Watch the following Videos
Also see the following links on my Dunn & Bradstreet Seminar presentation and some videos on sales.
• Oversimply Golf 6 https://youtu.be/OA2UGpTgOQE
PUBLIC SPEAKING VIDEO LINK https://photos.app.goo.gl/3Uuj6AVm93epUd9W6
Plan & Self Grooming/Study
- Career & Life
- Home Loans
- Self Study
CAREER & LIFE PLAN (AMMEND THIS FOR YOUR LIFE)
|1965||10||Learn cycling & Swimming|
|1966||11||Apply for Science Tallent||Individual Sport Tennis, Golf, Badminton. Billiards|
|1967||12||Join NCC||Team Sport|
|1968||13||Open Bank Savings Account||Debate & Essay Competition|
|1969||14||SSC||Do Part time Job||Learn Banking, FD, Draft||Do Social Work|
|1970||15||Apply for NDA||Run 10 Miles Marathon|
|1971||16||HSC||NCC Republic Day Parade||Run Full Marathon|
|1972||17||Learn Stock Market||Rock Climbing|
|1973||18||Do 5 Launches in Glider|
|1974||19||NDA||B Sc||NCC C Certificate||Learn how to book Air Tickets and|
|1976||21||NDA Pass||MBA1||Do Power Flying|
|1978||23||Jhansi, Cmdo Belgaum||JOB 1||Start Tithe|
|1979||24||YO, Deolali, OPTC Pune||PUBLIC SPEAKING COURSE||ULIP STARTS, Term Insurance|
|1981||26||IIM(A) MID LEADERSHIP||Apply for Housing Loan||Start Yearly Holiday Scheme|
|1982||27||BUY HOUSE 1||Train Wife to be Independent|
|1983||28||JOB 2||CHILD 1|
|1984||29||NEGOTIATION SKILLS COURSE||Start support one orphan’s Education|
|1986||31||PERSONALITY DEVELOPMENT COURSE||CHILD 2|
|1988||33||Do Entrepreur’s Course|
|1989||34||GM LEVEL||BUY HOUSE 2|
|1992||37||IIM(A) Strategy Course||Make Child 1 LIFE PLANNER|
|1995||40||Make Child 2 LIFE PLANNER|
|1996||41||Start Ph.D||CHILD 1 SSC|
|1997||42||CEO||BUY HOUSE 3|
|1998||43||CHILD 1 HSC|
|1999||44||CHILD 2 SSC|
|2001||46||CHILD 1 B Sc/CHILD 2 HSC|
|2002||47||Start own company||CHILD 1 BE|
|2004||49||CHILD 1MBA2/CHILD 2 B Sc|
|2005||50||CHILD 2 BE|
|2006||51||CHILD 2 MBA1|
|2007||52||CHILD 1 MARRIAGE/CHILD 2 MBA2|
|2010||55||CHILD 2 MARRIAGE|
|2013||58||Take Company Public||RETIREMENT|
|2016||61||Go on world tour with Family|
MUST DO COURSES /CAPSULES
Toasters’ Club (Public Speaking)
Train the Trainer (Teaching Skills)
Microsoft Projects (Project Management)
UNDERSTANDING HOW TO BECOME BETTER COMMUNICATORS
Breakdowns in communication, lowered productivity. Communication skill can be learned. Empathy, Listening, Reading skills, Observations, Word choice, Body languages and Action are all involved in improving communication.
- Does not mean you necessarily agree, understand why that person speaks and acts in a certain way. “feel” the bitterness.
- Constant talking interferes with listening and learning. Average speaking speed is about 120 – 200 words per minute. Comprehend words is more than four times the speed at which the words are spoken.
- Evaluate listening – free time is devoted to evaluating the speakers remarks.
- Projective listening – To fully utilize their time, project themselves into the position of the speaker. Carl Rogers suggested “Each person can speak for himself only after he has related the ideas and feelings of the previous speaker accurately and to that speaker’s satisfaction”.
- Through Training, Reading speeds can be doubled and tripled with little or no loss in comprehension.
- Some Managers are adept at assessing the atmosphere of an organization merely by strolling through its work place.
- Simple and Common words.
- 90 percent of first impression.
- Crossed legs or ankles and folded arms – indicate a defensive posture or a dislike of the situation. Open position may indicate the opposite as may leaning forward or backward in a relaxed manner.
- A worker facing away, hands in pockets – negative posture.
- Free use of hand gesturing – indicates highly emotional, animated or relaxed relatively carefree.
- Tense individual – body rigid.
- Hard gestures – Positive attitude
- Facial expression is usually understood. Emotions like anger, interest, happiness, disgust, contempt, surprise, fear and love.
- A frown, a sarcastic smile, a blank stare and mean to the employee that the manager is not interested.
- Sweaty hands or nail bitting may mean that the workers feel ill at ease.
- Desk moved
- Deliberately restricting their output.
- Machinery that could do the work of this crew.
- Guidelines for Dealing with Communication
- Have a plan.
- Get organized.
- Develop the message from the receivers point of view.
- Select the best way to communicate the message.
- Look for feedback.
- Follow up.
- Do not assume too much.
- Be a good listener.
- Use language that other can understand.
- Observe non verbal cues.
SPECIAL SKILLS FOR EFFECTIVE COMMUNICATIONS
- How to handle personal criticism
- Put forward a proposal.
- Register a protest.
- Disagree without being aggressive.
- How to be creative.
- How to negotiate.
- How to buy and sell.
- How to interview and praise.
- How to contribute to a meeting.
IMPORTANCE OF CONVERSATIONAL CONTROL
- Criticism with confidence
- Get the correct information quickly
- Talking to people in a convincing way
- Objections and Opposition
- Where people are coming
- Interviewing and appraisal
- Use the dynamics of conversation for both problem solving and social use with friends
BENEFITS OF CONVERSATIONAL CONTROL FOR MANAGERS
- Managers often tell that the major problems they face are in responding to the concerns and problems of others and trying to influence people.
- To be able to manage conflict.
- To negotiate more effectively.
- To develop listening skills.
- To persuade and influence
- To get people to work together
- To facilitate problem solving.
- To get people to think more creatively about the job.
- To get others more involved in planning and implementation.
RECOGNITION OF CUES AND CLUES
- All conversations and discussions are full of cues and clues as well as signs and signals. Other s who do not hear and see them will miss the opportunity and the conversation will probably fail.
- Very often people give some of their most important clues through non-verbal behaviour. The shrug, the hand over, the mouth, the lean backwards or forwards in the chair, clenched fist
- A cue is a word or phrase you see when you want to give an indication that something is important to you.
- A clue is a similar set of words, only the key point is that the words as spoken by someone else
EXPECT CUES AND CLUES
- We all miss cues and clues because often we are not quick enough to observe and understand. We need to listen to the important words people use. Cues and Clues are difficult to handle because they are not always directly visible.
IDENTIFICATION OF CUES AND CLUES
Basic principles are:
- First, listen carefully when people use the words “I”, “Me” or “My”. At that point they are speaking about the most important person in the world – themselves.
- Second, listen carefully if people follow up comments about themselves with strong adjectives such as “disappointed”, “annoyed”, “worried”, “angry” etc.
- Third, listen for words which imply the other person is under pressure to do or achieve something.
- Fourth, listen when people express doubts and concerns.
SIGNS AND SIGNALS
- Signs refer to the behavioural indicators such a the pointed finger to emphasize a point, the hands over the mouth to guard against the wrong word or the eyes looking forward to help are sings etc.
- Signals refer to the behavioural indicators others give to you. When a person is relaxed and at ease he will usually smile more and nod their head. You can therefore observe, without a word being spoken, the attitude of the person.
- IAS, IFS, IRS, IPS
- CDS (Army, Navy, Air Force,)
- TCS, WIPRO, INFOSYS GRADUATE EXAMS
- Bank Officers
Highlight When Reading
Speech notes into word to get Notes
2 to 5 Practice Papers
Never leave any Question Blank except in Objective Tests where Negative marking is more HALF OR ABOVE
Studying for Retention
- Highlight or underline as you are reading.
- Write important points / new words in the margin
- Read Preface, Executive Summary and about the Author before you start the book.
- First run through the index.
- After you finish each chapter dictate the main points into a voice dictation software like Speech Notes (Android Play Store)
- Carry out an exercise or project to use that knowledge practically within 1 week.
Ideal Age to get Married
- Male 28 to 32
- Female 24 to 30
Select City & Location to retire and settledown as early as possible.
- Need to relocate family & parents , Siblings
- Affordability based a 10% increase in your earnings due to Promotions and Increments
Plan for Safety & Insurance
- Term Insurance
- Health Insurance
- Home or Property Insurance (Normally included in Home Loan Process
- Over all Tax efficiency under Home Loan 80 C, Pention Plan
CHILDREN & HEALTH
Ideal Age to get married – Boy 28 to 33, Girl 23 to 3o
First Child – 30 to 34
Second Child – 36 to 40
Must have Company Group Medi Claim
Must have Term Insurance of about Rs 50 Lakhs
Home Loan for 1st Flat , Land Investment & Tax Planning
Cost of Flat 20 Lakhs
Cash down 15% = 3 Lakhs
Home Loan about 17 Lakhs ( It is low interest between 8% to 12% and very Tax efficient).
Take max loan ie 85% of cost of flat for 20 to 30 years
Try in a Class a City / Metro
Buy what you can afford as it can stabilize you.
Cost of flat – 20 Lakhs
Cash down – 3 Lakhs
Loan Amount – 17 Lakhs
EMI will be about 17000 (Eligible 80C & 2 Lakhs as deduction from Income tax)
If the cost doubles in 10 years your profit is 20 lakhs on an investment of 3 Lakhs.(Huge Profit)
2. BUY an Equity based Systematic Investment Plan
3. Buy some land & Gold
Good Health in the long run is fully your responsibility. What ever your existing ailments or genetic tendencies – 95 % of the problems can be prevented with disciplined habits in eating, exercise, Yoga, Rest and Stress mitigation. You are also responsible for the health of your family who will emulate you.
HEALTH HINTS FOR YOU
Two things to check! as often as you can
- Your blood pressure
- Your blood sugar
Three things to reduce to the minimum on your foods
- Starchy products
Four things to increase in your foods
Three things you need to forget
- Your age
- Your past
- Your grievances
Four things you must have, no matter how weak or how strong you are
- Friends who truly love you
- Caring family
- Positive thoughts
- A warm home
Five things you need to do to stay healthy
- Smiling / Laughing
- Trek / Exercise
- Reduce your weight
- Voluntary work
Six things you don’t have to do
- Don’t wait till you are hungry to eat_
- Don’t wait till you are thirsty to drink_
- Don’t wait till you are sleepy to sleep_
- Don’t wait till you feel tired to rest_
- Don’t wait till you get sick to go for medical check-ups otherwise you will only regret later in life
- Don’t wait till you have problem before you pray to your God.
Watch 6 Videos on You Tube Oversimplify Golf
Oversimply Golf 6 https://youtu.be/OA2UGpTgOQE
GUIDELINES FOR A NEW GOLFER
INDOOR WITH RUBBER BALLS
ONLY DROP OUTS – For Good Health
AIM – 18 HANDICAP in 5 days (only 2% score that low)
5 RULES GOLF
- FULL FOLLOW THROUGH
- NATURAL SWING(Start with half easy swing with ball in center & minimum divot)
- NEVER LOOK AT THE BALL – Head should not move & keep looking where the ball was lying
- PLAY TO GREEN CENTER – USE ONLY 3 CLUBS (5W/Hy,7 & PITCHING). Correct CONSTANT ERRORS – Aim 8 Deg LEFT
- WITHIN 30 YARDS ONLY USE PUTTER – UPHILL 18 inches + & DOWN HILL 18 inches short – use only shoulder
1 – SELECTING YOUR NATURAL SWING
2 – USING THE SELECTED NATURAL SWING
3 – USING PLASTIC BALLS & MAKING CORRECTIONS
4 – CALIBERATING THE PITCHING WEDGE FOR SHORT GAME (Less than 80 Yards)
5 – PUTTING – THE MOST REWARDING TALENT
LESSON 1 – SELECTING YOUR NATURAL SWING
- Never Copy Tiger Woods
- Stance – feet 2 ft between heals & almost erect – back straight
- Longer route Back Swing.
- Down Swing – Let it fall initially and then accelerate – no jerk on top or Head movement
- Minimum elbow and wrist movement – just around your shoulders
- Back swing just enough so that the Head does not move
- Back swing never beyond the VERTICAL
- Easy – no pain -80 %
- Just scrape the ground – no divot
- Full follow through – stop after club hits your back
- Head should not move – Never look at the ball – either the Tee or where it was lying
- No wrist or elbow and Left heal always on the ground
- Test the back swing where you can hit 9 out of 10.
LESSON 2 – USING THE SELECTED NATURAL SWING
- Pendulum using 7 IRON
- Scrape the ground 200 times with HALF SWING
- Keep increasing back swing till Head is forced to move
- Use NATURAL SWING with 4 HYBRID, 7 IRON & PITCHING WEDGE 50 times each.
- CHECK if LESSON 1 is being fully followed
- RETEST – You can hit 9 out of 10.
LESSON 3 – USING PLASTIC BALLS & MAKING CORRECTIONS
- EASY NATURAL SWING with 5 HYBRID, 7 IRON & PITCHING WEDGE 25 times each.
- FOLLOW THROUGH – FULL,
- HEAD DOES NOT MOVE – Reduce Back Swing to HALF if Head is moving at the top of the swing
- NO LOOKING UP- See the ball only when it is about to be hit by you. NEVER AT ANY OTHER TIME
- Minimum elbow and Wrist movement.
- Ball in center
- Minimum divot
- Correct direction by Closing Face (80% fade the ball – so Close the CLUB FACE & AIM 8 Degrees LEFT)
- Scrape the floor 200 times with HALF SWING
- Again use 5 HYBRID, 7 IRON & PITCHING WEDGE to hit the ball 25 times each.
- RETEST – You can hit 9 out of 10. If not again reduce Back Swing till you achieve that
LESSON 4 – CALIBERATING THE PITCHING WEDGE FOR SHORT GAME (Less than 80 Yards)
- ONLY CLUB WHERE YOU USE LESS THAN YOUR NATURAL SWING IS PITCHING WEDGE
- Use Table given below:-
- For 80 Yards – NATURAL SWING of PITCHING WEDGE
- For 70 Yards – Three fourth of NATURAL SWING of PITCHING WEDGE
- For 50 Yards – Half of NATURAL SWING of PITCHING WEDGE
- For 30 Yards – One Fourth of NATURAL SWING of PITCHING WEDGE
- For 20 Yards – One Eighth of NATURAL SWING of PITCHING WEDGE
LESSON 5 – PUTTING – THE MOST REWARDING TALENT
- Different Styles Used
- Choose your own
- Aim is never to take more than 2 on the GREEN
- Putting should by the shoulders and not by the arms or hands.
- While putting down hill try to stop the ball just within 6 inches past the hole.
- For uphill putts try to go 2 feet beyond the hole.
- Uphill puts turn much more with the slope (but chipping a Pitching wedge turn least)
- Within 3 ft of the hole putt firm and don’t bother about the slope.
- For all putts the back swing and forward swing should strictly in line.
- Control distance by increasing length of Back Swing and not by hitting it harder
DETAILED NOTES & GOOD HABITS
- SECRET OF SUCCESS
- Find and consistently use your ‘Natural Swing’ and the most comfortable Club Head Speed’. Too fast or too slow are both bad.
- Try to achieve the same distance with each club every time you use it. Hard hitters are usually not as consistent
- HOW TO BECOME A GOOD PLAYER WITHIN A MONTH
- Golf is a game of Concentration and Full Follow Through.
- Use only 80 % of your strength with full follow through and you will achieve the best accuracy with no mis-hits
- Keep looking at the point you hit the ball. It is Caddy’s job to watch the ball NOT yours.
- Keep your Left elbow straight as far as you can in the slow Back Swing.
- Always hit the ball first and then scrape the ground
- Irons are precision instruments and so your back swing should stop near the vertical position and start the down swing gradually.(use same for Fairway Woods without a Tee)
- HOW TO PLACE & HIT THE BALL
- For Tee Shots – hit the ball on the upward swing almost near your front toe
- For Fairway Woods – hit the ball near the bottom of the swing at the Centre point between your feet
- For Irons – hit the ball first – then scrape the ground on the downward swing almost at the bottom of the swing around 1 inch before the Centre point between your feet. For Wedges – Place the ball opposite the rear foot heel’s inner point. The hands will thus be ahead of the ball. Use only maximum half the full swing. Hit the ball first and then the grass just after that on the downward part of the swing. Otherwise the sand will pad the ball and the distance achieved will be unpredictable
- HOW TO USE THE PUTTER
- Putting should by the shoulders and not by the arms or hands.
- While putting down hill try to stop the ball just within 6 inches past the hole.
- For uphill putts try to go 2 feet beyond the hole.
- Uphill puts turn much more with the slope (but chipping a Pitching wedge turn least)
- Within 3 ft of the hole putt firm and don’t bother about the slope.
- For all putts the back swing should be very slow and deliberate and keep looking at the spot where the ball was rather than follow the ball.
- HOW TO HANDLE WIND
- Head winds stop the ball much more than the amount tail winds help the ball.
- The maximum height reached by all the clubs is quite similar and varies from 29 to 35 Yards and so is the Time of Flight at about 6 to 7 seconds.
- Wind velocity is higher at higher height above the ground
- HOW TO QUICKLY BECOME A GOOD PLAYER
- Ensure that you do not mishit even a single ball. Initially to achieve this, you will have to use a limited swing and use less force. Later you will develop better co-ordination- you can use a bigger swing and slowly increase the force. But at no stage should exceed 85% of your full force.
- In a practice round take all the risks but in a tournament don’t take any risk. After a bad shot forget it and don’t try to recover in one shot.
- Standardize your swing. Your swing should be exactly the same irrespective of which Club you are using. This will ensure that each club will give a specific distance every time you use it. (There is usually a difference a 10 yards difference between successive clubs).
- Make a table for distances achieved for each club with an easy constant swing for both headwind and downwind of about 10 Miles per Hour.
- What I achieve with each club in No Wind conditions in yards – SW-60, PW-80, 9 Iron- 90, 9 Iron- 90, 8 Iron- 100, 7 Iron-110, 6 Iron- 120, 5 Iron- 130, 4 Iron- 140, 3 Iron- 150, Rescue 26 Degrees- 160, 5 W- 170, 3 W-180, Driver -240 yards.
NOTE : Try to achieve the same distance every time you use each club.
- HOW TO MASTER THE SHORT GAME – USE PLEZ 8
- Short game is most important. So concentrate on the 20 feet pitch with a Pitching Wedge (most of the time) and Sand Wedge (when there is less distance from the Apron to the Pin) and roll with a 9 Iron or a Putter (if you are on the apron). The swing in the short game should be shallow and only scraping the ground – NO DIVOT
- The “Pelz” part of Phil Nicholson’s “Pelz-8” refers to the concept of controlling distance by controlling backswing length and the “8” is code for 8-iron, but the swing can be made with any club. It’s composed of a less than full backswing and produces slightly less distance and backspin. You stop the backswing when his left arm gets horizontal to the ground. The forward swing should be at the normal pace (not faster to make up for a short backswing).
- By this you can develop amazing consistency in the distance your shots travel. This can be done for any club (wedges, 9-, 8- or 7-irons).
- It’s like having an extra set of distances that he can produce on command depending on the wind, temperature and humidity.
- HOW I PLAY GOLF
- Developed most easy swing which is same for all Clubs.
- Close all clubs equally but enough to ensure that there is no Fade or Draw (Swing to Right or Left which will force me to aim left or Right – I always want to aim only at the target)
- I use quarter swing only near the greens of different clubs for distances up to 50 yards and then Full swings as follows:
- 1 to 30 yards – Pitching wedge (punch the ball or use Sand Wedge to go over obstacle (quarter for 17, Half for 25 & Full for up to 32 yards)
- 30 yards – Pitching wedge (quarter swing)
- 40 yards – 9 Iron (quarter swing)
- 50 yards – 8 Iron(quarter swing)
- 60 yards – 7 Iron(quarter swing)
- 70 yards – Pitching wedge (Full Swing)
- 80 yards – 9 Iron (Full swing)
- 90 yards – 8 Iron(Full swing)
- 100 yards – 7 Iron(Full swing)
- 110 yards – 6 Iron(Full swing)
- 120 yards – 5 Iron(Full swing)
- 130 yards – 4 Iron(Full swing)
- 140 yards – 3 Iron(Full swing)
- 150 yards – 26 Degree 7 Hybrid Rescue(Full swing)
- 160 yards – 19 Degree 4 Wood(Full swing)
- 170 yards – 15 Degree 3 Hybrid Rescue(Full swing)
- I90 yards – 14 Degree Lady’s Driver(Full swing)
- 240 yards – 11 Degree Driver(Full swing)
- Short game is most important. So concentrate on the 20 feet pitch with a Pitching Wedge (most of the time) and Sand Wedge (when there is less distance from the Apron to the Pin) and roll with a 9 Iron or a Putter (if you are on the apron). The swing in the short game should be shallow and only scraping the ground – NO DIVOT
|Yards||Steps||Aim Left Degrees||BEST Club||Three fourth Swing||Half Swing||One Fourth Swing|
How to reduce yourHandicap rapidly:
1. Hitting shorter with an easy swing and not mishitting a single ball.
2. Always remaining on the fairway. If outside come back and don’t try to compensate for a bad shot.
3. Always aiming at the Center of the Green and not on the Hole for the approach shot.
4. Follow through full and never looking at the ball till it has come to rest. Let your Caddie find the ball.
5. Try for a 2 Putt all the time.
6. Take atleast one Practice Swing. Never take it casual even for one shot.
OTHER GAMES WORTH PICKING UP
Bridge (Card Game)
SALES TRAINING CAPSULE
Watch the following Videos
Also see the following links on my Dunn & Bradstreet Seminar presentation and some videos on sales.
PUBLIC SPEAKING VIDEO LINK https://photos.app.goo.gl/3Uuj6AVm93epUd9W6
TRAINING CARRIED FOR MBA BATCHES
1. Introduction and importance of communication
2. Emergency announcements on shop floor(for rains/blast)
3. Talk to late comers (genuine and naughty late comers)
5. How to give a motivation lecture
10. Practice in convincing workers about a project
15. Short write up on subject of ones choice and presenting it
22. How to collect information about a competitor company
25. How to participate in a conference
26. How to behave in a social party /hosting skills
28. How to interview workers
29. How to negotiate with trade union
30. Written communication (types of letter)
31. Making off light conversation and what topic to avoid
32. How to talk with senior management
33. Telephone ettiqute
34. Official spokesperson and P.R.O
35. How to avoid being misquoted
36. Conflict resolution
37. How to make friends
38. Maintaining a contact list
40. Talent Exhibition
41. How to get an appointment with senior official
42. How to built and assess the culture of an organisation
SKILLS YOU MUST PRACTICE
- – Induction Speech
- – Brainstorming sessions – Organization
- – Conducting a meeting.
- – Conducting a game.
- – Motivation lectures by Manager
– Addressing your team to pull up their socks and start performing failing which each will be terminated
– Condolence speech on some ones death
– Appreciation on a job well done
– Conflict Management and how to avoid conflict with other departments
— Speaking a trade union leaders.
- – Organizing a party game.
- – Delivering joke
- – Singing a song to an audience
- – Party Etiquette
- – Attending Calls
- – Call Centro Training
- – Important Personalities in Indian and World History
- – National & International by Cultures
- – Formation of Clubs
- – Organizing an event with checklist
- – Basic Computer knowledge
- – Using the Internet
- – Using Outlook and PowerPoint
- – Excel &Making Graphs
- – Writing a Biz Plan will help of a template
- – Using templates for everything
- – Using Microsoft Project
- – Basics of Project Management
- – Evolving a Sales talk
- – Speech on- Value System of your Company
- – Biz games
- – Basics of Project Marketing
- – Organizing a Project Team
- – Dealing with Foreign Delegation
- – Dealing with Politicians and Ministers
- – Tendering Process
- – Bribing and Biz Development
- – Insurance Products
50 WEEK MANAGEMENT DEVELOPMENT PROGRAM
|WEEK 1||THE GROW MODEL FOR COACHING|
|WEEK 2||DEVELOPING INFLUENCE AND ASSERTIVE LEADERSHIP|
|WEEK 4||THE CHANGE CURVE|
|WEEK 5||THE LEADERSHIP PIPELINE|
|WEEK 6||EMPLOYEE ENGAGEMENT AND THE THREE-FACTOR THEORY|
|WEEK 7||THE NINE PRINCIPLES OF MOTIVATION|
|WEEK 8||SITUATIONAL LEADERSHIP (LEADERSHIP STYLES)|
|WEEK 9||THE JOHN WHITMORE MODEL|
|WEEK 10||ACTION-CENTRED LEADERSHIP|
|WEEK 11||THE SIX STEPS OF DELEGATION|
|WEEK 12||KOTTER’S EIGHT–STAGE PROCESS FOR LEADING CHANGE|
|WEEK 13||SIX PRINCIPLES FOR GAINING COMMITMENT|
|WEEK 14||BELBIN’S TEAM RULES|
|WEEK 15||DRIVERS OF TRUST AND THE TRUST CYCLE|
|WEEK 16||THE TRUTHS OF STRATEGY|
|WEEK 17||SWOT ANALYSIS|
|WEEK 18||SCENARIO THINKING|
|WEEK 19||THE BALANCED SCORECARD|
|WEEK 20||THE 7S MODEL|
|WEEK 21||THE RULE OF 150|
|WEEK 22||THE SERVICE PROFIT CHAIN|
|WEEK 23||UNDERSTANDING AND AVOIDING INERTIA|
|WEEK 24||THE SIX RS OF BUSINESS|
|WEEK 25||THE BOSTON CONSULTING GROUP MODEL|
|WEEK 26||THE PARETO PRINCIPLE|
|WEEK 27||BLUE OCEAN STRATEGY|
|WEEK 29||THE PRODUCT LIFE CYCLE|
|WEEK 30||SYSTEMS THINKING|
|WEEK 31||MARKET BARRIERS|
|WEEK 32||THE SIX PS OF STRATEGIC THINKING|
|WEEK 33||PORTER’S GENERIC COMPETITIVE STRATEGIES|
|WEEK 34||PESTLIED ANALYSIS|
|WEEK 35||THE DYNAMICS OF PARADIGM CHANGE|
|WEEK 36||ANSOFF’S PRODUCT MATRIX|
|WEEK 37||RESOURCES AND THE CRITICAL PATH|
|WEEK 38||DEVELOPING INTANGIBLE RESOURCES|
|WEEK 39||MARKET POSITIONING AND VALUE CURVES|
|WEEK 40||COMPETITIVE ANALYSIS: PORTER’S FIVE FORCES|
|WEEK 41||INNOVATION HOTSPOTS|
|WEEK 42||DEEP DIVE PROTOTYPING|
|WEEK 43||DEVELOPING CREATIVE THINKING|
|WEEK 44||THE DISCOVERY CYCLE (ORCA)|
|WEEK 45||THE FORTUNE AT THE BOTTOM OF THE PYRAMID (BOP)|
|WEEK 46||THE SIX THINKING HATS|
|WEEK 47||INNOVATION CULTURE|
|WEEK 48||DISNEY’S CREATIVITY STRATEGY|
|WEEK 49||THE MATE MODEL FOR STRATEGIC SELLING|
|WEEK 50||THE TEN CS OF SELLING ONLINE|
THE GROW MODEL FOR COACHING
The single most important technique for executive coaching
The GROW model, developed by Sir John Whitmore, provides a frame-work for coaching. GROW has four stages: Goals, Reality, Options and Way forward. Responsibility for setting goals rests with the coachee. The coach works in a non-directive way, supporting and challenging.
This focuses on the coachee’s aims and priorities. It sets the agenda for the coaching conversation. The coach should be flexible and prepared to explore, question and challenge. This is achieved with questioning and empathy. The outcome is a clear set of goals for the session and the overall coaching relationship.
|Questions include: What is your goal? What are your priorities?What are you trying to achieve? How will you know when you have achieved it? Is the goal specific and measurable? How will you know when it has been achieved? What will success look like?|
Explore the learner’s current position: the reality of their circumstances and their concerns relating to their goals. The coach needs to help the coachee analyze and understand the significant issues relating to their goal through intelligent questioning. The coach can also provide information and summarize the situation to clarify the reality.
|Questions include: Can you control the result? What don’t you have control over?What are the milestones or key points to achieving goals? Who is involved and what effect could they have? What have you done so far and what are the results? What are the major issues you are encountering?|
The coach helps the coachee to generate options, strategies and action plans for achieving goals. This can uncover new aspects of the individual’s current position with the result that discussion reverts back to the coachee’s reality. This is fine if it is productive or enlightening – the aim is to help the individual, not rigidly follow a process.
|Questions include: What options do you have? Which do you favour and why? If you had unlimited resources, what options would you have? Could you link your goal to another organizational issue? What would be the perfect solution?|
Do not rush the final stage. The aim is to agree what needs to be done. It can help for the coachee to develop a practical plan to implement their option. The coach should be a sounding board, highlighting strengths and weaknesses, testing the approach and offering additional perspectives.
|Questions include What are you going to do – and when? Who needs to know? What support and resources do you need? How will you overcome obstacles and ensure success?|
Finally, the most effective plans incorporate a review and feedback process to check progress and provide motivation.
DEVELOPING INFLUENCE AND ASSERTIVE LEADERSHIP
Providing support and challenge while strengthening results and relationships.
Whether you are giving feedback or selling a product or an idea, influencing requires an understanding of how your behaviour affects others.
All individuals have their own personality – the result both of nature and nurture – and this remains largely unchanging. However, behaviour is different: it is flexible and capable of being developed and enhanced. It’s useful to consider behaviour (yours and others) in terms of warmth or coldness, dominance or submissiveness.
- Warm means being supportive, open, positive, empathetic, constructive and engaging – not simply ‘friendly’.
- Cold means being suspicious, detached, not focused on people or relationships.
- Dominant means being challenging, in control, confident, strong, authoritative and direct.
- Submissive means subduing your own thoughts or actions for something or someone else.
The diagram below (the assertiveness model) highlights different types of behaviour (based on the Thomas-Kilmann Conflict Mode Instrument).
Aggressive behaviour Assertive behaviour
- Argues • Professional
- Needs to win • Inquiring
‘Sort yourself out.’ ‘Tell me what’s on your mind.’
Avoiding behaviour Appeasing behaviour
- Uninvolved • Over-friendly
- Indifferent • Talkative (rambling)
‘I’ll deal with it later.’ • Highly positive
• Too agreeable
Aggressive: dominant and cold behaviour
When dealing with aggressive behaviour, the best approach is to:
- increase your dominance to match their high dominance levels
- ensure that you are demonstrating behaviour that is assertive and warm rather than aggressive
- use open questions to generate understanding
- use body language and tone of voice to increase your dominance levels.
Avoiding: cold and submissive behaviour
When dealing with avoiding behaviour, the first priority is to get people engaged. Useful techniques include displaying lower dominance and higher warmth, using open questions aimed at making them feel secure and softening body language and intonation while continuing to smile.
Appeasing: warm and submissive behaviour
When dealing with appeasing individuals, it can help to:
- stay focused to keep them on track
- use open questions that appeal to their social needs but temper these with closed questions when they waffle
- ask summary questions to maintain clarity and focus
- use their name if you are interrupting them.
Assertive: warm and dominant behaviour
When dealing with conflict, it can help to be assertive and encourage others to be assertive as well. Consider how easy it is to warm up behaviour: why and when is it not easy? Why do we, as individuals, not behave in an assertive manner? What is it that hinders supportive and challenging behaviour? Finally, what are the most important questions for you to ask?
Creating your future
By imagining the future you want and then translating those ideas into practical and actionable plans, you will make it happen.
Orienting thinking towards the future is particularly important for middle and senior managers and leaders because it provides focus, determines the company’s culture, builds resilience and adaptability and engages employees.
A powerful vision motivates and guides everyone at all levels in a company. People manage what is in front of them, as daily and short-term tasks understandably dominate our routine and thinking. This certainly keeps things running smoothly in the stable present but is ill suited to coping with change or taking advantage of (or creating) opportunities. Visioning liberates us from simply managing the present, achieving more of the same or being unprepared for new developments, and thus enables us to build a more successful future.
Visioning involves assessing and challenging current thinking and methods, developing new ideas and deciding on the future you would like. It is also necessary to look outside your company – noticing and understanding trends, identifying threats and opportunities.
It can be helpful to involve others in a visioning exercise by asking their views on various issues. These questions will prompt thinking and encourage each person to consider and challenge the company’s aims and activities and to suggest new options (giving reasons for their choices).
Using these answers, you identify the most common issues and ideas, reduce these options to the ones that are most significant and then draft a provisional vision statement – this can be done by a smaller group of people, with the final vision being reviewed and approved by everyone involved. As well as generating ideas and opening up discussions, a major advantage of involving others in the visioning process is that you will gain their commitment to the final vision.
Once you have developed your vision, determine how it can be achieved:
- Deal with any barriers that may stand in the way and consider how future events may affect it.
- Develop a practical plan and communicate the vision and plan to every-one – show people why it is important, what it will achieve and how it will work and gain their commitment.
- To bring others with you, your vision needs to be clear, convincing, credible, easy to grasp, actionable, inspiring and focused – but not overly prescriptive, to provide flexibility and adaptability.
A vision is for nothing if it is not acted upon. You should ensure that all strategy and decisions are guided by the vision and that everyone remains committed to the vision. A vision also needs to be reviewed and adapted to changing circumstances to ensure that it remains relevant and useful.
THE CHANGE CURVE
Understanding how people respond to change
The human reaction to change is now well understood. The change process is commonly understood by reference to the research on people’s reaction to bereavement. Elisabeth Kubler-Ross has been a great contributor to our understanding of the experience of loss and bereavement, as well as how we react to changes more generally. The stages of loss that people typically go through are now commonly known as the Change Curve.
Organizations often refer to the Change Curve in the context of job loss and redundancy. Dr. Kubler-Ross undertook her research on dying by interviewing terminally ill patients. Although this is one of the most extreme and disturbing changes that anyone can face, the reactions to it are the same as for many different types of change. There are several key stages that people go through, as shown in the graph below:
2. Denial 6. Acceptance and integration
- Shock 3. Frustration
- Shock. The first reaction can often be shock – and all the emotion that results from this.
- Denial. This is a typical reaction and it is important and necessary. It helps cushion the impact of the inevitability of change.
- Frustration and anger. The person resents the change that they must face while others are less affected.
- Depression. First, the person feels deep disappointment, perhaps a sense of personal failing, things not done, wrongs committed. Around this time they may also engage in bargaining: beginning to accept the change but striking bargains -for more time, for example,
- Experiment and decision. Initial engagement with the new situation and learning how to work in the new situation, as well as making choices and decisions, and regaining control.
- Acceptance and integration. Dr. Kubler-Ross describes this stage as neither happy nor unhappy. While it is devoid of feelings, it is not resignation – it is really a victory.
People who are made redundant can go through a similar process. Just as with other types of change, people often go through a first stage before denial – that of shock or disbelief. We have witnessed people in shock following news of their redundancy. It can take a long time for people to reach the acceptance stage and often people oscillate between the different stages.
THE LEADERSHIP PIPELINE
Developing a leader-powered business
Performance is inseparable from a company’s approach to leadership development. Developed by Ram Charan, Stephen Drotter and James Noel, the Leadership Pipeline is a company-wide framework for developing future managers and leaders.
The Leadership Pipeline is a continual process that ensures a throughput of talented leaders. It is a practical, easily understood system that clearly explains what is required to work successfully at each leadership level, helping:
- individuals and companies to understand what is required for excellence at each level
- individuals to develop their skills, optimize potential and progress their careers
- organizations to manage and develop talent, and to build strategic an organizational capabilities.
How it works
The Leadership Pipeline represents the flow of internal talent into business-critical roles. As such, organizational structures, processes and reward mechanisms are geared towards encouraging preferred behaviours. For the individual, the Pipeline clarifies the development path that will build the leadership capabilities required to operate successfully at higher levels. At each stage:
- people need to be clear about the capabilities needed for each level
- managers and leaders should use the skills and values that are expected at each level so that others can operate effectively.
Traditional approaches to leadership development tend to simply strengthen existing skills, and inadequate attention is paid to learning new ones. The Leadership Pipeline formally recognizes that change and improved performance occur best when the skills that are needed for the next level are built on a solid foundation at previous levels and when individuals are given the time and correct support and training to learn the skills, time management and values required for the new role.
This clear framework makes it easy for people to see what capabilities and values are needed for successful career progression and it focuses people on the skills the organization needs – thus improving both current and future performance.
Working towards successful transitions
Typically, career progression involves making successful transitions at six key stages:
- From managing yourself to managing others
- From managing others to managing managers
- From managing managers to functional director
- From functional director to business director
- From business director to group business director
- From group business director to company director.
In reality, people often make these transitions with little support and inad-equate preparation, commonly modelling themselves on their predecessors and learning what works through trial and error. The Leadership Pipeline makes explicit what is required for success at each level. In particular, it clarifies the requirements in three key areas:
- Developing new skills
- Improving time management
- Adopting the values the organization is looking for.
Acquiring these capabilities at each level builds the foundation for success at the next level. Consequently, this focus on skills, time management and values prioritizes improved performance for advancement – benefiting both the individual and the company.
EMPLOYEE ENGAGEMENT AND THE THREE-FACTOR THEORY
The three things that matter most to people at work
The factors that influence employee engagement combine in different ways and at different times for each person. Obviously, pay and leadership are important – with a direct relationship between pay and effort and the quality of leadership being critical to employee engagement. In addition, people like to do work that has meaning and purpose.
Following international research, Sirota Consulting developed the Three-Factor Theory, addressing employee engagement by addressing three basic needs: equity, achievement and camaraderie.
Leaders need to engage, inspire and energize their people. Gaining commitment and getting people to acquire new skills and achieve their full potential leads to ongoing improvements in performance, benefiting all concerned – individuals, teams and companies. The Three Factor Theory establishes a self-sustaining cycle of effective employee engagement by ensuring that practices and policies focus on equity, achievement and camaraderie.
People need to feel they are being treated fairly – especially in relation to others both inside and outside the company. This includes:
- physical aspects – for example, working in a safe environment and being physically able to do a job
- economic factors – people need to feel that their pay, benefits and job security are fair
- psychological issues – including being treated with respect and consideration.
People work better and achieve more if they believe in what they are doing and have confidence in the direction they are going. In short, they work best when they feel they are achieving something. Six issues influence this:
- Having challenging work and being able to use their skills
- Having the opportunity to develop their capabilities and to take risks
- Having the resources, authority, information and support to work effectively
- Knowing that the work is important and has value and purpose
- Receiving recognition – both financial and non-financial
- Having pride in the company’s aims, ethics, products and brand values.
It is important for individuals to have good relations with co-workers. This requires congenial, co-operative, interesting and supportive relationships at all levels, with the most immediate ones being the most significant. This involves relationships:
- with co-workers
- within the business unit
- across on-site departments
- across the whole company.
THE NINE PRINCIPLES OF MOTIVATION
Creating the right environment
So much in business depends on motivating others. There is only so much any one person can do, so getting the most out of others is crucial to success. This all begins with winning trust – everything else follows.
Motivating others is an essential part of leadership. Your ability to motivate others relies on what they think of you and how they think you view them. This requires planning and vigilance and knowing that different people are motivated by different things. To motivate effectively, you need to know what motivates each person, the pressures they face, what influences their decisions and thinking, and how you can make a difference. These nine principles of motivation will help you to help your colleagues.
- Be motivated yourself
Self-motivation rallies others. People will ‘step up to the plate’ if you do so yourself. Knowing what motivates you will help you to motivate others.
- Recruit people who are highly motivated and assign them to the right position
Match people’s motivation to their job. Some are motivated by making sales while others are motivated by following processes, building teams or pursuing new ideas.
- Treat people as individuals
We all have different values and personalities. What works for one may not motivate another. So, tap into what motivates each individual to improve performance.
- Set challenging but realistic targets
Nothing is more demotivating than unachievable targets. Nothing is more motivating than achievable, we-can-beat-the-competition targets – they tap into our competitiveness and desire to produce something to be proud of.
- Focus on progress – it motivates
Everyone responds to a pat on the back – they’ve earned it and deserve it, so make it happen. The result: an upward spiral of people wanting to achieve more.
- Develop an environment that motivates people
Eliminate or minimize anything that blocks motivation – from bureaucracy and unnecessary procedures to lack of resources. Provide training and coaching to develop skills and to make people feel valued.
- Ensure that people receive fair rewards
Promotion, pay rises, sales commission, profit share, work benefits, additional responsibilities: these motivate people. They give people a reason to stay and to help your company excel.
- Recognize people’s work
We all want our efforts to be acknowledged. Recognition is needed to maintain commitment.
- Be honest about your intent
Honesty lies at the heart of motivation. Be clear about what your intentions are. People will be motivated only by those they can trust.
SITUATIONAL LEADERSHIP (LEADERSHIP STYLES)
Adapting your approach
Situational leadership improves your ability to lead others and to respond effectively to situations.
Different leadership styles
By adjusting your style to match each challenge, you are more likely to achieve your desired outcome. To decide which approach is best, you need to consider the issues, what needs to happen and the people involved. To develop your situational leadership, you must be self-aware and understand your own style and how it impacts others.
The model of situational leadership developed by Ken Blanchard and Spencer Johnson identifies and details the different leadership styles.
|Directing ………..telling||Centres on structure, control and supervision and one-way communication Effective for teams that are new, temporary or forming A hands-on, decisive and involved approach that directs and emphasizes tasks and deadlines|
|Coaching ……….engaging||Focuses on directing and supporting – using teaching and guiding skills Works well with teams that have worked together for a period of time Promotes a balance between short-term and long-term needs – such as monitoring target achievement while developing longer-term priorities|
|Supporting ……….developing||Involves praising, listening and facilitating development Appropriate for teams that continue to function well Leaders are no longer involved in short-term performance and operational measures Long-term aspects are more important, with a focus on individual and team development, planning and innovation|
|Delegating …….hands-off …….facilitating||Responsibility for routine decisions is handed over Works best with a highly experienced, successful team when little involvement is needed The focus is on working externally for the team by developing networks, securing resources and sharing best practice Intervention is usually at the request of the team wanting support and advice with defining problems, devising solutions or handling problems|
Using the right style
Each situation should use the most appropriate style. For example, directing is useful in exceptional circumstances such as a crisis requiring people to follow a particular course of action or when handling difficult personnel issues.
To decide which style is appropriate, assess the competence, ability, confidence and motivation of those involved. For example:
- Low confidence may indicate reduced commitment, so a supportive and encouraging style is appropriate.
- Low motivation requires a listening approach, to identify the causes and change the situation.
THE JOHN WHITMORE MODEL
Are you setting the right goals in the right way?
Sir John Whitmore gave us the GROW model for coaching and he also highlighted a model for goal-setting that is SMART, PURE and CLEAR, ensuring that you and your colleagues have goals that are appropriate, achievable and successful.
Goal-setting is vital whenever you need to focus someone (including yourself) on a specific objective or series of objectives – for example, at an annual appraisal, when someone starts a new role, or simply at the start of a new project.
When developing people, it is important to provide a focus for action and to ensure a sense of purpose. This is the value of the John Whitmore model: it provides a checklist for goal-setting. So, when you are goal-setting, keep it simple and check that each goal meets the 14 criteria in Whitmore’s model.
|Specific||The right goal||Challenging|
When goal-setting, distinguish between end goals and performance goals:
- End goals are the ultimate objective. They could typically be to gain promotion or additional responsibility or to complete a major project (e.g. I need to achieve sales of £300,000 this year’).
- Performance goals establish the level of performance that will help an individual to achieve their end goal. Performance goals include such elements as quality standards, time management and production targets (e.g. ‘I need to develop my negotiating skills’).
Think about a current goal you have or one you want to address in the future. Answer the following questions to assess the robustness of your how approach to goal setting, monitoring and achievement. Also comment on how you could improve your approach.
|What is your goal? Is it specific? What, exactly, will success look like? Is it an end goal or a performance goal? Is it measurable? How will progress be measured and monitored? Is it attainable? Do you have the skills and resources needed?How will you succeed and what will you do? What could go wrong? What are the risks? Is it realistic? How does it relate to other people and activities? Are these links understood and could this goal benefit from other activities or expertise elsewhere in the organization? What is the timescale? Are there milestones or dependencies in the plan? Is the goal stated as positively as possible, in a way that will engage and encourage people? Is it understood – is there a clear vision and view of what success will look like?Is it relevant – how well does it relate to other issues and priorities? Is it ethical? Will it provide the right level of challenge? Is it legal and are there legal (or regulatory) issues to consider? Is it environmentally sound? Is everyone agreed or is more agreement needed? Has the goal been recorded and is it being monitored, with progress assessed and lessons learned?|
Managing the task, team and individual
John Adair’s Action-Centred Leadership model views the role of leaders as integrating three areas: ensuring that the task, the team and the individual are working effectively and that their needs are met. Success relies on ensuring that all three responsibilities are mutually reinforcing.
As a leader, people look to you to set the direction, to support them, to help them achieve their goals, to ensure that team members work well together .and to make sure that the structures and procedures are in place (and working effectively). It is not enough to have a great idea; you are responsible for making it happen. In short, leadership is a total activity. If individuals aren’t motivated, teams will not function well; if teams don’t work well, tasks will fail and individual satisfaction falls, and so on. Whether you are leading one team, a business unit or an entire company, you need to provide for:
- the needs of the task – provide the appropriate systems, procedures and structures
- the needs of the team – promote team cohesiveness so that team members work well together
- the needs of the individual – engage each person (by considering pay, their sense of purpose, their need to have achievements and contributions recognized, and their need for status and to be part of something that matters).
A functional approach to leadership
To provide for the needs of the task, team and individuals, John Adair out-lines eight leadership functions:
- Define the task. Everyone needs to understand what is expected, so be clear about the task at hand – make it SMART (Specific, Measurable, Attainable, Realistic and Time-constrained).
- Plan. Identify options, look for alternatives, make contingency plans and test your ideas. Working with others in a positive, open-minded, constructive and creative way will help you to develop the best plan.
- Brief others. To create the right conditions and bring people with you, you have to keep people informed. Both teams and individuals will work well only if they have access to information and your thinking – without open communication, confusion or even distrust can seriously hamper business strategy.
- Control effectively. You need self-control and you need to positively control others. Put the right procedures and monitoring in place, delegate tasks and trust others to both take responsibility and deliver results.
- Evaluate. Assess likely consequences, measure and judge the performance of both teams and individuals and provide necessary feedback and training.
- Motivate. Motivate yourself – if you are not motivated, it will be difficult to motivate others. Recruit people who are highly motivated. Set realistic and achievable targets – people respond to doable goal Focus on progress, reward success and recognize achievements.
- Be organized. Be organized yourself and ensure that teams and individuals have the necessary skills, procedures, structures and resources in place for them to do their jobs efficiently.
- Set the right example. The example you set to others influences their behaviour, motivation and willingness to follow you.
THE SIX STEPS OF DELEGATION
Developmental, productive – the cornerstone of leadership
Without delegation, leaders cannot lead and managers cannot manage. Delegation develops skills, challenges and retains great people, and in-creases productivity. Yet many people have difficulty delegating. These six steps will help you to delegate effectively.
Delegation requires empowerment and trust. You need to empower people give them the skills and confidence to act and take risks. You need to trust them and accept that mistakes will happen – mistakes that can be rectified and learned from and that are more than made up for by the progress that is achieved. Delegation is essential precisely because it goes directly to the bottom line – it has a huge impact on productivity, innovation and employee engagement and retention.
Delegation can be learned but, to be successful, it rests entirely on having the right mindset. It is about bringing people with you. While experience helps, what is more important is attitude, good communication skills and confidence in yourself. These six stages provide a framework to help you delegate successfully:
- Prepare to delegate
Know what you want to achieve. Be clear about goals and priorities and decide how these can be achieved. Plan what needs to happen, and when, and bring people along with you. Winning hearts and minds and making sure people know the reasons for your plan and what is expected of them are essential.
- Match the person to the task
Know your people. Understand what they can do, their potential, what would challenge and stimulate them. It also helps to understand their future career plans. Make the most of each person’s abilities. Look for potential and take risks. With encouragement, training and trust, you will get more from each person.
- Discuss and agree objectives
Engage people with the task that needs to be completed. Everyone needs to understand your thinking, agree with the plan and be clear about what needs to be done and when. Consider constructive criticisms because it can improve your plan and gain the buy-in of others.
- Put resources and power in place
Provide the necessary resources and authority. In this way, your people can make decisions and act. Support your people whenever this is needed – they need to know you are behind them.
- Monitor progress
Ensure that people are accountable for delivering what is expected of them. Having overall goals and interim targets will help people to stay focused, to meet deadlines and to ensure that standards and results additional art met. The goal is to keep people motivated and on track and to provide support where needed.
- Review progress
Learn from experience and feedback. Compare and discuss results and objectives with those involved. Look at what worked well and what could have been done better. Use this to improve future plans.
KOTTER’S EIGHT–STAGE PROCESS FOR LEADING CHANGE
Achieving progress and getting the right things done in the best way possible
The eight-stage process of creating major change was first outlined by John Kotter in his bestselling book Leading Change; it describes what the leader needs to do to ensure that beneficial change is achieved.
- Establish a sense of urgency
As a leader, you should initiate or take control of the process by emphasizing the need for change. The more urgent and pressing the need, the more likely people will be focused. Usually, the leader’s role is to stay positive and build on success. However, it can also help to emphasize failure – what might go wrong and how, when and what the consequences could be. You can also emphasize positive elements such as windows of opportunity that require swift and effective change.
- Create the guiding coalition
The guiding coalition needs to understand the purpose of the change process. Members should be united, coordinated and carry significant authority. The coalition needs to have the power to make things happen, to change systems and procedures, and to win people over.
- Develop a vision and strategy
The guiding coalition needs to create a simple, powerful vision that will direct and guide change and achieve goals. You need to develop a detailed strategy for achieving that vision. The strategy needs to be practical, work-able, understandable, simple and consistent.
- Communicate the change vision
Use every means possible to constantly communicate the new vision and strategies. This will build pressure, momentum and understanding, sustaining a sense of urgency. The guiding coalition should lead by example and act as role models for the behaviour expected of employees.
- Empower broad-based action
The leader and the guiding coalition cannot achieve change in isolation – it needs the commitment and effort of others. Provide a blame-free and supportive environment and empower your people by removing obstacles, changing systems or structures that undermine the vision and encouraging risk-taking and non-traditional ideas
- Generate short-term wins
These produce momentum and provide an opportunity to build on success. To do this, plan for visible improvements in performance – or ‘wins’, create those wins and recognize and reward people who make wins possible.
- Consolidate gains and produce more change
Once the excitement of the start-up phase has passed, the successes have been built and people know what is needed, people can tire and problems can arise. The key is to move steadily: maintain momentum without moving too fast. You need to continue by using increased credibility and understanding of what is still needed, hiring, promoting and developing people who can implement the changes and reinvigorating the process with new projects, themes and change agents.
- Anchor new approaches in the organization’s culture
A key danger in managing change is to finish too early. The best situation is often where change, development and continuous improvements become the norm. What matters is making changes that are firmly grounded in the organization. This requires you to explain the connections between the new behaviours or actions and success.
SIX PRINCIPLES FOR GAINING COMMITMENT
Achieving employee engagement during times of transition
What is the goal of employee engagement? Quite simply: to maximize performance and profit. These will not happen if leaders don’t have their people’s commitment. Gone are the times when leaders simply informed others; nowadays a dialogue needs to take place. People need to feel valued and listened to, and leaders need to inspire, win hearts and minds, and harness talent and potential.
Successful transitions depend on gaining commitment. Without it, companies underperform and strategy is harder to achieve. John Smythe developed six principles to engage employees – releasing creativity, raising productivity and promoting commitment and loyalty. They give people a compelling reason to work for you, to excel, and to implement plans successfully. By listening, engaging, empowering and encouraging people to share ideas, you will build confidence, loyalty and camaraderie.
- Develop the right plan and make sure that everyone agrees
Ensure that the senior team has explored all options and developed the best strategy. While teams often agree on a plan, some people may have held back ideas or not been on board. Making sure that everyone at the senior level is on board is critical.
- Plan the transition process and prepare a timeline
When planning the timeline for implementation, consider the timing of all demands that will be placed on people, including emotional and motivational aspects.
- Decide who is to be involved – and how
Make sure that everyone is clear about who is involved and how and why they are involved – or affected. When people know what their role is and understand your strategy, they are more engaged, adaptable and committed.
- Set standards (including role modeling and measuring progress)
Putting standards and timed goals in place enables people to measure progress. The key is to win and maintain people’s commitment: measures need to work with people; they should not demotivate. When setting goals, consider the people involved – ask yourself how they would respond.
- Connect with each person as an individual
Include opportunities for people to reflect, learn and enjoy working for your company. Implementing a new strategy should be enjoyable – emphasize the excitement, the potential and the opportunities. Include opportunities to celebrate past achievements – moving to the future without a nod to the past is discouraging.
- Tell and sell the new strategy
Tap into people’s desire to be part of something and interpret situations from their perspective. Empathy is an invaluable tool for generating enthusiasm and commitment. Remember: the version of change you are giving is not the only one people hear. Be honest, keep people informed, and offer a better, more inspirational and convincing explanation of events and strategy.
BELBIN’S TEAM RULES
Building, managing and understanding teams and teamworking
R. Meredith Belbin identified nine ways people work together in teams. Understanding these types will help you build and lead better teams.
Leading a team
While people can have characteristics from different categories, one style tends to dominate. To manage teams effectively, you need to identify and understand the style each person uses. Knowing the type of person each team member is will help you to build the right team, get the most out of people, delegate effectively and manage situations successfully. The information can be used to motivate, secure commitment, encourage the behaviours and actions you are looking for, and help you understand when to challenge and when to hold back. This insight enables you to know what type of support to offer, as well as knowing how to avoid conflict or manage it effectively should it arise.
Belbin’s nine team roles
|Team role||Strengths – contribution to team-working||Weaknesses – problems for team-working|
|Plant||Plants are creative and imaginative individuals. Their approach can be unorthodox, unusual or freethinking. As a result, they are particularly effective at solving difficult problems.||A propensity to ignore details and become too preoccupied or-focused on one issue, hindering communication and collaboration.|
|Resource investigator||Typically resource investigators are outgoing, extrovert, enthusiastic and communicative. Skills include the ability to explore opportunities and develop contacts.||Over-optimistic and positive, rather than realistic or resilient. This can mean that they lose interest after their initial enthusiasm.|
|Coordinator||Coordinators are mature and confident, able to connect big-picture thinking with detailed implementation, good planning and organizational skills.||Too much delegation and co-ordination of others can be seen as manipulative, and they can sometimes be perceived as offloading work.|
|Shaper||Shapers are challenging, action-oriented and dynamic. Within teams they enjoy decision-making and problem-solving, and bring the drive and courage needed to overcome obstacles.||Prone to provocation, and may risk offending team-members’ feelings with their focus on action and results (rather than people).|
|Monitor Evaluator||Monitor evaluators’ strength is their sober, strategic and discerning approach. They contribute to team effectiveness by viewing all options and displaying sound, accurate judgement||An ability to monitor, evaluate and assess is not always dynamic, and their weaknesses can include a lack of drive and ability to inspire others.|
|Teamworker||Teamworkers are especially co-operative, perceptive and diplomatic. They complement a team with their ability to listen, build on ideas, promote collaboration and mutual support and avoid friction.||A key weakness is indecision in crunch situations, including those scenarios where there is no ‘right’ way forward.|
|Team role||Strengths – contribution to team-working||Weaknesses – problems for team-working|
|Implementer||Implementers contribute to teams by being disciplined, reliable and efficient. They are especially skilled at turning ideas into practical actions and results||Can slow down teamworking by being inflexible or slow to respond to new options.|
|Completer finisher||Completer finishers deliver on time and succeed by providing the team with a conscientious, anxious approach that looks for errors and omissions.||Completer finishers can worry unnecessarily or excessively and sometimes be reluctant to delegate.|
|Specialist||Specialists are single-minded, dedicated self-starters. who contribute to team effectiveness by providing valuable knowledge and skills.||The specialist’s weakness is their tendency to concentrate on technicalities and they may only contribute in a single narrow area.|
The diagnostic questionnaire for BeIbin’s team role analysis is available at Belbin Associates’ website (www.belbin.com).
DRIVERS OF TRUST AND THE TRUST CYCLE
What we look for when choosing to trust someone
The drivers of trust are the attributes that lead to effective relationships.
The cycle of trust is the process through which trust can be developed and maintained.
Trust matters because success can be achieved only by working through others. By inspiring trust, you will encourage those around you to be flexible and collaborative. Developing the drivers of trust and maintaining the trust of others will lead to productive business relationships.
The drivers of trust
The main drivers of trust are:
|fairness dependability respect openness courage||unselfishness competence supportiveness empathy compassion|
By promoting these qualities, relationships with colleagues, customers and stakeholders are more beneficial to everyone involved.
The reality of trust
In reality, the attributes we are more likely to encounter (the reality of trust) are:
|likeability dependability critical ambitionfairness||professionalism competence respect controlling predictability|
The trust deficit
People look for the drivers of trust when deciding when, and how much, to trust someone. When people’s expectations are not met, trust and indeed the entire relationship are seriously undermined. It would seem that without a concerted effort to develop and demonstrate these qualities we are unlikely to develop the rapport we need for good working relationships. Avoiding a trust deficit becomes all-important if we are to get the most out of business relationships. By understanding the drivers of trust, along with the cycle of trust, we can better shape the way we relate to others and build successful, reliable and productive relationships.
The Trust Cycle
|Explore – understand the issues and priorities||Commit — agree what you will deliver, how and when |
|Confirm — check that delivery has met the person’s expectations||Deliver — take action and achieve what you have promised|
By continually following these stages, you will build and maintain the trust that is essential for effective, productive relationships. As trust is such a fragile commodity, failing to achieve any one of these stages will damage the relationship and require you to go back and rebuild it. For this reason, ensuring that trust is maintained – by continually developing the drivers of trust and following the cycle of trust – is less disruptive, less time-consuming and less stressful. It creates the positive and productive relationships that are necessary for success.
THE TRUTHS OF STRATEGY
Who, what, how: succeeding with business strategy
Developing a distinctive, successful business strategy is often over-elaborate and over-complicated. Strategy is simply about understanding where you are now, where you are heading and – crucially – how you will get there.
Strategy has three essential elements: development, implementation and selling (meaning, obtaining commitment and buy-in). Underpinning all three is choice, in particular the need to choose a distinctive strategic position on three dimensions:
- Who to target as customers (and who to avoid targeting)
- What products to offer
- How to undertake related activities efficiently
Strategy is all about making tough choices in these three dimensions: who, what and how. It means deciding on the customers you will target and, just as importantly, the customers you will not target. This issue requires a focus on customer segmentation and geography.
Delivering a successful strategy also means choosing the products or services you will offer and what product features or benefits to emphasize. Finally, strategy means choosing the activities you will use to sell your selected product to your selected customer.
This approach sounds simple but there are several key points to note to ensure a successful strategy:
- Ensure that your strategy creates a unique strategic position. This is achieved by focusing on who your customers are, the value proposition offered to these customers and how you can do this efficiently.
- Make distinctive, tough choices. To be distinctive and meaningful, strategy must make difficult choices and combine these choices in a self-reinforcing system of activities that fit. Common mistakes include: keeping options open; permitting incentives in the system that enable people to ignore choices; searching for growth in a way that forces people to ignore the firm’s strategy, and analysis paralysis.
- Understand the importance of values and incentives. In particular, the underlying environment of your organization creates the behaviours of that organization. The organization’s culture and values, measurement and incentives, people, structure and processes all determine the underlying environment.
- Gain people’s emotional commitment to the strategy. Any strategy, however brilliant, will fail unless people are emotionally committed to its success.
- Remember, understanding is not the same as communicating. Explain why the strategy is important to the organization and the individual.
- Do not overlook the knowledge-doing gap. Individuals tend to do the urgent things and not the important ones. There is a gap between what they know and what they do. Remember, what gets measured gets done.
- Do not believe that ‘strategic’ means important. Closely linked is the mistaken view that only ‘top’ people can develop strategic ideas. Ideas can come from anybody, anytime, anywhere.
- Keep your strategy flexible. All ideas are good for a limited time – not forever. Keep checking the answers to the ‘who – what – how’ questions. Strategy does not need to be changed too often but it will occasionally require adjusting to suit external circumstances. So, give your people freedom and autonomy to respond and to adjust, without waiting for permission or instructions.
A valuable decision-making technique
SWOT analysis can work at many different levels: from the overall operation of the organization as a whole to the separate and independent issues affecting a department or a single product.
Internal sources of strength and weakness
These are typically found within an organization, whereas opportunities and threats are most often external. Some factors can be sources both of strength and weakness: for example the age of employees. Older employees may denote a stable organization, able to retain employees and maintain a wealth of experience, or it may simply mean that the organization is too conservative. Many factors can be either strengths or weaknesses and they can change from one to the other surprisingly quickly.
External sources of opportunity and threat
These are more difficult to assess than internal ones. Examples of sources of opportunities and threats are detailed below.
|Sources of opportunity include: new markets (including export markets) new technologies new products and product enhancements mergers, acquisitions and divestments new investment factors affecting competitors’ fortunes commercial agreements and strategic partnerships political, economic, regulatory and trade developments|
|Sources of threats include: industrial action political and regulatory issues economic issues trade factors mergers and other developments among competitors new market entrants pricing actions by competitors market innovations by competitors environmental factors natural disasters crises, notably including issues of health, safety, product quality and liability key staff attracted away from the business security issues, including industrial espionage and the security of IT systems supply chain problems distribution and delivery problems bad debts (resulting from the fortunes of others) demographic factors and social changes affecting customers’ tastes or habits.|
Walking the battlefield before battle commences
Scenario thinking is a tool for exploring possible futures. It is used to stimulate debate, develop resilient strategies and test business plans against possible futures. It enables us to think innovatively and to develop strategy that is not constrained by the past. It provides the insight needed to manage uncertainty and risk, set strategy, handle complexity, improve decision-making, reveal current potential, promote responsiveness and control our future.
Scenarios inform and guide our understanding of possible futures that lie ahead and the forces contributing to those events. The outcomes of different responses to potential developments can be tested, without risk, through exploring various scenarios. The aim is not to predict the future accurately but to experience events before they happen.
Scenario thinking allows us to:
- reveal new perspectives and identify gaps in organizational knowledge
- challenge assumptions, overcoming business-as-usual thinking
- understand the present and identify potential e promote awareness of external events
- encourage people to share information and ideas
- improve our responses to events
- promote a shift in attitude and develop greater certainty
- promote a shared purpose and direction.
The Strategic Conversation is an ongoing process of assessing the present, creating and testing scenarios, developing and analyzing options, and then selecting, refining and implementing the chosen options. Scenarios should:
- Involve people at all levels
- be relevant and valued
- avoid existing biases
- be rooted in a thorough analysis of the present.
Create a separate team to plan the process – preferably external people known for innovative, challenging thinking. They should:
- identify gaps in knowledge, given the business challenges to be faced
- agree the project’s duration
- interview members of the scenario workshop – asking each person for a ‘history of the future’ (what could happen and how it happened)
- collate and analyze their responses in a report, identifying the main issues, ideas and uncertainties. (This will set the agenda for the first workshop.)
Developing the scenarios
The aim is to understand the forces shaping the future. The workshop should develop scenarios that create and assess possible events and their consequences. Participants should:
- identify the forces that could impact a situation
- agree two possible opposite outcomes (and the forces involved)
- identify how these forces are linked
- decide whether each force has a low or high impact and a low or high probability
- develop likely ‘histories’ that led to each outcome, detailing the factors involved.
Analyzing and using the scenarios
Identify the priorities and concerns of people responsible for key decisions in the scenario who are outside the organization – including their likely reactions at different stages in the scenario. Then develop an action plan by working backwards from the scenario’s future to the present in order to identify the early signs of change. These can be recognized and acted upon swiftly and effectively, thereby influencing the strategic direction of the company.
THE BALANCED SCORECARD
Developed by Robert Kaplan and David Norton, the Balanced Scorecard is a valuable adjunct to traditional business measures that are limited by their focus on past performance. The Balanced Scorecard overcomes this limitation by providing a means of assessing future performance to better inform and guide strategic development.
The reason for its success is its ability to integrate measures of performance to present a balanced view of a company’s overall performance and to pinpoint areas that need completion or further development. The process generates objectives in four areas – financial data, customers’ perceptions, essential internal processes, and innovation and learning – and puts in place action plans and continuous assessment. It has been criticized for being too prescriptive and quantitative, but its use can be broadened to include qualitative aspects.
How to use the Balanced Scorecard approach
The approach taken will depend on the company’s type, size and structure. However, there are five broad stages:
- Prepare, define and communicate the strategy – people need to understand the objectives and how to achieve them
- Decide what to measure – typical measures are shown in this table:
|Area||Aim||What to measure|
|Financial||To increase profitabilityshare price performance return on assets||Cash flowsCost reduction Gross marginsReturn on capital / equity / investments / salesRevenue growthPayment terms|
|Customers||To improve: customer acquisition customer retention customer satisfaction cross-sales volumes||Market share Customer service and satisfaction Number of complaints Customer profitability Delivery times Units soldNumber of customers|
|Internal processes||To improve: core competencies critical technologies employee morale … and tostreamline processes||Efficiency Lead times Unit costs Waste Sourcing and supplier delivery Employee morale and satisfaction, and staff turnover Internal audit standards Sales per employee|
|Innovation and learning||To promote: new product development continuous improvement employees’ training and skills||Number of new products Sales of new products Number of employees receiving training Outputs from employees’ training Training hours per employee Number and scope of skills learned|
- Finalize and implement the plan – this stage ensures that measures are workable, tailored and adopted. Essentially, this is managing by setting objectives.
- Publicize and use the results – being seen to act is important. Also, while ensuring that everyone understands overall objectives, decide who should receive specific information, why and how frequently.
- Review and amend the system – to solve any problems and to set new challenges.
THE 7S MODEL
Assessing business performance
The 7S model is a framework for assessing the performance of a company. It views all seven elements as equally important because they impact on each other – with failure in one area undermining the others. By appreciating how they are related, and assessing performance from this perspective, companies and teams can better align activities to achieve goals.
First developed in the 1970s by McKinsey and refined by Tom Peters, Robert Waterman and Richard Pascale, the 75 model works from the principle that success relies on simultaneously pursuing a combination of seven hard and soft aspects of running a business. Known for changing people’s thinking at the time, it still provides a useful framework for assessing and improving a company or how a team is working – identifying gaps and enabling adjustments to be made to ensure that all seven aspects are aligned, working together, and supporting and reinforcing one another. By knowing how things are interrelated, the framework raises awareness of the full impact of any changes.
These are plans that determine, define and outline how to fulfill the company’s goals and purpose and to achieve competitive advantage.
This is how the company is organized and how each part relates to the others.
This is about how both formal and informal business processes function.
- Shared values (superordirlate goals)
These are the company’s beliefs, values and guiding mission that draw people together and that directly influence their approach, thinking and actions.
These are the capabilities of both the people and the organization.
This concerns the nature, type and general abilities of the people employed.
This is the organization’s culture and style of leadership that, along with having an internal impact, determine how people outside the organization view the company.
The main point is that all seven elements are interrelated, with each affecting the others. In this, it can be viewed as an early proponent of holistic business. Significantly – and this is of particular relevance to leaders today – it reveals how underperformance can be attributed to neglect in any one of the seven aspects, regardless of strong focus and capabilities in one or more of the others. Richard Pascale subsequently argued that, while it is generally important to view all seven as equally significant to achieving success, having shared values (superordinate goals) is the element that binds all the others together.
THE RULE OF 150
A bold way to create the right working conditions.
This rule is about limiting the number of people at any one location to 150.
The rule is based on the idea that 150 is the largest group size that people can deal with – beyond that number, it is increasingly difficult to form bonds with others. If groups are larger, hierarchies, regulations and formal measures are required. However, with fewer than 150, goals can be achieved informally and people work better and are happier, more motivated and more productive.
Why it works
Co-workers find socializing, teamworking, innovating, collaborating and sharing knowledge easier to achieve in groups of fewer than 150 people. By organizing operations into smaller groups, large companies can gain the benefit of smaller groups – being closer, driven, entrepreneurial, supportive and productive.
The rule in practice
Gore Associates, a high-tech firm, uses this rule. It has 15 plants all within 20 kilometres (12 miles) of one another, and each with fewer than 150 employees. It has resisted the option of merging its separate sites – despite potential cost savings – because the small size of each unit ensures that everyone knows everyone else and works well together.
By organizing itself in this way, Gore, despite being a large company with thousands of employees, is still able to enjoy the entrepreneurial approach of a small start-up. Each unit enjoys the benefits of collective management, which are
- improved communication
- greater initiative
It is notable that employee turnover is significantly less than the industry average and the company has enjoyed sustained profitability and growth for over 35 years.
This does not mean that Gore has no control or input. It has put a strong managerial system in place to oversee each unit, to ensure that activities are coordinated and efficient. The company also encourages a sense of community and teamwork within these groups – after all, the rule only means that it is possible for workers to form positive bonds with each other, so efforts must still be made to ensure that this happens. In addition, Gore makes sure that it develops a sense of community across the company by encouraging people to communicate and collaborate with workers from other groups.
THE SERVICE PROFIT CHAIN
Managing the vital link between people and profit
The service profit chain highlights how employee engagement drives improvements in company performance. When employees are able to see the impact of their actions, it changes their approach and improves results.
The service profit chain is based on the premise that market leadership requires an emphasis on managing value drivers those factors that have the greatest impact on success and provide the most benefit to customers. This concept is then focused on the value drivers that are the most important determinants of success: employee retention, employee satisfaction and employee productivity – it is these that strongly influence customer loyalty, revenue growth and profitability.
How the service profit chain works
In practice: Sears
In the 1990s US-based retailer Sears reversed significant losses by focusing on employee issues in order to turn around the company’s fortunes. They examined:
- how employees felt about working at the company
- how employee behaviour affected customers
- how customers’ experience affected profits.
Sears asked employees to estimate how much profit was made for each dollar sold. The average answer was 46 cents while the real answer was 1 cent – demonstrating that profitability was poorly understood. The company introduced changes in order to engage with employees and to get them to understand what influences profitability – in particular, to make clear the link between employee behaviour, customer satisfaction and company success. By understanding the implications of their actions, it changed their approach, resulting in sustained improvements in profitability.
In practice: B&Q
At UK retailer B&Q, each percentage increase in staff turnover was costing the company £1 million. By reducing staff turnover from 35 to 28 per cent through its Employee Engagement Programme, the company reduced costs and increased turnover per employee by 20 per cent.
UNDERSTANDING AND AVOIDING INERTIA
When success traps us in the past
It might seem counterintuitive to warn people about the dangers of success but that is exactly what Donald Sull did when he developed the concept of ‘active inertia’ – where people repeat the strategies and activities that have worked well in the past.
A reliance on previous thinking and approaches – the formula of success – can cause a company to fail to respond properly to new developments. By applying past approaches to new conditions, the end result can be a downward spiral – leaving an organization vulnerable to more dynamic companies with approaches better suited to the new environment.
How active inertia works
A firm correctly discerns gradual shifts and developments in the external environment, but fails to respond effectively.
Managers get trapped by success, often responding to the most disruptive changes by accelerating activities that succeeded in the past.
The source of active inertia is a company’s success formula, the unique set of strategic frames, resources, processes, relationships and values that collectively influence managers’ actions.
With time and repetition, people stop considering alternatives to their formula. The individual components of the success formula grow less flexible.
How active inertia happens
Active inertia occurs because people come to rely on a past formula of success, where accepted approaches become entrenched and people stop considering alternatives. Consequently, people continue to respond to external changes by pursuing fixes and activities that worked in the past. However, these responses are likely to be ineffectual because they are based on past success and not current and future needs.
Why a past success formula does not guarantee a successful future
Essentially, like it or not, our brains are lazy – subconsciously preferring the easy route to solving problems and then, equally subconsciously, superimposing a solid layer of reasons to justify our decisions. So it is hardly surprising that our brains fool us into being happy to rely on approaches that have proven successful in the past: it is easy and we have a ready-made wall of rock-solid excuses to hand.
As individuals, our thinking, strategies, Methods, use of resources, relationships and values all become firmly entrenched. The consequence for companies is that this formula becomes so deeply embedded that they are left vulnerable when faced with changing conditions.
It is understandable that past approaches should be so revered and relied upon – they are, after all, the reason for the company’s current success. However, we should keep in mind that this formula is exactly that: suited to the current, stable situation – not the future. Companies can suddenly find themselves commercially stranded.
The bottom line is that, when faced with new developments, your approach needs to change accordingly – essentially, the survival of the fittest depends on adaptation.
THE SIX Rs OF BUSINESS
Business is a total activity
Luis Gallardo’s Six Rs is a total approach to business — where all activities work together, moving the whole company forward in the same direction.
Having all company activities support one other enables us to develop the right mindset, strategy and approach for growing a successful business. This holistic approach ensures that no part of a company undermines overall goals or the activities of another part of the business. The Six Rs are:
Why the Six Rs matter
The Six Rs should work together, supporting one other and never undermining other business activities or goals. As companies can discover to their cost (witness the damage to sales when legal tax avoidance is revealed), any aspect of running a business can have serious consequences. Conversely, when the various corporate activities support one other, they will strengthen the brand and promote success. Essentially, everyone and all activities should pull together. To have parts, even unwittingly, pulling in different directions will derail strategy and cause a company to veer off course.
The starting point, and ongoing requirement, for setting and directing all activities is to know the reason why you are in business – your vision, values and purpose. This sets the tone and gains commitment and, consequently, has an enormous impact on customers and achieving goals. Your purpose should be communicated to everyone in the organization. Also, by fitting your products and services to your reason and values, customers and employees will understand what your company means.
Managing and maximizing revenues is essential for enacting strategies and building resilience. An often overlooked but critical aspect is the portfolio of clients – it reveals strengths and gaps elsewhere in the company. The important thing is to manage revenues through the prism of the rest of the 6Rs – and to manage the others through the lens of revenue.
Engaging your people and aligning their thinking and behaviours to the rest of the company’s activities depend on being able to inspire them. This has an enormous impact on all areas of a business – especially customers – and sets the right conditions for people to be innovative and to adapt successfully to change.
Reputation is critical to success. It affects employees as well as current and potential customers and all stakeholders. The important point is that reputation can be affected by any aspect of the business – emphasizing the need to ensure that other activities do not undermine reputation.
All business – internal and external – is about handling relationships. Everything is affected, with a direct bearing on profitability, so all relationships should be managed carefully, keeping in mind the importance of the Six Rs approach.
Developing resilience enables companies to continue achieving goals, to survive difficult circumstances and to take advantage of opportunities. It enables swift and appropriate responses to any developments and the flexibility to adapt to change. Resilience involves being proactive, prepared and having the right mindset to deal with any events, threats or opportunities.
THE BOSTON CONSULTING GROUP MODEL
How to manage your product portfolio
Identifying which products and investments should be continued (and at what level of investment) is a complicated task. Cutting through this confusion, the Boston Consulting Group model (developed by Bruce Henderson) provides a straightforward means of managing your port-folio of products.
How it works
The model uses a matrix, each box representing a type of product: Star, Cash cow, Question mark and Dog. Products are located in a quadrant according to market growth and market share. The category a product falls into enables you to see whether it is worth pursuing. By Looking at the matrix, it is easy to see why each category has certain characteristics and prospects.
Given the high market growth, this product is obviously a rising star and should be pursued. Coupled with high market share, the risks are minimal and the return will be high. A note of caution, though, is that a growing market will inevitably cost a lot to keep up with so it is advisable to consider your ability to fund this – especially if there are large set-up costs or if you expect a delay in the product generating revenue.
Clearly, given the large market share, there is still a lot of potential for generating revenue. However, given the low market growth, there may be some limiting factors (such as time or changing technology) that suggest you should milk these products as much as you can before the opportunity for high returns dwindles in a declining market. It would be wise to monitor market conditions closely to prevent losses should the market decline rapidly.
If a product falls into this category, there are issues that need to be addressed before a decision can be made. Although there is high market growth, you have to ask yourself whether the low market share will generate enough revenue to justify the investment – especially given the likely high costs of keeping pace with a growing market. A key factor in making a decision is having deep-enough pockets either to wait for higher returns as the market grows or to turn it into a Star by securing a stronger market share.
With low market share and low market growth, this product is going nowhere fast. Clearly, it is not worth pursuing. Sometimes, you may wish to continue with this type of product if it provides other benefits – such as maintaining customer loyalty for your overall brand.
THE PARETO PRINCIPLE
Finding the right locus and answer using the 80:20 rule
Pareto analysis arose from Vilfredo Pareto’s observation that many activities break down into an 80:20 ratio, where 80 per cent of output is due to 20 per cent of the contributory factors. This observation is now used to focus business strategy, problem-solving and operations on the key inputs that are responsible for 80 per cent of the outcome.
How it works
The 80:20 ratio applies both to positive and negative situations, providing a useful means of dealing quickly with problems or opportunities. In other words, by identifying the small number of key factors that are contributing most to a situation, we can better focus efforts to achieve the desired result.
Pareto analysis is only as good as the data that is used, so we need to ensure that all contributory factors are identified and that appropriate and revealing parameters and measures are established and interpreted correctly. Although not everything falls neatly into an 80:20 rule, Pareto analysis is still useful for identifying the main causal factors.
This simple example shows how the process works.
- Research and discuss the issue, identifying all contributory factors.
- Decide an appropriate time period and method of measurement.
- Measure how frequently each factor occurs (or another measure, such as cost).
- Rank the factors in descending order, with the largest one first.
- Calculate the frequency of each factor as a percentage of the total occurrences (or cost).
- Calculate the cumulative percentage (current percentage plus all previous percentages).
- Depict this information on a graph – with ‘frequency as a percentage of total’ as a bar chart and ‘cumulative percentage’ as a line, adding a third line showing the 80 per cent cut-off point.
All factors that appear to the left of the intersection of the two lines are the ones contributing to 80 per cent of the result – these are the factors to focus on.
Example of how the Pareto Principle can be displayed
BLUE OCEAN STRATEGY
Creating unique market opportunities
A Blue Ocean Strategy is one where the key to success Lies not in competing directly with rivals within a market, but in creating an entirely new market where there are currently no competitors and where the potential for high returns is vast.
Developed by W. Chan Kim and Renee Mauborgne, Blue Ocean Strategy involves a change in strategic thinking towards a mindset that challenges existing market boundaries, rewrites the rules of competition, and creates a new, as yet uncontested, market space. The theory outlines two attitudes to competition: Red Oceans and Blue Oceans.
The current marketplace for all products and services is made up of Red Oceans (bloody battlegrounds), where boundaries are clearly defined and companies operate within the boundaries of their accepted Red Ocean markets. Here, the entrenched battleground is one where companies compete to gain extra market share within the current market boundary.
A very different attitude pervades the Blue Oceans. These are areas of deep, uncharted, almost limitless potential where the aim is not to compete on traditional grounds but to develop products and services that create entirely new markets. In essence, it is creating customers that do not yet exist.
At its core, Blue Ocean Strategy believes that it is better to create tomorrow’s customers through developing a new market rather than scrabbling around trying to capture existing customers in the current marketplace. There may be many justifications for this approach but, quite simply, the reason seems straightforward: to create a monopoly situation and reap the high rewards before competitors enter the new market.
Value is achieved by integrating the utility of the product with its cost and price. It is not a case of choosing between competing through managing costs or product differentiation: it is about pursuing both. It is this that creates the value that appeals across customer groups, drawing them into a new market. Think of this as maximizing the gap between the utility of the product and its price (facilitated by lower costs) – the larger this gap, the higher the value and the more it attracts customers.
Blue Ocean Strategy relies on four main principles:
- Challenging existing market boundaries. Reconstruct the marketplace, identifying and creating new markets and customers. The Blue Ocean is a vast place where demand is unrealized – it doesn’t yet exist. The aim is to bring this demand into existence.
- Keeping focused on the overall picture. Be clear about your goals: what matters and needs to be achieved.
- Minimizing risk. Assess current industry standards and decide what can be:
- eliminated – things that are not necessary
- reduced – things that do not need to be done to a high standard
- raised – things that should be done better
- created – things that have never been offered before.
- Planning careful implementation. You will need to overcome barriers and secure the resources and the support of your people (especially key influencers).
Benchmarking establishes standards against which performance can be measured. It is used to assess performance and to set targets across a range of business activities.
The purpose of benchmarking is to improve efficiency and quality, to determine and promote best practice, to maintain competitiveness and to focus people on the need for change and improvement. Carol McNair and Kathleen Leibfried divide benchmarking into four categories as shown in this table:
|Internal||Using internal measures to match or surpass current performance, ensure consistent standards throughout the company, eliminate waste and improve operations|
|Competitive||Using competitors’ standards to set targets that match or improve upon their performance|
|Industry||Setting benchmarks that are industry standards|
|Best-in-class||To match or surpass the standards of the best companies in any industry or country|
The data should be free from bias or vested interests. Using an external company to gather evidence and measure standards will help to maintain impartiality.
Successful benchmarking needs everyone to be ‘on the same page’ and to understand the process. People need to be clear about what is being measured and what, and it is important to give people the time and resources they need.
While targets need to be realistic and achievable, they also need to ensure that standards are maintained and consistent throughout a company and they should seek to continually improve upon performance. To do this, it is necessary to look at both internal and external evidence.
Benchmarking is a continual process that needs to adapt quickly to changes – it is no use measuring activities that are no longer relevant or failing to measure activities that are now more significant. To do this effectively, as well as assessing internal operations, you need a keen awareness of your customers, competitors and companies in other sectors. This ensures that benchmarking is focused on the issues that matter now rather than reflecting the past, and is not blinkered by a narrow, internal focus that risks delivering more of the same.
By enabling you to know what competitors are doing and what the most innovative, high-performing companies in other industries are achieving, benchmarking will help to maintain your company’s competitiveness.
THE PRODUCT LIFE CYCLE
Managing your product portfolio
From development and launch, through its peak to eventual decline, a product’s life cycle determines the strategy needed to optimize its return at each stage and to develop further products to ensure ongoing profit-ability and competitiveness.
Although not an exact science, the duration of each stage varies according to the product and the markets involved. Some life cycles are obviously shorter than others – such as technology products. With very short life cycles, it is essential to maximize returns as quickly as possible and to be continually developing the next products. A long-lasting branded product, despite undergoing many life cycles, enjoys continuity from its brand name. Companies, however, still have to manage the life cycles of such branded products – planning the next improvement and managing the replacement of the current version.
There are five stages in the product life cycle:
- Development – this includes entirely new products and changes or improvements to existing products
- Introduction – at this stage, costs can be high relative to revenue
- Growth – revenue rises and offsets costs
- Maturity – growth slows and competition rises
- Decline – sales decline due to increased competition or changing customer preferences
The following describes tactics appropriate to each stage:
Development can be very costly, with unexpected delays, so cash-flow issues are paramount. Researching what customers are looking for and testing prototypes with potential customers will help you develop the right products with fewer glitches – as well as promoting a ready-made pool of customers. Importantly, product development is an ongoing process, ensuring that new products or improvements to existing products are ready to replace current products.
Getting the launch right is essential. Raising product awareness quickly requires promotional and advertising investment – depending on the nature of the product, targeting early adopters can be useful at this stage. An aggressive pricing strategy can achieve fast market penetration – although this will depend on the brand’s attributes. You could also consider minimizing distribution costs by limiting the availability of the product.
In the face of more competition, but still with considerable potential revenue and falling unit costs, strategy needs to focus on outcompeting rivals, delivering extra value to customers and increasing market share. Further promotional offers, marketing and advertising campaigns, attractive prices and promoting the product’s brand will strengthen your position.
Given the influx of competitors, a company is faced with several strategic options to strengthen its market share, including: product differentiation, entering new markets, attracting rivals’ customers, a price war, and reducing costs to maintain competitive pricing and profitability. It is important at this stage to monitor the financial situation and the viability of the different options.
With falling sales and reduced margins, any plans and further investment should be considered carefully. Reducing the available options for the product and reducing the number of markets the product is offered in will re-duce costs. Catering to your core customers to cement their loyalty can also boost profits at this stage. Other tactics to extend the life of a product include product extensions and entering previously untapped markets.
Building better companies
A company is a collection of systems, and systems within systems. These all need to operate individually and collectively, to drive the business forward. A company’s systems need to work with strategy, and they need to be open, adaptive and understood.
Traditional approaches to strategy have emphasized the mechanics of how things work. This can result in too much complexity and ‘over-engineering’, with processes and systems being overly focused on the present, unable to adapt and failing to win people over. The fundamental flaw is setting a predetermined solution at the start of any redesign, which then influences subsequent thinking, narrowing views and ambitions, and misses better options. Often, the result of re-engineering is an expensive disappointment.
In The Fifth Discipline, Peter Senge revolutionized business re-engineering by arguing that solutions should be considered only after fully understanding the relationships within and between systems (including the behaviours involved) and examining all related problems and issues. Essentially: go back to basics, look deeper and search further, before you start thinking about solutions. Such open systems thinking builds teams, promotes creativity and develops new approaches. It works with the company’s long-term strategy, enabling adaptability and continual improvement. It is not the easiest approach: it is time-consuming and mentally demanding and generates an overwhelming number of questions. It works best when the right culture and mindset exist.
There are seven steps to successful systems thinking:
- Explore the situation
Gather the information you need without making judgments or looking for causes and effects. At this stage, do two things:
- Cast your net wide, collating as much information as possible.
- Be objective and detached (see things as they are, without an agenda).
- Describe the system
To understand what you are dealing with, list and describe the things that have happened – including the culture, people and atmosphere. Identify, date and examine trends and patterns. Position each factor on a diagram to show the relationships that exist between them. This highlights how aspects work together and reveals negative and positive feedback loops to enable you to analyze the systems in more depth later.
- Build models
Mathematical and IT tools are useful but they will take you only so far because systems need to be considered as they really function if they are to be understood and improved.
- Compare your model to what is actually happening
Check your model against reality to see whether it fits and whether you have understood it correctly or have missed something.
- Identify potential improvements
Once you have confirmed that your model is an accurate representation of what is happening, explore ways in which the system can be improved.
- Implement your improvements
Monitor changes and identify any further improvements that could be made. It is essential to win people over – successful change depends on people’s willingness to work positively with the new systems.
- Repeat the process
Systems thinking is a continuous activity; companies need to adapt to change and to take advantage of new opportunities.
Protecting your profits
Market exit and entry barriers have both positive and negative effects on profit, depending on your company’s position and on the impact the barriers have on your competitors. A key aspect of awareness of market barriers is that they increase our focus on external issues. In short, it forces us to look up and see the business horizon in much greater detail.
The word ‘barrier’ is slightly misleading. While barriers will certainly make you do your sums, consider the ramifications and prepare contingency plans, they also deter your competitors. And that is the point: use barriers to your advantage. Your strategy must include careful calculations about the costs involved and you must balance these against the revenue and market dominance potential, but it should also look for how to exploit barriers to your advantage.
The matrix below summarizes the impact of barriers to entry and exit on profitability.
|Low entry barriers||Returns: stable Profit: low||Returns: at risk Profit: low|
|High entry barriers||Returns: stable Profit: high||Returns: at risk Profit: high|
|Low exit barriers||High exit barriers|
There are many barriers to entry, including:
- the high cost of capital
- other companies owning patents and proprietary technology
- high research and development costs of developing necessary products
- expensive technology
- existing companies enjoying economies of scale that you can’t afford to match
- a restricted number of government licences
- the expense of (or lack of access to) effective distribution channels
- Your product not being different enough from market leaders.
There are many exit barriers, including:
- high fixed costs
- few buyers for your expensive, specialized equipment
- contractual salary, redundancy and pension commitments
- legal regulations
- outstanding contractual obligations
- being tied to other companies
- risk to brand image.
Not only do you need to understand all the costs, legalities and brand issues, you need to understand how barriers work: how they affect you and, importantly, how they will affect your current and potential competitors. Do this and you will determine the business strategy that is right for your company.
For example, the ideal scenario for an established company is to have high entry barriers and low exit barriers. The reasons are self-evident: high entry barriers deter others from entering the market you are already operating in; low exit barriers will not cause you a problem should you decide to change course.
A much less favourable scenario is having low entry barriers but high exit barriers. Obviously, with low entry barriers, competitors can flood into the market. Unfortunately, the high exit barriers will make it difficult and ex-pensive to leave the market, restricting your strategic options in the future.
THE SIX PS OF STRATEGIC THINKING
Following the right path
Strategy is an overused word, but it simply means moving from where you are now to where you want to be. The Six Ps framework helps to guide thinking when developing, implementing, monitoring and reviewing strategy,
Business strategy is a total activity, with every part of the organization connected and working together successfully. Because of this, some of the best-laid plans can go awry or fail to achieve their potential because of simple oversights or by a failure to properly explore an issue. The Six Ps highlight how all aspects of a business must work together, and how shortcomings in one part will affect other aspects of your strategy.
Using the Six Ps framework will help to keep the strategy focused on the most important issues as well as enabling you to understand exactly what is happening, to look at issues creatively, to develop solutions, to monitor progress and to think strategically.
The Six Ps of strategic thinking are Plan, Ploy, Pattern, Position, Perspective and Process, explained in the following flow chart.
|PLAN – Know where you are headed, and design the plan that will get you there.|
|PLOY – Determine the tactics that will deal effectively with competitors or others in your own company.|
|PATTERN – Assess the patterns of behaviour that are apparent in order, for example, to improve processes or to identify potential customers and markets.|
|POSITION – Know where your company fits in the market relative to the competition.|
|PERSPECTIVE – Assess the current character of the company and consider how this could be improved to better match strategic aims.|
|PROCESS (programme of activities) -, Develop, monitor and improve a programme of activities to achieve your strategy.|
PORTER’S GENERIC COMPETITIVE STRATEGIES
Choosing the road ahead
Porter’s Generic Competitive Strategies describe how a company develops competitive advantage across its chosen market. There are three generic strategies: cost leadership, differentiation and focus.
A company chooses to pursue one of two types of competitive advantage: either with lower costs than its competitors, or by differentiating itself along dimensions valued by customers so it can command a higher price. A company also chooses one of two types of scope: either focus (offering its products to selected segments of the market) or industry-wide, offering its product across many market segments. The generic strategy reflects choices made about both the type of competitive advantage and the scope. The concept was first described by Michael Porter in 1980.
The strategic aim is to offer competitive prices by reducing costs and to also use lower costs to raise profit margins, fund discount campaigns, or launch an aggressive price war to gain market share and eliminate the competition. Reducing costs can also open up new markets that were less able to sustain higher prices. Another advantage of lowering costs is providing flexibility should suppliers raise prices unexpectedly and suddenly, without you also having to raise prices.
The risks, however, are that other companies can copy your methods, eroding any advantage you have, and the lack of investment in research and development will leave your products looking dated and inefficient compared to those of competitors with better equipment and methods.
Developing distinctive products for different segments separates you from the competition. It creates product desirability, strengthens your brand, promotes customer loyalty, provides competitive advantage, enables higher prices and delivers higher returns. Your products can be differentiated from those of your competitors but you can also differentiate your own products from one another to target different customer groups and markets.
The risks are higher costs and waste and the potential for more complex operations.
While focus incorporates aspects of cost leadership and differentiation, it is concerned with targeting products and services at one market segment, gaining increased share in that segment. The risk is that this will produce a narrow view that is overly focused on the short term, on too few factors, and on a less lucrative or unstable market and thus fails to see potential elsewhere.
Looking outwards for opportunities
Using PESTLIED analysis improves awareness of the impact of external factors. Given the huge number of influences – both opportunities and threats – it is essential to constantly scan the environment for changes and adjust strategy and operations accordingly.
When running a business it is always advisable to keep a wide range of external matters in view. PESTLIED provides a format to check that strategy and plans have adequately accounted for external factors and to conduct an overall review of how the company is performing and how it could be improved. Significantly, by valuing and using this format, it encourages people to always look beyond the company to notice opportunities and threats. It therefore works well with the technique of SWOT analysis.
The broad areas to consider that form part of PESTLIED analysis are outlined below.
Consider the governmental actions that could affect your company – from local councils and national governments to larger, supranational bodies.
Understand all current and potential financial aspects (in different countries) that are either detrimental or offer opportunities – such as taxation, financial regulations, interest rates and currency markets.
Knowing about developing trends, the general mood of a country, and people’s beliefs, changes in tastes and fashions and their expectations has always been important, but never more so than today, with the rise and power of social media.
We are living in an age where knowledge and use of the latest technologies are everything. These can reduce costs and enable us to offer better products and services. It is an inescapable fact: the company that doesn’t move with new technology rapidly becomes outdated and out-competed.
Not conducting due diligence and not knowing exactly what legalities and regulations are involved is irresponsible and risky. While this should be normal in terms of your current places of operation, you should also look to possible future developments and to what is happening (and likely to happen) in other countries. Are there better places to base your operations and will future changes make somewhere else advantageous? When entering new markets, it is important to know all legal aspects so that you set the right strategy and ensure that all legal obligations are met.
This is a broad area covering everything from what is happening in international politics and economics to exchange rates and stock markets. The point is: cast your net wide and be aware of changes on the international stage.
Your brand is affected by everything your company does, including its environmental policy. You also need to consider current and likely environmental regulations when setting and implementing strategy.
Demographic changes have a huge impact on companies and yet they are often poorly understood. This is a serious oversight. Demographics should inform business decisions: not only will it affect the availability of workers and pension obligations, but it will also determine current and future market opportunities.
THE DYNAMICS OF PARADIGM CHANGE
Creating better futures
Introducing changes in an organization is difficult. Changing your entire business model is even harder – not least because the need for such a fundamental shift often doesn’t occur to us or is full of the fear of uncertainty. Even so, competition doesn’t stand still and companies need to adapt; sometimes the answer may require a shift in the basic paradigm.
When things need to change, people often prefer manageable adjustments because they are cautious and dislike uncertainty. While some issues can be solved with smaller improvements, sometimes a larger shift in thinking is needed. Having the courage and creativity to change a company’s fundamental business model radically isn’t easy but may be the only real answer to a problem or even point the way to a better future. After all, your current situation is ultimately resting on the paradigm that has got you to this point. So, tweaking this and that further up the line may help to a degree but may not be tackling the root cause of the problem: a flawed or outdated business model. You are not likely to make significant changes to your situation without questioning the basic paradigm of your company and considering whether it is time to overhaul the entire business model.
One of the main hurdles in dealing with a failing or underperforming company is overcoming people’s mental blocks that seriously limit the scope of strategic thinking. Such strategic inertia is a recipe for long-term decline because, when a company doesn’t keep pace with external developments, its strategy drifts. It is essential to break out of the business-as-usual mindset and to open your thinking to possibilities. Competition doesn’t stand still and neither should your business model.
The process of paradigm change
The following diagram outlines three stages of improving business performance. The first step involves tightening controls. The second step involves developing new strategies that are still aligned with the current paradigm. The third step involves changing the paradigm itself.
Crucially, this model is designed to improve business performance. It therefore starts with an existing model or paradigm, translated into a strategy which is then implemented. The opportunity and impetus to improve the business model becomes compelling only after the strategy has been implemented and the effects on performance are assessed. At that point the process of reinvention can gain pace starting with step 1 – the need for tighter controls – before moving to steps 2 and 3.
ANSOFF’S PRODUCT MATRIX
Getting from A to B
Ansoff’s Product Matrix provides a useful means of clarifying your thinking through generating a snapshot of where you are and where you would like to be and enabling you to identify strategic priorities.
By helping you to see the gap between the current situation and your goals, the Product Matrix serves to illuminate your situation, your goals, your thinking and the route you need to take. Knowing your goal isn’t enough: you need to know what needs to be done to get there. Strategy consists of two elements: portfolio strategy and competitive strategy. Portfolio strategy sets the goals for each product and market, while competitive strategy determines how to achieve those goals.
The grid has four areas that point to different options, depending on your current situation and goals.
|Current product||New product|
|Current market||Market penetration Increase market share||Product development Develop new products for existing markets|
|New market||Market development Take existing products into new markets||Diversification Develop entirely new products for new markets|
The portfolio strategy explores each product and market combination as geographical growth vectors. These vectors have three aspects – market needs, market location and product needs (such as required technology). The three-dimensional nature of Ansoff’s grid highlights the many points of intersection of current and potential products, market locations and market needs. By seeing how these aspects intersect, it will clarify the strategic options that are open to your company.
Ansoff’s Product Matrix provides a clear snapshot to help you set and achieve strategic goals. There are four aspects to using the matrix that are all connected – the priorities you set in one will inevitably affect the others. The four aspects are:
- The geographical growth vector. Know where you are and where you want to be. Assess your current product and market combinations and decide what and where you would like those combinations to be in the future.
- Competitive advantage. Determine your core strengths and what gives you a competitive edge. Then identify the resources and capabilities needed to achieve goals – know what your company does well and not so well and the skills, resources and technology it will need to acquire.
- Synergies. Identify synergies between activities, cut costs and bolster competitiveness.
- Flexibility. Ensure that your company is prepared for the unexpected and is able to respond quickly and effectively to change. Make sure that one part of the company can incorporate change without harming other parts.
RESOURCES AND THE CRITICAL PATH
The drivers of business performance
‘Resources’ is an overused term in business but any factor providing value or benefit, from whatever origin, is a resource that can be used to benefit the business. Increasing and strengthening resources over time can be seen as the critical path to business success.
Assessing which resources are important involves taking a view across the whole of the business and identifying those factors, direct or indirect, tangible or intangible, that can be expanded and used for competitive advantage. Understanding which resources are most important and how they should be managed requires a clear understanding of the nature of each resource, in terms of the following:
- The interaction between resources. Resources can combine in a cycle to accelerate their growth. For example, rising sales volumes may lead to more cash and more internal capacity, both of which can be used to generate increasing sales, perhaps by entering new markets, in a self-sustaining cycle. Similarly, product quality (an intangible resource) may lead to increased sales, and this in turn can generate sufficient cash to continue improving product quality (and continue increasing sales). In the same way that resources can interact to reinforce one another, they can also interact by limiting one another.
- The fragility of the resource. Cash, quality, customers, staff, reputation and most other resources can all disappear with remarkable speed and ease. It is, therefore, important to control the main factors likely to damage or undermine resources. For example: cash needs to be monitored and controlled; quality can be eroded by suppliers; service can be undermined by the attitudes of personnel; and brand reputation may be damaged by the actions of distributors.
- The quality of resources. It is worth considering how the quality of re-sources can be developed. For example, a customer base is a valuable re-source, but its quality might be improved by increasing customer loyalty to your brand – for instance, by using customer loyalty schemes.
How resources affect performance
Resources have a special characteristic: they fill and drain over time. Since a firm’s performance at any time directly reflects the resources available, it is essential that we understand how those resources develop over time and how we can control that process. To build strong business performance, we need to know:
- how many resources are available
- how fast these numbers are changing
- how strongly these factors are being influenced by things under our control and by other forces
- how resources interrelate with one another.
In a system where resources are integrated and working together, what matters is not the uniqueness of individual resources but how they combine and work together to deliver value for customers. To manage resources and ensure that they drive performance in the desired direction, start by understanding how resources work together.
DEVELOPING INTANGIBLE RESOURCES
Intangibles: what they are, why they matter, and what they can do for you
Soft ‘intangible’ factors can play a crucial role in developing a business’s competitive performance. For example, a charity with strong commitment from its donors will achieve its goals more easily, and a business with a culture that encourages coaching, risk-taking, new ideas and avoids blame is more likely to make improvements and achieve progress.
Unfortunately, intangibles can be tough to manage. You may easily borrow cash, buy production capacity or hire staff, but it is slow and difficult to build staff morale, a strong reputation, support from a charity’s donors or to generate new ideas.
Resources can typically be classified into two of four categories: either direct or indirect and tangible or intangible.
- Direct resources are those factors such as staff expertise, cash or intellectual property that can be developed and nurtured by the business. Customers are, perhaps, the biggest single direct resource. (Viewing customers as a resource focuses thinking on how to accumulate and retain them.)
- Indirect resources are those factors that have a bearing on the quality, strength and value of resources. For example, effective training and development policies are an indirect resource, as they build the effectiveness of staff expertise.
- Tangible resources are those that can be physically seen, such as cash, inventory, sales volumes and customers; typically, these have the highest profile within the organization, as they are the most apparent.
- Intangible resources such as service quality, brand reputation or staff expertise are also vitally important to success.
Of these, intangible resources can be the hardest to manage (and the easiest to ignore). Several techniques will help ensure that intangible resources are working well with the rest of the business:
- Identify the most important intangibles. Since your performance relies on concrete resources, assess whether an intangible factor is likely to influence your ability to win or lose the resources. It is not advisable to waste time examining too many factors, as it is more likely that only one or two factors will have a significant impact.
- Be clear which of these factors genuinely ‘accumulate’ through time and which are simply current features of the business. ‘Quality’ and ‘service’ reflect the balance between what has to be done and what is available to do it, in which case they do not accumulate. Reputation, motivation, commitment and relationships, on the other hand, are built up and drain away over time in response to events.
- Assess intangibles carefully, identif9 the best measure and also the events causing each intangible to rise or fall. Look for ways to strengthen intangibles.
- Build intangible measures into your performance tracking system. Reporting systems now commonly incorporate soft measures (as distinct from hard data, such as financial measures) from various parts of the organization, recognizing that soft measures such as engagement or reputation are crucial to a well-performing system.
- If you don’t know, don’t ignore the issue. Soft factors are influencing your organization, continually and powerfully. Remember, if you choose to ignore them, you are not, in fact, really leaving them out. Instead, you are assuming that they are satisfactory and unchanging. This is unlikely to remain correct, so make your best estimate and start tracking and understanding them.
MARKET POSITIONING AND VALUE CURVES
Choosing the best position in the market for your business or product
A value curve is a way of highlighting customers’ needs and preferences. This can be used to understand a firm’s competitive position, as well as potential trade-offs, opportunities and areas for further development.
Competing firms emphasize and trade off different things that customers value. For example:
- The UK retailer The Body Shop traded the slick packaging, clinical approach and glamorous image traditionally favored by the cosmetics industry in return for a lower price and a more sustainable identity (see diagram).
- In the USA South-West Airlines pioneered low-cost aviation by trading the features of traditional air travel in return for the benefits of cheap, point-to-point travel.
- Multiplex cinemas traded the conventional convenience and centrality of town centre locations in return for the benefits of space and a different experience for customers.
- Home Depot expanded into out-of-town locations on freeways and employed ex-contractors as a way of providing a new level of service and value for customers who did not typically visit home building stores.
The concept of value curves highlights several points about market positioning:
- Competing firms emphasize and trade off different values (e.g. luxury may be traded for a lower price).
- Customers value specific features (e.g. price, packaging) differently at different times.
- Different values enable firms to target new, different – and possibly un-fulfilled – market segments, potentially increasing the size of the market.
- Initially, strategic innovators (e.g. South-West Airlines) create new ‘market space’, gradually redefining the market.
- It can be extremely difficult, if not impossible, for incumbents to successfully copy new arrivals. This is because internal cultural and resource issues keep firms anchored in their conventional way of working.
- When reviewing a value curve, consider the trend: how are things changing?
COMPETITIVE ANALYSIS: PORTER’S FIVE FORCES
How competitive is your company?
Porter’s Five Forces model provides a deeper understanding of a firm’s current competitiveness and highlights options to improve competitiveness.
Michael Porter outlines five forces for competitive analysis:
- New entrants
- Substitute products
- Existing competitors.
- New entrants
Ask yourself how easy it is for new companies to enter the market. There are many factors to consider, including barriers to entry (such as patents and high set-up costs), attractiveness of profit margins and the strength of your brand.
Assess how easy it is for your products to be substituted by other products. This includes all alternatives – not just similar products. For example, airlines compete with train and coach companies, not just other airlines.
Review how strong your buyers are. Is it a buyers’ market? Can buyers switch to competitors easily? Are some of your customers in such a strong position that this leaves you vulnerable? If your business-to-business buyers are operating at low profit margins, what impact will this have on your company?
Assess the strength of your suppliers. Are you dependent on a particular supplier – and how can this be mitigated? Does the supplier rely on your custom or could it easily take its operating capacity to other companies or sell directly to your customers? Could you use alternative products or methods to reduce your vulnerability?
- Existing competitors
Understand your competitors and how you compare to them.
- What threat do they pose?
- What are their strengths and weaknesses?
- Could there be a price war or other aggressive strategies – and would you be able to survive such tactics?
- Are they innovative?
- Are customers able to move to other companies easily?
- Now many competitors are there?
- Which companies are the strongest?
- Are there any newcomers ready to take the market by storm or render your products redundant?
Assessing competitiveness through all five forces will help you to determine how the company is performing, its strengths and weaknesses and the direction it is heading in. Because a weakness of Porter’s approach is the focus on external issues, it is often used alongside complementary models that are better at revealing the internal issues that impact on a company’s competitiveness.
How to build a culture of innovation
Developed by Professor Lynda Gratton, Innovation Hotspots occur where conditions are right and there is encouragement – they cannot be formally imposed. Encouragement is needed in four areas, which are:
- a co-operative mindset
- boundary spanning
- developing a sense of purpose
- productive capacity.
- A co-operative mindset
A co-operative mindset results from a company’s practices, processes, behaviours and norms – the behaviour of top management is significant. People have to want to share both explicit and tacit knowledge. Several elements are vital:
- Consider relationships when selecting staff.
- Emphasize relationships in inductions.
- Provide mentoring.
- Emphasize collective rewards over individual ones.
- Establish structures that facilitate peer-to-peer working.
- Develop social responsibility.
- Boundary spanning
This involves thinking beyond your immediate boundaries – seeing the larger picture. This involves:
- being undeterred by physical distance
- welcoming a diverse range of ideas, insights, experience and people
- being willing and able to explore issues together
- networking and building bridges for others to cross
- using different levels of co-operation (e.g. use strong ties where developing trust quickly is important; use weak ties to generate a lot of ideas)
- listening and reflecting in conversations rather than just pushing a point of view.
- Developing a sense of purpose
Pose challenging (or ‘igniting’) questions. These don’t have a ‘right’ answer; they invite exploration of options. They inspire and engage people and lead to a new vision that provides purpose and energy.
- Productive capacity
Ensuring that a hotspot realizes its full potential relies on building productive capacity by:
- understanding and appreciating the talents of others
- obtaining practical, public and explicit commitment from participants
- harnessing the creative energy which results from problem-solving and decision-making
- synchronizing time, especially where different time zones have to be accommodated or where there are different attitudes to time
- ensuring that pressure is neither too high, where people burn out, or too low, where they lose interest.
Innovation relies on teamwork, agility and the ability to lead change. Crucially, it is about mindset: you need to think like an innovator and you need to encourage this in others. Innovation isn’t only about products – it’s about understanding customers and building a brand, improving efficiency, reducing costs, improving the quality and quantity of people’s work and removing constraints.
DEEP DIVE PROTOTYPING
Developing creative, practical solutions
Developed and popularized by the consultancy firm IDEO, Deep Dive Prototyping is a focused, team-based approach to generating solutions to a particular problem or challenge. It is a useful way of stimulating creative thinking and to capture and fine-tune ideas.
A deep dive combines brainstorming and prototyping (building and exploring a potential solution) to devise actions that will help move a business forward. There is no time limit, and the main stages are:
- Build a team that has a mix of strengths and approaches.
- Define the design challenge – to do this, understand your market, customers, technology and constraints and use this information to develop key themes.
- Visit experts, and gather information on markets, customers – and ideas generally.
- Share ideas.
- Brainstorm and vote – this involves intensive brainstorming and discussion to imagine new concepts and ideas based around the main themes.
- Develop a fast prototype.
- Test and refine the prototype, streamlining ideas to improve the proto-type and to overcome obstacles – at this stage, evaluate and prioritize ideas and decide how they can be implemented.
- Focus on the prototype and produce a final solution.
- Give credit to those involved – this promotes motivation and encourages continued innovative thinking.
DEVELOPING CREATIVE THINKING
Making creativity the norm
Edward de Bono sees creativity as a learnable skill, one that is best harnessed through formal techniques. He proposes that parallel thinking is a more useful and effective means of putting creative talent to work.
Formal creativity works because it works with the way everyone’s brains work: both consciously and subconsciously, we automatically filter, categorize, process and organize information. Building on this, de Bono argues that parallel thinking is more effective for generating the results that make a difference to companies. (Parallel thinking is when each individual puts forward their own thoughts in parallel with those of others. In this way, each individual is able to complement, enrich and build on one another’s thinking, rather than competing or attacking the thoughts of others.)
The reason why this is more important than ever is because what companies previously relied on for competitive advantage – competence, information and technology – are now easy-to-obtain commodities. These are all buyable commodities, enabling your competitors to rapidly erode any advantage you may have had. Today, what matters is creating value from these commodities.
Creativity solves problems, challenges existing methods, and provides a better and constantly improving way forward. Given the reward, companies need to know how best to harness creativity in a way that is useful. A major flaw in traditional brainstorming is that it assumes that, if you give people the freedom to express themselves, they will magically become creative. This is not the case. For organizations, useful creativity needs to be a formal activity that requires thinking that provokes and challenges a current situation and then searches for answers.
Provoke, challenge and search for solutions
Given the brain’s natural inclination to organize information and think laterally, we can tackle issues by simply taking a random starting point. Our brains will automatically process information, make connections and point us in new directions. Allowing such randomness in selecting a starting point is important. It suggests new possibilities and takes thinking along new paths. Significantly, it is likely that our brains have already processed information and are subconsciously suggesting such opening gambits because they could be highly relevant. This serves to break us out of the current doldrums and set us on a new course.
Next, our new thinking needs to move forward: to challenge the information it is processing. Just because something has always been done a certain way does not mean it is carved in stone: methods can always be improved upon. Constantly questioning and challenging is a mindset that is a huge source of competitive advantage precisely because it is the way that companies create value from their resources. An important point to remember is that even when something seems to be working and is successful it doesn’t mean it is the best that it can be. Once thinking challenges the norm, we will automatically explore alternative and potentially better solutions.
Creating a culture of creativity in a world where competence, knowledge and technology are no longer enough is now the true source of success.
THE DISCOVERY CYCLE (ORCA)
Discovery – making things known or visible – is a vital precursor for innovation. The Discovery Cycle is a way of choosing new ideas that are profitable and scalable.
The Discovery Cycle has four stages, summarized in the acronym ORCA:
- Observation. Understand how the world is changing – for example, by looking for anomalies, paradoxes, peripheral developments and direct experience.
- Reflection. Techniques that work best at this stage include zooming in and out, using a muse, suspending judgement, slowing down, reflecting on what’s missing, restructuring data to simplify patterns, juxtaposing pieces of different information (bisociation) and taking time to rest.
- Conversation. People set the pace and scope for innovation, so the best techniques to use at this stage include contrasting views, setting the agenda, framing the issues and generating hypotheses.
- Analysis. The final stage of the Discovery Cycle involves gathering systematic evidence, classifying and categorizing data, naming, completing data analysis and hypothesizing.
Lessons from great innovators
What lessons do innovators have for us? Several come to mind:
- Build on the ideas of others / collaborate. That should be easy for scientists who are, in the words of Isaac Newton, ‘standing on the shoulders of giants
- Take an unorthodox, distinctive approach.
- Embrace diversity.
- Create a diverse, open and creative culture.
- Develop empathy for the consumer or customer (understand people).
- Execute and practically take action.
- Be confident and bold.
- Find your motivation; enjoy your work.
This list also highlights three other vital points:
- Innovation relies on teamwork, agility and the ability to lead change, the other elements of this programme.
- Innovation is about mindset: you need to think like an innovator and you need to encourage that in others.
- Innovation isn’t only about products: it is about improving efficiency, reducing costs, improving the quality and quantity of people’s work, removing constraints – and that’s just internally; it also means serving and understanding customers, building a brand – and more.
THE FORTUNE AT THE BOTTOM OF THE PYRAMID (BOP)
Developing the innovator’s mindset
If a company goes to the bottom of the wealth pyramid and builds affordable products, creates awareness and provides access, then the market is phenomenal.
The late Professor C.K. Prahalad argued that there is a ‘poverty penalty’ where the poorest people pay more for everything because they don’t have a choice: they are stuck with local monopolies and bad products and services.
Research recently highlighted by the World Resources Institute shows that the world’s four billion poorest people represent a US$5 trillion market opportunity. There are several other issues at the bottom of the pyramid: e
- Pricing is vital. At the BOP, you need to start with an affordable price, understanding that price minus profit equals the acceptable level of cost. This different way of thinking leads to a new range of exciting options.
- Innovation is essential. This can be accelerated and improved by focusing on BOP markets because minor, incremental changes won’t be enough: the market requires a fundamental rethink.
- Businesses need to substitute investment for collaboration. Management time is needed to increase collaboration – and it is cheaper than simply in-vesting cash.
Companies that ignore growth markets will be left behind – and will have five years, at best, before businesses from growth markets start competing with them.
Developing the innovator’s mindset
Where can you improve your approach to innovation? Ask yourself the following questions and mark yourself out of 10 for each attribute: this will help highlight areas for improvement.
|When innovating, how effectively do you: engage as many people as possible …?… and build an open, diverse and positive team? define the specific challenge or issue? challenge assumptions: yours and other people’s? confront challenges and problems? understand that good ideas can come from anywhere? follow through – by being practical and realistic, and planning implementation? focus on the benefits as well as the potential pitfalls? question? Questioning is a great way both to provide support (e.g. what help do you need?) and challenge (how can we do this faster/cheaper?) give praise and credit: build momentum (revolutions fail, flywheels succeed)? be open, build relationships? remove constraints, tirelessly? remember the essentials of leading change? (See Number 35.) balance intuition and analysis? build collaboration and teamwork? (Think of the 5Ms: meaning, mindset, measurement, mobilizing, mechanisms for renewal.) avoid the pitfalls of decision-making? ZSee the description of inhibitors below which ones are your greatest vulnerability?) consciously develop your skills? design matters? (This affects how people feel about something: whether it’s credible, engaging, worthwhile.)|
The inhibitors of creative thinking are shown in this table.
|Personal blocks||Problem-solving blocks||Contextual blocks|
|Lack of self- confidence||Solution fixedness||Scientific reasoning provides a panacea|
|A tendency to conform||Premature judgement||Resistance to new ideas|
|A need for the Familiar||Use of poor approaches||Isolation|
|Emotional ‘numbness’||Lack of disciplined effort||Negativity towards creative thinking|
|Poor language skills||Autocratic decision- making||Lack of imaginative control|
|Rigidity||Overemphasis on competition or co-operation||Lack of smart goals, clear vision or timescale|
THE SIX THINKING HATS
If you want to get ahead, get a hat
Created by Edward de Bono, the Six Thinking Hats technique details the different styles of thinking that we use when making decisions.
People tend to have a preferred thinking style which, no matter how useful, can overlook solutions to problems that would only be revealed through other ways of thinking. The Six Thinking Hats method gives us the flexibility either to use the style that is appropriate to a situation or the ability to gain a fuller picture by applying more than one thinking style to a problem.
Each thinking hat represents a different way of thinking. By seeing situations from these different perspectives, you are more likely to make and implement the right decision. For example, seeing a strategy only from a logical and rational perspective may result in a failure to see a better solution or potential obstacles to implementation that creative and sensitive thinking could reveal.
The Six Thinking Hats
- White hat. This approach focuses on available data. It involves looking at the information you have to see what you can learn from it — identifying gaps in your knowledge and, by analysing past trends and data, trying either to fill them or take account of them.
- Red Hat. This style looks at problems using intuition, gut reaction and emotion. Try to think how other people will react emotionally and try to understand the responses of people who don’t know, or may not share, your reasoning.
- Black Hat. This looks at all the bad points of an issue, looking for why it won’t work. It highlights the weak points in a plan, enabling you to eliminate or change them or to prepare contingency plans — helping to make plans more resilient. A key strength of this approach is that problems can be anticipated and countered.
- Yellow Hat. This style involves positive thinking and optimism, helping you to see the benefits of a decision. Another advantage is that it enables you to keep going during difficult situations.
- Green Hat. This involves developing creative solutions. Thinking is free-wheeling, and there is little criticism of ideas.
- Blue Hat. This emphasizes control of processes and is common among those chairing meetings. When ideas are running dry, it is useful to combine this approach with Green Hat thinking, as its creative approach will stimulate fresh ideas.
Peter Drucker’s seven steps for developing a creative culture
Innovation is a company-wide activity. Creative, profitable ideas are needed to succeed, and history has shown us that great ideas come from many different people. Instead of relying on ad hoc suggestions or the skills of a few talented individuals, companies need to create an innovative culture.
Where does innovation come from?
While some people are known for their innovative thinking, successful and profitable ideas can come from anyone. To tap into this potential, what is needed is a culture that empowers people to question and think critically and creatively and then to share their ideas with others.
Innovation is not a rarefied activity or the domain of specialists. Neither is it solely about making huge leaps in thinking – smaller, incremental improvements are also significant sources of advantage. Innovation is not necessarily about large RECD budgets – important new ideas come from anywhere, at any time. It is a company-wide activity, reaching every aspect of running a business – from products and services to operations, decision-making and training. They are all sources of competitive advantage, and having an innovative culture will lead to continual improvements.
Creating an innovative organization
What distinguishes an innovative company from the rest is its dedication to creativity. Having the right culture and processes will lead to creative thinking, a challenging mindset and innovation. Innovative companies develop a creative culture where people challenge, innovate and look for opportunities. They adapt structures and procedures to enable innovation to flourish. Also, they often link with external experts to add to internal, innovative resources,
Peter Drucker outlines seven steps that promote innovation in a company:
- Analyse the reasons for unexpected successes.
- Examine why events were different from anticipated results.
- Challenge the status quo by examining why underperformance has become an accepted state.
- Determine how to take advantage of market changes.
- Be aware of broader developments in society, to identify potential opportunities.
- Consider the impact of changes in the economy and recognize the business opportunities they may offer.
- Think about how new information, ideas and technology affect customers.
Innovative organizations also have a general environment and culture that values and fosters innovation. Research by the Talent Foundation identified five catalysts for successful innovation:
- Consciousness. Each person knows the goals of the organization and believes that they can play a part in achieving them.
- Multiplicity. Teams and groups contain a wide and creative mix of skills, experiences, backgrounds and ideas.
- Connectivity. Relationships are strong and trusting and are actively encouraged and supported within and across teams and functions.
- Accessibility. Doors and minds are open; everyone in the organization has access to resources, time and decision-makers.
- Consistency. Commitment to innovation runs throughout the organization and is built into processes and leadership style.
If you are building an innovation culture in your business or team, it can help to ask yourself which of these catalysts you can improve. How will you do this?
DISNEY’S CREATIVITY STRATEGY
When you need more than just the bare necessities
We all have a preferred thinking style – some of us are dreamers, while others are realists or critics. This can prevent us seeing an issue from other angles. Walt Disney’s method uses all three of these thinking styles to help view a situation from different perspectives and find the best way forward.
Problem solving, decision-making and planning suffer when we have too narrow a focus, yet it can be difficult to change how we naturally approach issues. Using Disney’s three styles together will improve your decision-making.
- The Dreamer, who is a dreamer, is focused on potential and possibilities.
- The Realist focuses on practical aspects and implementation.
- The Critic questions and challenges plans and assumptions, and notices potential problems or flaws.
Using the Disney method
- Select an issue you want to address but put it to one side while you get into the right frame of mind.
- Go to three different places to think about the issue from each perspective (you will associate each environment with that approach). These can be entirely different places or simply different parts of one room.
- For each way of thinking (starting with dreamer, moving to realistic and then to critic), first remember a time when you were either creative, realistic or critical. This will help you access that style and apply it to the current situation.
- In each frame of mind, address the issue at hand solely from that perspective. This will let you get the most out of each perspective, revealing more options and ideas.
- In the dreamer space, let your ideas flow freely.
- In the realist space, think about how the ideas you have created can be implemented. How can they be achieved? What needs to happen?
- In the critic space, question and challenge your ideas and plan. Identify strengths and weaknesses; look for flaws; look for gaps or potential problems. Determine what needs to be done better.
- Once you have completed these four stages, go back to the beginning and re-evaluate your original dream and plan through each thinking stage in turn. You can repeat this process until you feel the plan works well from each perspective.
Types of questions to ask at each stage
|Why am I doing this?||How can I make that happen?|
|Can it be done better?||Who else do I need to make it work?|
|What would I like to happen?||What needs to happen – and when?|
|Wouldn’t it be great if…..?||What resources do I need?|
|What reward or result would I like?||How much will it cost?|
|Does the idea really have potential?|
|Is the objective achievable?|
|Are there any barriers or resource issues?|
|Does the plan work? Consider issues such as timing, cost or market potential.|
|How can the plan be improved – are there gaps or are some things unnecessary?|
THE MATE MODEL FOR STRATEGIC SELLING
Achieving your sales objectives
Segmenting and managing your contacts within a client organization in terms of their support for your sales objectives is a highly effective way of developing client relationships and selling.
- Step 1: define your unique sales objective.
- Be clear about what you are selling and when, and the value it brings. What makes it an attractive proposition? What is its value for the organization or client? This sounds simple but it can be muddled or overlooked, with disastrous consequences.
- Step 2: identify all the players using the MATE model.
- MATE highlights the need to focus on Money, Allies, Technical experts and End users. Identify each contact (including those you don’t know), recording their job title and name.
|Money They have the ultimate veto on sales||Allies They provide useful information, can guide you and influence others to support your objective|
|Technical experts/assessors They filter out information, can be gatekeepers, can influence ‘Money’||End users They use, manage or work with your products|
- Money. The budget holder has authority over the decision to spend. They tend to focus on the bottom line and have the power of veto. They will ask: ‘What impact will this have and what return will we get?’
- Allies /Advocates. These can help guide you during the sales process. They provide valuable information, can lead you to the right people and may be influential. Allies are both inside and outside the organization.
- Technical experts. They are gatekeepers who evaluate technical aspects of the proposal. They do not have final approval but offer recommendations to the decision-maker. They can say ‘no’ on account of technical issues. They ask whether the product or service matches their specifications.
- End users. They judge the impact of your proposal on their job performance. They will implement or work with your solution, so their success is linked to your product and they will want to influence the decision to buy. They ask: Will it work for me or my department?
- Step 3: consider each individual’s level of support.
- Having placed each individual on the MATE model, assess their level of support for your sales objective as high, medium or low.
- Step 4: consider each individual’s level of influence.
- Assess each individual’s influence within their organization — high, medium or low.
Check for warning signs
Ensure that there are no threats to the sale by asking yourself the following:
- Have I at least one person for each area?
- Am I free from concerns about their influence?
- Have I made personal contact with them?
- Do I know their response modes and what they are looking for?
Identify your tactics to further the sale and eliminate warning signs
Throughout, be honest and prepared to challenge and develop your thinking. With the information you have gathered, contact the key people, establish rapport and understand their needs.
THE TEN CS OF SELLING ONLINE
Building a successful business online
Centered round meeting customers’ needs, the Ten Cs are the key drivers of selling and succeeding with business online. Which factors are most significant for your company will vary over time, depending on the situation – such as its stage of development, competitive position, type of market or brand strength.
Content sets the tone and should drive your brand. It should be clear, compelling, engaging, entertaining, informative, visually appealing and tailored to the target audience. Enable customers to access information quickly and easily and to control the flow of information.
Communication is more than providing information. It is about listening, building trust and having a one-to-one relationship with customers. Understand what interests and motivates customers, give them the opportunity to interact, act on feedback and use clickstream data to monitor behaviour.
- Customer care
Customers need to trust you – to have confidence in purchases and to know that personal data is secure and that after-sales support is available. Provide various payment methods, enable customers to track orders and respond quickly to questions. Positive experiences enable up-selling, cross-selling, repeat business and personal recommendations.
- Community and culture
People look to the Internet to network and socialize. Provide expert information, allow people to react, ensure that information is accessible, clear and entertaining, and enable customers to meet and interact.
Customers have high expectations, so assess each feature from your customers’ viewpoint. Online experiences need to be smooth, effective, quick, easy and convenient. Ensure that navigation is clear and intuitive.
Make the site compelling and ‘sticky’ – so that customers stay longer, return often and recommend it. Ensure that customers value it by providing high-quality content and incentives to return. Enable customers to visit other sites that provide complementary information – such as skiing companies linking to weather channels.
- Cost and profitability
Your online strategy – objectives, priorities and benefits – needs to be clearly understood and planned. Focus on cost control and profit maximization to ensure that the site is profitable.
Plan customization from the outset rather than grafting it on later. Ensure that products meet customer’s requirements through dialogue. Make sure that customers know what they can and cannot choose. Develop and refine customization to maintain competitiveness.
To improve capabilities, encourage your people to see the Internet as a tool for meeting customer needs. Set, implement measure and monitor objectives. Ask customers what they want and what they think of your plans.
Continually review and refine your strategy relative to competitors. You need keen market awareness – you need to know what competitors have done, are doing and may do. Consider the worst-case scenario to make your online strategy durable and realistic.