Development, Adaptabilityand Governance

Repositioning Innovation and Regulation

Business talk must always admit that (with very rare exceptions) almost no kind of business requires a particular company, and that a given company may be in different businesses from time to time. The two things – business and company -- can be connected or disconnected.

We commonly talk about companies that are born-n-bred business organizations in terms of the distinctiveness of what they produce, of how they produce it, and of who cares.

That triumvirate of value, competency and stakeholders allows us to keep the essential narrative about a business easily in mind as we dwell, however lightly or heavily, on whether the company “really matters”.

Typically, the idea that a company matters will also have a simple multi-factor template to use.

The company is looked at in terms of what kind of impact it has on its operational environment, why it has that impact, and why it tries to do so.

In short, the factors of “what matters” about a company are role, purpose, and intention.

Put bluntly, if we think that a company matters in a good way, we’ll be supportive. And if we think it matters in a bad way, we will want it to go away or want it to change.

All of that sets up the framework in which it makes sense to talk about what companies think they should be doing.

The whole point of the company is to cause “practical” things to happen in an orderly way that otherwise will not happen by themselves, or will happen in an “un-orderly” way.

Nearly all popular business literature now focuses on a few gigantic headlines characterizing the current practical difficulty of the operational environment:• Cross-cultural workforce

• Globalization• Multiple generations

• The digital infrastructure• Automation• Security

• Radical competition• Market redefinition• New types of assets and transactions

In turn, the key issues posed for the company are about the desire versus the fact of:• How things are used• Where things are used• When things are used

Any organization that “uses” something to “cause” something else must obviously be seen as an “actor” or an “agency” of some kind.

We certainly understand the essential meanings of those terms: an actor does something hands-on, while an agency facilitates the realization of something.

That perspective helps us to lock in on the idea of a company’s “practical behavior” as a major point of reference.

What the company cares about the most is a sustained ability to conduct its role as an actor and/or agency.

What it worries about the most is risks (including threats) to sustaining that ability.

Dramatic journalists, writing frankly, call it “survival”. From a management standpoint, without the specter of carnage, the objective is to persist.

One of the key issues to address about that persistence is the collection and coordination of influences on the company that come from outside of the company and from inside of it.

The external and internal influences must be compatible in order to sustain the company’s active role. They affect what can be used, how it can be used, and why it is used.

Today, the complexity and variety of those influences is greater than ever before. This challenges the company to understand and exercise an ability to continually regenerate itself in the face of discontinuities and uncertainty in its operational environment.

In popular parlance, the urgency for being adaptive means there is an overall constant tension between innovation and regulation.

Transformers

The single most useful perspective on continual regeneration is from within the general term Development. How do we know this?

Intuitively, we know that regeneration means something is developing that will restore an important necessary state. But there’s more… and, different.

It’s easy to rely on governance as the attentiveness triggering that response. Normally, we see governance as a practice dedicated to preserving the feasibility and propriety of action within a set of intentions, consistent with stakeholder objectives based on a current-state environment.

However, in the current era of rapid, intensive and relentless change, company regeneration has an equal or greater priority that is not solved by governance.

The practicality that is an essential justification of a company’s existence is easily seen as a forensic description of its behavior, primarily based on three observations:• Why (Motive): comes from exploration and learning• What (Opportunity): comes from position and invention• How (Means): comes from resources and capabilities

Environmental factors that are malleable, volatile, ephemeral, evolutionary, or otherwise discontinuous in any way can change any one or more of the why/what/how factors that a company currently maintains in coordination.

When a change is inevitable, company regeneration must occur to an extent that restores potency of conduct in a role of current and imminent relevance.

Thus we must think of corporate development. The strategic shape-shifting of an organization occurs with a very significant respect of governance, where governance is expected to declare environmental constraints that can be successfully accounted for as organizational commitments. But in corporate development it is also always true that new organizational forms may come with constraints that are unprecedented for the company.

Consequently, corporate development is instrumental to strategies for regenerating the company as an actor and/or agency. Meanwhile, converting strategy to operations means creating the practices that are both governable and immediately relevant to impending or projected future states.

The key idea emerging here is that governance does not “cause” the behavior that is necessary for the company to continue to matter in its environment as a producer of beneficial value.

And, the issue of causality is fundamental to the purpose of having a company instead of just a network of associates.

Therefore, under pressure of continual regeneration, the practice that is dedicated to the causality of the necessary value-targeted behavior should be recognized as a form of something already having that definition: development.

The difference between development and governance is not as simple as innovation versus regulation. The interesting move now is to recognize some nuances of meaning and apply them usefully and consistently.

Coordinating and expanding Innovation & Regulation

Development is highly scalable and does not belong exclusively to any level or department of a corporate structure. In other words, the development function is an enterprise-class function.

Enterprise Development is not a common term in the most popular business journalism. But for our purposes, the precedent of course is “enterprise governance”. As does governance, development manifests in different ways within different contexts, but always for the same intention.

Meanwhile, a conventional research of the idea shows that while the popular business press has not taken up the term with much enthusiasm, the term already has a substantial pedigree and clear meaning that is only becoming more important and relevant at the scope of an individual company. The most common established meaning of Enterprise Development is entrepreneurship.

Enterprise Development is a more direct and urgent reference to the critical success factors of a company adapting in the typical current environment of constant change.

In this case, we observe that development and governance are each necessary while neitheralone is sufficient.

The question is whether the “necessity” leaves them parallel or requires that they intersect…

When argued to bundle development and governance together, there are at least two important justifications to highlight.

One objective of having both governance and development is to assure that the competencies selected and exercised in operations provide enough support for behavioral maturity. In other words, the competencies are: • effective enough to address requirements, • consistent enough to propagate reliably, • and stable enough to repeat while avoiding rigidity

Another objective will be to support corporate adaptability.

Numerous factors play a major role in entrepreneurship, affecting the effort at any scale. While the conventional “entrepreneurial” perspective for a business is to consider investment economy from a financial point of view, the appropriate point of view for a company(organization) is behavioral – a consideration of the way that the company co-operates, internally and externally, with the culture that it both uses and affects:• Ecology• Strategy• Policy

Corporate adaptability (not merely innovation) coordinates with Competency maturity (not merely regulation) so that each is more likely to achieve its aims.

By extension, the combination of support for adaptability and maturity enables business continuity in the face of change.

Business Continuity

Corporate Adaptability Maturity of Competencies

GovernanceDevelopment

Environmental Change

Success factors:• Ecology• Strategy• Policy

Success factors• Effectiveness, for requirements • Consistency, for reliability • Stability, for repetition

Co-operative causality Feasible propriety

©2015 Malcolm Ryder / Archestra Researchwww.archestra.commryder@malcolmryder.com