9 May, 2015 0 No tags 0

Designing a predictive type is a waste of time, an incredible source of frustration, wasted resources, and finally, suicide. A random fact supports better opportunist strategies. Strategies that are prepared to explore and exploit the opportunities that will provide the environment.

The best strategy is to create a system/ working model that allows to explore opportunities as they arise, making general plans. This implies establish general guidelines and rely on the judgment of those who have to execute them.  And that’s scary, because it means letting go of control to manage under the premise of trust.

Give space for decision making to the people who are on the ground. It is they who can best decide on tactical issues. They are the ones that can detect:

  • Opportunities and options that can mean for us new markets and unmet needs.
  • Tastes, fashions, and needs that change daily. The classic way to plan is unable to discover and manage these daily needs.
  • The resources that accounts (limitations) to address these opportunities.

The basis of the plan should have the two perspectives, the cost (which is what you always teach) and income:

  • They need to generate minimum margins for the project to go on foot. To cover costs, and how long we have to get it.
  • With current products that we can get, and contribution margins generated.

If we change the perspective, it will allow us to prove:

  • New products / services that we think may work.
  • New communication actions and / or promotion.
  • New forms of management associated with the above.
  • In short, new ways of interacting with the environment around us.

This approach will allow us to:

  • Explore new markets that allow us to stay in the game when current markets have disappeared.
  • Having a less suicidal vision for the future. It will let us to build each year on a conscious and consistent minimum base.
  • Browse = invest a small amount of resources and money to develop a battery of tests to prove that a hypothesis is valid.

Develop predictive systems is to assume that the theoretical economic models (and therefore strategies based on them) work in reality. And they do. They are models with manual an imaginary, abstract and free world of friction and the interrelationships of the real world (the unpredictable texture of reality). As they do not, the financial rather than changing their models or accepting these limits have the idea that the world has to adapt to its conclusions.

Economic thought is currently delusional. To sustain this delirium, it has been developed a narrative system that makes the core belief not altered by actual experience. This steadily developing stories as narrative fallacies that always clear retrospective, fail to explain what happened.

The old manual says: make predictive plans. Always projected growth, this ensures you get a budget steering committee and push people to achieve the objectives. If then it does not, we’ll know to explain convincingly. For that we are masters of retrospective narrative.

The new way of doing things says: Plan in order to find that minimum survival that will have you  cover in case of zombie apocalypse, and from that point project development of your project based on a consciously defined and executed system test form / mistake. This ensures that if the plans (and forecasts) do not come, we will be able to try again next year. We will be able to stay in the game while waiting for better opportunities to explore and exploit, some allow us to hit. The approach is summarized: Restrict and assume potential losses and risks for small maximum possible gains.

If we like the old manual it says: we will project a future we do not know about in the future growth illusion that only exists on paper.  And most suicide: we will project and commit investments that can not cover on this illusion, nonexistent in the real world. “This year will grow 10% more ….” You do not ever ask why, because many times the answer is. “Because it has always done it” Or something more fun: “Because I say so”


2 May, 2015 0 No tags 0

As I said before: The carrying capacity of a species is the maximum population size that the ecosystem can support without the species that inhabits the system to be damage.

The load capacity of a market would be the maximum number of companies (product offering) that can compete in that market, without having to start to disappear.

And really, the ability to load a new market has no way to be predicted. Surely in mature markets, with mature products, with many years of development, the same situation, if you can reach any reliable estimate, would be a miracle. For new products in new markets, forget it, do not waste time trying to figure this out. Use test / fail.