Reclaim hours as a business owner

Many business owners spend so much time working in the business that the long term viability of the business suffers, they remain hands on for far too long. The first way a business owner can reclaim time to allow them to focus on managing and growing the business is to hire someone with the right experience and delegate, this is often a hard thing to do as many owners struggle to "let go".

An alternative is to formulate standard operating procedures (SOP's). That is to:

• work out how a job needs to be done
• write down the process (flow charting is a useful tool)
• train someone to use process
• measure results

The key point here is to measure the results. With the right operational and measurement techniques and systems in place a business owner has no need to micro manage and can direct their attention to strategies to ensure growth, or to those areas that do not produce the expected results.

Having standard systems in place also means that no-one has to play the blame game. If something goes wrong the first question to ask is "Was the system followed?". There are several possible answers and scenario's:

• If the answer is no, was it because there was no system for that situation, if so you have an improvement opportunity to create a standard. If the answer was just the employee did not want to follow the system they can be informed that employment is contingent on following the standards. If the employee was not aware of the standard then again there is an improvement opportunity through staff training.
• If the answer is yes then the system needs to be reviewed for appropriateness, relevance and usability, another improvement opportunity.

Businesses who are not looking for ways to be continually improving their product, service or processes are limiting their success.

Top 7 Critical Success Factors for Business - Final Part

Last but not least in this 7 part series in the critical success factors for business is an area where many businesses make many mistakes.

1. Plan
2. Competitive velocity
3. Customer satisfaction
4. Network
5. Technology
6. Culture
7. Global thinking

Technology has shrunk the business world. Businesses of all sizes can now have access to worldwide markets, allowing them to share information, technology and products.

Keeping abreast of global trends can lead to new channel opportunities or ways to compete.

The vast majority of businesses going overseas fail within the first year after spending a lot of money on travel, consultants, market research, trade shows, giving out samples and entertaining potential clients.

The key reason for failure is the inability to understand, accept and fit it into a foreign culture.

Want to expand globally without the mistakes, Ivy Business Consulting can offer expert advice, having had experience in operating global businesses. We can also assist with the preparation and lodgement of grant applications for export marketing funding.

Top 7 Critical Success Factors for Business - Part 6

For the second to last week of the series I talk about a subject that many managers wish they could ignore and many have no idea how to manage or change it.

1. Plan
2. Competitive velocity
3. Customer satisfaction
4. Network
5. Technology
6. Culture
7. Global thinking

Business leaders must create environments that communicate consistently their passion, goals and mission to every individual employee. Nurturing a sense of ownership among your staff is key to attracting and retaining the most talented and qualified people.

Empower staff to innovate and be held accountable and most individuals will focus their strengths for the benefit of the business.

In need of a mentor or motivator? Contact me via www.ivybusinessconsulting.com.au or by return comment.

Top 7 Critical Success Factors for Business - Part 5

Week 5 of the series in discussing the Top 7 Critical Success Factors for Business brings us to a subject that scares many people due to the pace of its change and the need to constantly keep up to date.

1. Plan
2. Competitive velocity
3. Customer satisfaction
4. Network
5. Technology
6. Culture
7. Global thinking

The right use of technology can not only reduce manpower needs and operational costs but also increase efficiencies and open channels to new markets, all directly affecting your bottom line. The danger is adopting technology for technology's sake, care must be taken to identify and only implement that technology that is needed to support your business and its growth.

As part of the technology consideration the mix of Online vs Offline must determined.

Many facets of business operations can now be conducted both on and off line - e-commerce, business development, sales, customer service, marketing and public relations - you must find the right balance between online and offline that is right for your individual business and budget.

Whatever the mix though, consistency of message must always be maintained.

Top 7 Critical Success Factors for Business - Part 4

Week 4 in my series of the Top 7 critical success factors for business brings us to a discussion of how we cannot go it alone.

1. Plan
2. Competitive velocity
3. Customer satisfaction
4. Network
5. Technology
6. Culture
   
7. Global thinking

No one can be all things to all people, so use the skills and resources of others to open and unlock growth opportunities and provide support outside of your core business.

Analyse and determine what capabilities (usually non-core) that could probably be provided more efficiently or effectively through strategic alliances in which each alliance partner realises a benefit from working together.

There are many virtual resources that can be tapped into that in years past would have necessitated capital and or human outlay.

Networking requires thinking outside the box and building strong relationships, it does not happen overnight but persistence can reap huge rewards.

Top 7 Critical Success Factors for Business - Part 3

For week 3 in my series of the Top 7 Critical Success Factors I discuss the thing that many businesses place too little importance on and is my pet subject.

1. Plan
2. Competitive velocity
3. Customer satisfaction
4. Network
5. Technology
6. Culture
7. Global thinking

Sub standard customer service not only alienates the immediate customer but can damage the reputation and brand of the organisation, leading to additional customer loss and an inability to attract new customers.

Surveys suggest that a discontented customer tells an estimated 10 people about their experience while a happy customer tells only one.

The more information you have about your customers the better you can service and anticipate their needs. You must have mechanisms in place that gathers customer information to allow personalised marketing and service and the future needs of your customer to be anticipated.

There is also the internal customers to consider - the humble employee, a type of customer that is quite often left feeling very dissatisfied at great cost to the business.

Remember a satisfied customer is a repeat customer!

Top 7 Critical Success Factors for Business - Part 2

This week I discuss number 2 on my list of 7 Critical Success Factors for Business:

1. Plan
2. Competitive Velocity
3. Customer Satisfaction
4. Network
5. Technology
6. Culture
7. Global thinking

To maintain an advantage in a highly competitive world a company must move faster and more effectively to outpace its rivals and grow as a business.

Successful businesses not only provide a better product or service than their competition but continue to innovate, by adding new functionality to old products or creating new offerings.

As a result of the GFC many businesses cut R&D costs and are now finding it hard to maintain market share as their products are old and tired.

Jeff Immelt of General Electric said recently that "only optimism creates growth". This is a fabulous statement and for any business that has put off any innovation they should heed these words and create!

Time to gain velocity!

Top 7 Critical Success Factors for Business

I have been asked to join the panel on a series of Webinars addressing businesses concerns post the Global Financial Crisis. See this link for details: http://www.corporatecanary.com.au/uploads/ProtectGrowFly.pdf

In formulating my material for the Webinars I have listed what I feel are the 7 critical success factors for sustaining profitability in business.

Over the next 7 postings I will dedicate each entry to discussing one of these factors.

1. Plan
2. Competitive Velocity
3. Customer Satisfaction
4. Network
5. Technology
6. Culture
7. Global Thinking

First and foremost in my opinion is to have a business plan. They seem to have become a bit passe but given the pace of business today it is imperative that businesses have at least a basic operating plan and budget as the framework to keep things in focus.

This plan needs to be organic, changing and evolving as opportunities and challenges arise. Reviews and updates should happen at least quarterly to keep the business on target. Both financial and operational metrics should be measured to allow for early detection of problems before the business reaches crisis point.

Not sure how to write your business plan so that it is a useful tool that can be used to drive the success of your business, Ivy Business Consulting can assist by either completing the entire project or facilitating your own staff in the compilation process through insightful workshops that will sharpen the focus of even high functioning management teams.

Remember the Peter Principle

I recently came across The Peter Principle again and was struck anew by its aptness.

Formulated by Dr Laurence Peter and Raymond Hull way back in 1969, it is a humourous treatise which essentially states that members of a hierarchy are promoted so long as they work competently, sooner or later they are promoted to a position in which they are no longer competent (their level of incompetence) where they remain, unable to attain any further advancement.

Peter further states that "work is accomplished by those employees who have not yet reached their level of incompetence"

This is the statement that I think both employees and employers need to be aware of. If someone is achieving great things in a role, does it necessarily follow that they should be promoted? The answer obviously is no, but as a society, if we do not achieve regular advancement we presume we have ceased to perform at our best, or worse yet that we have failed.

The best employers find ways other than promotion to solve the stagnation problem, such as:

• to acknowledge and reward performance, with things such as company awards, financial incentives or elevation to mentor status for others.
• provide training in a new role and only promote after sufficient evidence of capabilities have been displayed.

Don't become a company which blindly elevates employees to their level of incompetence, a properly constructed performance management system will identify not only who, but when someone is ready for promotion. To do otherwise only elevates the company to its level of incompetence and reduces its competitive advantage.

Competitive advantage in service organisations

When operating a professional services business the primary means of achieving a competitive advantage over your competitors is to have a better understanding of the needs and wants of clients then the competition does.

The greatest way to learn what these needs and wants are is to listen to your clients. Sounds very simple but many service practitioners do not actively listen.

There are various ways and means to listen to your clients:

1. user groups
2. reverse seminars
3. attending client industry meetings
4. market research
5. senior partner visits
6. engagement team debriefings
7. systematic client feedback

You must also determine the difference between reactions and feedback. Reactions are an immediate response, either verbal or non-verbal, to a communication whilst feedback is a response with logic and reason, or other useful information. Take note of the reactions but to truly learn what your clients want feedback is more useful.

Designing and implementing an active client listening program can have immediate and startling results for any business. Call Ivy Business Consulting for help with developing such a program.

Leadership and influence

Leadership is the ability to influence.

Influence is the art of using power to move people voluntarily toward a certain end or point of view.
Power is useless unless converted to influence.

Organisational application of Maslow's hierarchy of needs

I was recently reminded of Maslow’s hierarchy of needs and realised it can be applied quite effectively to the organisational sphere in many areas.


For example to customers:
The physiological aspects are represented by the basic performance of a product or service - does the product work?
The safety needs correspond to the reliability and security of the product – will it let me down or cause harm?
The belonging needs relate to the social aspects of products of service – is this the brand that everyone is wearing?
Esteem often relates more to the transaction itself than the product – did the sales assistant treat me with respect? However, esteem can also be product related – will people admire me when I buy this product?
Self-actualisation occurs when a product or service allows the buyer to be creative or fulfil capabilities.

Alternatively it can also be applied to employees:
The physiological needs are salary and wages;
Safety is job security;
Belonging means being accepted in the workplace and being part of a team;
Esteem involves being respected by management and colleagues; and
Self-actualisation is achieved when the employee's abilities are fully utilised.

For any effective organisation, the aim is to meet the needs in order, from lowest to highest.

Thus, for a supplier, the organisation would first ensure that a fair price was being paid for the supplies; then offer security to the supplier in the form of long-term contracts; then make the supplier part of the team and involve them in discussion and planning. Treating the supplier with respect and concern is also important. Finally, using the skills and knowledge of the supplier to create higher end-value completes the process.

Many organisations would benefit from looking at what level they are currently meeting various stakeholders needs and committing to strategies to ensure higher needs are met.

The benefit to meeting those higher needs, quite simply – satisfied, loyal customers; engaged and committed employees; proactive and innovative suppliers which will result in improved profits.

Ivy Business Consulting can assist with strategy development to meet the higher needs.

Operating metrics vs. Financial metrics

Many businesses spend large periods of time collecting data and producing detailed reports at the end of each month, quarter or year, containing pages of financial metrics while ignoring operating metrics. There is a profound difference between operating metrics and financial metrics.

Operating metrics are those inputs that drive the financial outcomes.

While financial metrics definitely provide useful measurements of business performance, it is all historical information by the time they are produced. Operating metrics on the other hand provide scope for continual learning and improvement.

Concentrating on operating metrics to improve customer satisfaction by reducing wait times, producing better quality products, providing exemplary after sales service, can all increase customer loyalty, which in turn is likely to increase the value of the customer to the business.

A by product of measuring and improving these operating metrics often results, in this example, in an increase in sales, which will in turn take care of the financial metrics.

Ivy Business Consulting can implement programs to measure and improve operating metrics across all business disciplines.

Business improvement does not have to cost a lot!

Many businesses struggling along can be too afraid to seek help for fear of incurring huge fees and getting little tangible returns.

During a project for a company facing bankruptcy I implemented a new process that cost the business a total of $160 in "capital" outlay. Integral to the new process was a shift in employee responsibility and accountability. There was resistance at first, but quite quickly the new methodology was embraced wholeheartedly - and the returns to the company:

• increased staff involvement, which lead to further improvement suggestions
• decreased staff turnover as they became engaged to a greater extent AND
• dollar savings of $150,000 in the first year

Not a bad return for the initial investment of $160!

Combined with other initiatives I implemented this company achieved:

• revenue growth of 37%
• eliminated $1.2 million of costs
• transformed from bankrupt to achieving 5 times industry average net profits

My firm, Ivy Business Consulting, specialises in providing innovative, cost effective approaches to business turnaround, improvement and growth.

Are you an effective trainer / teacher?

Can't get your message across?

None of us want to think that the problem might be ourselves, but the question must be asked if people cannot follow your instructions, are you instructing in the right way?

Leading educators have found that people retain:

• 10% of what is read
• 20% of what is heard
• 30% of what is seen
• 50% of what is seen and heard
• 70% of what is seen and spoken
• 90% of what is said while doing what is talked about

Sounds simple but to be a good trainer / teacher you must have:

• thorough knowledge of topic
• desire to teach
• positive, helpful, cooperative attitude
• strong leadership abilities
• professional attitude
• exemplary behaviour to set positive example

And the basic principles of learning are:

• people learn best when they are ready to learn
• people learn more easily when what they are learning can be related to something they already know
  
• people learn in a step by step manner, take it slowly, enjoy the journey, not the destination
  
• people learn by doing, when at all possible make it hands on, see the point above - 90% is retained by doing!
  
• the more often people use what they are learning, the better they will remember and understand it, in other words use or lose it
  
• success in learning tends to stimulate additional learning
• people need immediate and continual feedback to know if they have learned, positive re-inforcement, possibly the one thing that gets forgotten most in the workforce
  

Point to remember, if your student one day surpasses you, instead of feeling threatened by competition, take pride in your talents as a mentor and teacher - it is a hard skill to learn.

Risk assessment

Why are some people prepared to risk it all and others spend their entire life playing it safe?


Business owners, their managers and supervisors are responsible not only for risks to the business itself, but also to staff.

Risk assessment consists of both a subjective and objective component and that these components are weighted differently. Simply providing data that proves a situation is “safe” can sometimes be insufficient to change a person’s mindset.

There are a number of factors can influence and bias an individual’s perception of risk, including:

• Knowledge. Not enough knowledge of a particular task may give a false sense of security as the potential risks / dangers are unknown.
• Situational awareness. Familiarity can bred contempt and a person who is very experienced or familiar with a particular situation, even if aware of the dangers, may become complacent and so take inappropriate shortcuts etc.
• Hazard identification. Having recognised one form of hazard, people may focus myopically on this and miss other hazards present in an area.
• Characteristics of the consequences. The more catastrophic or unpleasant an outcome, the greater is the risk perceived in the event. This ignores taking the frequency of the event into consideration.
• Perceived control. The greater the control an individual feels they have over an event, the less exposed they feel. Individuals who feel they will be supported by managers/supervisors will also be less threatened by an event, and even encouraged to contribute.
• Perceived benefits. The higher the return, the more likely they are to accept risks associated with that situation (maybe even minimising the risks).
• Individual personality. Level of education, cultural background, experience etc, will all influence how they respond to risk.

Good business practice would indicate that to overcome these influences and biases, and to maximise the effectiveness of risk assessments, adoption of the following principals would be effective in reducing exposure to risk by creating an efficient risk assessment and management process:

• Create teams with practical knowledge of the operation being assessed, knowledge of risk assessment and awareness of other factors that may influence the risk of the operation to carry out the assessment
• Ensure that risk assessors are trained to identify, understand and reduce the impact of known risk perception biases
• Encourage input from the processes operator in the risk assessment
• Monitor and review the accuracy of risk assessments
• Perform risk assessment prior to commencement of a project to enable implementation of assessment outcomes to be easily incorporated in that project.
• Empower personnel with sufficient authority to implement risk control measures
• Communicate known risk perception biases.

End of Financial - reduce your tax bill

With the end of the financial year fast approaching there are some decisions that need to be made which will determine how much tax you pay.

One of the biggest things for Australian Business entities to consider is the expected lower tax rates for next year, this offers considerable incentive to defer as much taxable income into the 2010/11 tax year.

Two main ways to do this:

1. reduce or defer income and
   
2. increase deductible expenses.

Also, those of you that qualify as small business entities, are you claiming the available tax concessions?

Introduction to IVY

I started Ivy Business Consulting after too many frustrating years in corporate life. It is a boutique practice set up to guide businesses of all sizes through various stages of the business life cycle.

Starting Up your Business

The main challenge throughout the start up stage is not to burn through what financial reserves you have. You need to learn how to service your clients needs most profitably and to continually monitor performance to keep your business on the right track.

Start-ups must focus on establishing a customer base and market presence along with tracking and conserving cash flow.

Ivy Consultants can assist new ventures by setting up where applicable:

• accounting and reporting systems
• cashflow monitoring
• payroll functions and processes
• sales reports
• customer relationship management systems
• website

Growing your Business

During the growth phase revenues and customers are increasing with new opportunities arising while also bringing to light many issues and possible threats. Profits are getting stronger but competition can also be elevating.

The biggest challenge growing companies face is dealing with the constant range of issues competing for more time and money. Effective and efficient management is necessary. Businesses in a growth phase must focus on running the business in a more formal fashion to deal with the increased complexity, sales and customers. A successful organisation creates value for the customer by focusing internal activities on customer oriented primary processes.

We can assist during this phase as an outsourced business support in functions such as:

• bookkeeping
• accounting
• HR
• compliance
• IT
• new project feasibility and due diligence

By outsourcing non income producing activities and leveraging off Ivy Consultants experience you can better utilise your precious time to focus on your primary income generating activities such as business development, customer service, product & services improvement and R&D, allowing you to grow your business without growing your internal headcount.

Establish and Expand your Business

Every business gets to a stage where issues of business complexity, competition, internal and market growth or other critical factors demand an injection of outside knowledge or resources to launch a new era of performance.

Ivy Consultants can provide:

• a full back office outsourcing facility focusing on finance and accounting functions
• improved business processes through automation
• efficiency improvement and/or re-engineering and business restructuring.
• develop strategies that can:
  

• assist your business to operate efficiently
• manage resources effectively
• utilise your competitive advantage
• grow your market share and build a financially sustainable business.

Exit
We can offer alternative exit strategies including full or partial sale of equity.