Month: March 2023

Cost Effective Small Business Marketing Strategies and Tips – Part Two

In my previous article (part 1), I discussed Marketing Keys, Marketing Plan Components and Creative Marketing. Now I will get into specific, cost effective marketing methods and strategies you can use today to increase your company’s exposure and profits.

MARKETING METHODS

Internet

-Highly targeted and extremely economical

-Extremely Interactive

Magazines

-Targets your niche

-Creates credibility

-Establishes Identity & Brand

TV

-Can be very cost effective

-Great for demonstrations

Direct Mail

-Highly targeted

-Medium that allows you to go through the entire sales process.

-Augmented with Follow-up Mailing and Telemarketing is very effective

Canvassing

-Provides personal contact, which can be the most effective

-Backed by targeted mailings and TV advertising increases its conversion ratio

Outdoor Billboards

-Constant Reminder

-Especially good for “Next Exit” Location traffic targeting

Indoor Signs

-Capitalizing on your marketing’s momentum

-Can be the most important sign – even more crucial than outdoor signage

-Signs don’t have to be static: i.e. Video Message, Slide Show, etc.

Online Marketing

-Absolutely the best medium which economically blends high interactivity with action

-Examples: Email, video & audio postcards, forums, blogs, websites, texting

-Very effective when content based

-Prospective customers are not constrained by time

-Good, targeted, updated content means repeat customer visits

-Great Follow up, Resale, Cross-sale and Up sell medium

-Exponential results when augmented by offline marketing

Classified Ads

-Very cost effective for a broad customer base

-Targets the very hottest prospects

-Confronts your competition head on

Brochures

-Only effective if combined with online and offline marketing

-Always a good after sale piece to keep the customer thinking of you

-Code the brochure, ask the customer to pass it out and provide discounts or referral fees back

Phone

-Telemarketing only effective if part of an Opt In Marketing Campaign, whether online or offline or both.

Reminder Tools

-Refrigerator magnet is the most effective

-Double sided or folded business card which provides mini-brochure capabilities

Trade Shows

-Targeted and motivated prospects

-Consider online versions

Publicity

-Public Relations driven marketing can be cost effective. Establish reputation and credibility

Community Relations & Sponsorship

-Establish powerful contacts and connections

-Great for image

-Great constant reminder

-Create an edge over the competition

-Needs to be sincere

COMBINE MARKETING TOOLS & METHODS

Creative Strategic Marketing is based on developing multiple Marketing Tools in concert to achieve an out-of-the box, competitively advantaged Creative Strategy. Marketing Methods should be integrated together for each cohesive Marketing Strategy, and then adjusted as the campaign proceeds and develops. Personally, I believe one of the most lethal combinations of Marketing Platforms are:

–Developing a Content Rich Internet Presence

–Online Marketing through Opt In

–Advertise free Articles, Newsletter, Guides, Webinar, etc. in a targeted Magazine Ad

This combination of print and online marketing is very cost effective, yet lucrative. Explore the possibilities.

The important thing to keep in mind when executing multiple Marketing Tools, Forums and Methods in a synergetic strategy is to carefully track and monitor the results, making Key changes as the initiative develops. This is where an online / internet marketing platform is so valuable because it can adeptly track results (i.e. conversion rate, response rate) in real time.

ONLINE MARKETING CALENDAR

A good Marketing Calendar is based on a 52 week year and helps considerably in planning and budgeting a Marketing Strategy. At any point in time, you can determine the best ads to run, what needs to be in inventory for the anticipated sales, the project costs and projected sales. The calendar should be an online platform for maximum interactivity, utility, access, flexibility and integration. The Marketing Calendar should be fully integrated with the Marketing Strategy, Strategic Plan and Budgeting Process for maximum utility. The calendar should be in an expandable spreadsheet format to reveal all necessary details for each marketing method within an overall strategy.

COST EFFECTIVE MARKETING STRATEGIES

Profitable Marketing does not have to be expensive! Some cost saving tips:

Cooperative Advertising

-Can save upwards of 50%. Partner up with a larger company, mention their name and get paid for the promotion. Spread the ad cost among fellow advertisers.

Per Order or Inquiry Payment Method

-Advertising costs subtracted after a sale or defined event.

Survey your Current Customers

-Costs pennies to do, yet gives you the most up to the minute market trends. Plus gives you an opportunity to Cross or Up Sell the customer at the same time.

Backend Products & Services

-Bundle your offerings to minimize your marketing cost per sale.

Code your Ads

-Codes allow you to track and measure your marketing strategy’s results. By keeping ahead of the campaign roll out you can adjust for maximum cost effectiveness.

-Online tracking is the most beneficial and cost effective means of keeping your marketing costs in line with your budget, while providing you where the most profits can be made per marketing dollar spent.

Don’t Use a Rate Card

-Make an offer for all your advertising – rates are always negotiable.

-A 30 second TV spot can be as effective as the more expensive 60 second one.

-Tap into Remnant Magazine Space

-Extra, unused ad space sells at substantial discounts.

TV Ad Tips

-Tight scripts and excellent prior planning cuts down the time costs.

-Do your Ad in 3-4 renditions move session.

-Use a production studio during off-peak times.

Concentrate Efforts on Established Customers

-Customers are 85% cheaper to market; Keep a good balance between Customer and Prospect marketing efforts.

-Exponentially expand your sales, cost effectively, through a Customer Referral Program.

-Up sell, Cross Sell, Cross Promote

Combination Marketing

A very cost-effective and successful combination is pairing a Magazine Ad with a Website. Offer a FREE Newsletter, Guide, E-book, etc and set yourself up as an Expert; mine the prospects data in a permission based, Opt In; Follow up free offering with product and service offerings. All your marketing efforts, mediums, tools and campaigns should be done in concert and combination as the results are exponential and the means cost-effective.

Website Design

-Web Design, Development and Optimization is very important, crucial in fact, but can be very expensive. –To cut Web design costs:

–Create your own content

–Write articles on areas you have Expert status or Knowledge

–Look at the web and decide what you want your site to look like and sketch it out, as well as, organize the link structure. Then have a designer lay out the website in a user friendly Content Management System, and you input all the content. Have the designer / developer review the site after your inputs for Search Engine Optimization tips.

Tip: Consider hiring a Web Designer / Developer overseas, such as from China or India, etc. They charge about $30 per hour (or less) verses $75 – 100 per hour. Make sure to carefully review a Designer / Developer’s credentials, referrals and past projects, to ensure credibility and reliability.

In the next article on Cost Effective Small Business Marketing, I will discuss Marketing Research and Targeted Marketing. Stay tuned!

A Tool For the Future – Assumption-Based Planning

The future is one of the most fascinating and talked about subjects today. You can see the future being practiced on a daily basis as people plan events and develop business ventures in a global dimension. Understanding the future is no longer achieved by performing magic or reading someone’s palm but is now recognized as a social science that can be identified as Strategic Foresight, Futures’ Studies, and Futuring (just to name a few), and becoming instrumental in developing new concepts and ideas in the fields of nanotechnology, neurotechnology, biotechnology, and electronics technology for the future.

One of the tools derived from strategic foresight or planning is called Assumption-Based Planning (ABP). This tool can be used to help people and planners from all walks of life recognize and incorporate assumptions in a plan during times of great uncertainty.  James Dewar defines ABP as, “a tool designed for improving the robustness and adaptability of plans-reducing the number of avoidable surprises in any plan or planning.” You may be asking yourself at this moment how assumption-based planning can accommodate you for your future? The key is in knowing how to recognize assumptions through creative thinking and include the assumptions in your plans to avoid surprises that could destroy your plans. This article will demonstrate how assumption-based planning can become a tool to circumvent the element of surprise and utilize creative thinking and planning in the development of your own ABP.

 

Origination of ABP

The Rand Corporation developed the ABP in 1990 to assist the US Army in trend-based planning. James A. Dewar explains that the ABP is a “post-planning” tool (recognizing that planning is an iterative process) that concentrates on the assumption that there are possibilities in which a plan can fail; preparing for alternatives that affect an already-developed plan. “Specifically, the ABP works to decrease the risks that assumptions represent.” ABP originated as a five-step plan defining ways on how a plan could fail. Dewar maps the assumptions below.

          

Step 1 – Load-bearing and vulnerable assumptions – Load-bearing assumption is like a load-bearing beam; pull it out and the roof caves in. Vulnerable assumption is one that could fail within the expected lifetime of the plan. Both of these assumptions can resort to an alternative plan.

Step 2 – In a broken assumption, the hedging action prepares the planner for failure. 

Step 3 – Signposts – warning signs that can be used to monitor assumptions that are mostly likely to produce surprises.

Step 4 – Shaping actions – help the assumptions play out to the planners’ satisfaction.

Step 5 – Hedging actions – prepares the planner for the possibility that the assumption will fail despite efforts to secure it.

 

Today’s global leaders need to consider the ever changing global environment and incorporate assumptions into their strategic foresight planning. On a personal basis, parents and children can learn to develop an ABP utilizing Dewar’s model, which can prepare them in creating and incorporating assumptions in the development of a futures’ plan for their activities, events, and their future. On a personal dimension, let’s visualize how an ABP can be applied to a family reunion event.

 

Forecasting a Family Plan Using an ABP

Let’s take the ABP into a personal level utilizing the imagination and creative abilities of the family members who will plan a family reunion. Imagine your family is planning a family reunion one year from today’s date. This is the plan; you incorporate assumptions into your post plan to develop a plan that ‘might’ meet the satisfaction of the family. Here are the assumptions:

  • Consider the family members that need to ask for time off from employers, which employers may not grant.
  • Consider travel costs over a person’s budget.
  • Consider the additional expenses each family will incur in case an unexpected emergency occurs and cancels their travel plans.
  • Consider the donations needed from each family to cover expenses for reunion and family member unable to supply. Will you pick up their tab?
  • Consider the possibility of some family members cancelling at the last minute.
  • Consider family members that do not contribute their part financially and need to be confronted.
  • Consider if hotel accommodations do meet with standards of family members.
  • Consider if reunion plans do not accommodate all age groups.
  • Consider any health or meal restrictions.
  • Consider available health professionals locale in case of emergency.
  • Consider activities for children and adults.

I believe you are seeing the picture of an ABP. It is taking all possible, probable causes and creating assumptive behaviors and/or actions that could alter a strategic foresight plan.  If you write out Dewar’s model, and you are a visual learner, the model can be converted into a visible table that can benefit both planner and family member. Taking the location as part of the assumptive process, the ABP helps identify the ‘what if’s’ to the reunion’s ABP. Consider some of the assumptions in the example below: 

  • Load-bearing vulnerable – Location provides for indoor and outdoor events
  • Broken assumptions – Location is vulnerable to inclement weather and power outages
  • Sign-Post – Family reads reviews of previous customers
  • Shaping Actions – Family asks location manager to guarantee generator in case of power outage.
  • Hedging Actions – Family makes back-up generator reservation in case with 24-hour cancellation allowance.

 Conclusion

People use the ABP on a daily bases and do not realize the creative abilities involved in the assumptions’ process. From the personal spectrum to the corporate environment, the ABP is an adaptable instrument that can benefit those who utilize the plan. Regardless of the structure of a leadership environment, whether top to bottom initiatives or flat, leaders, corporate executives, and everyday people can adapt the ABP process into their daily agenda. Cornish wrote about the lessons learned from great explorers such as Lewis and Clark, for example, in his book. He mentioned how these famous explorers used maps and ‘hearsay’ about the territory to develop their expedition. There may have been a prototype of an ABP in their plans which allowed them to consider assumptions and work around failures to successfully complete their ventures. Whatever the case may be, they were able to succeed and accomplish the task set before them.

Can an ABP tool work for you? Do you have the ability and imagination to interject assumptive planning into your daily agendas, work plans, strategic plans? The Book of Jeremiah, chapter 29, verse 11 in the Old Testament states, “For I know the plans that I ‘have for you’ declares the Lord, ‘plans for welfare and not for calamity to give you a future and a hope…” If we can draw inspiration that our plans can be successful, then tools such as the ABP can help us make our dreams come true. I like to compare the ABP to an apple, you can count the seeds in an apple but can you count the apples that will come from the seeds when they are planted and produce fruit? Creativity and imagination will forge the future of successful planning instruments.

A Guide to Auditing Top Management and the Internal Audit Checklist

Organizations must audit the processes associated with top management as part of an effective internal audit program. These processes include those relating to strategic planning, the establishment of policies and objectives, ensuring effective communication and ensuring the availability of resources.

Auditing management or directors is often seen as a sensitive issue but by considering each management activity as a normal organizational process, it becomes much easier to focus on determining whether the outputs of their activities are effective.

How to Audit Top Management

By using a formal risk-based approach to internal audit planning, as required by ISO 9001, auditors have a great opportunity to engage top management in the audit process. By making management part of the planning process and by giving them ownership of the areas to be audited, the internal audit becomes a valuable mechanism for development.

A good starting point is to copy, into the audit checklist, all requirements from the standard that say ‘top management shall’, almost every clause of section 5 starts with ‘top management shall’ and it’s the auditors job to find if management ‘did’. The audit checklist must cover the requirements from the following sections:

5.1 Management Commitment

5.2 Customer Focus

5.3 Quality Policy

5.4.1 Quality Objectives

5.4.2 Quality Management System Planning

5.5.1 Responsibility and Authority

5.5.2 Management Representative

5.5.3 Internal Communication

5.6 Management Review

5.6.1 General

During the Internal Audit

When undertaking the internal audit of top management, the auditor should collect and corroborate evidence of top management’s commitment from within the quality management system itself. The auditor should ask how the quality manual addresses management commitment issues and ask how they are accomplished; then, the auditor must find objective evidence that proves it’s actually being done. This method applies to management as well as the production machinist, and everyone else in the organization for that matter!

If the standard, documented procedures, policies and objectives are audit inputs, then the evidence sampled and the interview statements made by top management auditees are the audit outputs. If the input does not align with the expected output, the auditor simply states this misalignment as a non-conformance whilst providing an audit trail to the supporting evidence.

Final Reporting

Auditors should prepare the internal audit report in a manner appropriate for presentation. It might be necessary to present the executive summary of the audit report directly to the top management and other interested parties within the organization. The executive summary must highlight both positive and negative findings and suggest opportunities for improvement.

How to Start an Oil Extraction Factory for Edible Oil

The concept of extracting edible oil from seeds such as olives, soya beans and groundnuts is on the rise globally. For instance, in the United States of America alone, there is an annual production averaging more than 16 billion pounds. This huge production can be attributed to the increasing demand for edible oils. As the living standards or people continue to improve, so does the consumption of edible oils. It is used for various purposes such as cooking. Therefore, the extraction of edible oil is a profitable venture that in most cases rewards manufacturers with profitable returns. Although it is not difficult to start an oil extraction factory, the below steps will help to simplify the process further. They are the primary steps that have to be followed for one to start a successful oil extraction factory.

The first step to starting any successful business venture lies in the ability to have enough knowledge about the business. Thus, the first step would be to know more about the edible oil industry, its trends, and the factors influencing it. The edible oil industry information or data can be sourced from the internet, government agencies or from the already established edible oil manufacturing industries. An investor can seek the opinion and view of an expert in the edible oil industry to get a more informed opinion about the market trends. Also, this will give you an opportunity to know more about the different firm in the market that you will come to compete with.

Second, create a business plan for the manufacturing venture. A business plan will act as the guide or central reference point for the business. The importance of planning is best captured in the popular cliché’ failing to plan is planning to fail’. Without a business plan, the oil extraction factory set up venture will fail. In fact, it might not even takeoff. When coming up with the business plan, it is advisable to engage the services of an expert in the field. He/she will help you to create a comprehensive business plan that covers all aspects of the manufacturing process. A business plan is basically a formal statement that highlights the goals of the business, and plans of achieving these goals. Also, the business plan will contain sections that cover the financial needs of starting the manufacturing plant. Without enough funds or capital, the business might stall on the way. Hence, a business plan will help you to know the cost of the venture (cost such as equipment costs, transport costs, capital for running the plant, and wage costs), and the subsequent sources of capital needed to start it. A business plan will clarify the target market for the product and how to gain a competitive edge or advantage in the market.

Third, figure out where you will get your raw materials. Raw materials are the backbone of the manufacturing plant. Without the raw materials, the plant will not. Also, during this step, it is vital to know the type of materials that will be used for the oil extraction since edible oil can be processed from many sources. Availability of the relevant raw materials is also a major factor. The raw materials should be adequate enough for the business to run. A small source will be depleted quickly. Since edible oil is extracted from arable grains, the investor can decide to plant his or her own raw materials or buy them from another party.

Location has a significant effect on the success of the manufacturing business. The plant should be located near the source of raw materials. This will help reduce the transportation costs incurred when moving the raw materials from the field to the factory.

Fifth, apply for the relevant licensees and certification from the state or federal authorities. This will make you to run a legal and licensed edible oil extraction business. You can be arrested and charged if you run a business without a license.

Lastly, get the funding of the project and subsequently purchase the plant equipment, hire employees, and advertise the business.

These steps if followed strictly will make the process of starting an oil extraction factory for edible oil easy and simple.

Understanding SWOT Weaknesses

A little about SWOT

SWOT…. Strengths, Weaknesses, Opportunities and Threats. The SWOT analysis technique is typically used during strategic planning to provide a concise summary of a strategic analysis. Generally your strategic analysis will include an analysis of your three strategic environments, which are your

  • Internal Environment,
  • Industry Environment, and your
  • Macro Environment

In this article you will learn all about how to identify weaknesses and to help you to get started we have also provided you with a list of common weakness. We will also show you how to avoid the common mistakes that are often made when categorising weaknesses.

Now let’s start by defining the term weakness as it relates to your SWOT analysis.

Definition of a Weakness

Corporate Level Weakness Defined:A weakness is a core capability of your business where your competitor(s) have an advantage over your business, which your customers value i.e. you failed the better than your competitors test.

During your SWOT analysis you will consider a variety of weaknesses from within your business. It is important to note that these weaknesses will all be internal to your business and they are all found during your internal analysis.

The SWOT technique can also be used at divisional, departmental and team level. When completing a team level analysis, you should identify strengths and weaknesses from the eyes of your internal customers.

Understanding SWOT Weaknesses

Some Possible Weaknesses

There are two categories of weaknesses that you may identify in your business, both are equally valid and should have receive equal consideration, these two categories are

  1. Tangible Weaknesses, these describe characteristics of your business that can be precisely identified, measured or realized. (Normally you can touch them)
  2. Intangible Weaknesses, these describe characteristics of your business that can not be physically touched or physically measured (You can not touch them)

Now, that we have identified two categories of weaknesses let’s take a look at some common tangible and intangible weaknesses that maybe found in your business

Some possible tangible weaknesses that you may find in your business

  • Old or outdated plant and equipment. Old plant or equipment is generally supported by equipment reliability issues or a lack of general competitiveness.
  • Narrow product line
  • Insufficient financial resources to fund changes
  • High costs (Not high price, high costs specifically refers to the cost of brining your product or service to market)
  • Inferior technology or technology that does has not kept pace with customer or supplier preferred transaction methods.
  • Low volume or restricted in your ability to scale up

Some possible intangible weaknessesthat you may find in your business

  • Weak or unrecognizable brand
  • Weak or unrecognizable image
  • Poor relationships with your customers
  • Poor relationships with your suppliers
  • Poor relationships with your employees
  • Marketing failing to meet objectives
  • Manager inexperience
  • Low investment in research and development
  • Low industry knowledge
  • Low innovative skills

Where People often go wrong

The most frequent error we see in a SWOT analysis with the categorisation of environmental observations. This is particularly prevalent when identifying weaknesses.

It is common for weaknesses to be identified as an opportunity to resolve the weakness rather than as a weakness, and some times as a threat of the harm the weakness may cause.

For example

A weakness of poor relationship with your employee’s, could be written up as an opportunity to improve labour relations or as a threat of industrial action by militant employees. It is important to categorise it as a weakness. Why?

It is important to categorise your weaknesses correctly as later you will look to find opportunities that capitalise on your strengths as these are your greatest strategic opportunities and threats that are exacerbated by your weaknesses as these are your greatest strategic risks.

If you have worded a weakness as an opportunity there is a risk that you will not identify your strategic risks and appropriately prioritise action to mitigate these risks.

Another common issue with identifying a SWOT weakness is to allow personal preferences to come into play. For example, if you are a big fan of apple computers but the company who you work does not use them, it is not valid to claim the organisation has a weakness that they use inferior technology. It is only a weakness if the choice of technology platform is restricting your business from competing with your competitors.

And the final item is that managers are often reluctant to be open and honest about the weaknesses of the business that they are running. They see it as a failure on their part. It is best to encourage leaders to be open and transparent about the weaknesses in their business, only by be open can you ask for help.

SWOT Tip

By the virtue of its name the SWOT analysis technique is an analysis technique NOT a solution technique. It is hard to remain focused on analysis, but important to do so. A thorough analysis is the perfect foundation for making strategic decisions.

Once the SWOT analysis is complete the next stage of strategic planning is to develop alternative possible courses of action.

How to Implement a Business Strategy in Your Organization

Ask any successful business owner and they will tell you their success was not based on luck. The success – and failure – of a business is dependent upon the strength of their business strategy. A successful strategic plan employs cost reduction, development, and sustainability techniques to ensure a bright future. You need to know your business inside and out in order to create a comprehensive and realistic plan.

Your strategy should help you achieve the objectives of your business. A business strategy is the driving force behind any organization, and takes the form of an official report. Businesses are self-sustainable systems, when you change one thing in the system; it has a positive or negative chain reaction. Like an organism, businesses learn how to adapt to the change if it is positive, and rectify the situation if it is negative.

Organizations have several phases of development, including creativity, direction, delegation, and consolidation. A company may start out with lenient rules and regulations, but as time progresses management adopts more efficient policies that hinder creative thinking. Companies mature and lose sight of their goals and mission statements, with more of an emphasis placed on individual projects or initiatives. As a business enters maturity processes, departments, and policies are refined to reunite the organization.

Ways to Conduct Business Strategy

Historically there are two ways to develop a business strategy, using the “bottom up” and “top down” models. The bottom up method is when employees generate ideas on the floor and the best results are passed onto management. The top down strategy is when business owners create the strategy and implement the changes without seeking employee feedback. Unfortunately, both models fail to include all of the employee feedback.

The new method of developing a business strategy uses a collaborative process, which is when managers and employees exchange information and work together to create a sustainable solution. It is a team-oriented process that bridges the gap that exists between managers and workers. Before you create a business strategy ensure you have the additional resources to carry out the task without interfering with normal operation. Assign tasks and delegate responsibilities while keeping to a defined chain of command.

Functional versus Operational Business Strategies

There are two types of business strategies: functional and operational. The functional strategy focuses on general ideas and a variety of tasks for different departments. The generality is a major disadvantage, however; areas of concentration include marketing, new product launches, human resources, financial assets, and legal issues. Functional strategies provide a nice overview of the business but do not tackle the important issues employees encounter day-to-day.

Operational strategies are ideal for businesses that want to reduce costs and streamline processes because it is much narrower in scope and requires accountability on all levels. The detail oriented plan encompasses everyone and everything, from the number of cashiers on duty to how much inventory is carried at a given time. A strategy is unique to each business and reflects the needs and requirements of the company’s management.

Implementing a Business Plan

A business plan is the textual version of a strategy, as it includes pertinent information regarding the company, including: vision and mission statements, measurable objectives supporting the vision, actionable tactics meeting the objective, resources, milestones and timeframes, accountability and role designations, as well as internal and external risks. The business strategy is not evergreen and should be evaluated routinely to ensure the company still has the competitive edge.

A business plan includes the primary and secondary objectives of your organization, an analysis of current policies and procedures, and the development of new policies or procedures to correct weaknesses within the organization. Before beginning a strategy, it is helpful to conduct a SWOT analysis, which helps identify weaknesses and loopholes within the organization. Your competition capitalizes on your weaknesses, thus it is essential to continuously evaluate your business.

Developing a Competitive Strategy

Brainstorming and collaboration are essential to the development of a successful business strategy. Begin the process by identifying the strengths and weaknesses of the organization. Without erasing responses, continue to identify current opportunities that help your business succeed. Finish the SWOT analysis by identifying threats or risks that place your business in danger. Identify how your company beats the competition, outlining the various strategies already in place.

Identify your current target audience and list potential audiences in the form of demographics. Assess current market conditions and how your company can defeat the competition. Reevaluate how you are reaching current and potential customers and consider your overall marketing plan. Think positively and develop solutions to overcome any weaknesses that you have discovered thus far. Admitting your weaknesses is the hardest part of drafting a business plan, as most companies want to appear strong and mighty. Research why you have these weaknesses and find realistic solutions to the problems.

Business owners often become so caught up with their work that they fail to concentrate on their business strategy, which is a significant source of cost reduction. Achieve your goals by dedicating time each month or week to address issues surrounding the operation of your business. Make the process a tradition, ensuring operations are aligned with current goals and future forecasts. Make your business stand out from the competition by utilizing different techniques to attract the most people.

A successful strategy overcomes organizational hurdles by understanding customer needs and predicting the unpredictable. The formation of a business strategy is a science that combines current circumstances with a variety of internal and external variables, addressing immediate and long-term goals of the organization. The implementation of the strategy is rolled out slowly, starting with management. The plan encompasses everyone; however, customers are indicative of the final result.

The CEO’s Guide To Succession Planning – Managing Risk & Ensuring Business Continuity

Introduction

Once reserved for the upper echelons of senior management, and often viewed as replacement planning should catastrophe strike, today’s succession planning is being redefined. The discipline has broadened in both breadth and scope to become a central component of board-level strategy.

Succession planning focuses on managing risk and ensuring continuity across all levels of the organization – risk of untimely departures of critical personnel, risk of retirees taking their skills and knowledge with them and leaving nothing behind, and risk of losing high value employees to competitors. It does so by helping your business leaders to identify top performers within the organization, create dynamic “talent pools” of this critical talent that other leaders can leverage, and prepare and develop these high performing employees for future roles.

If this was easy, everyone would be doing it. The problem that exists today is that succession planning is barely automated, let alone optimized. This CEO guide provides five key tips for jump starting your succession planning efforts.

1. Automate and Reduce Costs

Today’s succession planning efforts are characterized by fragmented, inconsistent, paper-based processes. Indeed, 67% of companies are still primarily paper-based, according to a global survey conducted by SumTotal.

Conventionally, business and HR leaders will spend weeks or even months manually scouring different parts of the organization for information needed to build lists and pools of nominees and successors for specific job families or positions. The information required to generate the lists often includes self assessments, past performance appraisals (often paper-based), and 360 feedback. After a lengthy period of information gathering and aggregation followed by manual analysis (e.g., nine-box, gap analysis), the results are printed and collated into large three-ring binders for use in executive planning meetings. This time-consuming, inefficient, and costly process is still commonplace today.

To effectively transform succession planning from a manual, paper-based process to one that is systematic and technology-enabled, CEOs must focus on laying a solid foundation supported by strong executive leadership.

Program & Process Foundation

  • Establish dedicated management function (e.g., program management office) with CEO-sponsored executive leader or council (with senior representation from line-of-business, geography, and corporate HR)
  • Define core succession process along with key constituents and tasks at each step of the process; Clearly articulate touch points to other business processes (e.g., performance management, career development)
  • Understand implications of change with emphasis on managers & employees
  • Align program with broader business strategy
  • Determine initial scope (e.g., enterprise-wide, divisional)
  • Define processes independent of technology

Technology Foundation

  • Must support and enable key processes
  • Must integrate learning and development
  • Must link seamlessly to other business processes, especially performance management
  • Must be flexible and configurable to meet unique needs
  • Must centralize and consolidate key information and data
  • Must be easy for managers and employees to use

2. Drive Succession Planning Deeper into Your Organization

Many CEOs still view succession planning as replacement planning to designate successors in the event of a catastrophe befalling senior company leaders. Indeed, succession planning penetrates only the highest levels of the organizational hierarchy, according to survey data. Only 35% of companies currently focus their succession planning efforts on most critical roles within the organization.

Yet a most dramatic transformation is underway: 65% of the organizations surveyed plan to extend succession planning to all critical positions within the two years. Applying succession planning beyond the top layers of management is critical to retaining high performers across all levels of the organization and mitigating the risk of untimely departures of personnel in high-value positions.

The key to extending succession planning into the organization is to provide career development planning to employees. Indeed, fully 97% of business and HR leaders believe that a systematic career development process positively impacts employee retention and engagement. These leaders also believe that providing career advancement opportunities as well as dedicated development planning to employees are the two most important mechanisms for retaining high performers.

Retaining existing employees not only has the potential to minimize the effects of talent shortages, it also provides significant and tangible cost savings (since replacement costs range from 100%-150% of the salary for a departing employee).

3. Establish Dynamic Talent Pools to Improve Pipeline Visibility

Centralized talent pools provide CEOs with global visibility into their talent pipeline and overall organization bench strength. They provide a mechanism for ensuring that the organization’s future staffing plans are adequate, thereby reducing risk and ensuring continuity. To be truly effective, talent pools need to be dynamic in nature. For instance, if an employee is terminated, that person should be automatically removed from existing successor pools. Alternatively, if an employee closes a key skill or certification gap that had previously kept her from being considered as a successor, the pool should be updated appropriately. Talent pools that are inaccessible or not up-to-date are of little use to decision makers.

A key element of making talent pools accessible is in-depth searching for talent exploration. A talent pool is not much good if managers cannot easily view, track, update, and search for potential successors. Dynamic talent pools should take the guess work out of succession planning by aligning employee assessments, competencies, development plans, and learning programs. Proactive system monitoring ensures that as employees learn and grow, talent pools are dynamically updated to reflect the changes. It is this element in particular – supported by robust reporting and analytic capabilities – that helps CEOs make more objective staffing decisions and better plan for future staffing needs.

4. Promote Talent Mobility to Retain High Performers

Industry analyst firm Bersin & Associates defines talent mobility as “a dynamic internal process for moving talent from role to role – at the leadership, professional and operational levels.” The company further states that “the ability to move talent to where it is needed and by when it is needed will be essential for building an adaptable and enduring organization.”[1]

Talent mobility is:

  • A business strategy that facilitates organizational agility and flexibility
  • A mechanism for acquiring and retaining high performing and potential talent
  • A recruiting philosophy that favors internal sourcing over costly external hiring
  • A method for aligning organizational and individual needs through development
  • A proactive and ongoing approach to succession planning rather than a reactive approach

A systematic talent mobility strategy enables business leaders to more effectively acquire, align, develop, engage, and retain high performing talent by implementing a consistent, repeatable, and global process for talent rotation. Without a cohesive talent mobility strategy, CEOs face several risks:

  • Focus on costly external recruiting vs. internal sourcing
  • Wrong hires (cost can be 3-5x person’s salary)
  • Increased high performer churn
  • Reduced employee engagement
  • Reduced flexibility as business conditions change

CEOs should consider the following integrated processes – and a complete technology platform to support them – to promote and enable talent mobility:

  • Current workforce analysis:Includes detailed talent profiles, employee summaries, organization charts, competencies, and job profiles.
  • Talent needs assessment: Assess employees on key areas of leadership potential, job performance, and risk of leaving.
  • Future needs analysis:Development-centric succession planning to create and manage dynamic, fully-populated talent pools.

5. Integrate Succession Planning to Broader Business Processes

Succession planning is not a silo. It implicitly relies on other talent processes and data, especially assessments that provide a performance and competency baseline. Yet unlike a performance management process, which can be executed in a relatively self-contained fashion (assuming it has access to core employee data), the same is not true for succession planning.

Succession planning requires foundational data (e.g., competencies, job profiles, talent profiles, and employee records) and inputs (e.g., appraisals, feedback). Outputs include nominee pools, successor pools, development/learning plans, and reports. To facilitate the level of integration required to get succession planning right, a single, natively-integrated technology platform that centralizes key talent processes and information is required. With this single platform, the time to develop succession plans can easily be reduced from weeks or months to mere hours. The benefits can be significant: reduce costs, reallocate personnel from tactical activities to more strategic endeavors, and mitigate the risk of untimely departures of essential personnel.

Additionally, a single technology platform promotes the linkage of learning and career development to succession planning. By bridging these processes, nominees who are not ready for advancement can be assigned detailed development plans that guide them to improve the competencies and skills required for new job positions. Learning paths and specific courses can be established for employees to facilitate their career growth. By providing learning opportunities and development plans to employees, CEOs can take a more active role in promoting employee growth, retention, and engagement.

Finally, with a single system of record, reporting and analysis is vastly improved, since all relevant talent data resides within a single data structure. Strategic cross-functional metrics can be readily established (e.g., measure the impact of learning and development programs on performance). Reporting and analysis are key to the CEO’s success in managing employee resources and implementing strategies that support corporate objectives and initiatives.

Conclusion

Organizations can realize significant efficiency gains and cost savings by moving from a manual, paper-based succession process to one that is fully technology-enabled. The shift to a single technology platform facilitates extending succession planning deeper into the organization, since a well-architected solution seamlessly links succession to career development and learning. A complete platform improves senior management’s global visibility into the talent pipeline and bench strength, and promoting talent mobility to retain high performers becomes a viable engagement strategy. Succession planning, done correctly, is all about process and supporting technology integration. Without integration, succession planning becomes just another organizational silo.

Endnotes

[1]Lamoureux, Kim. “Talent Mobility: A New Standard of Endurance.” Bersin & Associates, November 30, 2009.

Business Process Management 101: BPM Defined

Lean enterprise and business process improvement, business optimization, cost cutting TQM, quality, Six Sigma, business re-engineering and other such-like initiatives, falls within the cadre of business process management.

It forms the cradle, feeding ground and impetus for making sense of, improving and capitalizing on the intricacies, dynamic elements and events that occur in our planning, conducting, practice and execution of modern business in the new economy and digital age.

It is about objectively, stepping back, diagnosing, base-lining and analyzing, then streamlining and making things more effective, changing for the better, improving, sustaining, and optimizing the processes and desired results! It attempts to objectively study, assess, measure, adapt, refine, sustain and improve business processes, defying the over-reliance on at times pure speculation, past knowledge, intuition or other ‘expert’ opinion or interpretations. It gives business wings and freedom to pursue a higher calling and standard.

Core business processes like budgeting and even capital expenditures, manufacturing, operations and even transactional, administrative processes from part of this coordinated undertaking and endeavor, introducing it into all areas of the business, conquering new frontiers, moving boundaries and bars, pursuing the gold-standard of business practice (OK, or at least get a better handle on things to start with!) Measurement tools, metrics, assessments, diagnostics, performance statistics all become critical inputs for the successful execution of the business enterprise.

At its truest core and in its purest form, BPM is a philosophy and practical method utilized in business practice today, to bring, enable, plan and structure for and into success. A deliberate attempt and approach or business management strategy, taking proactive, co-creative, data-driven, statistical and scientific method, troubleshooting and problem-solving into the business arena, optimizing efficiencies, minimizing waste and the organizations who choose to pursue it, to new heights of performance excellence and positive business results, growing profit and world-class breakthrough!

Business process management is often seen as all organizational activities that deal with optimizing or adapting these processes, as changing situations and business needs dictate. Continuity, process design, execution and monitoring, results over time, with a forward-looking eye always on the future and opportunity, human-driven processes and even workflow systems, relational data and enterprise content management strategies and solutions all find a home under this encompassing umbrella as does a lot of the quality and continuous improvement methodologies businesses choose to pursue.

The Principles of Business Process Management (BPM) and Business Process Improvement (BPI), is well known. Here is a brief synopsis of the premise, rationale, as well as the key elements of the strategy and approach with their implications for business:

o Changing the status quo, by placing your focus in the right places, at the right time, all the time! Outcomes-based and focused, results-driven and oriented, BPI proposes synergizing and optimizing all steps and elements within and through processes, by focusing on the outcome itself and not as much the routine, accepted specific tasks required to get you there and getting rid of inefficiencies.

o Customer-centric, focused and driven in all activity and endeavor, regardless.

o Efficient, systems and process above all – not automation for example, for the sake of using technology or getting on the band wagon of another ‘fad’ or initiative.

o The value of frequent benchmarking and measuring,,taking the pulse, testing the waters, direction and health of your business. Gold-standards and points of reference that are quantifiable, attainable, and realistic are at the order of the day.

o Roles and responsibilities, ownership and accountability for processes and outcomes.

o Process controls and regular progress checks built in, planned, executed well and responded to, including halting the process if it gets of track or it looks like failure is imminent.

o Pursuit of deliberate planning, process-standardization and commonalities and having no mere ad hoc approach to business processes anymore – it simply is NOT accepted practice, considered good enough any more to thrive, saving money and effort as a new economy business!

o Immediate and consistently implementing as well as executing with success over time, sustaining the efforts

o Utility and purpose of accurate metrics and measurements and implementing action based on them.

A final word in closing: In our customer-driven and empowered economy, these approaches, strategies and tools, provides us the context and means whereby we can enable enterprise capabilities and capacities, to unfold into and through business processes across applications and organizational boundaries – pro-active, co-creative and dynamically-organic way, while doing so in planned and disciplined, data-driven, monitoring and objective fashion. Which inevitably leads to us proposing to an extent, yet another refined or even new perspective on things!

Marketing Planning – Don’t Do SWOT

SWOT (Strengths, Weaknesses, Opportunities, Threats) is a popular framework for developing a marketing strategy. A Google search for “SWOT” and “planning” turned up almost 93,000 hits (August 2004), most all of which laud the use of SWOT. Some students have said that it is the most important thing they learned at the Wharton School.

Although SWOT is promoted as a useful technique in numerous marketing texts, it is not universally praised: One expert said that he preferred to think of SWOT as a “Significant Waste of Time.”

The problem with SWOT is more serious than the fact that it wastes time. Because it mixes idea generation with evaluation, it is likely to reduce the range of strategies that are considered. In addition, people who use SWOT might conclude that they have done an adequate job of planning and ignore such sensible things as defining the firm’s objectives or calculating ROI for alternate strategies. I have observed this when business school students use SWOT on cases.

What does the evidence say? Perhaps the most notable indication is that I have been unable to find any evidence to support the use of SWOT.

Two studies have examined SWOT. Menon et al. (1999) asked 212 managers from Fortune 1000 companies about recent marketing strategies implemented in their firms. The findings showed that SWOT harmed performance. When Hill and Westbrook (1997) examined the use of SWOT by 20 companies in the UK in 1993-94, they concluded that the process was so flawed that it was time for a “product recall.”

One advocate of SWOT asked: if not SWOT, then what? Borrowing from corporate strategic planning literature, a better option for planners is to follow a formal written process to:

  1. Set objectives
  2. Generate alternative strategies
  3. Evaluate alternative strategies
  4. Monitor results
  5. Gain commitment among the stakeholders during each step of this process.

I describe this 5-step procedure in Armstrong (1982). Evidence on the value of this planning process, obtained from 28 validation studies (summarized in Armstrong 1990), showed that it led to better corporate performance:

  • 20 studies found higher performance with formal planning
  • 5 found no difference
  • 3 found formal planning to be detrimental

This support was obtained even though the formal planning in the studies typically used only some of the steps. Furthermore, the steps were often poorly implemented and the conditions were not always ideal for formal planning.

Given the evidence, SWOT is not justified under any circumstances. Instead, use the comprehensive 5-step planning procedure.

References

Armstrong, J. S. (1982) “The Value of Formal Planning for Strategic Decisions,” Strategic Management Journal, 3, 197-211.

Armstrong, J. S. (1990), “Review of Corporate Strategic Planning,” Journal of Marketing, 54, 114-119.

Hill, T. & R. Westbrook (1997), “SWOT Analysis: It’s Time for a Product Recall,” Long Range Planning, 30, No. 1, 46-52.

Menon, A. et al. (1999), “Antecedents and Consequences of Marketing Strategy Making,” Journal of Marketing, 63, 18-40.

Does Your Business Need To Hire An IT Consultant?

Whatever your type of business you own, you need to make sure that you’re using the latest technologies and software to provide quality solutions to your clients. Not only does using only the latest technology help you achieve your goals faster, doing so also ensures that you’re ahead of the competition. However, with the fast paced change in technology, keeping up with technological advances can be an uphill battle. Most businesses are not knowledgeable regarding technology so most of them are stuck with whatever their system is, for better or for worse.

For newer businesses, adaptation of technological advances should be embedded into their business plan. Newer businesses should make use of technology unlike older businesses. Businesses nowadays should even have their own IT department to sort out systems for the entire business. Financially speaking, hiring an IT department makes sense, wise even. Working with an IT consulting services company will provide the following benefits.

Assistance to business

Hiring an IT consulting firm is like hiring hundreds of people to do a business analysis on your company. IT consultants have experience in implementing projects for numerous companies and they know the best ways to go about it. Having learned from all their previous dealings with other companies, IT companies are experts in this field.

Your company will surely benefit from the collective experiences of IT companies. Their collective effort, expertise, and experience will make management planning and business transition a lot smoother than normal.

Streamline the process of business

IT companies will streamline your process once they are able to evaluate your entire business process. They will identify the important resources for your company and improve them. They will use proven business templates to ensure that your company will remain successful for years to come.

After an overhaul and careful study of your business model, they will be able to shorten the process quite extensively. Knowing how valuable time is to a company, it will lead to increased profit and efficiency.

Independent point of view

An external consultant will bring an outsider’s perspective to a company. The result will be an objective outlook of a company without any bias. An external company overlooking the process of another company can identify processes that need improvement.

An external IT company will help sort out many problems that exist within a company. New technologies will be implemented making work that much easier.

Utilization of proper tools

IT consultants are familiar with different tools and methods for different kinds of businesses. Depending on their expertise, they may favor using one method over the other. IT professionals will use a tool depending on the need of a company. Their experience will make them capable of giving the best advice out there.

The best IT companies will often partner up with many technology industry leaders giving them access to the best tools available. While many companies are only concerned with short-term solutions, IT companies are more concerned over long-term solutions for your company. After all, your continued success is detrimental to their business so expect something more permanent when you hire an IT consulting firm.

Added savings

Let’s face it, with the way the technology is advancing, a lot of work will become automated within the next decade. We’re already automating some of the most menial jobs out there. This is true for any company, big or small. Hiring an IT consulting company, you are able to identify which processes you can do without. You can also choose to automate some jobs to free some work load of your employees. While it may seem that you will spend more by hiring an IT company, you will actually save more in the long run.

Choosing to hire an IT consulting firm will boost the overall efficiency of any business. Use it in conjunction with a more efficient business planning and you’ll save a lot on unnecessary expenses. Clearly, there are many advantages in working with an IT company, yet not many businesses are willing to hire one. How would you know if you need an IT consultancy service?

The answer is simple.

Every company needs one. Big or small, every business needs someone who is able to work using the latest technology. By enabling a business to utilize technology, it will open up new opportunities in terms of expansion. If a business is able to function without IT architecture, imagine the possibility once the IT processes are implemented. Truly, the advantages of using an IT Consultation Company make it truly worth it.

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