Posts in ‘Business Strategy’

We, at Active Garage had run this promotion for the free eBook earlier in the year and we are running this again, now. If you find yourself wondering that if the eBook has been available for free download since then, why are we saying we are “running the promotion again”? Valid point.

Here’s why.

The author of the eBook, Mark McGuinness, is opening doors to folks interested in Creative Success, once again, for his amazingly valuable course “The Creative Entrepreneur Roadmap”, for a limited period and seats are limited.

Before you go ahead with making a decision of if this course if for you or not, I would suggest reviewing the blog I had written in January about what being Creative means and who this book (and subsequently, the course) is for (yes, it is not for everyone… ).

There are some great success stories form real folks who have taken this course and produced magical results by directly applying what they have learnt from the course. For instance, there is:

Since the course is now open for only a limited time, you could also directly go to the opt-in page to check it out and register.

To your Continued Success…

Himanshu JhambThis article was contributed by Himanshu Jhamb, co-founder of ActiveGarage and co-author of #PROJECT MANAGEMENT tweet. You can follow Himanshu on Twitter at himjhamb.
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The Holy Grail for complex organizations experiencing high risk is finding a balance between stability and flexibility. This presents a very real challenge since the environment is almost always shifting and the team has to think on its feet because time, money, people, and other resources are limited. There isn’t enough time to cycle up to senior management and back down to the team.

The previous two blogs presented linear models of success and failure that are inadequate in complex situations but which are still alive and well in many organizations. They are also limited in term of being either fixed solely on the individual (Domino model) or top-down in terms of policies and procedures (Barrier model).

This blog starts the process of looking at a more realistic model for addressing success and failure in dynamic situations, the Functional Resonance Accident Model (FRAM) developed by Hollnagel. Its roots are in complexity theory and it comprises four principles:

  • Equivalence of success and failure. Successful teams rely heavily on anticipatory awareness, i.e., paying close attention to the environment as it is, without expectations. They perform early-warning weak signal analysis, and decide how best to organize for the situation. An anesthesia team might best characterize this behavior. Guiding medical principles are present but the number of hard-and-fast rules is low compared to how much the anesthesia team must monitor the surgery and think on their feet constantly assessing the entire situation while simultaneously monitoring details. Failure can occur when the team temporarily losses this ability.
  • Approximate adjustment. The team is constantly adjusting its performance to suit the situation. This includes adapting to shifts in resources as well as unique requirements for the specific task at hand. Imagine your elderly, sick grandmother is staying with you and she is very sensitive to excess heat but also chills easily. You have an air conditioner that can maintain 75°F indoors in direct sunlight only if the outside temperature is below 95°F.  On days forecast to be hotter than 95°F what do you do? You must gauge what time in the morning to turn the thermostat below 75°F. How low do you turn down the temperature? At what time do you do it? Does it vary with the afternoon forecast? Could she chill with the setting you’ve chosen? Answering these questions from day to day is making an approximate adjustment in the presence of limited resources and high risk.
  • Emergence. The constant adjustments in performance means there is constant variability. This variability can have a compounding effect, which is non-linear and disproportionately large. New behaviors can emerge. A tipping point can be reached. Think of the impact one failed safety relay has had on the electrical grid in the United States. Whole areas have been plunged into darkness.
  • Functional resonance. A whole constellation of variables can show emergent behavior and impact each other, causing a particular function in a system to resonate without there being one direct, cause-and-effect relationship to which one can point. Think of the speed with which Google grew initially or sales of the iPad or the initial impact of Palm. Failure can emerge as well. Think of Palm’s sales for the last few years before being bought by HP. In a different area, look at how the functional resonance of political dissent has changed in the Middle East. Have changes in communications had an impact?

In principle you can see that FRAM is much more robust than the Domino or Barrier models covered in previous blogs. It goes well beyond the individual or attempts to create all-encompassing policies and procedures. It addresses the dynamics of the situation, which keeps it grounded. We will go deeper into the FRAM model in the next blog.

Gary Monti PMI presentation croppedThrough his firm, Center for Managing Change, Gary Monti has over 30 years experience providing change- and project management services internationally. He works at the nexus between strategy, business case, project-, process-, and people management. Service modalities include consulting, teaching, mentoring, and speaking. Credentials include PMP number 14 (Project Management Institute®), Myers-Briggs Type Indicator certification, and accreditation in the Cynefin methodology. Gary can be reached at gwmonti@mac.com or through Twitter at @garymonti
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In 1971 I was 19 years old and freshly promoted into my first management job – assistant manager of the band and orchestra department at Jenkins Music Company.  To this day, I’m not sure exactly what it was I was supposed to manage, because I was clearly the lowest ranking employee in the building.

No Trouble

On the first day of my management career I was called into Jess Coulson’s office.  Jess was my boss’s boss.  He was a compelling, charismatic guy.  He had a huge mane of silver hair and a twinkle in his eye that told you he knew the secret and he just might let you in on it.  Jess smoked cigarettes nonstop, he drank bourbon and milk pretty much all day long and he told the greatest musician stories a kid like me had ever heard.  I was in awe.  So when he called me into his office I was nervous and excited.  Here’s what happened:

He was on the phone when I walked in and his chair was swung around so he was looking out the window.  All I could see was a cloud of smoke swirling around the top of his head.  He spun around, stood up and shook my hand and said,

“Congratulations, Kid – you’re in management now!”

He grinned and his eyes sparkled and I’m sure I stood up just a little straighter.  He looked away for a moment like he was lost in thought and then he turned and locked in on me like I was the only person in the world.  He said,

“Kid, the big guy wants three things and only three things.”

I wasn’t exactly sure who the big guy was but it didn’t seem like a good time to ask so I just stood there.

“The big guy wants high productivity, low costs and No Trouble.  You got that?”

High productivity, low costs and No Trouble.  I got it.

“That’s good, Kid.  Now get out of here.”

I was in Jess Coulson’s office for a total of about 60 seconds.  But in that 60 seconds he outlined the essence of HR.  High Productivity, Low Cost and No Trouble.  For business owners, that’s what HR is all about.

In the 40 years since I stood in Jess’s office, the No Trouble part has become increasingly difficult for employers.  Employment laws are more onerous and courts are significantly more sympathetic to employees’ claims than ever before.  For business owners, legal attacks by employees or former employees have become a serious concern.

The bad news is, there is no foolproof way to protect your business.  No matter what you do, there is still some risk associated with having employees.  But you can minimize that risk by creating an employee handbook.  An employee handbook is the centerpiece of an effective HR program.  It explains your company’s policies and procedures and it communicates your expectations to employees.  A good handbook also helps protect your company in the event of a dispute.

Now the good news – there is a quick and free way for you to create an employee handbook.

In less than 10 minutes and at absolutely no cost, you’ll have an employee handbook with the policies most small businesses need.  And that’s a huge step toward No Trouble!

Jack-Hayhow Jack Hayhow is Chief Executive Servant of Opus Communications in Kansas City. Opus provides tools and techniques to help business owners build their business. Jack is also the author of two highly acclaimed business books, The Wisdom of the Flying Pig: Guidance and Inspiration for Managers and Leaders and, Breaking Through the Barrier: What Companies That Grow Do Differently
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5 Steps to Sound Growth for Small Businesses

by Matthew Carmen on July 4, 2011

Over the last several months, I have mostly written about the financial, strategic and operational needs of mid-sized and large companies.  What about small business?  Companies with, say, 10-150 employees…what in these areas can best serve them?  Of course there are the obvious: the ability to track expenditures, report on company spend, rudimentary budgeting, payroll, etc. Certainly these are very important, but really, the owners and stakeholders of the small business should be able to handle this on their own – or with minimal help.   The most important need for small business owners is to work with someone well-versed in things financial, who can offer a growing business the ability to formulate strategy and then develop sound finance processes, procedures and who can offer the right tools to turn strategy into practice.  In this way, the finance person participates in the growth of the business and helps take the company to the next level.

This resource discussed above is the hardest to articulate to small business clients.  They usually want someone to tell them how much they are spending, on what, and how they can spend less on the same services.  These are important questions, but somewhat short-sighted.  What the client should be asking, (and I like to ask questions to get them thinking this way) is:  How can I get my company to the next level?  The proverbial next level of course means something different for each company: it may be $10 million in sales for one, higher margins for another, or opening up new markets for another still. Regardless, I’ve found that there are 5 key steps that must take place in order to reach ‘next level’ status:

  1. Decide what the next level is, specifically.  What is the direction in which your company wants to go?  There will be some type of desired growth, what is it?  Does this growth match the company’s mission and values?  Formulating your goal is most important; if the goal is unclear, there is no way that a strategy can help achieve that goal.  Sure, some goals are reached anyhow simply by dumb luck, but as you probably guessed, it is not a scalable process.
  2. Develop a strategy to reach a clear goal.  This takes true leadership from within.  Once a goal is formulated, a well-thought-out strategy or detailed plan is needed to get there.  What will it cost to reach our goal? What skills are required (marketing, product development, operations, etc)?  How much time with this endeavor take?  Once these large questions are answered, a program or project management team should be able to take over and develop a detailed plan of action.
  3. Plan of action. The program team in a small company (usually 1 or 2 people) will need to develop the timeline for the actions that need to take place, and who will actually perform the work.  This program team may be made up of internal employees or outside contractors/consultants.  There are many tools which help in this area as well, including Microsoft Project and others, that can help organize tasks and timing.  Once a plan is developed and approved, the real work starts.
  4. Communication:  The plan and assignment of roles must be clearly communicated to the entire organization.  This serves multiple purposes: it lets those that will be involved understand their roles and what their expectations are, and it also lets those not involved know what the future state of the organization will look like. Finally, it lets management know how they should start planning for future roles in a fashion that will evolve along with company goals.  Expectations of everyone will change during this process, typically for the better.
  5. Reporting and Tracking:  This step entails reporting on the progress of the strategic implementation.  The best tools for this are a balanced scorecard and separate financial reports.  A balanced scorecard will track the inner workings of the strategic implementation – what is going on at the operational, leadership and learning levels, how the organization is changing and ensuring it is on track to meet goals on time.  The financial reporting piece will let leadership know if they are spending what was approved and in the right areas.  Analysis of both these reporting mechanisms will allow for operational changes as the external environment changes (competition, products, legal, etc.)

The process is finished once the project goals are met.  (Have the new systems been put into production, etc.?) Now the claims made by the new strategy need to be monitored closely, and the results examined likewise.  Is there progress being made towards our goal?  If yes, is this progress happening as planned? Faster? Slower? Perhaps the new systems now in place allow for amending goals upward, or results in better returns on investment. If so, what a great problem to have, right?  Continued reporting and vision are also required – and once new goals are established, the process should ideally begin anew.

So you see, the finance person at a small company must wear many more hats than his/her counterpart in larger organizations.  In the scenarios above, there is a good chance that the finance person will also serve as the program manager for the strategic implementation, or at least play a key roll in that implementation.  The risks are often greater for a small company, but the rewards for the company can be greater as well – and isn’t that what owning a business is all about?

Matthew Carmen launched Datacenter Trust along with Marc Watley in February, 2010 and serves as Co-Founder & COO as well as Managing Partner of their Financial Intelligence practice. Datacenter Trust is a recently-launched consulting and services delivery firm, providing outsourced server hosting, bandwidth, cloud services, and IT financial intelligence and analysis services to growing businesses. Follow Datacenter Trust on Twitter @datacentertrust
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When I was researching the book, Breaking Through the Barrrier: What Companies That Grow Do Differently, I would often ask business owners,

Do you want to grow your business?

While I received a range of answers, the typical response was some variant of, “Well, yeah, sure.”  When I probed a bit deeper, asking how much do you want to grow your business, I’d usually get an answer that involved traditional metrics such as market share, annual revenue or head count.  But these traditional metrics ignore one profound truth:

In a privately owned business, the owner’s life should be better because he or she owns the business.

Better is, obviously, a subjective term.  For some owners, better might mean more money – for others, more time off.  A better life could also mean doing work that makes the world a better place.  The problem with traditional metrics is that they don’t address the owner’s quality of life.

So it might be productive to look at business and growth through a slightly different lens.  It’s a lens that helps an owner consider how he or she wants to be involved in the business – a lens that helps clarify what activity the owner wants to engage in on a day-to-day basis – a lens that illuminates how the owner wants to live his or her life.

There are, essentially, four business structures:

  1. Hands-On: The owner does some or all of the work.
  2. Owner-Operated: The owner supervises the line level employees.
  3. Managed: The owner manages the managers.
  4. Enterprise: The owner is largely removed from day-to-day operations.

While to some extent revenue dictates the structure of the business, revenue isn’t the only determinant.  Let me use a couple of my friends to illustrate.  Mike Pasley owns Central Packaging.  Danny O’Neill owns The Roasterie.  These businesses have a similar revenue, cost of goods sold and overhead structure.  Mike operates in the Owner-Operated structure and Danny operates in the Enterprise structure.  Mike has a high need for control and is committed to a methodical approach.  Danny lives at 30,000 feet and abhors operational details.

Both of these guys have profitable, growing businesses and from what I can tell, both guys are happy.  But if for some reason they had to switch places, they’d both be miserable.  It’s not about revenue or market share or profit – it’s about how they live their lives.

How big your business should be depends on how you want to live your life.  If you’re happy in the owner-operated structure, will you be as happy when growth forces you into the managed structure?  Can you accept the loss of control that inevitably comes with growth?  Is your life really going to be better if your business is bigger?

Jack-Hayhow Jack Hayhow is Chief Executive Servant of Opus Communications in Kansas City. Opus provides tools and techniques to help business owners build their business. Jack is also the author of two highly acclaimed business books, The Wisdom of the Flying Pig: Guidance and Inspiration for Managers and Leaders and, Breaking Through the Barrier: What Companies That Grow Do Differently
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Resilience Engineering #1: Robust Vs. Resilient

by Gary Monti on June 7, 2011

Sustaining success in complex situations presents challenges where classic approaches to projects, programs, and processes may fall short. This series of blogs will present a tool for dealing with those challenges, resilience engineering (RE). I’d like to start with two terms from RE: robust and resilient. Why? In a word, Relevance. These terms will give a taste of RE and set the stage for the rest of the series.

Robust Systems

Robust: A system is robust when it can continue functioning in the presence of internal and external challenges without fundamental changes to the original system.

An example of robustness may help. Company XYZ is an early entrant into a new market with Product Line A. In supporting Product Line A, a series of integrated databases are built in the back office and end-user operations are superb. As time goes by the industry morphs and there is opportunity for introducing Product Line B. The database requirements for Product Line B are a mix: 60% can be handled with the current systems and the remaining 40% present new requirements.

Time-to-market can be reduced if a commercial, off-the-shelf (COTS), stand-alone product is purchased to cover the new requirements. The problem is it does not integrate with the existing system and double entry in both systems is required. Specifically, products and services for Product Line B clients will be tracked in the COTS system while accounting will be done separately in the original system.

While an integrated solution is desirable it will take 6-9 months and is decided against. Another reason for deciding against the integrated solution is Company XYZ is in a recession in their market and keeping costs down is a “must.” Those in functional operations, the end-users, are told they will have to figure out a way to handle the double entry and insure problems don’t arise. The database end-users absorb the changes, create new policies and procedures, and the entry into the new market achieves sales and margin projections.

This is an example of robustness, i.e., the organizational system responded to a challenge and met its functional requirements while the original database systems are not modified. People absorbed the changes. This absorption comes at a cost, though. The stress level of the end-users rises and they are a little less masters of the database system and a little more victims of double entry.

Resilient Systems

Resilient: A system is resilient when it can adapt to internal and external challenges by changing its method of operations while continuing to function. While elements of the original system are present there is a fundamental shift in core activities that reflects adapting to the new environment.

With a resilient approach the integrative change would be adaptive in nature. Database operations would morph to reflect and environment comprising a composite of Product Line A and Product Line B. This is in stark contrast to the robust solution, which is still Product A-centric.

In its simplest form with the resilient solution, the end-users would focus on serving the customers and be free of the clunkiness and increased potential for failure associated with the double entry system.

Robust or Resilient: What’s the Difference?

Is the robust decision a bad one? Not necessarily. It just comes at a cost; a cost incurred while deciding on trade-offs, a cost that may be invisible to the culture. This issue of trade-offs is at the core of RE.

In the next blog we will look more at the accrued costs associated with trade-offs and a rather scary element that can be associated with robust solutions – drift. As the series progresses more innovative ways to approach trade-offs will be presented.

Gary Monti PMI presentation croppedThrough his firm, Center for Managing Change, Gary Monti has over 30 years experience providing change- and project management services internationally. He works at the nexus between strategy, business case, project-, process-, and people management. Service modalities include consulting, teaching, mentoring, and speaking. Credentials include PMP number 14 (Project Management Institute®), Myers-Briggs Type Indicator certification, and accreditation in the Cynefin methodology. Gary can be reached at gwmonti@mac.com or through Twitter at @garymonti
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Two factors comprise the market potential for any product or service – demand and attachment.  Demand is about quantity – how many people want what you sell.  Attachment is about quality, how much do people want what you sell.

There are some products and services for which there is obvious demand.  For example, almost everyone needs a grocery store, a cell phone and the occasional cup of coffee. Universal demand creates extraordinary opportunity.  But universal demand also spawns burgeoning supply and intense competition.  The harsh reality is, in virtually every sector, supply exceeds demand in a way that isn’t cyclical.  We’ve crashed full speed, head first into a world where we have more stuff to sell than people want to buy.  And yet, a number of companies in highly contested categories are growing dramatically, even exponentially.  How do they do that? What’s their secret?

Attachment

Their secret is attachment.  Attachment is about how much your prospects and customers value the product or service you provide.  It’s about the extent to which you improve their lives.  And at the highest level, it’s about how your product or service defines or supports your customer’s aspiration and self-image.

There are five fundamental value platforms – what you might think of as the five basic reasons that any customer is motivated to make any purchase.  They are:

  • Price/Value
  • Location/Convenience
  • Quality/Functionality
  • Style/Status
  • Experience/Lifestyle

The platforms of Price/Value and Location/Convenience are rational platforms and very seldom create much attachment.  If a Walmart customer discovers that Target has a lower price on laundry detergent this week, that Walmart customer will probably hot-foot it over to Target and load up.  She’s not attached to Walmart, she’s attached to the low price, which is relatively easy to replicate.

At the other end of the spectrum, a Nordstrom’s shopper who is motivated by Style/Status or Experience/Lifestyle is unlikely to darken the door of JC Penney, even if JC Penney has the same item at a lower price.  Style/Status and Experience/Lifestyle are emotional platforms.  They have the potential to invoke powerful feelings and create strong attachment which are almost impossible to replicate.

Effect of Attachment

Let’s think about the effect of attachment in one of the categories with universal demand, grocery stores.  Have you ever met a customer of Trader Joe’s?  They are borderline rabid.  Given half a chance, they’ll regale you (endlessly) of their Trader Joe’s favorites:  Two Buck Chuck, Green Papaya Salad, Mango Butter or Chili Feta.  To say these folks are attached to Trader Joe’s might be the understatement of the century.  And that attachment translates directly into revenue.  Think about this:  According to Fortune Magazine, Trader Joe’s averages $1,750.00 per square foot in sales.  That’s more than double the sales per square foot of competitor, Whole Foods Market.

Now let’s turn our attention ro cell phones.  Ever try to pry an iPhone out of the hands of an Apple fanatic?  That’s attachment in every sense of the word, attachment that has led to astonishing growth for Apple.  Since being released in 2007, well over 100 million iPhones have been sold and Apple has become the most valuable tech company on the planet.

Attachment means your product has become an essential, even indispensable, part of your customer’s life.  When that happens, you have a shot at exponential growth that few can match with, let alone surpass!

Jack-Hayhow Jack Hayhow is Chief Executive Servant of Opus Communications in Kansas City. Opus provides tools and techniques to help business owners build their business. Jack is also the author of two highly acclaimed business books, The Wisdom of the Flying Pig: Guidance and Inspiration for Managers and Leaders and, Breaking Through the Barrier: What Companies That Grow Do Differently
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Many people assume that most any business can become a big business.  But if that’s true, why is it that 95% of all businesses in the United States never reach a million bucks in annual sales?

Surprising as it may be, most businesses simply don’t have what it takes to grow significantly.  In fact, only two or three businesses out of a hundred will ever grow past the Mom & Pop stage – past the owner’s immediate span of control.

If you’re a small business owner with visions of growth, these facts can be a little unnerving, and more than a little disheartening.  What these facts tell us is that if you want your business to grow into a substantial enterprise, you need to do something that roughly 25,000,000 other business owners have been unable to do!

So where do you start?  You start by confronting the brutal facts.  You start with perhaps the most important question a business owner can ask:

Is the market sufficient?

Two factors comprise the market, demand and attachment.

  • Demand is about quantity – how many people want what you’re trying to sell.
  • Attachment is about quality – how much do people want what you’re trying to sell.

For a business to grow significantly, there must be high demand or strong attachment, preferably both.  Although it’s a little unwieldy, here’s a question that gets to the core of market evaluation:

Do enough people care enough?

Sometimes, the answer is no.  Last year about this time our company released an online service called ReallyEasyHR.  The service provided a complete small company HR program for $30 a month.  It was a great service and a remarkable value.  But guess what?  Nobody cared.  It turns out that small business owners have virtually no interest in spending even a few dollars a month on HR.

I believed ReallyEasyHR was going to be successful.  And I suppose I could berate myself about how wrong I was.  But here’s the thing:  You don’t know how the market will respond until you start trying to make sales.  The hard truth is, until you ask a prospect to fork over some cash, it’s all just guesswork and speculation.

That’s true in small companies like ours and it’s also true in huge, wildly successful organizations.  Not so long ago the brain trust at McDonald’s looked at emerging demographic trends and saw what they thought was an opportunity.  People were living longer and the older adult population was burgeoning.  In response, McDonald’s spent $300 million to develop and launch the Arch Deluxe, a sandwich positioned as “a more sophisticated burger for the adult palate”.  The Arch Deluxe was a complete flop. As it turned out, people didn’t want a sophisticated burger from McDonald’s.  Which just goes to show you that some of the smartest people on the planet can be flat-out wrong when projecting demand.

Demand is one thing your company can’t grow without.  Unless enough people care about the product or service you’re trying to sell – and care enough to go out of their way to buy it – survival is unlikely and growth is impossible.  So here are two important reminders for owners who want to grow their businesses:

  1. You won’t know if there’s enough market for your product until you offer that product for sale.
  2. There’s a chance you’ve overestimated demand, so don’t go all in.  Make sure you live to fight another day.

In my next article, I’ll offer some thoughts on the other factor of market potential, attachment.

Jack-Hayhow Jack Hayhow is Chief Executive Servant of Opus Communications in Kansas City. Opus provides tools and techniques to help business owners build their business. Jack is also the author of two highly acclaimed business books, The Wisdom of the Flying Pig: Guidance and Inspiration for Managers and Leaders and, Breaking Through the Barrier: What Companies That Grow Do Differently
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Week In Review : Feb 13 – Feb 19, 2011

by Magesh Tarala on February 20, 2011

Social Media and Tribes #29: The new BLINK!

by Deepika Bajaj, Feb 14, 2011

Contrary to popular belief, FaceBook is not a distraction. This is true at least for people who can use it in moderation like everything else in life. Glancing at the news feed once in a while helps you be connected. It happens in a split second and you see something that doesn’t register at the conscious-level but provides a gut-feel about the thing. Just like what Malcolm Gladwell states in his popular book BLINK: The power of thinking without thinking. more…

Project Reality Check #9: Tyranny of the “Truth”

by Gary Monti, Feb 15, 2011

Everyone sees their version of the “truth” and this can cause tyrannical behavior. This happens if the person’s “truth” limits the available options for action. Or it could be because of the rigidity in the system or bureaucracy. A great example is the comparison between the Brits and the Germans in WWII. Even though both of them has the technology for a similar artillery piece, the Germans were adept at improvising whereas the Brits were more concerned about maintaining status.  more…

7 Key Strategies for designing an Analysis based Company

by Linda Williams, Feb 16, 2011

In today’s fast changing environment being an analysis based company is critical to survival and profitability. Different industries will have different needs for analysis but there are some key components of an analytical strategy that are foundational to the majority of businesses. In this article, Linda lists the top 7 strategies for designing an Analytical Strategy. more…

Flexible Focus #41: Your 100 year life span

by William Reed, Feb 17, 2011

Irrespective of what ages determine the boundaries of each stage, the truth is that there are stages to life. And you cannot see some things clearly until you take the 100 year perspective. The 100 Year Life Span Mandala Chart can help you gain clarity. It takes a while to thoughtfully fill it out, but that is a small investment of time compared to the perspective it gives you. Think of it as climbing a mountain to the summit of your life, and getting the view of everything below. You owe it to yourself to go there at least once, and if possible at least once a year. more…

Leader driven Harmony #12: 4 P’s to get your !deas moving – Part 1

by Mack McKinney, Feb 18, 2011

The four Ps to move your ideas are be Pleasant, be Professional, be Patient and Promote like crazy. But very often you may not be able to find the traction in your organization. If that’s the case, Mack suggests some ways to rectify that. more…

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7 Key Strategies for designing an Analysis based Company

by Linda Williams on February 16, 2011

In today’s fast changing environment being an analysis based company is critical to survival and profitability. Different industries will have different needs for analysis but there are some key components of an analytical strategy that are foundational to the majority of businesses. Here are the top 7 strategies for designing an Analytical Strategy:

  1. Taking an existing business model and innovating against it: Some of the most successful companies over the last decade have been innovators in their space: Netflix, Google, Amazon, Apple, and Priceline. Each took an existing model and made compelling technological and structural changes. This model can be used by other sectors to take advantage of emerging trends and technologies.
  2. Keeping aware of changes in the technical environment and quickly growing your offerings to take advantage of newly emerging trends: The pace of technological change has been steadily increasing and businesses that miss these trends miss opportunities to thrive. For example, Netflix moved from postal delivery of movies to downloads on laptops and WII based systems and now is moving into offering content on iPhones and iPads. Its competitors are scrambling to catch up as evidenced by Blockbuster’s recent filing for bankruptcy.
  3. Developing an easy interface for customers, customizable to their interests: Customers have come to expect near instant response to changing orders, tracking, and complaints. Using technology is part of this equation but it should also include value- added services such as presenting relevant suggestions on what else they may find valuable either in products or shipping options. This is seen in the use by Amazon and Netflix of making recommendations or suggestions for new orders given past orders.
  4. Focusing on listening to the customer to develop and improve your service; capitalize on complaints customers have with your competitors: One of the key differentiators for companies is their real (or perceived) focus on the customer. People have come to expect superior service and are quick to go to a competitor when they don’t get it. It is critical to develop robust customer service capabilities for handling questions, complaints, and surveying customers on speed of delivery. Social media blogs are now an expected forum for customers to use to exchange ideas and suggestions.
  5. Offering a variety of service plans/products at several price points: This feature was a key to Netflix’s initial strategy which was to get customers to try their new delivery service – who can’t afford $4.99 per month. Then there is a simple upgrade plan with many levels that is flexible to meet anyone’s needs. Again, the pricing plans are very customer focused. This same approach could be used for pricing services for a support service giving various price points each with a higher level of services.
  6. Designing logistics so as to ensure cost effective, fast delivery: Logistics are pivotal to any business providing a product especially as the business expands internationally. Any product business must be able to deliver their goods/services in a timeframe that not only meets their customer’s needs but exceeds them.
  7. Having a data-driven culture that supports your strategy, direction, and profitability: Successful companies rely on using data-driven information to strengthen their product offerings and emerge ahead of the competition. This includes being able to identify top purchasers based on profitability, sales by market segment, or potential. Having a robust marketing analytics program has now become indispensible to providing valuable insight to drive the company’s strategy, direction, and profitability.

In summary, the increasingly competitive environment makes it critical to gain the advantages that an analytically focused strategy can give to your company’s success

Written by Linda Williams who is partnered with Datacenter Trust and also has a Business Intelligence consulting practice where she provides businesses with assistance in performance measurement, process improvement, and cost reduction.
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