Structure & Logic of This Book

The book is naturally broken down into five parts. Part I – no surprises here – covers the fundamentals of BDL methodology. It begins with a proper definition of natural fundamental objectives of business management which we must do before we can properly define what the ‘quantum leap’ really means. For three different categories of business entities – established private companies, business ventures and public companies.

This definition – like everything else in this book – is based on undisputable facts, rock-solid logic and good old common sense. Proper definition of quantum leap – in both corporate performance and financial value – will follow this definition.

As I will demonstrate (hopefully, beyond the reasonable doubt), the fundamental business management objective has two components – financial and operational. Financial component requires maximization of financial (shareholders’) value of your company; operational – transforming your company into a ‘lean, mean, money-making machine’.

Well, not necessarily mean, but definitely lean (I will cover the exact meaning of the latter in one of the following sections in Part I). And powerful. The machine that will generate the maximum possible amount of financial, functional and emotional value. At all times.

Achievement of your fundamental financial objective requires development of a solid corporate financial model that I will cover in the next section. Of your operational objective – another model (‘paradigm’) that I will use to come up with optimal structure for the business entity. And for the optimal CBA sequence.  I will show that the best such paradigm is the ‘aircraft’ paradigm that I will cover in the next section (followed by a promised section on lean organization and much-overrated ‘Six Sigma’ methodology). Which will be followed by a small section that will cover a very important section on corporate synergy.

‘Aircraft’ paradigm obviously involves significant engineering component. The basic premise of this paradigm (and of the whole BDL methodology) is that a business entity (in fact, any organization) can and must be engineered as… an aircraft, for example. Or re-engineered, if its performance is no longer satisfactory and must be radically improved.

Unlike ‘traditional’ corporate restructuring which is based mostly on functional approach and more recent ‘classic’ reengineering based on the process approach, engineering and re-engineering methodology that I will present in this section, will be based on much more natural and efficient object-oriented approach. BDL is, after all, an object-oriented language…

Which I will cover extensively in the next section of Part I. Which will present and explain all BDL components – corporate object maps, scorecards (APS and KPIS), ACRC, financial and operational plans, Aggregate Performance Indices (API), etc.

To properly analyze performance of corporate objects and processes and especially to properly calculate API (which are always calculated as % of maximum), we need to know what this ‘maximum’ is. In other words, we need a definition and description of a ‘perfect business’ that operates at maximum performance. It does not exist, of course, but still can serve as a convenient benchmark that your company must be ‘measured against’. Therefore, I will describe it in the next section of Part I using the comprehensive corporate objects map (of so called ‘Level 1’).

The next three sections will be devoted to actual CBA procedure – key steps in your CBA project, key issues in executing and managing this project and an often overlooked (but crucial) issue of handling the corporate fraud that your CBA might very well uncover.

I will conclude Part I with two sections devoted to other two ingredients for your quantum leap – strategic corporate re-engineering (SCR) and development and deployment of a continuous improvement – kaizen – system. The latter must make sure that your company always operates at its maximum performance.

Part II will cover key components (‘sections’) of your strategic and operational CBA analysis. Why it is placed before financial analysis? Because strategic and operational components of your business system generate financial results – and not the other way around. Your get your S&O right – you will get your financial numbers right.

This part is based on a comprehensive corporate objects map and consists of eight sections – strategic section, organization structure, marketing section, operations section, communications section, knowledge management section and human capital section.

Strategic section covers key external factors, the overall structure of your business system, your KPI system, your corporate governance system, your corporate history, your declaration of corporate identity, your mission and vision statements, your corporate strategies (all of them), and your strategic plans – financial, operational and business plan.

Organization structure section covers all dimensions of your corporate organization structure – business units, regional (geographic) branches, retail locations, internal value centers, functional units, workgroups and, finally, legal entities.

Stakeholders’ relationships section covers relationships with all of your key stakeholders – shareholders, customers, suppliers, partners, etc. Marketing section covers unique value propositions (to all stakeholders), target markets, competition, core competencies, competitive advantages, products, brands and services (both explicit and implicit).

Operations section covers key elements of your operational (or ‘operations’) infrastructure – corporate projects, processes, tools and your corporate risk management system.

Communications section (closely related to your marketing section) covers all your corporate communications channels and tools – communications campaigns, Web site, social networks and the like.

Knowledge management section covers key components of your corporate knowledge management system – corporate knowledge base (including its vitally important part – best management practices); your computer hardware and software and your corporate Intranet.

Your human capital section covers the comprehensive analysis of your personnel, your corporate culture, corporate code of conduct, your comprehensive employee motivation system and deals with an important issue of ‘corporate happiness.

Coverage of each subsection includes (1) brief description of the section in question; (2) a vision of an ‘ideal’ implementation of each section – what it needs to operate at its maximum possible performance and (3) a list of questions to analyze the current performance of the corresponding section. Each subsection in Part III is, obviously, analyzed in the same way.

Part III covers financial analysis. It includes analysis of financial statements, financial ratio, your corporate budgeting system and your accounting systems for financial accounting, management accounting, cost accounting and tax accounting.

Parts II and III cover generic issues – common for practically all companies in all industries. Hence, Part IV is devoted to a few special cases that I considered important to cover. Commercial banking, investment funds, manufacturing, distribution and logistics and research and development. Plus, I included into that part a couple of ‘beyond business’ subsections – on performing a comprehensive corporate analysis of government entities and NGO. Non-Government Organizations, that is.

Part V is all about the future. Future of business management; entrepreneurship and startups; investment management; management of government entities and NGO; information and knowledge management; management consulting and education and of the global economy in general. At CAIB, I was pretty good at forecasting so I took the liberty to do some in my book as well.

I will conclude this book with… well, conclusions, where I will present the most important propositions that can – and should – be derived from this book. And with the usual stuff – appendices, glossary and bibliography.