Now we illustrate (in green) the cumulative Transformation
Costs of an Enterprise that does expose and
manage Enterprise Debt™.
Cumulative Transformation Costs rises more steeply than
before, as management decisions release resources to keep Enterprise Debt™
Enterprise Debt™ does build up but this debt is exposed and
managed and does not get as large as before, purely because we are managing it
and spending money wisely.
Since we are managing Enterprise Debt™, increased
Transformation Costs to reduce it can be planned ahead, so that when debt
reaches a critical point we can use those execute the Transformation in a
In addition, while this increased Transformation Cost solves
any short term problems that may be evident it is also aligned to longer term
After the increased Transformation Costs, we again return to
a more moderate level of Transformation Costs and the whole process repeats its
Exposing and managing Enterprise Debt™ is characterised by:
An Increased level of Transformation Costs while Enterprise Debt™
is exposed and managed…
Followed by moderate Transformation Costs when planned…
Providing Predictability, which leads to Stability, which means
management is in Control.
Exposing and Managing Enterprise Debt™
relieves this boom and bust investment cycle. The downside is that it requires
an increased initial investment in the short term. The upside is that it
requires lower investment over time and prevents Enterprise Debt™ from
spiraling out of control.
“If you don’t control your Enterprise Debt™, it will
Do you think this investment
profile is preferable, and if so, why?
What will you do to achieve it?
How much hidden Enterprise
Debt™ exists within your Enterprise?
What is the interest rate you
How long will you have to
continue to pay the debt for?
How do you intend to pay off
the Debt and when?
How close are you to maxing
out your Enterprise’s credit card?
What do you need to do in
order to answer these questions?