How do you harness Non-Market factors? Anyone in Ontario taking advantage of the province’s “Feed-in Tariff” has an answer.
But while most people can name a host of Market Factors that shape business strategy, including saturation, maturity, fragmentation, etc., the mention of Non-Market Factors (regulation, public pressure, etc.) often draws blank stares.
Market Factor Strategies are built on maximizing offense-oriented business line priorities. Conversely, Non-Market Factor Strategies focus on minimizing negative impacts and liabilities. As a result, responses to Non-Market factors (led by governance, compliance and risk management functions among others) are all too often treated as boxes to be routinely checked off.
The checklist approach can be dangerous, as Non-Market factors can often be a source of Black Swan events. But a strategic plan that fails to integrate your organization’s approach to market and non-market factors also risks missing real opportunities.
Prof. Richard Rumelt of UCLA points out that every change or innovation uncovers (one might add, creates) new value denials. By value denials, Rumelt means missed opportunities. When it comes to Non-Market factors, these opportunities are frequently driven by institutions and constituencies that often treat regulatory and environmental directives as a cost that must be borne and often minimized.
However, some organizations are re-thinking Non-Market Factors as a way to capture opportunities. One way to do this is to rework your risk management plans. This often requires a strategic pivot by the whole organization. A key reason this strategic pivot is not made is that while every organization must manage risk, and many of those risks are on Non-Market fronts, most organizations do not treat risk management as a core line of business.
Three Strategic Planning Approaches that consider both Non-Market and Market Factors
Some of OPTIMUS | SBR’s most daring clients are seeking aggressive ways to retain risk, and harness the opportunities that go along with it. In so doing they are able to create new benefits to stakeholders and customers upstream.
The key to this emerging practice is to balance the capabilities you need to build to meet Non-Market factors such as compliance with ones that also enhance market competiveness. Three key approaches are emerging—
1. Turn Trash into Treasure: Some organizations are developing new, creative ways of finding value hidden in assets abandoned, underused or devalued because of their associated risk. A good example of this is the growing industry of recycling solution providers with ISO and Ministry of the Environment certification that assume others’ ‘risk’, process it and as a result are able to extract valuable material that can be repurposed.
2. Influence the Agenda: partnering with regulatory bodies that are tasked with regulatory oversight has two key benefits: First, you ensure optimal alignment between your organization’s offerings and activities to the regulator’s mandate to achieve social improvements. Second, you position yourself in the marketplace as an adoption leader, effectively minimizing any perceived pass-along risk to your clients. Corporations building corruption-busting partnerships in developing economic zones are an example.
3. Set the Benchmark: By cultivating your mandate and strategy work where stable benchmarks and comparator data do not exist, you could potentially prevent the need for Non-Market factors to be created. The more dynamic utilities and banks are finding ways to partner with their oversight stakeholders to shape the regulatory environment and pre-empt regulation by improving their self-assurance.
Complex and onerous regulatory obligations (think the new Basel III rules, or the EPA’s broadened regulatory efforts under the Clean Air Act) are heating the crucible, forcing —or enticing— both large and mid-size organizations to see factors such as regulatory and environmental risk the way public-sector entities do: as a top-tier success factor. Look for the trend to gather momentum, but in unpredictable ways.

Natural Language in Data Visualization: A Showdown Between Tableau and Power BI
Two industry-leading data visualization tools, Tableau and Power BI, both offer the ability to query data using natural language. But how do they stack up?

Steering Through Uncertainty: The Impact of IFRS 17 on Risk Management and Control Strategies
With a strong emphasis on accuracy and integrity, insurers are faced with the task of redefining their control environments and governance structures for financial reporting.

Analytical Data Mart vs. Data Lake: Which Approach is Better for Your Analytics?
Welcome to the world of data-driven organizations where it is crucial to have a well governed repository to efficiently store and manage your valuable data.

Mastering IFRS 17 with a Strategic Target Operating Model
When applied specifically to the realm of IFRS 17, a strategic Target Operating Model provides a high-level view of the end-to-end solution design, processes, controls, and close schedule required to execute the new finance model.

The Push for Companies to Prioritize Leadership Development
Leaders have been expected to do more than ever in the past few years. Navigating through uncertainty, dealing with new challenges, and responding to rapid change have all become commonplace demands for management teams.

Navigating a Hybrid Work Environment with Gen Z Employees
Millennials, who have dominated the workforce for the past decade, are now ceding the stage to the next generation of employees – Generation Z.

Developing Early Career Talent: 5 Strategies for Success
A robust and effective early career talent development program is essential for companies looking to grow their future leaders from within.

How to Capitalize on Your IFRS 17 Investment
With guidance and support insurers can move from IFRS 17 compliance to business as usual (BAU) and fully capitalize on their investment.

Leading & Engaging Gen Zs – The Bold Approach
Gen Zs are the new age workforce that is gradually changing the landscape of the corporate world. Leading and engaging Gen Zs in this environment requires a bold approach.

Optimus SBR Named 2022 Most Admired Corporate Cultures™ Winner!
What a thrill it is to be honoured as a 2022 Most Admired Corporate Cultures™ Winner! This award celebrates the Bold Attitude and Entrepreneurial Spirit each of us embodies.

Power BI vs Tableau – Which is Better?
Although Tableau and Power BI are similar business intelligence tools, there are key differences that organizations should be aware of when considering analytical requirements.

7 Drivers of Economic Development
These seven drivers of economic development bring new money into the municipalities, accelerate the velocity of money within the city, increase the engagement of citizens, and propel the generation of new ideas, technologies, talent, success stories, wealth, and global rankings.