Simplicity As a Business Strategy

  • Problem #1 – The Gee Whiz Company sees profits slipping. The call goes out for innovative, creative solutions. Rather than pausing to realign and reaffirm the company’s vision, goals or mission, managers propose more steps, whiplash changes, or faster action.

Solution – Adding something in the name of improvement isn’t always the answer. Remember the KISS axiom, about keeping it simple? Sometimes removing a step, simplifying a process or dialing back the pressure results in greater workflow and greater buy in. Your workforce recognizes and values common sense and revels when they realize that the executive suite values it too.

  • Problem #2 – The Do It Today organization was in a scramble to replace a valuable high level manager that was retiring. The group was stuck in the “How will we ever replace her?” mindset. They were quickly complicating the process by assuming they couldn’t find anyone to match up to the previous employee.

Solution – Instead of overloading the wish list for the new candidate, utilize tools and assessments to identify the skills and attributes of the outgoing manager, then look for those same attributes in potential hires. This helps remove the emotional aspect of the hiring process and streamline and clarify the requirements. Using a tool such as the Attribute Index, the organization was able to identify their top requirements and screen candidates against those. Doing so reduced the time table and identified talent within their network, allowing for a simplified transition.

In the heat of action, it’s not unusual for management to miss the overall picture. If the world’s top 200 companies fall prey to this, chances are you are struggling too.

When you are mired down in complicated processes, it’s difficult to find your way out. Someone outside the trenches can take an impartial look at the overall operation, workflow or process. Talking with employees in an unbiased environment will yield candid and useful input that can set people and processes back in alignment. Asking the question, “What can we subtract?” gives a new perspective when you are locked in the improvement mindset.

Business Realm

Similarly, for a business, creating and implementing a business plan is a major reason of surviving in the competitive market of the 21st Century. However, most entrepreneurs or firms are not properly familiar with why they need a business plan. Let us talk about the importance of a plan, for existing as well as new businesses, today.

Mapping the Future

One of the biggest reasons you need a plan is that it helps you in preparing for the future. You can set goals, develop techniques to achieve and set a mission statement for your business. This helps you to set your business on the right track.

Building the Foundation

A business plan helps in building the foundation of a company. You have a detailed summary of what you need to follow and how you are going to run your business. Once you know the way you want to run a business, the rest becomes quite easy.

Regular Performance Check

Creating a plan can help you in keeping the regular performance of your business in check and changing your operational methods accordingly.

Secure Funding

One of the main reasons why idealistic businesses build a plan is because it is a secure way to protect your funding. You can calculate the previous spending, diving your funds on different tasks and take out an estimate of what you will earn in the future.

There are mainly two types of businesses – one which already exists and a newly established. For a newly started business, the best way to develop a plan is to aim for a one-page business plan.

A robust and detailed plan will just take your attention of the other important things you need to take care of in the initial start-up stage, for example, marketing strategies.

On the other hand, an existing business needs to sketch out how they performed in the past and then build a detailed plan for the future, with a vision to achieve an objective.

The Final Verdict

Having a business plan is one of the most important steps a firm might take, in order to keep a track of the present performance, and sketching out what the company needs to achieve in the future. Business plans can help a firm create a mission statement and then follow it until they stand on a firm foundation and years of experience.

Darren McAllister has many years of hands on business and internet experience and utilizes these different skill to give a fresh outlook to how to become the best you can.

Milestones and Metrics

How to Write a Business Plan: Milestones While the Milestones and Metrics chapter of your business plan may not be long, it’s critical that you take the time to look forward and schedule the next critical steps for your business. Investors will want to see that you understand what needs to happen to make your plans a reality and that you are working on a realistic schedule. Start with a quick review of your milestones. Milestones are planned major goals.

For example, if you are producing a medical device, you will have milestones associated with clinical testing and government approval processes. If you are producing a consumer product, you may have milestones associated with prototypes, finding manufacturers, and first order receipt. While milestones look forward, you will also want to take a look back at major accomplishments that you have already had. Investors like to call this “traction.” What this means is that your company has shown some evidence of early success. Traction could be some initial sales, a successful pilot program, or a significant partnership. Sharing this proof that your company is more than just an idea-that it has actual evidence that it is going to be a success-can be critically important to landing the money you need to grow your business. In addition to milestones and traction, your business plan should detail the key metrics that you will be watching as your business gets off the ground. Metrics are the numbers that you watch on a regular basis to judge the health of your business. They are the drivers of growth for your business model and your financial plan.

For example, a restaurant may pay special attention to the number of table turns they have on an average night and the ratio of drink sales to food sales. An online software company might look at churn rates (the percentage of customers that cancel) and new signups. Every business will have key metrics that it watches to monitor growth and spot trouble early, and your business plan should detail the key metrics that you will be tracking in your business. Knowing what your assumptions are as you start a business can make the difference between business success and business failure.

Finally, your business plan should detail the key assumptions you have made that are important for your businesses success. Another way to think about key assumptions is to think about risk. What risks are you taking with your business? For example, if you don’t have a proven demand for a new product, you are making an assumption that people will want what you are building. If you are relying on online advertising as a major promotional channel, you are making assumptions about the costs of that advertising and the percentage of ad viewers that will actually make a purchase. Knowing what your assumptions are as you start a business can make the difference between business success and business failure. When you recognize your assumptions, you can set out to prove that your assumptions are correct. The more that you can minimize your assumptions, the more likely it is that your business will succeed.

Future of Rewards

What were motivational tools a decade back are now hygiene factors. Appreciation letter from the Managing Director, one-time ad-hoc bonus of INR 25000, out-of-turn promotion, publishing personal details in the in-house magazine, special jump in compensation, etc. have become too routine and rather unproductive. Such rewards have now become almost obsolete or have moved down from the managerial hierarchy to the supervisory or blue-collar hierarchy.

What is pushing the new philosophy of reward? Three factors stand out.

One, and accelerated change in the workforce demographics including changing expectations of older horses. Two, chronic need for retaining the performers, and the third, faster erosion of the perceived value of the reward.

If one goes with the trend, how would rewards for star performers look like in future?

For the Junior Management (up to 9-10 years of service), the rewards could include an unlimited GB data plan for personal use for a year or sponsorship of marriage expenses pegged at 50% of the annual compensation. Another option for this category would be a fully paid sabbatical for pursuing full-time education of choice. Sponsoring an all-bachelor group’s two weeks Europe tour is a fabulous idea and could be a perfect testimonial of the pinnacle performance.

This group being young has interest in sports and adventures. Then why not give them formal training and even consider sponsoring deserving ones for advance training in adventure sports? The company can analyse the hobbies & passions of star performers and offer matching rewards. If an employee likes old Hindi songs, the company can set up a meeting with the leading vocalist of his choice or gift him a Bose Audio System with complete set of the singer’s recordings. If an employee likes tennis, then how about a fully paid trip to a grand slam tournament of her choice? Imagine the impact if the reward is to shadow a board member for seven days.

This group brings energy, aggression, flexibility, and above all, passion. Of course, the attrition rate is the highest in this lot, but then the moot point would be to maximize the output while working on retention.

What would then the Middle Management (10 to 17 years of service) fancy as rewards? Annual sponsorship for a child’s education, foreign tour with family (including parents), all paid interior design of the house, subscription to an internationally acclaimed domain magazine, paid up wealth-management advisory services, and an exceptional bonus to prepay the housing loan up to half the annual CTC. This lot would be typically in 30s or early 40s and hence might even want sponsorship of a leading gymnasium for fitness & health management. This group too might like to have excursion trips or adventure sports training.

Employees in this group are more stable than the younger ones. However, the challenge for the HR people here is to offer ‘renovation’ opportunities. As knowledge fads faster than ever, this lot would certainly be pleased if offered advance training for managerial or leadership development at a premier management school (of course within the given domain) with a cap on the expenses at one month’s gross compensation. A reward that has an impact on the near-future career is always more valuable.

The Senior Management (18 & above years of service) is the most sensitive lot of the troika, simply because it carries the rich experiential knowledge of the business, domain, and the environment. Retention here has more to do with the job content and personal treatment. Monetary needs are no longer relevant for this lot. It is the most difficult group in terms of understanding what rewards would members like to receive.

The primary need for this lot is (public) recognition and opportunities for crossing the new bridge. Therefore, the approach for this lot would have to be personalized. Representing the company in international conferences, being nominated on the academic council of a leading management school, spending 3 months a year in the company’s CSR domain, retreating for spiritual purposes, are a few examples of rewards that could suit this group. It would not be wrong even to seek inputs from the lead performers on what type of reward they would prefer i.e. give them a bouquet of rewards to choose from.

To end, I recommend an employee survey on the effectiveness of the current rewards and for obtaining employees’ inputs on which could be dropped & what new categories could be introduced.

About Business Logistics

I speak to individuals about the companies they work for, and they refer to different departments, such as Planning, Purchasing, Warehousing, Inventory Control, and Transportation. These are many of the roles within the scope of Business Logistics, yet their companies have not realized they are all intertwined and can be banked against each other; traded and bartered for better company discounts. Additionally, they mention Returns, which is actually referred to as Reverse Logistics.

All of these roles are components of the Supply Chain in every industry. Logisticians help companies realize cost savings throughout the Supply Chain. Speaking with Logisticians about the Supply Chain encourages businesses to locate and differentiate the savings their companies could reap. This leads to new profit opportunities for their organizations.

Once I speak to individuals about the scope of Business Logistics and what it entails, they are fascinated by it. They tell me I should speak to their Management about the cost savings they can make through tradeoffs of services. There should be more high profile papers and articles on Business Logistics to educate the business world. It’s not just something students should learn about in college.

Supply Chain assists organizations with cost savings by streamlining the Planning and Purchasing roles so that the right materials are at the right place at the right time, so manufacturing can continue in order to exceed Customer expectations. No manufacturing down time is the goal of many businesses, in order to achieve just in time advantages. JIT can either reduce or eliminate inventory carrying costs of the organization, and can promote lean manufacturing processes. Lean manufacturing processes initiate cost savings throughout the Supply Chain, and savings can be transferred to Customers.

Benefits of Balanced Content

This may seem like a counterintuitive concept but let me explain. In my global work with leading speakers, authors, and thought leaders, I’ve noticed that most content is out of balance. Authors and thought leaders have a tendency or a bias. They are either incredibly academic or hyper focused on business, and this makes sense, given that many thought leaders come from either the hallowed halls of academia or the shining towers of the corporate world. Their world view and perspectives are shaped by their experiences.

Now there’s nothing inherently wrong with leaning towards business or academia. The content market admires, appreciates, and consumes content that leans in either direction. That being said, the best content I’ve seen is balanced. It has hard data to support the theories and it is peppered with stories and anecdotes based on the content’s real world business application. All too often I’ve heard academics snobbishly dismiss a business book written by a world renowned CEO because it doesn’t have an academic underpinning or data. I’ve also heard many C level execs discount the potential value of content that comes from academia as they claim that it wouldn’t work in “the real world” of business.

I’d use the Switzerland strategy. Be neutral and open to the needs and concerns of both sides and respect them both. For example, if you’re a less academic thought leader, put the effort in to finding some academic research to validate your concepts and theories. Chances are there is academic work that has been done that you can cite and it will neutralize the darts that academics may toss at you. Conversely, if you’re an academic you need to get out into the field and talk to business leaders and run experiments in the real world to validate your claims. Oftentimes things that should work just don’t for a variety of reasons; the lab is not the same as the market place.

Now you have one more thing to keep balanced in your life, however, the benefits of cross pollinating your work will make it stronger and reduce the resistance as it spreads across an organization.

Importance of Business Systems

Business systems are documented procedures setting out how your organisation operates. They are processes, usually combining actions taken by people and some form of automated application, organised in such a way so as to meet a given set of business objectives. Such systems can generally take place without the business founder / owner’s direct action, over and over again, as efficiently as possible.

Examples of processes may include how your staff should answer the telephone, how they take and pass on messages; the procedure for raising, approving, placing and receiving orders; the process for generating, checking and sending out client invoices, as well as receiving payments and following up on outstanding bills etc.

Regardless of the size or type of your business, it is likely that you already have set procedures in place covering many functions within your organisation, which employees follow out of habit or as directed by their supervisor / manager.

Business systems are the manual for your business; the “know-how” of any business that many business founders / owners usually hold in their head, and have not got round to putting onto paper.

There are many reasons and just as many benefits for having established and documented systems in your business, some of which include the following:

  • They provide a framework for your operations and an effective structure to support your business.
  • They improve consistency: production, delivery, customer service, after-sales care etc.
  • They improve results and/or productivity, because you and your employees don’t have to re-invent the wheel every time.
  • They provide a better work environment for your employees, as an effective system will contribute to clarifying roles and responsibilities as well as providing staff with some guidelines to refer to.
  • They ensure compliance with legislation, safety regulations or any other legal requirement specific to your type of business operations.
  • They give your business the ability to expand and they facilitate business growth, as they will make your business more attractive to any potential investor or buyer.

Although there are similarities across many functions, such as Accounts, Human Resources, Sales, Stores, Logistics etc., unfortunately there is no one perfect, one size fits all system that works for all companies. Any system will need to integrate the company’s business objectives, its people and the way it provides its products or services.

It is important to have a well-designed system, customised to your type of operation, and thought out by people at all levels within the organisation.

Such a system will be more likely to be followed by all employees, because they have been involved in its design, and they understand the value that having a system in place brings to the quality of their work and the service they provide to customers.

One point to keep in mind is that having great people working with poorly designed systems – or no systems – is likely to lead to an under-performing business. On the other hand, great systems without good people won’t work either, hence the additional benefit of involving employees in designing a system, or simply in documenting the processes they are following.

Equally so, employees who have been trained in your business systems should also feel empowered enough so that they don’t feel they just have to follow a given script without using their head.

For this reason, it is important to encourage feedback not just from your customers, but also from your employees and to use such comments to review and to continuously improve and develop your business systems.

About Integrated Talent Management Strategy

Talent Management involves several practices linked together and propelled by organizational infrastructure. It begins by having a firm written understanding of the core capabilities needed to perform tasks meshed with the actual business intelligence for the industry. For this article’s example we will be using the financial services industry, but we must remember that support functions like IT, Human Resource, Accounting, and Purchasing have unique business intelligence issues that need to be included any industry strategy.

While banking business intelligence is similar from one institution to another, your market, choice of products and services and unique culture make for a different plan and approach. The clarity of goal for talent management is essential before assembling the pieces.

One of the most complete models for a Talent Management Strategy I have found includes the following nine practices:

  1. Recruiting & Staffing
  2. Performance Management
  3. Rewards & Recognition
  4. Workforce Planning
  5. Talent Review
  6. Succession Management
  7. High Potential Development
  8. Leadership Development
  9. Employee Development

These practices are not in any particular order or priority because they all must be in place, and integrated for the strategy to be effective. Rolling out one at a time is a waste of energy and leads to minimal impact. This is probably the main reason many companies have hired a Director of Talent Management to design, implement and monitor the strategy. To be effective, no other function can add all this to their existing workload.

Now while it is more effective to put talent management under the responsibility of a single leader, the practice responsibilities are spread throughout human resources, training, and selected management sponsors. This initiative may begin with the Board of Directors and/or Senior Management; but it eventually is a process that involves every single employee if it is to be successful in achieving a lasting effect.

As you review the list of practices, it becomes clear that the focus is on your employees (the talent) and the conscience attention to setting and achieving desired outcomes to function in today’s economy as well as being prepared for changes in your workforce and working environment. Banks often promote their technologies to clients, and yet it is our human capital that makes the bank possible. Let’s face it, years ago we did it without as much technology, but we still need the human factor to make it happen today.

Now while you might hire someone to management this whole process for you, by the very nature of this much change all at once you would be wise to bring in an external consultant to guide the creation of the strategy. Someone who fully understands what integration means and how it is applied to each of the practices. This consultant acts in many ways as someone who can act without emotional attachment to ancient practices, and is skilled in bringing consensus between processes and people. Yet consensus is not everything. The consultant is not going to be with you forever, so part of their job is to make sure your management team comprehends what integration means, and a year later can identify issues in your strategy, and how to make tweaks to close the loop holes.

Eagle’s Dynamic Strategy

The problem is that we no longer do business in a bubble. Therefore, your competitive advantage can be enjoyed only for a short period of time. Modern business strategy must be a continuous process evolving with new competitive advantages. One must build their business on the basis of moving from one competitive advantage to another as smoothly as possible. This is a continuous process and one that is critically important to long-term success.

In general, you can only depend on new innovations giving you an edge for a year or two. For example, lower cost of base elements and new configurations can last a short period of time, sometimes as little as one-quarter of a year. These are tangibles that will impact your current edge. There are intangibles that must be paid attention to as well including how you are perceived by your customer base. This includes issues like how satisfied your customers are, how strong your brand is nationally and in some cases, internationally, how strong your distribution channels are and whether they can be expanded. The best part of the intangibles is they are far more challenging for your competition to duplicate without a significant investment in time, energy and in some cases, money.

In short: your overall business strategy and the competitive advantages you develop and nurture have to be more dynamic than ever. You have to identify a business strategy that works for you, analyze your competition’s responses to your advances and work out your next steps. Stop and think about it like an eagle on a migration route: The eagle already knows where he is going and how he is going to get there. However, his decisions remain dynamic, responding to altitude, air currents and stops. There may be other factors that come into play including the weather and his need for food and shelter. Simply put: The eagle is always on the lookout for a new competitive advantage and he has developed a dynamic strategy to ensure he reaches his destination regardless of the circumstances he is facing. Without this type of dynamic strategy, the eagle would quickly exhaust himself; he must always be ready to adapt to changing conditions along his route.

While this may seem like an oversimplification of the problem, business strategies must have a competitive advantage roadmap. This means determining early on how long we will have a competitive edge once we have a new innovation and being able to jump to the next area that will provide us that competitive advantage once again.

One of the biggest obstacles that a company has with maintaining a competitive edge is internal issues. One has to be poised to extract maximum value from each advantage and have the flexibility to adapt to new advantages nearly immediately. For most companies, this means having a continuous process of innovation and research and development.

Competition within the industry is not always the main competitive threat; in fact, there are far more significant threats that most businesses face like new business models, new technologies or new companies. You might be surprised to find out that the least of your problems is current competitors; there may be others waiting in the wings to pounce at an opportunity. These “nonobvious players” may be a more significant threat than your current competition.

This means you have to be constantly looking out for ways to keep your brand in a competitive model and be prepared to address changes nearly immediately. This is why businesses are now dealing with what we identify as “transitory competitive advantages”. If your strategy for staying on top is not flexible and easily maintained through a dynamic strategy, you will lose any competitive advantage you have quickly and may not have an opportunity to regain your position.

Organize for Growth and New Business

New products, services, programs, and business can be systematically created within one department where the responsibility for knowledge and communication is managed and produced, specifically:

  • current capacity,
  • past experience,
  • future vision, and
  • the benefits people can realize with the organization’s solution.

New business arises from proposals (knowledge products), and those organizations with efficient systems of converting their experience, processes, quality control, and financial systems into articulate documents that address marketplace needs will win new business and provide superior service in comparison to the competition.

The idea is to have the capacity to strategically plan to grow revenue even though growth often means bumping against the organization’s time and capacity.

In complement to the development of proposals, the efficient collection, summarization, and storage of information is required. Organizations require current information to understand and respond to the needs of stakeholders. Data collection tools for the gathering of this type of information include:

  • interview surveys and questionnaires,
  • expert reports and white papers, and
  • intelligence about clients from other various sources.

Summaries can then be communicated verbally or in short memos to decision-makers.

Since organizations prosper or die from the delivery of messages to internal and external stakeholders, it is vital to maintain a consistency about who you are, where you were, what you represent, and where you will go in the near future. Communication staff therefore maintain the responsibility for:

  • program descriptions,
  • models,
  • visualizations,
  • videos,
  • web pages,
  • trainings, and
  • presentations.

Organizations that develop a structure for new business will ultimately succeed better than those organizations that operate as if growth happens by luck and personal connections.