Russia Threatens Economic Warfare and Crashing the US Economy – Idle Threat or Reality Check

More and more we find that human wars are not fought on a big battlefield with large armies and loss rations following a mathematical law of attrition. Today, we have wars in the media, cyberspace, stock markets, economic systems, and elsewhere. Not long ago, the Russians made a comment in the global media after John Kerry threatened economic sanctions, they said that they can cause the US economy to collapse. Now then is that so?Well, it turns out that the answer is; quite possibly. Would they succeed if they tried? Hard to say, but it could cause temporary chaos, and it wouldn’t be funny for your retirement or 401 K. Okay so, let’s talk shall we?

Not long ago, I was talking about all this online. Alexander, an acquaintance notes; “The day President Obama’s op/ed “Taking Cyberattack Threat Seriously” was printed in the WSJ, there were additional articles on algorithms used by big trading firms, some of which present a security attack vector… hypothetically.”Right! And I’ve found many of the authors of books, research and reports on that challenge from RAND, GAO, CATO, PEW, OMB, Pentagon Quadrennial, US Naval Research, USAFRL, MIT etc. somewhat scary scenarios. Economic Warfare is real. Both the Russians and the Chinese have economic chaos strategies to use against us if political impasse becomes too hot for the State Department, CFR, NATO, EU, UN, ASIAN Trade Block, or BRIC detail. If the FED isn’t worried then that new gal running it isn’t paying attention.Flash Crash events show the vulnerability, just as the Russians claim they can take down our economy if they want too. Doubtful that they could completely, but the trillions lost in the interim would be devastating which is why I cringe when John F Kerry starts talking about economic sanctions on Russia’s mining, manufacturing, banking, energy sectors as he tells us that nothing is off the table. Well, maybe some things should be.

We saw what happened when Russia stopped exporting wheat one year due to the fire they had in the summer – Arab Spring in Egypt remember. I am just saying, the global world is interconnected and economic warfare hurts common people, realigns wealth, and often just pisses off the opposing powers that be to double or triple down. That’s my comment, you turn.I recommend going to YouTube and watching; “James Rickards – Economics And National Security,” posted on the JamesRickardsTV YouTube Channel, if you think that economic warfare from Russia isn’t one of their future scenarios. Well, that’s all for now, I hope you will please consider all this and think on it.

Strategic Planning With Implementation in Mind

Plans come in all shapes and sizes, but the sorts of plans that I have in mind are those whose effective implementation is vital to the organisation’s continued well-being. The plan might be a marketing plan involving the development of new markets and products; it might be a restructuring to enhance flexibility and customer focus or the adoption of a concept such as lean thinking. It might be all of these which, together, form the elements of a strategic business plan. The common denominators are that the effective implementation of the plan involves many more people than were involved in the plan’s formulation and the price of failure to execute is high.

The three fundamental reasons for poor strategy implementation are:

  1. Planning and implementation are seen as two entirely separate activities whereas the reality is that the seeds of success or failure are sown the moment the planners sit down to plan.
  2. Planners spend a disproportionate amount of time deciding what they are going to do rather than dividing their time equally between that and planning how they are going to do it.
  3. Too few people are involved in the “how” process – assessing the plan’s feasibility and its impact on all the organisation’s resources.

These are further broken down into the following 13 barriers to good planning:

Planning Barrier No.1 – “The plan did not take into account the new environment we were operating in”.

If the plan ignores the present or fails to predict the future environment that the organisation will be operating in, it is doomed to failure from the start.

Planning Barrier No.2 – “The rationale behind the plan was never incorporated into the written document”

It is said that 70% of people will change, given a good enough reason to do so. Since almost by definition these days plans involve change, the rationale behind the proposed changes must be explained and justified. It is not sufficient to state that “this is what we are going to do”. Management has to articulate the debate that resulted in a particular course of action being proposed.

Planning Barrier No.3 – “There was no overall goal that everyone could relate to”

My company conducts Customer Satisfaction Surveys and one of the key outcomes is a weighted Customer Satisfaction Index (CSI). A division of a large public company recorded an average CSI that was satisfactory but which masked a significant problem – inconsistency. The 24% of clients who rated the supplier very highly was offset by the 27% of clients who were dissatisfied with the supplier’s performance. The supplier decided to set an overall goal of a certain CSI to replace the contribution margin that they had previously used. Although the staff found the new measure of performance much easier to relate to than the old one, it would have been even better if the revised goal was to eliminate any customer ratings below an agreed figure in an agreed time frame.

Planning Barrier No.4 – “The plan was just a series of activities – there were no clear results to aim for”

If you were trying to lose weight, you might decide to exercise more, drink less alcohol and eat more green vegetables. These are activities. I’m sure your campaign would be far more successful if you set a goal weight to be achieved at the end of 12 months together with intermediate monthly targets. Corporate plans are no different.

Planning Barrier No.5 – “Those responsible for the plan’s execution were not sufficiently involved at the planning stage”

There is an old adage that says that the more people who plan the battle, the less there are to battle the plan. Not only does this strategy begin the transfer of ownership from the “planners” to the “implementers” but it also results in a better quality of planning.

Planning Barrier No.6 – “The planners failed to integrate the plan with the current circumstances facing the organisation”

Very few planners start with the luxury of a clean sheet of paper. As a consequence any plan needs to address the present as well as the future. Womack & Jones in their book “Lean Thinking” recount the story of a company that decided to embrace the concept of “Just-in-Time” – reducing inventories and manufacturing batch sizes. Unfortunately for them, they made no fundamental changes to their production system that remained as inflexible as before. Manufacturing costs and freight costs skyrocketed due to increased machine downtime and the need to airfreight customer orders to meet delivery times.

These six barriers are connected to the first component of any plan which is deciding “this is what we are going to do”. The next stage is to think through the implications of stage 1 of the plan on every function that makes up the organisation.

Planning Barrier No.7 – “The implications of the plan were not sufficiently worked through by the planners”

For example, what if the plan calls for the development of six new products a year? Such a target has implications for Development, Production, Marketing, Sales, Distribution, Supply, HR and Finance. To minimise this problem, you need to involve the people with detailed knowledge of these functions at the planning stage.

Planning Barrier No.8 – “Insufficient time was spent planning before moving to implementation”

You would think that with all their experience, Boeing could design and bring into service a new airliner in the timeframe originally envisaged. This certainly wasn’t the case with the 787 “Dreamliner”. It was four years late into service mainly because of the problems encountered by not only out-sourcing the production of many components using new technology but in some cases also out-sourcing design. As one senior Boeing executive admitted – “… we put a global supply chain together without thinking through some of the consequences”.

Once the issue of “how we are going to do it” has been thought through, the next step is to look at the implications for human resources and finance. These are the two key Enabling Functions. Without people and money, no plan can be implemented.

Armed with the knowledge of “this is what we want to do” and “this is how we are going to do it”, the next set of questions to be asked is whether the organisation has the right number of staff with the right expertise in the right places to effectively implement the plan.

Planning Barrier No.9 – “The implementation of the plan required changes in the current organisational structure that management was not prepared to make”

Furthermore, is the organisational structure suitable to implement the planned changes? Under the direction of Lou Gerstner IBM underwent massive organisational changes in the 90′s as it moved from a technology driven hardware company to a market driven services company. The “old guard” resisted such changes to the status quo and the reorganisation would not have succeeded, had not Gerstner redistributed the “levers of power”.

Planning Barrier No.10 – “The planners underestimated the cost of implementation”

By this stage of the planning process, you will have built up a shopping list of the requirements necessary to bring your plan to reality. New infrastructure, new equipment, new IT systems… to say nothing of new people for new roles. If you cannot afford to implement the plan in its present guise, then maybe you can stagger investment or extend the period for implementation – or maybe you have to reduce the scope of the plan so it is within your means to execute. Far better that you come to the realisation now that you cannot afford the costs of the strategy implementation than discover it six months down the track.

Planning Barrier No.11 – “There were no clear subsidiary objectives”

It was the Chinese philosopher Lao-tzu who said that a journey of a thousand miles begins with a single step. Similarly, the achievement of the goal will be dependent on a large number of subsidiary objectives and the strategies to achieve them. It is so important that these objectives are related to “how we are going to do it” rather than “this is what we want to do”. In effect, we plan from the top down but execute from the bottom up.

Every plan should conclude with an initial Action Plan. “Initial” is emphasised because action planning is a rolling exercise. As some actions are completed, others take their place. The final two barriers relate to the transitional phase where the focus on strategic planning gives way to one on execution.

Planning Barrier No.12 – “There was no Action program that set out the objective of each action, who was to be responsible for it and its completion date”

There is one action that is frequently overlooked and that is to communicate the totality of the plan to everyone who will play a part in its execution. If you want to engage your staff – and who doesn’t – you have to explain where the organisation is now, where it’s going and why and each person’s role in getting there.

Planning Barrier No.13 – “Management underestimated the time required for implementation – we simply did not have enough hours in the day to complete the actions that we were responsible for by the date indicated and do our “normal jobs” at the same time”

This very real barrier needs to be addressed at the planning stage – not when the execution of the plan starts to flounder. Before agreeing to completion dates with those responsible for completing actions, talk with them, make sure you understand what is involved in carrying out the action and arrange for them to receive assistance if necessary.

The quality of execution is dependent on the quality of the strategic planning. The good news is that as you successfully tackle each barrier in sequence the next barrier, and the one after that become less daunting.