IA-Forum: This year you’re talking about the Emerging-Business Opportunities (EBO) model. Would you explain what it is and how it differentiates itself from other models?
Tanai Charinsarn: EBO is a strategy that has been evolving for 18 years. I first encountered it when I met Harvard Business School Adjunct Professor and former IBM Senior Vice President Bruce Herreld. He shared this model with me, which was originally published in California Management Review.
Basically, this model works at the corporate strategy level, focusing on assessing and designing portfolio business strategy, which is something that the Boston Consulting Group (BCG) and McKinsey and Company have been doing since 1960. One of the differentiating parts of the model is the metrics that look at cash used and cash generated. Through the model’s metrics, you can analyze the space between internal capabilities and external opportunity. The EBO model tries to change the way we think of how to achieve profitability, growth and sustainability at the same time. To me, it’s eye opening because that’s exactly what every organization, large or small, wants to have: profitability, growth and sustainability at the same time. Despite the fact that this model is for portfolio strategy, it has a very different approach from the rest.
The EBO model describes the portfolio of the business into three horizons. The first one is mature business, in which we aim for profitability. The second one is broad business, in which we aim for market share. And the last one is future business, in which we aim for innovation. So basically it’s a complete framework to build the portfolio strategy, as well as with the clear leadership for the business strategy of different businesses that’s been in one organization. It also addresses the challenge organizations always face between exploitation and exploration: exploitation of the existing business that they have, and exploration of the new business that they want to incorporate into the future. That is important in strategy because you have to have the right balance between short term performance and the long term future. An understanding of the corporate situation helps me analyze the level of balance and recommend how to create a more balanced portfolio, one they can use to maintain profitability, growth, and sustainability at the same time.
IA-Forum: What has your experience been with EBO?
Tanai Charinsarn: I’ve found that it works very well. Since I was introduced to this tool past three or four years ago, I have successfully used it in my strategic planning for different projects. Whether the project is with a metrics company, media company, food company, bank, or others, I try to incorporate this model, because it provides a higher level of thought about how to develop a corporate strategy as a whole first, before doing a deep dive into business strategy and competitive strategy. It also touches upon innovation strategy.
IA-Forum: Based on your experience, what words or advice would you give to someone who is looking to implement it, this type of strategy?
Tanai Charinsarn: This set of business tools is very scalable. You have to understand the corporate level in depth first. Why is it, and what’s the benefit? Also, you have to understand the financial aspect. I actually perform financial modeling to ensure that the results are correct. Also, you have to think about risk. Risk is very important in looking at a balanced portfolio.
A potential pitfall of EBO is that you have to look at the industry performance as well and see where you are in the industry, rather than just looking at your own performance.
IA-Forum: The upcoming ASP Conference in May is focusing on the topic, Leading and Managing Strategy in a Disrupted World. How does EBO facilitate handling strategy in a disrupted world?
Tanai Charinsarn: Yes, we all live in a very dynamic world, and have to reconsider strategic planning approaches that we have been using for many decades. Businesses cannot rely on just a single business anymore, because things are moving very quickly to gain advantages in the business and they must look at gaining advantages in the future as well. Corporate strategy and popular strategy will become even more important moving forward. Of course, there are greater expectations from shareholders, the government, and consumers as well. Everything has to balance with your profitability so that the business can be sustained economically in this fast and disruptive world. This will ensure that the business has a place to stay, and also that you have the future business as a pipeline. From what I’ve seen, no other toolset is more successful for leading and managing strategy in a disruptive world than the EBO model.
IA-Forum: Would you tell us a little bit about your session and what people can learn from your session and walk out with?
Tanai Charinsarn: In the session, I will introduce EBO and explain the philosophy behind it. I will also share some case studies that I have been doing using this toolset. This will include discussing success stories and some recommendations for achieving the best outcomes using EBO.
Dr. Tanai Charinsarn is a Strategy Professional with more than 18 years of experiences working with the Top Management Team in various industries such as financial services, foods, industrial products, and healthcare on strategy formulation, reorganization, re-engineering, corporate planning, operational effectiveness, strategy implementation, IT strategy, and strategic capability development. He is well recognized among the international Strategy Professional communities internationally. He holds a designation of Strategic Management Professional (SMP) of the Association for Strategic Planning (ASP), a Fellow of the Strategic Planning Society (SPS), and a Chartered Director of the Thai Institute of Directors (IOD).
Dr. Charinsarn will be leading a session on Emerging-Business Opportunities (EBO) model at the Association for Strategic Planning Annual Conference this May.