bizzXceleration: Performance, Value and Profit

 Here we continue building, categorizing and summarizing the Business Analysis Toolkit/Dashboards by taking a deeper dive on certain key Industries. In our view to understand how a particular enterprise is going to perform one needs to understand its' context - the environment and ecology in which it lives. On the broadest level that is the geo-political environment - think of it as the equivalent of the climate, weather, terrain and so forth.

Then there are the broad Economic trends and condition which define the ecology within which it must function. A set of challenges which are usually shared by all firms within a particular industry.

And there are always many characteristics common to all firms within an industry. For insiders there will be huge differences in individual companies. Yet, in our experience, firms in a particular industry have more in common than their differences; something they are usually often not willing to admit publicly. Yet something they all recognize and deal with - after all, otherwise there wouldn't be industry conferences would there ? Years ago I got involved with the periphery of IBM's efforts to establish a common reference framework for all its' manufacturing operations. This took years of heavy investment in the large teams. And one of the biggest barriers they faced was the argument of every division and every plant that they were different. Yet, despite stubborn opposition, the central team managed to hammer out a common, shared process model of the general manufacturing enterprise. A model which we then proceeded to test across many other manufacturing industries and sectors. We mirrored and replicated that experience across many other industries as well including Retail, Distribution, Transportation, Finance and Healthcare.

What we found was that there was/is/will be a commonality of approximately 80% in processes across an industry. And that the differences usually lay, or should lay, at the detail level. Yet at the same time those processes were vastly different in name, structure, organization, staffing, etc. So one can't blindly impose the common framework on each firm. Rather the common framework provides a template or blueprint to use as a starting point for analysis, customization and configuration.

It also and most importantly provided a blueprint of things that should be being done even when they weren't. And that was the most telling finding of all. In fact what we found was that there were a lot of innovative ideas that carried, at least potentially, across industries. And offered major new sources of innovation and advantage. Just as one example the Airline industry built its' business models around a process called "Yield Management" - getting the last marginal dollar possible for the last marginal seat. Well a manufacturer couldn't implement Yield Management the same way that an airline could because the products were so different. But the underlying enabling processes required of market analysis, demand forecasting, adaptive pricing and customizing product mix and availability to narrower markets did apply. Ditto for retailers.

So when we analyze industries in our posts this is the underlying approach that's built into our discussions.

1) Industries share a common set of problems and challenges.

2) Industries share a common framework or blueprint that defines the collective best practices and "to-be" vision of the things they should be doing.

3) That common baseline can be used to evaluate the industry as a whole and individual players within the industry. Further elements of that baseline are "sharable" across industries; or can at least be used to analyze opportunities and risks.

4) The industry also shares a common ecology in terms of industry structure and dynamics that defines the shared environment different firms must compete in.

5) The ideal enterprise and the industry ecology are dynamic, constantly evolving and are inter-dependent.

6) By understanding the current and evolving status and characteristics of the enterprise and the industry one can anticipate many of the pressures, opportunities and future paths of both an industry and a particular firm.

We'll have to see how that holds up as time goes on but in the tables after the break we've listed and commented on the prior posts on several key industries. Hopefully this serves a couple of purposes. First, if you're interested in tracking down some ways of analyzing a particular industry this should make it easier. Second it's a catalog of industry analysis tools, approaches, readings and other resources. We hope you find it useful and valuable.

Below you'll find the pointers to the prior posts on Airlines, Autos, Retail, Oil/Energy and Finance Industries. We will point out that the headlines this week and last are strangely congruent with the discussions and guesstimations in these prios however. In other words, not to put to fine a point on it, the analysis seems to be holding up reasonably well so far. Which may argue that there's something to the approach, perhaps ?