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Strategy Dynamics Course - Class 6 – Resource development

NOTE: The frameworks in this class can be applied on their own, as well as being used as part of a more complete business model.

This class explains how resources often develop through stages, and how they contribute differently to performance at each stage – disloyal or loyal customers, junior or experienced staff, and so on. Especially widespread and powerful cases concern the efforts of firms to win awareness and choice of customers, to hire, develop and retain staff, and to develop and promote new products. Other resources, such as equipment do not so much develop as deteriorate.

The class provides frameworks for laying out and quantifying where in the development process customers, staff, products and equipment resources lie. It shows how to assess the effort and cost needed to drive those resources from stage to stage, and anticipate the performance that will result, often from the most-developed resources – loyal customers and experienced staff, for example.

Key issues addressed

  • How resources move through different stages and contribute differently at each stage.
  • This development process is often the critical focus of functional strategies and issues that functional teams have to deal with – but is also critical to the performance of the whole organisation.
  • These states are "mutually exclusive and collectively exhaustive" (MECE) – any item can only be in one state at any time, and all are in one of the stages of the chain.
  • The importance of knowing and controlling the rates at which resources develop – customers, staff, products and assets.
  • How effort and cost – often very considerable – are required to develop resources before any performance return comes back – often long before.
  • Understanding that some resources deteriorate rather than improve as they develop, such as items of equipment, and effort and cost is needed to keep them in good shape – or replace them.
Class 6.0 – Developing Resources: Summary - (32 min)
Resources move between stages - potential customers to active customers; staff from trainees to experienced; equipment from reliable to. But there can be many stages, so this segment explains these, and the challenges that arise in moving resources to their most valuable states.
Class 6.1 – Developing Resources: Doing it right! - (17 min)
How to ensure that resource-development chains properly track the movement of customers, staff, products or assets through their different stages. How to work out where cost and effort arise and where performance comes from. How to deal with completely new resource being added or lost from the whole system.
Class 6.2 – The customer "choice pipeline" - (10 min)
How people move through different "states of mind" and behaviour towards a product or service – unaware, aware, informed, disloyal customers, and loyal customers. How the widely-used customer "funnel" analogy just does not work, and a simple model of the more useful pipeline framework for a consumer brand. Also useful in business-to-business and non-business cases, and for organisational change challenges.
Class 6.3 – Deteriorating Resources - (15 min)
How equipment and other assets deteriorate and the very costly efforts needed to resist and correct for this process. Introducing a model for the strategy choices that arise, over very long time-scales, in a business that depends heavily on such assets. How simpler businesses must also manage deteriorating assets, sometimes over shorter time-scales.
This course is supported by a series of worksheets provided in both PDF format and as Sysdea online models.
There are a number of Sysdea models used to illustrate issues in this class:
  • Law firm staff growth strategy - plays out the growth of trainees, lawyers and partners at a law-firm over 6 years.
  • IT-support company trainee and experienced staff - plays out the staff-change scenario for the company.
  • The consumer pipeline brand model - plays out the building of a new consumer brand, with a potential market of 50 million people, over 36 months.
  • Asset strategy for a power company - plays out the asset maintenance and replacement strategy described in the class 6.3 video .

free access for teachers - login or register Additional materials are available to registered teachers as well as free access to the complete course. Login here or register here for more information.

Other resources and links

Books

Particularly recommended is
Finskud, Lars. (2009) Developing Winning Brand Strategies.
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Other books

Liker, J.K. (2004) The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer, McGraw-Hill, New York.
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Kotler, P. and Keller, K. (2006) Marketing Management (12th edn), Prentice Hall, Upper Saddle River
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Rogers, E. (2003) The Diffusion of Innovations (5th edn),Simon & Schuster International; 5Rev Ed edition.
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Moore, G. (1999) Crossing the Chasm, Harper Business, New York
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