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Archive for the 'Management & Leadership' Category

Top Tips for ‘Sustained Success’

Published by Corrina on 12 August, 2010 in Management & Leadership and Top Tips • 3 Comments
Top Tips for ‘Sustained Success’
Eight key principles to help any business achieve and maintain its long-term objectives.
These tips are based on the ISO 9004:2009 standard, which defines eight quality management principles that can help any business “achieve and maintain its objectives in the long-term”. We have quoted the eight principles and added our own tips alongside. More information on ISO 9004:2009
1. “Customer focus”. Understand customer needs and expectations through research and other customer intelligence. Ensure business and management objectives are aligned with customer needs. Effectively communicate customer needs and business objectives across the organisation. Balance customer needs and the interests of other stakeholders such as owners, employees, wider society.
2. “Leadership”. Establish purpose, direction and vision for the business. Set goals and targets designed to meet the vision. Ensure employees and stakeholders understand their roles in meeting objectives and realising vision. Create an environment which enables people to achieve objectives, providing the required support, resources, training and freedom. Establish trust. Recognise people.
3. “Involvement of people”. Ensure people understand their roles and how they contribute to business success. Evaluate employee performance; identify constraints; work to improve employee competences, knowledge and skills. Encourage participation in seeking opportunities to improve business performance and personal skills. Encourage people to share knowledge, experience, problems and issues.
4. “Process approach”. Systematically define activities/steps required to achieve a particular result. Work to improve resources, methods or materials in order to refine key activities and processes. Set responsibilities for managing processes and measuring effectiveness. Improve how different business functions work together on shared activities. Evaluate risks of activities to all affected parties.
5. “System approach to management”. Create a management system that effectively and efficiently manages processes and activities to meet objectives. Define how activities and processes should work. Evaluate processes and continually work to improve them. Understand interdependencies between processes; harmonise and integrate processes. Ensure roles and responsibilities are clear.
6. “Continual improvement”. Take a consistent approach to innovation and continual performance improvement. Make innovation and continual improvement an objective for all employees, and train people in the methods and tools of continual improvement. Set goals, measure performance, and acknowledge improvements through employee recognition.
7. “Factual approach to decision-making”. Establish a rigorous decision-making process which balances facts, experience and judgement. Ensure processes exist to collect relevant data and past experiences such as feedback or lessons learnt. Make data available to decision-makers. Work on improving analysis methods. Listen to personal judgements but ensure they are balanced with data.
8. “Mutually beneficial supplier relationships”. Create strong long-term supplier relationships which are mutually beneficial and balance short-term gains and long-term considerations. Create and maintain open relationships and clear communication with suppliers. Where appropriate share information, expertise and resources, and establish joint development and improvement initiatives. Encourage innovation and continual improvement and recognise supplier achievements.

Eight key principles to help any business achieve and maintain its long-term objectives.

These tips are based on the ISO 9004:2009 standard, which defines eight quality management principles that can help any business “achieve and maintain its objectives in the long-term”. We have quoted the eight principles and added our own tips alongside. More information on ISO 9004:2009

1. “Customer focus”. Understand customer needs and expectations through research and other customer intelligence. Ensure business and management objectives are aligned with customer needs. Effectively communicate customer needs and business objectives across the organisation. Balance customer needs and the interests of other stakeholders such as owners, employees, wider society.

2. “Leadership”. Establish purpose, direction and vision for the business. Set goals and targets designed to meet the vision. Ensure employees and stakeholders understand their roles in meeting objectives and realising vision. Create an environment which enables people to achieve objectives, providing the required support, resources, training and freedom. Establish trust. Recognise people.

3. “Involvement of people”. Ensure people understand their roles and how they contribute to business success. Evaluate employee performance; identify constraints; work to improve employee competences, knowledge and skills. Encourage participation in seeking opportunities to improve business performance and personal skills. Encourage people to share knowledge, experience, problems and issues.

4. “Process approach”. Systematically define activities/steps required to achieve a particular result. Work to improve resources, methods or materials in order to refine key activities and processes. Set responsibilities for managing processes and measuring effectiveness. Improve how different business functions work together on shared activities. Evaluate risks of activities to all affected parties.

5. “System approach to management”. Create a management system that effectively and efficiently manages processes and activities to meet objectives. Define how activities and processes should work. Evaluate processes and continually work to improve them. Understand interdependencies between processes; harmonise and integrate processes. Ensure roles and responsibilities are clear.

6. “Continual improvement”. Take a consistent approach to innovation and continual performance improvement. Make innovation and continual improvement an objective for all employees, and train people in the methods and tools of continual improvement. Set goals, measure performance, and acknowledge improvements through employee recognition.

7. “Factual approach to decision-making”. Establish a rigorous decision-making process which balances facts, experience and judgement. Ensure processes exist to collect relevant data and past experiences such as feedback or lessons learnt. Make data available to decision-makers. Work on improving analysis methods. Listen to personal judgements but ensure they are balanced with data.

8. “Mutually beneficial supplier relationships”. Create strong long-term supplier relationships which are mutually beneficial and balance short-term gains and long-term considerations. Create and maintain open relationships and clear communication with suppliers. Where appropriate share information, expertise and resources, and establish joint development and improvement initiatives. Encourage innovation and continual improvement and recognise supplier achievements.

Improving business decisions

Published by Corrina on 12 August, 2010 in Management & Leadership and Strategy & Operations • 1 Comment
Improving business decisions
We explore and summarise interesting insights which could help to make better strategic decisions.
Interesting insights from McKinsey and Harvard Business Review
McKinsey & Company share interesting insights on strategic decision-making in interviews with Martin Sorrell, chief executive at advertising firm WPP, Randy Komisar, partner at investment firm Kleiner Perkins Caufield & Byers, and former Xerox chairman Anne Mulcahy.
Decision-making should be quick, flexible and informal, says Sorrell. “This is not to say the process shouldn’t be rigorous: run the analyses, suck up all the data, and include some formal processes as well”. “The only way to avoid making mistakes is to avoid making decisions”, adds Sorrell; “Instead, learn from mistakes and listen to feedback.”
Komisar suggests creating a balance sheet, “where everybody around the table is asked to list points on both sides”. Rather than giving judgements, contributors first outline the good and the bad points relating to a decision. Once done, participants share their opinions and discuss the decision based on objective insights and personal judgements. “By assembling everyone’s insights rather than their conclusions, the discussion can focus on the biases and assumptions that lead to the opinions.” Komisar adds: “Listen to the little voice… It’s great to see a leader who will echo the little voice in the back of the room that has a different point of view – and thereby change the complexion of the discussion”.
“You need internal critics”, says Mulcahy, “who have the courage to give you that feedback”. Timeliness is also important: “Decisions have shelf lives, so you really need to put tight timeframes on your process.”
In an article for Harvard Business Review, Tom Davenport explains that animation studio Pixar conduct a ‘postmortem’ on major aspects of a project, where team members are asked to present five things they would and would not do again. Postmortems weed out problems, says Davenport, providing crucial feedback which helps to learn from mistakes when making future decisions.
Instinct is important, “but only when four tests are met”, says McKinsey. The familiarity test asks whether we have experience in similar situations, because: “If we have plenty of appropriate memories to scan, our judgment is likely to be sound.” The feedback test questions the availability of reliable feedback in past situations, and whether the right lessons were learnt. The measured-emotions test asks if a decision evokes highly charged emotions which can unbalance judgement. And the independence test asks if we are “likely to be influenced by any inappropriate personal interests or attachments?”. “If a situation fails even one of these four tests, we need to strengthen the decision process”, argues McKinsey.
Turn insights into better decisions
According to these insights, decision-making should be quick, flexible and informal (to avoid missing opportunities), but also rigorous and process-driven. The process should include analysis of relevant data, pros and cons, personal opinions, judgements, instincts, and past experiences such as feedback and lessons learnt. Where no relevant experience exists, or where instincts or judgements are weakened by bias, charged emotions or personal interests, further analysis must be done to strengthen the process and avoid bad decisions. Listening to the ‘little voice’ and ‘internal critics’ could provide the necessary challenge which further tests the quality of decisions.
These insights could be used to create simple decision-making tools, such as Komisar’s balance sheet or McKinsey’s four tests. So why not take a few moments to jot down your own ideas for a quick-but-rigourous decision-making process to suit your business and management team?

We explore and summarise interesting insights which could help to make better strategic decisions.

Interesting insights from McKinsey and Harvard Business Review

McKinsey & Company share interesting insights on strategic decision-making in interviews with Martin Sorrell, chief executive at advertising firm WPP, Randy Komisar, partner at investment firm Kleiner Perkins Caufield & Byers, and former Xerox chairman Anne Mulcahy.

Decision-making should be quick, flexible and informal, says Sorrell. “This is not to say the process shouldn’t be rigorous: run the analyses, suck up all the data, and include some formal processes as well”. “The only way to avoid making mistakes is to avoid making decisions”, adds Sorrell; “Instead, learn from mistakes and listen to feedback.”

Komisar suggests creating a balance sheet, “where everybody around the table is asked to list points on both sides”. Rather than giving judgements, contributors first outline the good and the bad points relating to a decision. Once done, participants share their opinions and discuss the decision based on objective insights and personal judgements. “By assembling everyone’s insights rather than their conclusions, the discussion can focus on the biases and assumptions that lead to the opinions.” Komisar adds: “Listen to the little voice… It’s great to see a leader who will echo the little voice in the back of the room that has a different point of view – and thereby change the complexion of the discussion”.

“You need internal critics”, says Mulcahy, “who have the courage to give you that feedback”. Timeliness is also important: “Decisions have shelf lives, so you really need to put tight timeframes on your process.”

In an article for Harvard Business Review, Tom Davenport explains that animation studio Pixar conduct a ‘postmortem’ on major aspects of a project, where team members are asked to present five things they would and would not do again. Postmortems weed out problems, says Davenport, providing crucial feedback which helps to learn from mistakes when making future decisions.

Instinct is important, “but only when four tests are met”, says McKinsey. The familiarity test asks whether we have experience in similar situations, because: “If we have plenty of appropriate memories to scan, our judgment is likely to be sound.” The feedback test questions the availability of reliable feedback in past situations, and whether the right lessons were learnt. The measured-emotions test asks if a decision evokes highly charged emotions which can unbalance judgement. And the independence test asks if we are “likely to be influenced by any inappropriate personal interests or attachments?”. “If a situation fails even one of these four tests, we need to strengthen the decision process”, argues McKinsey.

Turn insights into better decisions

According to these insights, decision-making should be quick, flexible and informal (to avoid missing opportunities), but also rigorous and process-driven. The process should include analysis of relevant data, pros and cons, personal opinions, judgements, instincts, and past experiences such as feedback and lessons learnt. Where no relevant experience exists, or where instincts or judgements are weakened by bias, charged emotions or personal interests, further analysis must be done to strengthen the process and avoid bad decisions. Listening to the ‘little voice’ and ‘internal critics’ could provide the necessary challenge which further tests the quality of decisions.

These insights could be used to create simple decision-making tools, such as Komisar’s balance sheet or McKinsey’s four tests. So why not take a few moments to jot down your own ideas for a quick-but-rigourous decision-making process to suit your business and management team?

Capturing the Challengers

Published by Business Link on 21 July, 2010 in Management & Leadership and Strategy & Operations • 1 Comment

This year we showcased 100 inspirational local businesses of all sizes and from all sectors. Each one displays the type of drive, passion and innovative approach that has enabled them to challenge larger, established firms and succeed despite fierce competition.

These ‘Challengers’ have captured the imagination and admiration of businesses across the region. Today we take another look at all 100 case studies to try and capture the essence of a Challenger business.

To do this we tried something different. We took all 46,600 words from the case studies and put them into a ‘word cloud’ generator. The resulting ‘cloud’ features the top 50 most popular words; the bigger a word appears in the cloud, the more frequently that word appeared in the case studies.

Capturing the Challengers

So, does the cloud reflect the true essence of a Challenger?

Customer(s), People. Challengers talk about ‘people’ as opposed to ‘customers’ – a reminder that behind ‘target audiences’ and ‘customer groups’ are unique individuals. They are keen to know what both existing customers and new prospects want and need. They are also focused on developing their own people.

Innovation, Development, New, Ideas. As one business put it, it’s about “constant innovation, expansion and improvement”. Another adds: “Innovation and reinvention are vital”. In addition to product development, service innovation was frequently mentioned. Clear focus on new ideas, new products and services, new markets and ventures.

Sales, Marketing. Challengers are sales focused, and have a tight grasp of sales numbers. Online sales – or an online presence to promote offline sales – was frequently mentioned. Employee development also said to be a key sales driver. Two quotes reflect the mood towards marketing: “We are absolutely marketing led”, and “Marketing is vital”. Sales and marketing innovation is important; one firm said it “thinks outside the box”, doing “lots of smaller activities” rather than more costly approaches.

Local, International. Great importance attached to ‘local’, in terms of local markets and use of local tradespeople, but also a clear focus on cracking international markets and becoming global businesses.

Energy, Environmental. Numerous mentions of energy efficiency, lowering fuel usage, renewable energy sources, green business policies, reviewing energy consumption. Challengers take pride in an ethical approach and see financial and marketing benefits in being green.

Commitment. Constant commitment to customers, customer service, quality, product and service development, people, relationships, the brand, social media, modernisation. The words ‘focus’ and ’time’ frequently attached to these phrases, suggesting such commitments are not always easy. Finally, to quote a Challenger, there’s simply: “A commitment to deliver exactly what customers are looking for”.

Approach. Challengers take pride in their approach, calling themselves: entrepreneurial, pioneering, different, new, unusual, flexible. While they see value in traditional approaches, they are not afraid to approach things differently.

Download the Challenger Guide to Business

Ten minute innovation

Published by Business Link on 28 April, 2010 in Management & Leadership and Strategy & Operations • 1 Comment
Ten minute innovation
Take ten to improve your business, its products or services, and how you get things done.
Before we begin, remind yourself why innovation is important
▪ It’s the process that transforms new ideas into customer value and business success.
▪ It’s not just about big ideas, it’s about small or incremental improvements that we can all make.
▪ It’s not just about products or services, it’s about processes; about improving how we do things.
▪ It’s a chance to do good in our working lives by making things better than they were before.
Step 1. Make innovation a priority
Research suggests that people and culture are the most important drivers of innovation, and that the best way to create an innovative culture is to formally integrate innovation into the management agenda. Doing so means that innovation can be proactively encouraged, introduced, managed and measured.
So take two minutes to invite your management team to discuss innovation as a key business priority. If you work alone, take a moment and make time in your diary to think through your innovation plan.
Step 2. Plan for innovation
An innovation plan formalises intent and provides focus for you, managers, and the business as a whole. So take five to work through the following tips, and list your innovation objectives and priorities.
Look at your products, services, customers, marketing presence and business processes. How could you innovate within these dimensions? Are weaknesses present? Are there any unmet customer needs or underserved segments? Could you adapt processes to improve efficiency and effectiveness?
When reviewing these dimensions, consider the different ways to innovate: Solve problems that customers face, or problems faced within your business; Simplify products, services and processes; Differentiate by creating or improving upon points of difference between you and competitors; Change products, services or experiences by adapting elements that don’t meet customer needs or are deficient relative to competitors; Create new products or services that meet unmet or underserved customer needs; Create innovative points of marketing presence, or new distribution channels.
In just five minutes you can create a draft innovation plan which you can refine and discuss with others. Ask management to work through step 2, focussing on their own business functions. If you work alone, seek an outside perspective by discussing your plan with a business associate or Business Link adviser. Also search online for innovation tips and resources, and read our business i innovation series.
Step 3. Buy into innovation
Ten minutes can spark innovation, but as discussed, people and culture are what drives it forward, and an innovation plan is what helps to give and maintain focus. Your plan, and innovation itself, need buy-in from you and your people. So to push things forward, take your plan to management, develop it together, and make sure they believe in it; then take it to your people and invite ideas to pursue your goals. If you work alone, keep your plan front-of-mind so that you constantly aim to think differently and innovate.
The business case for innovation
Use innovation to grow your business
Planning innovation

Take ten to improve your business, its products or services, and how you get things done.

Before we begin, remind yourself why innovation is important

  • It’s the process that transforms new ideas into customer value and business success.
  • It’s not just about big ideas, it’s about small or incremental improvements that we can all make.
  • It’s not just about products or services, it’s about processes; about improving how we do things.
  • It’s a chance to do good in our working lives by making things better than they were before.

Step 1. Make innovation a priority

Research suggests that people and culture are the most important drivers of innovation, and that the best way to create an innovative culture is to formally integrate innovation into the management agenda. Doing so means that innovation can be proactively encouraged, introduced, managed and measured.

So take two minutes to invite your management team to discuss innovation as a key business priority. If you work alone, take a moment and make time in your diary to think through your innovation plan.

Step 2. Plan for innovation

An innovation plan formalises intent and provides focus for you, managers, and the business as a whole. So take five to work through the following tips, and list your innovation objectives and priorities.

Look at your products, services, customers, marketing presence and business processes. How could you innovate within these dimensions? Are weaknesses present? Are there any unmet customer needs or underserved segments? Could you adapt processes to improve efficiency and effectiveness?

When reviewing these dimensions, consider the different ways to innovate: Solve problems that customers face, or problems faced within your business; Simplify products, services and processes; Differentiate by creating or improving upon points of difference between you and competitors; Change products, services or experiences by adapting elements that don’t meet customer needs or are deficient relative to competitors; Create new products or services that meet unmet or underserved customer needs; Create innovative points of marketing presence, or new distribution channels.

In just five minutes you can create a draft innovation plan which you can refine and discuss with others. Ask management to work through step 2, focussing on their own business functions. If you work alone, seek an outside perspective by discussing your plan with a business associate or Business Link adviser. Also search online for innovation tips and resources, and read our business i innovation series.

Step 3. Buy into innovation

Ten minutes can spark innovation, but as discussed, people and culture are what drives it forward, and an innovation plan is what helps to give and maintain focus. Your plan, and innovation itself, need buy-in from you and your people. So to push things forward, take your plan to management, develop it together, and make sure they believe in it; then take it to your people and invite ideas to pursue your goals. If you work alone, keep your plan front-of-mind so that you constantly aim to think differently and innovate.

The business case for innovation

Use innovation to grow your business

Planning innovation

Self-employment, limited company or partnership?

Published by Business Link on 28 April, 2010 in Management & Leadership and Strategy & Operations • 0 Comments
Self-employment, limited company or partnership?
We explore the three main business structures and outline the responsibilities, pros and cons of each.
The legal structure of a business determines several factors, including administrative, tax, and national insurance responsibilities, personal liabilities, and control over business decision-making.
Self-employment
You must register with HMRC when you become self-employed. Aside from some exceptions the self-employed must pay Class 2 National Insurance; the current rate is £2.40 a week. Self-employed people must also keep financial records, submit self-assessment tax returns, pay income tax, and pay Class 4 NICs on profits. Other duties may include VAT registration, obtaining permits, or paying business rates.
Pros: sole control of business; simple structure, rules and administration. Cons: sole responsibility for business and any debts; not usually suited for raising investment/capital.
For a more detailed overview read Setting up and registering as self-employed
Limited company
A limited company must be incorporated; this process can be self-administered or you can appoint a formation agent, solicitor, accountant or chartered secretary. Ongoing administration includes preparing company accounts, paying corporation tax, and operating a PAYE system to pay income tax and National Insurance for employees. Companies may choose to register for VAT or be required to do so if turnover is expected to exceed VAT threshold. Limited companies are usually controlled by one or more directors and owned by shareholders, although shareholders may have decision-making influence.
Pros: paid in full shareholders are not liable for business debts; money can be raised by selling shares in the business; some customers/clients may perceive limited companies to be more professional. Cons: relatively complex administration and rules which may require professional handling.
For a more detailed overview read Setting up and registering a limited company
Partnership
General business partners share the control, responsibilities, profits and losses of a business. Usually the officers of a partnership are self-employed, so they must register with HMRC and administer their own tax and National Insurance affairs. General partners may be personally liable for business debts, whereas limited liability partnerships offer reduced personal responsibility.
Pros: alternative option to incorporation for those setting up with others. Cons: potential sole or shared liability for business and any debts; shared control over decision-making.
For a more detailed overview read General partnership or Limited liability partnership
Seek professional advice if you are unsure about which structure to choose. Also try our interactive tool, Choose the right legal structure, and read Legal structures: the basics

We explore the three main business structures and outline the responsibilities, pros and cons of each.

The legal structure of a business determines several factors, including administrative, tax, and national insurance responsibilities, personal liabilities, and control over business decision-making.

Self-employment

You must register with HMRC when you become self-employed. Aside from some exceptions the self-employed must pay Class 2 National Insurance; the current rate is £2.40 a week. Self-employed people must also keep financial records, submit self-assessment tax returns, pay income tax, and pay Class 4 NICs on profits. Other duties may include VAT registration, obtaining permits, or paying business rates.

Pros: sole control of business; simple structure, rules and administration. Cons: sole responsibility for business and any debts; not usually suited for raising investment/capital.

For a more detailed overview read Setting up and registering as self-employed

Limited company
A limited company must be incorporated; this process can be self-administered or you can appoint a formation agent, solicitor, accountant or chartered secretary. Ongoing administration includes preparing company accounts, paying corporation tax, and operating a PAYE system to pay income tax and National Insurance for employees. Companies may choose to register for VAT or be required to do so if turnover is expected to exceed VAT threshold. Limited companies are usually controlled by one or more directors and owned by shareholders, although shareholders may have decision-making influence.

Pros: paid in full shareholders are not liable for business debts; money can be raised by selling shares in the business; some customers/clients may perceive limited companies to be more professional. Cons: relatively complex administration and rules which may require professional handling.

For a more detailed overview read Setting up and registering a limited company

Partnership

General business partners share the control, responsibilities, profits and losses of a business. Usually the officers of a partnership are self-employed, so they must register with HMRC and administer their own tax and National Insurance affairs. General partners may be personally liable for business debts, whereas limited liability partnerships offer reduced personal responsibility.

Pros: alternative option to incorporation for those setting up with others. Cons: potential sole or shared liability for business and any debts; shared control over decision-making.

For a more detailed overview read General partnership or Limited liability partnership

Seek professional advice if you are unsure about which structure to choose. Also try our interactive tool, Choose the right legal structure, and read Legal structures: the basics