can forecast will (not might) have a strong positive effect on our bottom line? (NB. Cause and Effect analysis and prediction is an integral part of the scientific method.)
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