Business Hierarchy of Needs® – Business ApplicationsDecember 12th, 2022 | RealizeS
In my recently released book: “Strategy Realized – The Business Hierarchy of Needs®”. a corporate success book, I talk extensively about change management and the application of a proven process for moving from a current business model to a future business model. While this model applies to the implementation of strategy for any business, at my consulting firm: Group50® Consulting, we apply the techniques from the book to every project we do, realizing hundreds of millions of dollars in savings for our clients. We find it very applicable to redesigning a company as a result of a merger, restructuring or Inflection Point. It is also applicable to getting a business start-up off the ground. In this post, I want to share with you excerpts from the book on these topics.
Mergers and Acquisitions
Mergers and acquisitions seldom deliver the added value contemplated in the deal justification. Several studies indicate that as many as 80% of mergers and acquisitions do not create the anticipated incremental value. The ineffective combination of different business strategies, cultures, people, markets, products, and operating systems are the prime contributors to this result. The Business Hierarchy of Needs® provides a framework for creating a synchronized approach to combining the entities, creating a Most Important Goal, getting agreement and alignment on clearly thought through strategies which in turn create one culture, while adding significantly more value.
There are times when even the best-laid plans go awry, and a business must be restructured. This is a strategy that should be driven by a Most Important Goal that measures the success of the restructuring effort. All elements of the Business Hierarchy of Needs® apply here. Level 2 plays an oversized role in this type of strategy because people are more affected by the restructuring strategy and are required to significantly change what they do. They need to make tough decisions on how the business will be reshaped.
Carve Outs and Business Start-up
Carve Outs and a business start-up create a brand-new entity that will have a unique Business Hierarchy of Needs®. In both cases, the new company will need a strong foundation to be successful. A carve out will be different from its former parent organization and will have unique needs. A business start-up will have unique needs because it never existed before. In both cases, a Most Important goal, strategic planning and strategic execution are critical to success. The Business Hierarchy of Needs® provides the change management framework that gives the new entity the ability to define itself, its value proposition, MIG, supporting strategies, systems, organizational structure, and the appropriate leadership management framework for implementing the plan.
An Inflection Point is where a company has outgrown its existing organizational structure and technology backbone and is beginning to see deteriorating business performance, as shown in the next figure. Sales slow, service levels deteriorate, and financial performance suffers. This usually happens when a company doubles in size and requires a redesign of the business model. The Business Hierarchy of Needs® once again is an extremely useful tool for plotting the future state of the company, positioning it to double again.
The above business strategies require a unique approach and a disciplined process for going from the current state to a future state and creating a unique corporate culture, one we call a “Culture of Strategic Execution”.
The entire process along with resources and checklists are included in “Strategy Realized – The Business Hierarchy of Needs® – Turning Strategy Into Results” for your use.
About the Author: Jim Gitney is the CEO and Founder of Group50® Consulting, and the author of “Strategy Realized – The Business Hierarchy of Needs®” which is a new corporate success book that summarizes a framework for creating a business that leverages topics in this article. (You can find out more about the book and acquire a copy by clicking on the image to the right).
Founded in 2004, Group50®consulting is focused on working with middle market companies to significantly improve their strategy execution and productivity by leveraging people, process and technology as part of a company’s strategic plan. We have done dozens of integrations, restructurings, business start-up projects and helped companies navigate through an inflection point. Group50® consists of consultants who have spent their careers in corporate America learning how to optimize businesses. We specialize in working with senior leaders to develop and implement strategies that accelerate top line and bottom-line performance.