The one thing that war, sports and business have in common!

Let’s talk about strategy. A subject easily related to war and sports, but a little hazy when it comes to business.

So, here is the time poor summary for those of you who are still not planning your time effectively! There are entire books devoted to the definition of strategy in business, but a simple definition would be “Working out how to succeed in the upcoming business period”. In a business context, strategy must be applied simultaneously across the 2 primary levels of the business – corporate leadership (the whole organisation) and business unit (division or market) – and then applied practically and tactically at team level in order to achieve the relevant definition of success. Each level requires a different starting point and skill set in order to be successful. Done. (Oh by the way, there is a link to a great free tool that will help you decide on your strategy, at the end of this post.)

And now we can dive a little deeper for those of you who have decided to stay.

“Working out” ties back quite nicely to my previous blog on planning, and this is really the flip side of the same coin. Strategy at the corporate level is a natural progression from the vision and mission development process that defines the long-term scope and direction of the organisation as a whole. The vision and mission will also determine the fundamental configuration of the business in order to meet the needs of the target market and the stakeholders. The scope, direction and configuration, together make up what is commonly defined as the “corporate strategy”, and this is what is used to shape the big picture of what the business is and does. The individual business units then work out the part they play in achieving the big picture, and this is then cascaded down to individual team level to ensure that the day-to-day activities support the big picture, and keep the organization on track. The beauty of our simple definition is that it applies equally at every level, so let’s look at each of them individually.

Corporate strategy is the overall direction of an organization that is usually made up of multiple facets, operating in multiple markets. This can range from all of the functions of a one-person home business carried out by that “one person”, all the way up to the corporation running multiple business units operating in multiple fields. Corporate strategy needs to be aiming at the unicorn of synergy in it’s purest form – how to combine all the different elements in a way that creates greater value than the sum of the individual parts. This is normally achieved by building robust core competencies, developing and growing a strong brand identity, capitalising the business in a cost effective way, and applying the economies of scale by sharing resources and technology across multiple business units or functions. Corporate strategy should merge seamlessly with organizational design to combine the different functions and business units together in a way that allows the available resources to be applied most effectively. This then creates competitive advantage and supports the business goals, both of which deliver the success the business is after, in the period under consideration.

At a business unit, or functional level, strategy needs to focus on competing successfully in the specific applicable market. We can tweak our definition in this context to “Working out how to succeed in this market or function, in the upcoming business period”, whilst supporting the corporate strategy. Clearly analysing your core competencies and applying these effectively to meet your prospective customer’s needs is a great starting point. Gathering as much information as you can on your competition, their strategies, strengths and weaknesses, allows you to work out how to exploit your competitive position. And all of this can be done very efficiently using a simple SWOT analysis of your, and your competition’s, businesses. In a small business context, there will be a significant overlap between corporate and business unit strategy, but as a business grows and starts operating in multiple markets, each individual business unit will need to work out it’s own unit strategy, whilst staying aligned to the corporate strategy, in order to develop brand identity. People involved in the individual functions, or business units, need to be able to see the obvious link between the work they do every day and the business unit strategy. A clear understanding of how what they do helps the business unit “succeed”, creates a motivated and, therefore, productive, workforce.

At a team level, strategy needs to create the environment in which teams work together effectively. Every team contributes something different to the overall business, and the team strategy must link all the different activities and contributions in a way that achieves, and where possible enhances, the business unit and corporate strategies. KPI’s, SSF’s and even an MBO system help to define both the team’s boundaries and purpose. Optimizing service quality, operational excellence and managing relationships with suppliers, all work towards efficient teams that contribute to the strategic goals set at the corporate and business unit level, and underpin an effective team strategy.

On a practical level, “Working out how to succeed in the upcoming business period,” means that you know what to change and what to keep doing, in the next season of your business. To help you get to the root cause of some of the issues you are facing, I’ve put together a quick and easy-to-use tool called The WHY Analyser™, that will help you clearly identify what is ACTUALLY slowing you down, and let you prioritise the order in which you resolve the issues. You can download it here.

If you aren’t sure what all of those 3 and 4 letter acronyms stand for, or if you are not sure how they apply to your business or team, give us a shout at www.version8.com.au, or through our Facebook page or Twitter feed, and we’ll be happy to walk you through it. Alternatively, if you need some help with any level of your strategic planning, we have a number of ways of helping you and your team.

The one skill that is not negotiable for success in business, or life is.........

I  was told recently that I take too long to get into the meat of what I want to say in these posts or blogs. If you are time poor and don't want to read the whole blog, I'll remedy the problem up front. Planning is the most fundamental skill required for success in business - without it, you will waste time and money, expose your business to unnecessary risk, underutilize your team, and not achieve your goals. Done. You can now get on with the other things you need to do, and I'll ramble on to the rest of you who probably have the time to read the whole blog because you have PLANNED your time properly!

 A plan is generally defined as "a detailed proposal for doing, or achieving something", and in most cases the "something" referred to in business terms would be a "goal". Building on the original definition, we could then say that planning is " the definition of an organized program of steps, or actions to be taken, in order to achieve a desired outcome". So let's knock off each of the issues I attributed to a lack of planning, one by one.

No matter how big or small your business or team is, you do not have unlimited resources. Utilizing those you do have efficiently is one of the primary roles of management, and planning delivers the kind of information that leadership needs in order to allocate people, time, money and equipment in the way that has the greatest chance of delivering the success they are after. The outcome of effective planning is that available resources are channeled into the projects with the greatest chance of success, and productivity is boosted significantly.

No matter how big or small you are, you also cannot control the external environment in which you operate. Risk is a factor in every business, and to be successful, it is an element that needs to be managed effectively. Every plan must be "stress tested" using "what if" scenarios to build redundancy and contingency into the plan. Unfortunately, the greatest stress test will utilize only predictable events, and in every business cycle there will be unforeseen events that require rapid responses to prevent, or at least reduce, the negative effect of those events.And even if you only encounter the predictable bumps in the road, the rapid pace of new technology and systems require teams to be able to quickly adjust both strategy and tactics to deal with the new conditions. Robust stress testing in the planning process helps reduce the number of possible unforeseen events to the absolute minimum, and therefore increases your chances of success significantly.

Planning also removes the rose tinted glasses, as it requires leaders and managers to develop a realistic understanding of the present state of the business or team. Strengths and weaknesses need to be defined, and a balanced view of the competition needs to be developed, as the starting point of the planning process. Proper analysis will also reveal areas of potential weakness in competitors offerings and service delivery, which allows product, sales and marketing strategies specifically designed to exploit those weaknesses, to be developed. Competitor analysis will often reveal emerging markets, or previously unknown opportunities, that can then be included in the current planning cycle.

Once the starting point has been accurately determined, the "destination" needs equal clarity. A vision of the "desired outcome" needs to be developed so that the steps required to arrive at said outcome can be decided upon.

Setting "desired outcomes" (goals) that challenge the organization to deliver better performance or service, is a key element of planning, as long as the goals are realistically achievable. Over-aggressive goals will have the effect of demoralizing most teams, so keep them within the bounds of reasonableness for them to achieve the desired effect. In today's fast paced business environment, leaders need to be stretching teams continuously, or they will find themselves playing second fiddle to the competition. Goal setting that stretches, also serves as a wake up call to leaders or team members who may have become complacent, spurring them on to function at an optimum, rather than comfortable level.And finally, having the goal in place allows leaders to measure actual outcomes against the planned outcomes, and apply the necessary remedies to the exposed variances.

A plan that is properly conceived, thought through, and then effectively communicated to the members of your business unit creates an environment in which cooperation grows and the team builds naturally. Involving team leaders, managers and supervisors in the planning process reduces future resistance, and potential conflict, immeasurably, and even budget reductions will be more easily accepted when the person affected had a say in the process. Each person knows not only what is required of them directly, but can also easily identify other areas of the process or organisation where their skills and experience will add value and momentum. Seeing that they can contribute productively to the success of the endeavor as a whole let's them take pride in what they do, and encourages the type of collaboration and responsibility that builds synergy.

So there you have a quick overview of the headline points that make up the fundamental skill required for success in your current business or team. If you would like help applying these principles in your specific situation, or would like a deeper grasp of the concepts, give us a shout through www.version8.com.au, or via our Facebook page and Twitter feed.












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That canapé crumb, or unasked question, might mean that an MBA is NOT for you......

A couple of weeks ago I accompanied my amazing wife to a presentation by a prestigious Australian Business School aimed at prospective MBA students. She had been invited, as a recent graduate of the school, to come and share her experience of the program, and it's benefits since graduating, in what was an obvious attempt to add an element of "I was just like you (4) years ago and look at me now". By now, you have hopefully worked out that I am married to an MBA graduate, and that may be making the title of this blog, just a little confusing - but stay tuned, all will be revealed!

The evening started with attendees being given a very impressive folder filled with equally impressive documents that explained, drew, graphed and illustrated why this particular Business School should be where one obtained one's MBA. All of the information is true and all of it is impressive. The obligatory drinks and canapés were circulating smoothly as the room filled with more and more people, most of whom were in their late twenties and early thirties. 5 minutes before the scheduled start time of the presentation, staff of the School started "suggesting" that attendees take their seats, and spot on go time, the "Head of Admissions" stepped up to the lectern and pressed the clicker to move on to the 2nd slide of the Power Point deck and we were away. The next 20 minutes were filled with beautiful images, more graphs, deep and meaningful quotes from previous graduates, and regular opportunities to name drop current captains of the business world who, you guessed it, we're all graduates of said business school. Once again, all of the information shown and presented was true and accurate, and then it was time for my wife and the other selected recent graduate to confirm how amazing, life changing and financially beneficial the process had been. Which both of them did very well, which added the required ring of authenticity to what had been shared, and gave the whole process the rubber stamp of "we have nothing to gain by you signing up for this School, so you can trust the fact that we appear to be confirming all the other things you have already heard" Then came the obligatory wrap up and thanks for attending content, and everybody was invited to stay and have a few more drinks and more impressive canapés, while asking any of the admissions staff, or selected faculty members in attendance, any questions they may still have had. We stayed for about 45 minutes after the end of the presentation, and many, many questions were asked and answered in that time. But nobody asked the critical question, that everybody should have been asking. You see, what had just happened was a sales presentation by an organisation whose product is academic content. The presentation was really good, and the academic content they offer is also very good, but nobody was asking if that specific academic content was what anybody in that room actually needed!

And it never will be asked. Because the business of a Business School is to present academic material of a business nature, and the job of the Admissions Department is to sell the sizzle of that particular pile of academic material. Whether you need it or not. So surely then, the critical question for very one of those prospective customers should have been "is this what I need?" And for every one of them that answered "yes", I can highly recommend that particular business school - but what about the ones who answer "no?".

Despite the fact that you have so many MBA options available - full time, part time, executive, on line, and the latest one - "blended", most MBA programs are aimed at creating corporate executives. I learned that night that the MBA as a qualification was originally designed for undergraduate engineers who aspired to management positions. Their technical qualification would get them to the top of the Supervisory ladder due to the technical nature of supervised projects, but they needed something to enable them to cross the rubicon from "technical" supervisor to "business" manager. Whilst you no longer need to be a graduate engineer, you do need to be a graduate something, in order to satisfy the entry criteria to any credible MBA program. So, if an MBA delivers a fully qualified corporate executive, and you need an undergraduate degree to gain entry to an MBA program, it follows that all successful businesses should have been started, or run, by a graduate of some description. But most of you reading this are hopefully already thinking about some of the most successful businesses in the world and the people who started, and run them. Apple, Virgin, Walt Disney Studios, Microsoft, Facebook, Dell Computing, Segway, Ford, and many more were started and run by people who do not have an MBA, or an undergraduate degree, and in some cases, they didn't even finish school!

Which then seems to confirm that an MBA is not for everybody, definitely not for anybody who doesn't want to be a corporate executive, and particularly not for anybody who has entrepreneurial aspirations. Every one of the companies listed above employs MBA's, so I need to make it absolutely clear that I am not in any way advocating against an MBA, but what I am saying is that it is not the right option for everybody. Many entrepreneurs realize they need "something" more, and fall prey to the usual MBA sales jargon, because it looks and sounds like what they need. But here we have to go back to the reality that the Admissions Department of the XYZ Business School, cannot sell said entrepreneur what he/she needs, they can only sell what they have! And what they have is designed to create a (usually competent) corporate executive.

So, to wrap this up, if you are considering an MBA, ask yourself these questions:

Do I want to be a Corporate Executive?
Is this the best way to invest my next 3+ years?
If I invested the $60 - 100K into my business idea instead of an MBA, would I be worse off 5 years from now?
Am I a loner?

If your answers are anything other than "yes, yes, yes and yes", I might consider wiping the canapé crumb off my lip and leaving the room to explore some other options.

If you need some help with answering these questions or knowing what some of the other options are, feel free to leave a comment below, on our Version 8 Coaching &amp Training Facebook page, or jump across to our contact page at www.version8.com.au and we will do whatever we can to help.