Strategic Management Dynamics

Chapter 6 - Resource Development

This chapter explains how resources often develop through stages, at each of which they contribute differently to performance – disloyal customers vs. loyal, junior staff vs. experienced, and so on. Organizations are often able to manage resources before they become an active part of the business system, and may need to do so, for example to make potential customers aware or interested in their products. Resources sometimes continue to have an influence after leaving an organization’s system, e.g. former employees recommending others to join its staff. 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. The chapter provides frameworks for laying out and quantifying where in their development process customers, staff, products, equipment and other resources lie. It also shows how to quantify the impact of the various factors affecting resource-development, including how managerial choices affect their movement, so that changes over time in performance can be assessed.

This chapter includes connections to the following frameworks and concepts: staff hierarchies, R&D pipelines, the ‘AIDA’ framework and other models of customer development, sales pipeline, ‘PEST’ analysis of political, economic, social and technological factors, the experience-curve of cost reduction and dynamics of industry innovation.

KEY ISSUES

• Recognising that resources contribute differently to an organisation as they move through different stages
• The importance of knowing and controlling the rates at which resources develop – customers, staff, products and assets
• Resources that deteriorate rather than improve as they develop, such as items of equipment
• Attracting and reaching potential customers and staff before they become active
• The exceedingly long-term consequences of strategic decisions on developing resources
• Assessing the impact of external factors as they drive resource development in innovation and industry development
• The continuing contribution of staff and customers after they leave the business
• Resource development in non-commercial cases
• How resource development connects with the organisation’s core strategic architecture