The formula to win in business – long Version
- BDEW-EW Magazin – article in issue 12-2013
- BDEW-EW Magazin – article in issue 13-2013
- BDEW-EW Magazin – article in issue 14-2013
- Handelsblatt-Journal Energie – article in issue January 2014
“Leveraging Flexibility – Win the Race with Dynamic Decision Management”, Springer Verlag 2014
What is the probability of your operations achieving the desired profitability? What role does flexibility play in your business plans? Have you ever considered its value in concrete terms?
Being able to react to the unexpected by taking a strategic change of course can prove to be the salvation of a company and its leaders. Flexibility, risk, probability and their interrelated value are the key components of Dynamic Decision Management, a breakthrough approach to validating your decision making process and ensuring the desired results.
The author team, characterized by a strong background in economic theory and practice, presents four case studies that address critical issues for global business management:
• High volume infrastructure investment – with significant uncertainties
• Power generation project – with volatile energy prices
• Renewable investment project – with high risk technology
• Investment strategy project – with complex purchase and repurchase options
Using the Dynamic Decision Management (DDM) approach, the well-known and widely accepted complex methods involving scenario building become obsolete. Why? Because DDM does the unthinkable: It integrates the influence of uncertainty and entrepreneurial flexibility in the strategic decision making process – and does so with precision.
In applying this holistic approach we don’t ignore the recipe for success used by successful entrepreneurs of every business age. They made their decisions based not only on theory, figures and facts but also on intuition and experience. Balance is the secret ingredient.
It is time to shift from thinking only in terms of select, discrete scenarios to a consideration of all possible future outcomes. Our investment decisions can no longer be made only on the basis of forecasted financial results but need to include the probability of these results. Making use of the valuable data generated by initial analyses, our new approach calculates probabilities based on the potential deviations of individual scenario components.
In the process of planning and implementing our strategic decisions, we also need to actively develop and include alternatives. Then we will begin to understand the financial impact this flexibility creates. As such our decisions are not driven by risk avoidance alone but also by leveraging opportunities.
This book serves to simplify your own strategic decision making while enhancing accuracy. At the same time it provides strong rational to utilize when seeking the buy-in of stakeholders such as company owners/shareholders, employees or supervisory boards.