The first requirement in quality assurance and improvement is the presence of a quality system.  With a quality system in place, quality assurance is possible: and the outcome of quality assurance is continuous quality improvement. 

Quality is the degree or standard of excellence, especially a high standard:   the totality of the attributes of a service or product that meets the requirements of the user of the service or owner of the product.

A Quality system is a series of actions designed to ensure consistency in approach, process and output.

A basic quality system is Total Quality Management (TQM), defined as the extent to which your organisation meets, or exceeds, stakeholder expectations and requirements.

TQM is defined as:

• the extent to which your organisation is able to identify stakeholder needs and expectations – quality of research
• the extent to which the total unit design of your organisation’s programs and services meets or exceeds stakeholder expectations – quality of design
• the extent to which your organisation is able to provide and continue to perform, function and operate as intended – quality of conformance

Quality control is the internal method of avoiding a deviation from the desired or required situation, or the method of altering or changing the situation to achieve the desired or required situation.   A key factor in any system is ‘control’, and there are two sorts of control:

1. the maintenance of an existing situation, bringing it back to normal when it deviates, and
2. the introduction of change into a situation, whether by making alterations to the existing situation or by creating a new situation

Quality assurance is the result of quality control, in that there is certainty as to consistency in approach, process and output through the quality system.  This includes ensuring that all repetitive functions or activities are consistently performed or carried out to the same desired or required standard.  An audit or assessment process is the usual means of check quality assurance.

Continuous quality improvement indicates an active commitment throughout the organisation to improving – rather than simply maintaining – the desired or required degree or standard of excellence.  The 3 basic stages are:

• increasing your organisation’s knowledge and understanding of stakeholder expectations and requirements
•  improving the design, so that the mix of features afforded by your organisation’s programs and services more closely match stakeholder expectations and requirements, and
•  improving your organisation’s ability to consistently perform, function and operate more closely to the design.

The outcome of a quality system is that the organisation has a sound basis for applying the basic philosophy of quality assurance, a clear set of guidelines for quality systems and processes, a means of satisfying contractual obligations, and readily available guidance and direction.

How do ‘quality’ and ‘risk’ relate to each other?

The basis of quality is that there are procedures and systems in place to ensure:

• consistent and replicable standards
•  consistency and replicability of improved standards
•  assessment and resourcing of identified risk factors, and
•  avoidance or management of risk.

A risk factor is present where there is likelihood that a product or component will have to be:

• re-worked – requiring further attention and therefore involving further cost and inconvenience, or
•  replaced – resulting in loss, wastage or inconvenience.

 A risk factor is present where there is a likelihood that a service or program will be:

• ineffective – unable to achieve the purpose for which it has been designed
•  inefficient – result in or contribute to an unwise use of resources, or
•  sub-standard – failing to meet or comply with advertised or required quality or standard of delivery, process or outcome. 

 Factors that can contribute to risk – and should be subject to quality control:

1. unwise, unexplained, unnecessary or unplanned change
2. disagreement, misinterpretation or misbehaviour among or between stakeholders
3. failure or delay in communication or information dissemination
4. inadequate, inappropriate, incorrect or vague information or instruction
5. non-availability of relevant information, plant, equipment, materials, facilities, tools
6. failure to protect the needs and interests of the organisation and the separate and particular requirements or expectations of each stakeholder
7. failure to comply with legal, statutory or contractual requirements, duties or obligations
8. unacceptable behaviour on the part of decision-makers – including conflict of interest, lack of confidentiality or unwise use of information
9. lack of appreciation or understanding of immediate, short-term and long-term constraints relating to such factors as finance, time, space, distance, technology and available resources
10. inexperience, undue haste, emotional stress, internal or external pressures, inadequate resources, unwise decisions, insufficient care, bad timing or bad luck
11. inadequate or inappropriate processes and procedures for:

• needs analysis
• task and territory management
• service/product/program/component design, costing, budgeting, scheduling, implementation, management and evaluation

Four Critical tools in risk management

 Decision-making

A consistent decision-making process and style, particularly in relation to the assessment of options and implications: the issues of risk avoidance, risk management and quality control are dependent on consultative yet incisive decision-making

Policy-making

A policy on policy-making to ensure that all policies and procedures are designed, discussed, endorsed, resourced, communicated, implemented and evaluated in a consistent manner

 Business practices – ensuring that the following basic business practices are in place throughout the organisation:

1. strategic and business plans
2. budget estimates
3. cashflow projections
4. financial controls
5. key performance indicators, measures and assessment
6. risk avoidance/management procedures, and
7. quality assessment and continuous improvement procedures.

Quality Assurance

Total commitment to the value of an organisation-wide system and procedure to ensure and sustain a consistent and replicable quality of product, component, service, or program, with efficient and effective procedures in place to either avoid or manage risk

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The trust factor can protect you and your business interests.  But to do this, you need to check your trust style.  Do you assume trustworthiness when you firstly engage with a person?  Or do you wait and watch for evidence of trustworthiness before deciding whether and how to engage with that person?

1. Strategic Business Relationships

Most businesses will have relationships with a number of external organisations, groups and individuals.   These may provide access to information, advice, trends, learning and development, or social or formal networking with like-minded people.   The challenge for any business is to ensure that each business relationship is an investment – which means it either creates or adds measurable value to the business.

There is an art and science to ensuring that each of your Business Relationships is an investment – and not just a cost:

Art is the doing of a thing.  You may have a need, challenge or opportunity, and decide to look for individuals or groups who may be able to assist or be useful.  The next step is to find out as much as you can before committing yourself and accessing their information, advice, data-base, workshops – or paying your subscription and entering in to a formal relationships.

You may decide that a business opportunity is in sight but that you wish to consider becoming part of a consortium or alliance – or even considering a partnership.

Science is the understanding of a thing.  It is necessary to understand and appreciate the practical implications of what you do, why you should do one thing and not another, how you assess risk and how you will manage any ensuing commitment.

If you understand your business relationship activity, you will be able to monitor and measure progress, value and costs.

Strategic business relationships – by very definition – are relationships that will contribute to the viability, credibility or durability of your business.    You need to strategically design this aspect of your business to ensure minimal cost and maximum benefit or value.  You will need to invest some of your scarce resources – which could be membership dues, registration fees, travel costs – or more importantly opportunity cost.  If you are convinced that time spent in each business relationship is an investment, then assess and then measure the investment as compared with the cost.

2. The Trust Factor

Trusting is a different challenge – and you will also need to work on this continuously.

The trust factor can protect you and your business interests.  But to do this, you need to check your trust style.  Do you assume trustworthiness when you firstly engage with a person?  Or do you wait and watch for evidence of trustworthiness before deciding whether and how to engage with that person?

The ideal starting point in a potential business relationship is to adopt a neutral attitude and expectation of others, and to manage trust by seeing if others earn or deserve our trust, or if they should not be entitled to or worthy of our trust.

If a business relationship earns your trust, the next step is respect, then willingness to collaborate, perhaps even dependence, and finally investment of time, energy or even money:  the ideal business relationship is one of mutual trust and respect where both parties work at retaining that trust.

On the other hand, if a business relationship does not earn your trust – or deteriorates at any stage along the path toward investment – you should heed any warning sign, which may turn to a sense of alarm: a relationship rarely survives the alarm stage – if it does, it has a high possibility of becoming dysfunctional and finally breaking down.

However, you can find yourself remaining in a dysfunctional working relationship if you either fail to recognize that this has happened, or have put yourself into a situation from which it is difficult or perhaps impossible to retreat or escape.

Be aware that, as a business person, you we can be charmed, tricked or cajoled into trusting another person or group of people, so that you subconsciously give them your trust rather than waiting for them to earn or deserve it.  This can result in your committing to an arrangement without checking whether the other party is worthy of such commitment.  On the other hand, you can hear something about a person before meeting them that may set off a warning or even raise an alarm within you: then, when you do meet them, you withhold our trust unnecessarily, thus negating any chance of an effective relationship.

Probably the hardest thing for a business person is managing trust.  And I need to emphasize that the key word in the previous sentence is ‘managing’ – it is your responsibility to manage trust, not the responsibility of others.  If someone lets us down or takes advantage of you, you need to look for the moment that you allowed this to happen.    If you genuinely look for it, you are sure to find it.  And there is your lesson upon which to build better trust management.

3. Strategic business relationships Checklist – checking the trust factor

This Checklist is a ‘to do’ list to follow – to make sure to read the following sections of my earlier writing:

1. Governance Kit No. 2 – Partnership Relationships

-       Features a 9-stage flowchart to establish an effective partnership relationship

2. Competitive Tendering – how to write a competitive tender

-       Features a detailed sections on analysis of existing relationships and strategic planning

3. Managing Governance in Nonprofit Organisations in Australia – book/CD ROM

-       Features several relative Units

4. The Left and Right Brain Business

-       Features the benefit of orientation in developing effective business relationships

5. One Man Show – the smallest of small business

-       Features a detailed ‘Continuum of Trust’ to assist in monitoring trustworthiness

6.      Issue Paper No. 37 – Stakeholder Analysis and Stakeholder Survey

-       Features detailed tools for assessing current and desired business relationships

• Governance Kit No. 2 – Partnership Relationships
• Competitive Tendering – how to write a competitive tender
• Managing Governance in Nonprofit Organisations in Australia – book/CD ROM
• The Left and Right Brain Business
• One Man Show – the smallest of small business
• Issue Paper No. 37 – Stakeholder Analysis and Stakeholder Survey

Related posts

• Jean’s Core Business Strategy No. 8: Project Mentality and Management (0)
• Jean’s Core Business Strategy No. 9: Retrospective Planning (0)
• Jean’s Core Business Strategy No. 3: Performance Indicators, Measures and Targets (0)
• Jean’s Core Busines Strategy No. 5: Financial Risk Management – don’t neglect your debtors! (0)
• Entrepreneurial Initiative as a Sole Operator (0)

Retrospective planning allows a degree of useful and objective observation, where the emotional component can be suspended: the future for your business may look uncertain, but you can be certain about how you got to where you are today.   Retrospective planning ensures the benefit of hindsight!

Planning is simply looking at the future and discovering alternative courses of action.  It provides a structure for examining possibilities for immediate or short-term action or direction, and choosing particular steps and stages to aim for the chosen action or direction.

Strategic planning is the process of reducing ‘possible’ alternatives to selected and specific courses of action over a medium to long-term period which are most likely to achieve and enrich the future of your business.    The purpose of strategic planning is to become aware of future needs, opportunities and trends and – as far as possible – avoid dangers and difficulties.

Retrospective planning is the ability to direct your attention back over a series of actions taken over a period of time after the impact and effect of those actions have become tangible and measurable.

All planning is useful – and retrospective planning is particularly useful for any business, and especially useful for entrepreneurs.

Planning is closely linked to your business life-cycle.  A frequent quote is that if you fail to plan, you are planning to fail.

The fear of failing is far greater for a micro, small and medium business than for a large, multi-national or transnational business – where failure is often toted as a desirable experience.

Fear can be an immobilising factor, and the likelihood of failing is a genuine and real fear.  These are some of the fears that people in business have shared with me over the years which they feel may lead to – or result from – failure:

a) becoming ill or indisposed, therefore unable to keep up with my commitments,

b) competitors closing in with similar or better products or services,

c) failing to produce a product or service that sells well,

d) feeling inadequate and uncertain about myself or my product or service,

e) not finding a financial backer,

f) getting in ‘over my head’, and perhaps losing current assets such as my home or car,

g) having to ‘win’ contracts by competing with other businesses,

h) losing confidence and credibility,

i) losing motivation or direction,

j) losing someone else’s money,

k) having to market myself,

l) not having sufficient personal time for family or friends,

m) not being able to take a holiday,

n) not being confident to negotiate financial arrangements, prices, discounts, etc.

o) over-committing myself and ‘feeling stranded’.

Fear can be managed and dealt with by having a solid framework in place to support retrospective and forward planning.  Such a framework would ensure that you:

1. know and understand the nature, extent and value of your current resource base – which means what you currently have to work with, eg skills, abilities, experience, knowledge, track record, qualifications, credibility and the state of your business,
2. keep up to date with available business methods and systems. Choose and use wisely, and ensure that those you choose keep you closely and accurately informed about the health of your business.
3. your own business library. You’ll need books of substance to guide development of your product or service, ensure competency and confidence with business methods and systems, provide practical tools and checklists on core business strategies – with a few books that will motivate, comfort and challenge you as well.
4. adopt project management strategies separately to your ‘business methods and systems’ and to your ‘product or service’.  Add at least one book on project management to your business library – a suggestion is The Fast Forward MBA in Project Management (Eric Verzuh, 1999), published by John Wiley and Sons, Inc.
5. give equal planning time to your (a) product or service, (b) business methods and systems, and (c) business and personal survival strategies.
6. ensure the most appropriate legal and organisational structures for your business that will enable you to meet your legal requirements, monitor your progress, control your affairs, manage risk, and ensure a consistent level of quality in all you do – without excessive costs.
7. develop a consistent and reliable process and procedure for making complex or contentious decisions – whether you are making these decisions alone or with others.  This will stand you in good stead in all aspects of your business activities, and be particularly useful in protecting both you and your scarce resources.
8. deal with unshakeable facts – and when you know and understand the facts, then – and only then – consider how you feel about the facts.  This allows you to deal with fact and emotion separately.
9. take careful steps to find a business mentor who respects you and your plans, and can provide you with a listening ear as well as support: this person needs to look at every possibility you share with him/her, and respond from the perspective of likely benefit to you and your business.

Retrospective Planning Checklist

This planning tool is both simple and effective, but only if you are consistently honest with yourself.  Choose a specific situation that has influenced or affected your business experience – either negatively or positively – and work through these questions:

1. What was I intending to do?
2. What did I (or others) actually do, and why?  And which things did I have control over?
3. How did I do these things?
4. When did I start and finish?
5. Where did it take place?
6. Who did it – did I do it myself, or did somebody else do it for me?
7. Who for – who benefited?
8. At what cost – what were the costs (including money, time, distance, space, technology, opportunity cost, etc) either in the process or as a result – and how was it financed?
9. Did this turn out to be an investment for me?
10. What was the return on this investment – in measurable terms: was this the best use of my scarce resources at the time, and did it add real value to my business (a) then, (b) now, and (c) into the future?
11. What went wrong – or didn’t work out as intended – this is a ‘risk check’, and it’s highly likely that some risks had been identified and assessed early in the process, and other had not.

Honest answers to these questions provide a factual analysis of how you got to where you are today – which is the best possible starting point for immediate, short-term, medium and longer-term planning.

An extract from my 2008 book, One Man Show – the smallest of small business

There have been many peaks and troughs in my One Man Show experience since 1985.  The troughs almost always have resulted in or contributed to a new or different service, product or market which has then led to a peak – although not always as rapidly as I would have liked.

When times have been tough for any reason, I have always found that my need has been greater than the challenge – in other words, when I’ve seen no alternative but to create something new, or to improve or change the way I’ve been working in or on my One Man Show.   The degree of need or the hint of opportunity was always sufficient to overcome the fear or trepidation associated with any challenge.  I have found reserves of inspiration, initiative and courage at such times, and made approaches, taken action and moved far beyond my ‘comfort zone’.

As a sole operator, my business has been built on – and is entirely dependent upon – my own energy, confidence, tenacity and what may indeed be audaciousness.  My business has continued – mainly because I have always produced something of value to those who are prepared to pay more for that something than it has cost me to prepare it for sale.   My basic business practice has been that people who spend time with me will be able to do something that they value differently or better the very next day – ie immediate practical benefits.

Retrospective planning has been my most consistent business skill.  But, on reflection, it has worked for me simply because I have actively and positively responded to my retrospection – by making plans based, not only on what I have done or not done, but on what I have learned through my retrospection.

There is plenty of wisdom available on the benefits of failure: and it’s not unusual for something that feels or looks like a failure at the time, later contributing to or transforming into an unanticipated benefit or achievement.

Imagine a lone rock climber studiously and strategically working their way up the face of a steep and jagged cliff toward a ledge where they would be able to rest, appreciate their efforts and enjoy the view.  A One Man Show is like this rock climber, with their face to the cliff, focusing on the cliff to find the best places for their hands and feet in order to safely continue their climb.

Retrospective planning enables you to look over your shoulder, see how far you’ve come, and use the experience of how you got to where you are today as a basis for planning your next move.

Tools for this Core Business Strategy are provided in:

• Jean Roberts Update – November and December 2009
• Competitive Tendering – how to write a competitive tender
• Managing Governance in Nonprofit Organisations in Australia – book/CD ROM
• One Man Show – the smallest of small business
• Successful Submission Writing for Business and Nonprofit Organisations

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• Jean’s Core Business Strategy No. 8: Project Mentality and Management (0)
• Jean’s Core Business Strategy No. 2: The Art and Science of Business: ‘Critical Success Factors – Jean’s A-Z’ (1)
• Entrepreneurial Initiative as a Sole Operator (0)
• Jean’s Core Busines Strategy No. 5: Financial Risk Management – don’t neglect your debtors! (0)
• Jean’s Core Business Strategy No. 6: Traps in Tendering and Outsourcing (0)

Together, project mentality and project management should help you handle the daily grind of business – as well as increase your job satisfaction.

Project management tools must support and reflect your own style of working, increase your sense of control in and over your business responsibilities, and add to your confidence and comfort.

Business of any nature and size requires making decisions – some of which will be complex and some will be easy.  But every decision then has to be implemented – and developing a project mentality is an effective approach.

Michaelangelo is not only the Project Manager’s mentor – he is the mentor’s mentor!

Eric Verzuh, President of The Versatile Company, a project management training and consulting firm based in Seattle, USA, makes this comparison in The Fast Forward MBA in Project Management, Wiley Publication 1999:

Project management isn’t new.  The pyramids and aqueducts of antiquity certainly required the coordination and planning skills of a project manager.  While supervising the building of St Peter’s Basilica in Rome, Michelangelo experienced all the torments of a modern-day project manager:

• incomplete specifications,
• insufficient labor,
• unsure funding, and
• a powerful customer.

Management of projects is a critical function within any organisation, and is not without its stresses and strains of varying intensity and consequence – as experienced by Michaelangelo in his major project, and countless other known and unknown managers of major and minor projects throughout time and in current times.

Definitions are always useful

The terms ‘project’ and ‘program’ can have different meanings in different contexts, for example:

• a ‘program’ can refer to an available pool of government funds with specifications for eligibility to apply: ‘project’ can refer to a specific activity, event or initiative funded through the program
• a ‘project’ can refer to the process of research, development, trialling and refining, with ‘program’ referring to the roll-out of the resulting replicable model
• a ‘project’ can refer to a major construction, with ‘programs’ referring to major stages or units of work within the major construction: each program would then consist of a number of activities, each of which would consist of a number of tasks.

However, the terms ‘project’ and ‘program’ are sometimes used interchangeably.  Practical and proven experience has shown that success of a ‘program’ or a ‘project’ depends upon detailed planning and preparation prior to implementation and evaluation.

Definitions for the purpose of this Core Business Strategy

Project

• a scope of work (which could be a service, program, publication, function, event, product or component) that can be specified, described, recognized, measured and justified:  it is designed to address or remedy an identified need, or capitalize on an identified opportunity, with a carefully designed and detailed plan that provides a valid basis for estimating, costing, budgeting, scheduling, monitoring and evaluation

Activity

• a planned series of tasks or actions designed to achieve or address a measurable outcome, which must be capable of being estimated, costed, budgeted, scheduled, implemented, monitored, evaluated and reviewed

Project Mentality

• the ability and willingness to think, plan and act by applying the following 4-Stage Project Framework, suitably adapted to the size and complexity of individual projects.

Project Management

• organising and monitoring the coordination of people, tasks, resources, systems, assessment of risk and assurance of quality in order to complete an approved plan to achieve specific outcomes within defined time and budget requirements and constraints
• project management may be undertaken with the benefit of appropriate software, qualification, experience, know-how, instructions and supervision

Most projects will have four Stages

Stage 1: Identifying and assessing the nature and extent of need, opportunity or problem

• identify the department, division, unit, team or person to be accountable for Stage 1
• identify existing and forward commitments
• identify (a) available and (b) accessible resources
• agree on the (a) nature and (b) extent of need, opportunity or problem to be addressed
• agree on the desired outcomes of the completed project

Stage 2: Project Design = designing, costing, budgeting and scheduling, based on Stage 1

• define and agree on the aim or purpose of the project in tangible terms
• draft the major stages in the project in sequential order, and undertake appropriate consultations before finalising them
• draft the activities necessary to satisfactorily complete each major stage
• detail the tasks necessary for satisfactory completion of each activity within each major stage, and use this level of detail to finalise the design, costing, budgeting and scheduling
• implement a thorough risk assessment
• design appropriate strategies to manage risk and ensure quality through Stage 3
• appoint a suitably experienced, qualified and available Project Manager

Stage 3: Project Management = implementation and evaluation of Stage 2

• resource the Project Manager to commence implementation
• ensure that core planning documents from Stages 1 and 2 are available and adhered to – or appropriately adapted
• commence the project evaluation process as early as possible, and treat evaluation as seriously as implementation

Stage 4: Project Evaluation = Post-program impact on your business of Stages 1, 2 and 3

• identify and measure the impact of anticipated and unanticipated activities, events or influences during Stage 3
• assess the impact or effect of the project upon Stages 1 and 2

On completion of the project

The Project Manager should examine and review all key perspectives to see:

• the nature and effect of both anticipated and unanticipated activities, events or influences associated with the project – these apply to both operational and financial aspects of the project
• whether the nature or effect is positive or painful, temporary or permanent
• the most obvious effects of identified change (either positive or painful), and who or what was responsible
• how to celebrate or capitalise on positive changes, and address or remedy painful changes.

Back to Michaelangelo

If you are tempted to feel weighed down by the responsibilities associated with project management, reflect on the experience of Michaelangelo – who didn’t have such resources as  computers, electricity, instant communication systems, local and global transport, professional associations, international or national standards.  Yet he managed – and dealt with – difficulties, challenges and problems which are still alive and well today:

• incomplete specifications,
• insufficient labor,
• unsure funding, and
• a powerful customer.

If you develop a project mentality and acquire skill and experience in project management, you are half way to surviving in this day and age.

Tools for this Core Business Strategy are provided in:

• Competitive Tendering – how to write a competitive tender
• Managing Governance in Nonprofit Organisations in Australia – book/CD ROM [wp_eStore:product_id:8:end]
• One Man Show – the smallest of small business
• Successful Submission Writing for Business and Nonprofit Organisations

Related posts

• Jean’s Core Business Strategy No. 6: Traps in Tendering and Outsourcing (0)
• Jean’s Core Business Strategy No. 2: The Art and Science of Business: ‘Critical Success Factors – Jean’s A-Z’ (1)
• A decade of action-research in supporting services for people living with difficulty, disadvantage or disability (0)
• Jean’s Core Business Strategy No. 9: Retrospective Planning (0)
• Entrepreneurial Initiative as a Sole Operator (0)

A workplace relationship exists when two or more people choose – or are required – to work collaboratively for a specific purpose. They may work as individuals or teams.

The starting point is to identify a workplace relationship, and the basic components by which you can:

• establish and maintain a positive workplace relationship, and
• recognize and improve a not-so-positive workplace relationship.

The three basic components of a workplace relationship

1. People – those involved with or affected by a workplace relationship:
the ‘who, who for, by whom, with whom, who else’, together with their separate and different needs, interests and aspirations

2. Task – the purpose of the workplace relationship, the actions to be achieved or addressed, which includes available resources:
‘what needs to be done, in what order, why, how, when, where, at what cost’

3. Environment – the context within which the people are expected or required to achieve or address the task,

• the broad environment (political, cultural, social, economic, geographic factors), or
• the immediate environment (organisational culture and issues, buildings, equipment, facilities, physical comfort)

The three basic components of a workplace relationship

1. People – those involved with or affected by a workplace relationship:
   the ‘who, who for, by whom, with whom, who else’, together with their separate and different needs, interests and aspirations
2. Task – the purpose of the workplace relationship, the actions to be achieved or addressed, which includes available resources: ‘what needs to be done, in what order, why, how, when, where, at what cost’
3. Environment – the context within which the people are expected or required to achieve or address the task, the broad environment (political, cultural, social, economic, geographic factors), or the immediate environment (organisational culture and issues, buildings, equipment, facilities, physical comfort)

My definition of Business Brainpower

“the ability to:

1. accept that people can think and act differently to you,
2. understand why they do, and then
3. apply this knowledge and understanding in managing problems, creating opportunities and accepting challenges.”

The application of Business Brainpower

Individuals and teams in the workplace frequently make decisions that can directly or indirectly affect the performance, credibility and viability of the business. Organisations are made up of people – therefore an effective organisation is one that understands, respects and capitalises on Business Brainpower when working with people within or external to the business.

It is possible to energise and improve any workplace relationship in order to facilitate the desired results of the team effort. This is done by considering whether the people involved are relating more naturally with the people involved with or affected by their efforts, the task to be achieved, or the environment within which they will attempt to achieve the task.

The application of Business Brainpower enhances the people involved, the task they perform and the work environment by capitalising on all available resources, which then strengthens any weaknesses.

The following Table (Table 1, The Left and Right Brain Business) lists the extremes of a range of orientation characteristics that manifest in behaviour. It shows, for example, that when we use or follow a linear or sequential process in our thinking or problem-solving, we are using a left-brain style and adopting left-brain behaviour. When we use or follow non-linear flashes of insight and intuition in our thinking or problem-solving, we are manifesting a right-brain style and adopting a right-brain behaviour.

You may not identify with all of the extremes presented in Table 1, but you will find your sympathy and comfort lies with one extreme more than the other. The purpose of this Table is to remind you that there are two clear and opposite possibilities in each characteristic or behaviour. Each person will have some left-brain and some right-brain characteristics. And each of us brings our personalities, inherited attributes and the effect of our life-style and life-time environment and experiences as well as our left or right brain dominance to our values, behaviour and styles.

If you find yourself identifying equally with both left- and right-brain characteristics in any row, you could be demonstrating equal value for both person and task – which would place your response in the Centre.

Value system

We more easily and willingly allocate our money, time or attention to the things we value, which in turn are influenced by our orientation – and more so if we have a significant dominance.

By recognizing and accepting the values associated with another person’s orientation, we have a ‘point of entry’ for negotiation, collaboration and agreement. With this point of entry, we can identify whether the person has a higher value for or interest in the ‘people’ component, the ‘task’ component, or the ‘environment’ component. We are then in a position to firstly influence and secondly move their consciousness, understanding and value to encompass or engage the remaining two components.

• People with significant left-brain dominance tend to enter a situation through their natural value for task. Once into the situation, they can be encouraged to move their consciousness, understanding and value to person and environment.
• People with significant right-brain dominance tend to enter a situation through their natural value for person. Once into the situation, they can be encouraged to move their consciousness, understanding and value to task and environment.
• People with only slight left- or right-brain dominance tend to enter a situation through their natural value for environment. Once into the situation, they can be encouraged to move their consciousness, understanding and value to task and person.

When working with a left-brain dominant person, we can adopt a left-brain style of communication and behaviour, for example:

• emphasise the importance of the task itself
• focus on results and outcomes
• delegate responsibility to analyse the problem
• discuss facts, analysis and interpretation of facts
• speak directly and stick to the point

When working with a right-brain dominant person, we can adopt a right-brain style of communication and behaviour, for example:

• emphasise the importance of the people involved in the task
• focus on feelings, personalities and personal qualities
• delegate responsibility to brainstorm solutions
• discuss possibilities and forward vision
• speak in anecdotes, conversational style and ask about their experiences and observations

When working with a centre person (with slight dominance), we can adopt a centre style of communication and behaviour, for example:

• emphasise the environment within which the task and persons will be involved
• focus on both task and person, but in an objective manner displaying equal value for each
• delegate specific tasks
• display leadership and give direction
• provide a structured opportunity for choice or involvement.

Related posts

• Jean’s Core Business Strategy No. 6: Traps in Tendering and Outsourcing (0)
• Jean’s Core Business Strategy No. 3: Performance Indicators, Measures and Targets (0)
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• Both are core business competencies and functions
• Both require and deserve thorough planning
• Always start with the project or prototype
• Keep your eye on the detail, not just on the process

What is a tender?

• A detailed proposal which will be assessed against specified criteria – it can be referred to as a bid, estimate, quote, proposal, submission or ‘request for quote’
• A successful tender must comply or conform with the mandatory requirements set out in the brief – as well present a positive, powerful and persuasive business case
• An effective tender document will include validated and sufficient detail on cost, quality, delivery and timeliness to convince the outsourcer of your organisation’s credibility, capability and commitment to a consistent and superior quality of product or service

What is a successful tender?

One that not only wins the contract, but also ensures that the work offered in the tender document is followed through to a successful conclusion – within budget, according to schedule, and meeting the terms and conditions of the negotiated tender contract.  This means ensuring that the work can be carried out effectively, efficiently and humanely in the interests and to the benefit of both the outsourcer and the tenderer.

What is outsourcing?

• a calculated decision by an entity (eg business, organisation, government department) to invite tenders to provide or create specific goods or services (often referred to as ‘contracting-out’)
• successful outsourcing begins with a careful analysis of one or more non-core competencies, functions or activities to be considered, and preparation of appropriate and detailed briefs
• an effective tender brief, guidelines or ‘invitation to tender’ will provide sufficient and accurate detail on eligibility, specifications, quality, timelines, assessment/evaluation criteria, selection procedure, probity, confidentiality, negotiation procedures and contractual obligations.

What is successful outsourcing?

When an entity effectively manages the negotiation stage and contract relationship through each outsourcing agreement.  This means that the entity is then able and confident to focus internal resources on sustaining and advancing their core knowledge base and uniqueness.

These are important questions to consider

1. Is your business or organisation treating the preparation for tendering and/or outsourcing as core business competencies, and core business functions?
2. Are adequate and appropriate internal resources allocated to the critical stages of planning, preparation, negotiation and contract/project management?
3. Do you consider tendering and/or outsourcing as growth strategies?
4. Do you know how many hours are currently spent in preparing, writing and negotiating tenders or outsourcing contracts that are successful – and those that are not successful?
5. Is this cost acceptable to you?
6. Are your contracts/projects managed and completed according to specifications and negotiations, or are variations and amendments to schedules, budgets and other details causing time and budget over-runs?
7. As a tenderer – how much repeat work are you getting?
8. As an outsourcer – how often do you review the cost-effectiveness of your contracts?

Sample traps to avoid in tendering

1. Don’t ignore deadlines:

a)    Read the tender brief and highlight all references to timelines – including through the contract period

b)    Compare the scheduling requirements and compare with your current workload and longer-term availability – and decide whether you will be able to prepare a positive, powerful and persuasive tender by the deadline for possible lodging, and complete the contract on time

2. Don’t compromise the quality of your current commitments:

a)    Don’t put the quality of your current commitments at risk

b)    If you don’t have time to prepare a tender document that is well-researched, fully costed, and well presented – you will do yourself and your business no favours!

3. Don’t just browse through the tender brief/specifications:

a)    Read the brief through aloud – this slows up your reading, and allows you to hear as well as read the content

b)    Have four different coloured highlighters – and in different colours, highly all directions as to (i) time/deadlines, (ii) specifications and mandatory requirements, (iii) eligibility criteria, and (iv) instructions as to completing the tender application.

4. Make sure to prepare a clear, concise and responsible tender document

a)    Read each question in the application form carefully, and circle the key word in each question: don’t have a set of prepared responses and look for questions to suit your responses

b)    The key word will give you the clue for your response: if in doubt, contact the outsourcer to check that you understand each question

c)    Draft your response to each question – print these out and read them through to check  for accuracy, relevance, compliance, and cost and time implications

d)    After editing and refining, make sure each response meets requirements as to number of words of characters – and then complete your application form

5. Prepare a fully costed and validated tender budget

a)    Start by designing the detail of your tender project or prototype – this enables you to create a solid basis for your costings and calculations, statement and claims

b)    The budget in your tender documents speaks volumes about how you do business!

c)    Check – and re-check – that you can fulfil the requirements and meet specifications, etc., without compromising either the quality of your work or the viability of your business

Sample traps to avoid in outsourcing

1. Make sure your anticipated cost savings are achievable

a)    Do your preparation thoroughly – particularly the financial case for outsourcing each non-core competency, function or activity

b)    Be careful in the contract negotiation stage – know your fallback position before you commence negotiation

2. The contracted party proved to have the technology but not the knowledge or experience

a)    In your planning and preparation – before completing the tender brief – make sure you know precisely what your minimum requirements are, including knowledge, skill, experience, technology, and business case details

b)    Carefully consider a range of risk scenarios that include performance, process, outputs and outcome/impact – and prepare an appropriate risk register and risk management plan

c)    Have your draft tender brief checked by your financial and legal departments or advisors before finalising and release

3. The contracted party couldn’t complete the contract

a)      Your contract manager should be at a level of authority to enable him/her to maintain close contact with the project manager in the contracted business throughout the contract period and beyond

b) This situation may evolve slowly, and there are a large number of contributing factors to be monitored and managed before the situation becomes a crisis

c) Make sure your contract manager is equal to the task

How does risk management align with tendering and outsourcing?

Sound and detailed project planning and development results in accurate costings, viable budgets, realistic schedules, confident risk analysis and identified monitoring points to keep the project/contract on task and on target toward the required or desired specifications, outputs or outcomes.

Confident risk analysis allows and ensures that the tenderer can offer an added value – which means something over and above what is being asked for in the tender brief that will be valued by the outsourcer: and that the outsourcer is able to calculate the actual value of such an offer.

Planning by both the tenderer and outsourcer begins with the ‘what, why, how, when, where, who, who for, at what cost and with what return’ factors, and should continue into a detailed analysis of where risk to any party can occur, where grievance or conflict is possible and how such risk, grievance or conflict can be at best avoided or at least managed.

How does risk management align with quality?

The basis of quality is having an accredited quality system, quality control mechanism, and procedure to ensure continuous quality improvement.

Quality is the flip-side of risk – if you are ensuring continuous quality improvement, you will have an equal focus on risk assessment, management and monitoring.

A risk factor is present where there is a likelihood that a product or component will have to be:

• re-worked – requiring further attention and therefore involving further cost and inconvenience, or
• replaced – resulting in loss, wastage or inconvenience.

A risk factor is present where there is a likelihood that a service or program will be:

• ineffective – ie unable to achieve the purpose for which it has been designed,
• inefficient – ie result in or contribute to an unwise use of resources, or
• sub-standard – ie failing to meet or comply with advertised or required quality or standard of delivery, process or outcome.

The outsourcer should know their minimum requirements or standard relating to quality and risk, and the tenderer should have a one-page flowchart showing how their quality/risk systems operate, are resourced and managed, and continuously improved.

Tools for this Core Business Strategy No. 6 are provided in:

• One Man Show – the smallest of small business
• Competitive Tendering – how to write a competitive tender
• Successful Submission Writing – for business and nonprofit organisations

Related posts

• Jean’s Core Business Strategy No. 8: Project Mentality and Management (0)
• Jean’s Core Business Strategy No. 2: The Art and Science of Business: ‘Critical Success Factors – Jean’s A-Z’ (1)
• Jean’s Core Busines Strategy No. 5: Financial Risk Management – don’t neglect your debtors! (0)
• A decade of action-research in supporting services for people living with difficulty, disadvantage or disability (0)
• Jean’s Core Business Strategy No. 3: Performance Indicators, Measures and Targets (0)

1. You need a set of Financial Principles – as an SME owner/manager

• Know the cost of each dollar you have to spend>
• Spend responsibly – you can only spend each dollar once,
• If you spend a dollar on or in your business, that dollar cannot be used for your personal expenses or life-style,
• Money is received, and money is paid out – get used to the ‘money in/money out’ lifestyle,
• Your cash position is important, but you must also know your current financial position – which takes account of forward liabilities, current debts, and money due from any source but not yet received,
• Your third best customer/client is a repeat customer/client,
• Your second best customer/client is one who pays on time and on your terms,
• Your very best customer/client is a repeat customer/client who pays on time and on your terms.

2. You need to have a Debtor Relations system

• Have a Customer/Client Relations system that is based on respect for their needs and interests, confidence in converting enquiries into sales, justified faith in the quality of your product or service, and wisdom in relation to after-sales service,
• Create a specific category for customers/clients who have yet to create a payment history with you – and monitor their payment performance carefully,
• Develop a ‘financial antennae’ to assess payment potential and payment pitfalls,
• Monitor the success of your Debtor Relations system in terms of (a) reduction in bad debts or overdue payments, and (b) increase in payments received within and according to your own terms, and
• Treat your debtors as a source of immediate or early revenue – chase them sensitively, but chase them!

3. Watch for these Financial Risk Factors

• Unwise, unexplained, unnecessary or unplanned change,
• Disagreement, misinterpretation or misbehaviour,
• Failure or delay in meeting your financial obligations on time and in full,
• Inadequate, inappropriate, incorrect or vague information or instruction,
• Non-availability of relevant information, plant, equipment, materials, facilities, tools,
• Failure to protect your own interests,
• Failure to comply with legal, statutory or contractual requirements, duties or obligations,
• Inadequate or inappropriate processes and procedures for financial planning, management, monitoring, and review,
• Lack of appreciation or understanding of immediate, short-term and long-term constraints relating to such factors as finance, time, space, distance, technology and the availability of components, products or information,
• Inexperience, undue haste, emotional stress, internal or external pressures, unwise decisions, insufficient care, bad timing or bad luck.

4. Financial methods should cover safe and responsible procedures

• Direct and monitor your financial performance, adopting appropriate and proven financial methods,
• Manage any type of wastage to avoid excessive or unnecessary costs
• Monitor access to or use of any of your assets or resources to avoid indiscriminate use,
• Allocate specific authority, accountabilities and responsibilities to relevant staff for the acquisition, allocation, management, accounting, administration and monitoring of your finances,
• Effectively manage risk relating to business activities such as investments, loans, credit, insurances, damage control, disaster plan, product liability, industrial issues, environmental issues and the occupational health and safety,
• Ensure security, promptness and efficiency in all financial matters,

5. A simple tracking system can help in designing an appropriate financial procedure for money in and money out

• Identify the separate and total steps currently being followed when a cheque, cash or credit card payment is received… right through to the point of recording the bank or financial institution deposit,
• Similarly, identify the separate and total steps currently followed when placing a verbal or written order, signing a delivery note for goods or services, receiving an invoice for goods or services ordered, drawing a petty cash voucher or giving prior approval for an expense… right through to the point of recording payment or reimbursement,
• Examine the current procedure to see if there are any lapses in responsibility, security or administration where either the money or details of receipt or payment could be at risk,
• Tighten procedures to ensure that such lapses are at best avoided or at worst able to be recognised and remedied immediately.

6. Take advantage of external assistance

Examples include:

• Tertiary research on SME Entrepreneurship – both state, national and international,
• Business Networks,
• Business Mentors,
• Business Enterprise Centres,
• Government Grants for a variety of business activities, assistance, methods, programs, or systems

7. Watch your cashflow!

Any business of any size and shape is dependent on cashflow – if it’s a problem, you could find yourself experiencing these effects:

• an inability to honour your debts,
• an inability to purchase supplies or increase your assets,
• a new diligence to call in all monies due or nearly due,
• an urgent need for immediate pre-paid orders,
• a sense of suspicion about window-faced envelopes or envelopes carrying the logo of your bank in your daily mail,
• a tendency to screen callers on your phone,
• a need to lessen your immediate personal expenses, eg to eat less or less frequently,
• a need to introduce a variety of white lies into your conversation with family, friends, suppliers,
• a definite familiarity with sleepless nights, a heavy heart and an undermining of your business confidence and enjoyment.

None of these can be identified as the cause: they are all effects. They sap your energy and can prevent you from finding and dealing with the cause.

It is vital to identify the cause, as there is only one cause to a crisis: one cause, but often countless effects. Unless and until you address the cause, the effects will magnify. Put your energy and initiative to the cause, and the effects will minimise in nature and effect.

Tools for this Core Business Strategy No. 5 are provided in:

• One Man Show – the smallest of small business
• Competitive Tendering – how to write a competitive tender
• Successful Submission Writing – for business and nonprofit organisations

Related posts

• Jean’s Core Business Strategy No. 6: Traps in Tendering and Outsourcing (0)
• Jean’s Core Business Strategy No. 9: Retrospective Planning (0)
• Jean’s Core Business Strategy No. 8: Project Mentality and Management (0)
• Improve your strike/success rate with tenders, submissions, grant applications, proposals, estimates, quotes (0)
• Entrepreneurial Initiative as a Sole Operator (0)

1. Be specific, confident and consistent about your:

• Uniqueness – How are you different and better than other similar business?
• Competitors – Can you measure the difference between their uniqueness and yours?
• Credibility and viability – Can you maintain these?
• Features and benefits – Do you know the difference, and do you market both?
• Priority market segments/audiences – who are they, and why are they your priorities?

2.    Your business objective is to create, produce and sell a product or service for which someone is prepared to pay a higher price than the cost of preparation and delivery.

3. Your marketing strategy is the means by which you have chosen to get your product or service known – and seen to be desirable, obtainable and reliable.

The purpose of a marketing strategy is to achieve specific targets, eg:

• increase in sales,
• increase in repeat sales/customers,
• convert enquiries and opportunities to sales, and/or
• increase market share.

It is important to have a coordinated marketing strategy – which means having a central message or theme that is presented through every avenue of contact or appeal to your target market.

For instance, I have coordinated my marketing message and strategy through my:

• website,
• promotional material,
• workshops,
• consultancies,
• books,
• issue papers,
• tenders, quotes and estimates,
• training manuals,
• presentations,
• corporate stationery/logo,
• language, and
• personal presentation.

4.  There are five factors of equal value and importance in marketing

• your philosophy and values,
• your current identity, achievements and reputation – which together indicate the  credibility and acceptance of your business,
• having a clear, concise and genuine vision,
• being able to ensure that your product or service is accessible, affordable, attractive and reliable, and
• that what you are offering is better or different to any competitor.

5.    Definitions relevant to a marketing strategy

Marketing Activities concerned with acquiring and maintaining markets for your product or service (ie outputs), and for ensuring that these outputs reach those markets

Market Current or potential buyers or consumers of a particular product of service

Strategy A general method or policy for achieving specified objectives

Marketing mix The combination of methods used for marketing your product or service

Market share The ratio of sales of a particular product or services during a period in a specified market to total sales of that type of output during the same period

Promotion Activity intended to increase the number of buyers or users of an output, or to improve  public acceptance of an idea, eg. advertising, personal selling or sales promotion

Publicity Information about your business or its outputs carried by media or channels of communication without payment

Merchandising Activities intended to place or promote your outputs for sale

Selling Transfer of ownership over a defined product or service – usually in exchange for money

6.  Examples of key marketing objectives

a) identifying the point of difference – what is it that sets you apart from your competitors, and your product or service apart from similar products or services?

b) separating the features from the benefits of your product or service:

• features are the technical and tangible components of your product or service.
• benefits are what owning or using your product or service can do for the buyer or user.

c) prioritising market segments/audiences:

• categories of people or places: for example, people who are decorating their new homes, who own computers, who have small children or grandchildren, who own or drive trucks; or places where people meet, spend time, shop, have holidays, attend school, catch trains or buses,
• communities of practice: for example, groups of people who have completed similar studies; who belong to professional associations; or who follow a particular theory, model or practitioner in their areas of business, work or activity,
• communities of interest: for example, people who share the same or similar interests –  which could be sport, recreation, study, travel, investment, history, environment, wines, cooking.

d) increasing both demand and supply – effective and timely marketing will increase demand, therefore make sure you will be able to meet increased demand without compromising   quality or availability.

e) promoting you and your product or service – you may wish to market yourself in the first round, which may be informing the market who you are, what you intend to offer and when, and how they can contact you with any requests, invitations or queries: this would then be followed by a separate marketing of your product or service.

f) attracting revenue, in-kind support and resources – this is a totally legitimate objective for a marketing campaign – but with very specific targeting to key people in positions of influence

g) improving and expanding your image/profile – keeping your name and your product or service in front of people is imperative in establishing yourself and your product or service into the psyche of target markets: and this regular contact needs to come from you, offering something of value in each contact

h) ensuring that each marketing project has specific objectives, strategies, budget allocation, evaluation procedure and monitoring points – marketing has to be an investment, not a straight out cost: it can be as simple as ten phone calls each week or each day to carefully selected people or places, distributing a regular newssheet (two sides of an A4 sheet) whenever you meet with people who may become users or buyers of your product or service, having a special flyer to hand out at professional or business networks meetings.

i) If you plan – or have – a website, make sure it is easy for any person to find, easy to access and easy to find their way around.  Simplicity is the key word – simple layout, simple messages, genuine benefits for taking time to visit your website, with simple and accurate contact details

7.    Tendering is a specific marketing strategy – as is providing quotes, estimates or proposals

A very simple definition:   a tender is a detailed proposal – which will be assessed against specified criteria

As well as being the vehicle for your proposal, the tender document should present a positive, powerful and persuasive business ‘case statement’.   It must have potential as both a marketing and educational document, informing the recipient of the uniqueness and strength of your business, and the value for them in accepting your offer or bid.

A successful tender is one that not only wins the contract, but also ensures that your bid or offer is followed through to a successful conclusion.  Tendering is a core business activity and growth strategy.  It should be a natural follow-on from your strategic and business plans.

8.  Some ideas to use tendering cleverly

Answer these questions carefully and honestly, as they are closely related to your marketing strategy:

• are you using your existing and available resources (including people) as well and as effectively as possible?
• what are you doing with what you’ve got, what you know and who you are?
• what can you offer or do that is different, better and of greater value than any other similar business?

If you know the answers to these questions, you are well placed to use tendering cleverly.

9. Why tender?

Tendering, quoting or estimating are core business activities – a means to an end, not an end in itself.   They should lead to:

• new or increased sales,
• a new, extended or improved product or service,
• addressing or satisfying a need,
• opening up a new market or a new market opportunity,
• enabling you to redress a resource deficiency or create a resource opportunity, or
• enabling you to achieve or improve your market position.

You will need to carefully define and assess tendering opportunities, select the opportunities which will benefit your business and your client/customer base – and then set out to win.

In particular, you will be looking for product, service, customer or market opportunities which will lead to either introducing a new or extended product or service into an existing market or an existing product or service in a new or extended market.

Always remember that tenders are not a one-off activity, they are a means of doing business and are therefore a core business activity.  As a core business activity, tenders must contribute to the success of your business.  They should be treated as a core strategy in achieving your business objectives.

Mostly importantly, aim to increase your strike rate.  If you are winning 40% of your tenders, you are missing 60% of your tenders – and you are winning 40% at a total cost of 100% or your effort!

As a repetitive function, you need an internal policy and procedure to ensure consistency in the content, format and purpose of tendering throughout your business.  To explain these terms further:

content:

a genuine response to the tender brief  plus added value that benefits both your business and the organisation calling the tender

format:

accuracy plus clarity plus conciseness in order to use your tender is a powerful, persuasive and positive marketing tool for your business

purpose:

to enhance your business effectiveness, which may be:

• making a profit or surplus,
• ensuring cashflow and therefore financial viability,
• satisfying the needs or demands of your customers/clients,
• sustaining or increasing order intake and work-in-hand, or
• achieving business growth.

10. Marketing cleverly gives you the opportunity to:

a) expand your business:

• into a new industry sector,
• into a new geographic location or region, or
• industry/profession/customer/competitor recognition.

b) expand your contract or order opportunities:

• a new client/customer,
• additional or repeat work with an existing client or customer,
• breaking into a new market segment or niche,
• creating a new market niche, or
• challenging a competitor or competing sector.

c) provide a service: services are intangible, usually produced or consumed at a close proximity and with significant social inter-action: it is difficult or impossible to re-work deficiencies in services once they are delivered.

d) manufacture a product or component:  products or components can be for use in manufacture by the client or customer or for on-sale to their own customers.

e) import a product or product components:  products or product components that are imported can be for use in manufacture by your client/customer, or purchased for on-sale to their own client/customers.

f) research and develop or design a product or service:

• a research and development (R&D) tender is simply that: to research a problem, need or opportunity and develop an appropriate process, procedure or product for manufacture or implementation,
• an R&D tender rarely moves beyond the development stage which means that a further tender process is required to proceed to manufacture or implementation.

Tools for this Core Business Strategy are provided in:

• One Man Show – the smallest of small business (Jean Roberts, 2008)
• Competitive Tendering – how to write a competitive tender (Jean Roberts, 1997)

Related posts

• Jean’s Core Business Strategy No. 6: Traps in Tendering and Outsourcing (0)
• Jean’s Core Business Strategy No. 8: Project Mentality and Management (0)
• Improve your strike/success rate with tenders, submissions, grant applications, proposals, estimates, quotes (0)
• A decade of action-research in supporting services for people living with difficulty, disadvantage or disability (0)
• Jean’s Core Business Strategy No. 3: Performance Indicators, Measures and Targets (0)

Each SME will have interesting and sometimes challenging decisions to make, and mostly these decisions will relate to the best use of their time, money, suppliers, connections, space.

There is nothing more exhausting than uncertainty – and the benefit of this level of planning is to address uncertainty.

Identifying a range of Business Performance Indicators – and extending each to measures and targets – is an investment of your time, and the return on this investment will be Clarity (Q1), Timeframe (Q2), Choices (Q3), and Flexibility (Q4).

As with most business methods and systems, the process begins with by developing your own logical sequence, and here’s one that I’ve followed in my micro-business through the past 25 years. Consider and adapt it for your own use.

Q1: What is your core business?

- Clarity

Whether your business is well established, new, or still in the planning stage – you’re wise to have a vision for the future, and best advice is that your vision reflects what you currently think of as ‘core business’:

CORE business is what you MUST do. This is your bread and butter!
– your available resources should be invested here: if you specialise, you are more likely to be seen to fill a specific gap in the market, and provide an immediate, practical benefit to your customers, clients or service-users

NON-CORE business is what you MAY do. These are options!
– products or services you should only attempt if and when you have or can attract the necessary resources: and they should not detract from your core business

NO-GO business is what you MUST NOT do. This is what you stay away from! They include markets, products and services that you do not attempt: they have the potential to undermine your speciality, confuse your established market and customer- base – and erode you resources.

Your vision needs to focus on customers, clients or service-users: therefore express your core business in terms of benefits to your customers, clients or service-users.

An example from my own experience. My major areas of business through the past 25 years are:

• project development, management and evaluation – incorporating submissions, grant applications, tendering and outsourcing, strategic and business planning, service development in the SME and nonprofit sectors,
• governance, management and delivery of services in nonprofit organisations, and
• increasing organisational effectiveness and individual job satisfaction – incorporating left- and right-brain orientation in SME and nonprofit sectors.

These are closely related and are linked by my need to communicate with customers, clients or users of my services and products.

Therefore, my core business is communication.

Each of my three major areas of business involve separate clients, activities, language/jargon, methods, systems, strategies, tools, packaging, delivery, etc.

However, each requires communication of:

• best practice,
• compliance,
• ideas,
• information,
• marketing and
• options, checklists,
• organisational responsibilities,
• promotion,
• questions,
• strategies, and
• tools.

Each of these three areas of business relies on specific content, appropriate methods and a range of its own products and services.

It’s at the ‘range of products and services’ that my core business is most easily identified, because I’m concentrating on – and communicating – immediate practical benefits.

Think of a retail outlet – their core business is not what they sell, it is service!

Q2: what is your vision for your business for the next year?

- Timeframe

Your starting point in addressing these questions:

• What’s the current situation in my business in measurable terms – as at today?
• What’s the desired situation in my business in 12 months’ time – in the same measurable terms?
• What’s the gap – in the same measurable terms – between my current situation and my desired situation?

Q3: How will you measure progress against your declared vision, ie the gap between your current and desired situations?
- Choices

In order to plan your ‘Project Gap-Fill’, you need to identify a number of Business Performance Indicators, which must be appropriate to (i) the nature and size of your business, and (ii) the quality of your core business.

Options include:
a)first-time customers, clients or service-users
b)repeat customers, clients or service-users
c)sales or confirmed orders
d)income within key categories
e)costs within key categories
f)profit or loss
g)market-share
h)staff turn-over
i)number and range of products or services
j)business methods and systems
k)equipment – age, cost of maintenance, in need of replacement
l)supplier reliability and performance

Before choosing options for your Business Performance Indicators – a maximum of ten is recommended – identify the valuable progress-related information that is possible from each Indicator, and make sure each is easy to monitor.

Q4: What are your short-term achievable goals in each of your selected measures?

- Flexibility

This stage requires you to state measurable targets against each of your selected Business Performance Indicators. The basis for your measurable targets is the gap between your current and desired situations for each of your selected Business Performance Indicators – in other words, what are your targets for improvement against each of your selected measures?

The more precise and measurable, the more chance to:

1. set meaningful and appropriate goals,
2. make appropriate choices to move from current to desired outcomes, and
3. have a proper basis for evaluation.

The more you precisely measure, the better you can know:

1. if you are on the right track,
2. if you have been successful, and
3. what should be changed if you are not successful.

Any statement of the desired situation should tell:

1. what result is to be achieved – ie targets ,
2. when the result will be achieved – ie schedule,
3. who or what will show the results, including anticipated cost/income – ie responsibilities and tools/methods, and
4. what criteria will measure its achievement – ie measures, and
5. under what conditions it will be measured and by whom.

Q5: Who does what, how, when and at what cost?

This is the crucial stage of your planning, because it brings you face-to-face with your available resources.

Answer each of these questions in turn:

• What do I or others need to do to achieve these targets/goals?
• How do we do it?
• When and where will we do it?
• How long will it take?
• How much will it cost?
• How will we manage and measure effectiveness – and most importantly, cost-effectiveness?

Be assured that ‘effectiveness’ is different to ‘achievement’: remember that is not necessarily progress!

If you can’t answer these questions adequately, then return to Q3 to check that you have control over the Business Performance Indicators and Measures, and that you have – or have access to – the information required to measure progress against your scheduled targets.

You’ll find this tool fully explained in:

• My 2008 book, One Man Show – the smallest of small business – Section 3: Two different – and useful – business life-cycles,

Related posts

• A decade of action-research in supporting services for people living with difficulty, disadvantage or disability (0)
• Jean’s Core Business Strategy No. 6: Traps in Tendering and Outsourcing (0)
• Jean’s Core Business Strategy No. 2: The Art and Science of Business: ‘Critical Success Factors – Jean’s A-Z’ (1)
• Jean’s Core Business Strategy No. 8: Project Mentality and Management (0)
• Jean’s Core Busines Strategy No. 5: Financial Risk Management – don’t neglect your debtors! (0)

If your business or organisation is picking up clear and factual signs that all is not well, then you have urgent and important work to do! Firstly, let’s address the difference and relationship between the Art and Science of business – and this analysis applies equally to commercial and social enterprises.

The ‘Art’ of Business is the doing of business

It is necessary to objectively assess how – and how well – you are doing business.

This requires a separation of (a) the way you operate as a business, from (b) the product or service you offer through your business:

• it is highly likely that your way of doing business is determined by a combination of the personality, knowledge, confidence, strengths, abilities and ‘comfort zone’ of key decision-makers in your business, and
• it is also highly likely that your product or service is something that your key decision-makers know exceedingly well or are inspired to know exceedingly well, and that satisfies or challenges their abilities to create and improve market/community and customer/client acceptance and loyalty.

Most importantly, establish one or more feedback loops to enable you to assess and measure the effectiveness and efficiency of your business methods and systems, and the market/acceptance acceptance of your product or service.

Tools to improve your comfort, confidence and competency in the Art of Business:

1. Know, understand and appreciate the difference and relationship between these six core financial principles, and apply them wisely in all business decisions

Cost: when you consider cost, you are considering the cash value of whatever your business has parted with or is liable to part with when committing to an expenditure for a tangible or intangible item, product or service,
Opportunity cost: when you consider opportunity cost, you are considering the value of a course of action which you could have taken but didn’t… due to the unavailability of resources (including your own time); wrong choice; or inability to appreciate, understand or accept the potential value of the opportunity,
Price: when you consider price, you are consider the amount of money which you – or a customer or client – is willing to exchange for an item, product or service,
Value: when you consider value, you are consider the benefit to the buyer or user of an item, product or service which you – or they – have accessed or purchased,
Added value: when you consider added value, you are considering a value that proves to be greater than expected, and involves no additional cost to the buyer or user – or to yourself,
Return on investment: when you consider return on investment, you are considering the value that directly results from the investment of any kind of resource, which may be tangible (able to be quantified, for example 20%), or intangible (leading to an opportunity that would not have been possible if you had not made the particular investment).
When you work strategically, you see that some of your costs are – or have the potential to be – an investment. Be prepared to be surprised and delighted at the variety of return on investment.

2.Track the use and application of inputs to ensure measurable outcomes

Inputs can include new or different ideas, opportunities, challenges, income, collaborators, suppliers, resources, premises. When these are added to the operation of your business, they should enable you to create, continue, improve or enhance the methods and systems through which you operate, manage and monitor your business.

Measurable outcomes are your planned improvements – which must contribute to:

• increasing sales,
• decreasing costs, and/or
• increasing market-share.

3.The difference and relationship between evidence and proof as a basis for problem-solving

Evidence identifies situations or circumstances upon which to base proof, or to establish truth or falsehood. Evidence provides a basis for testing truth, validity or quality. Evidence can best be described as ‘symptoms or a problem’, and most problems are identified firstly through symptoms.

Proof is the analysis of evidence in order to establish the truth, validity or quality. Proof provides the basis for action. Proof can best be described as the ‘cause of a problem’, and when you address the cause, you’ll automatically remedy or remove related symptoms.

But know and be confident that this process begins with evidence – it doesn’t stop at evidence!

4.Keep track of your tangible and intangible resources

• tangible resources are things you can see, touch and count, and
• intangible resources are what and who you know, your ability to conceptualise and analyse, your willingness to protect and defend what you have created, and your ability to apply your skill and knowledge in order to:
  • increase sales,
  • decrease costs, and/or
  • increase market-share.

The ‘Science’ of Business is the understanding of business

It is necessary to understand and appreciate the practical implications of what your business is doing – and how and how well it is doing.

If you understand your business, you will be able to monitor and measure progress, plan improvements or expansion, remedy deficiencies, and effectively manage your personal and business resources.

Understanding your business involves adequate and appropriate methods and systems to ensure sound research, planning, implementation and evaluation of decisions, and most importantly monitoring and measuring progress.

Understanding your product or service involves identification of the features and benefits of your product or service to such a depth and extent that you will be able to promote and sell your product or service appropriately to any audience or market. As your product or service earns an established customer base, you face the challenge:

• to offer an existing product or service into a new market, or
• to offer a new product or service into an existing market, or
• the more difficult challenge of offering a new product or service into a new market.

Tools to improve your comfort, confidence and competency in the Science of Business:

1.The reality of business life-cycles

An established business should be able, through retrospection, to identify several ‘life cycles’ in its history – points at which a new growth and development strategy has been introduced whilst maintaining an existing growth path, until such time as they either become unified, or the existing growth and development path has been phased out in favour of the new growth and development strategy.

Any business is wise to work within a theoretical framework:

• a theory is defined as a system of rules, procedures and assumptions used to produce a result,
• a framework is defined as a structure or frame supporting or containing something, and
• a theoretical framework is therefore a structure or frame supporting or containing a system of rules, procedures and assumptions.

The benefit of working to a theoretical framework is the ability to change, adjust or alter the rules, procedures or assumptions within the structure or frame that supports or contains them.

2.There is both breadth and depth in learning and knowledge related to your product or service

• breadth is best described as different uses and applications of your product or service, or changes in the context within which any user or buyer will expect to experience a value and benefit to their life or lifestyle because of your product or service;
• depth is best described as possibilities for improvement in, or expansion or transference of, the use and application of your product or service – this will involve you in further researching and developing or building progressive versions of your product or service: it may also lead to the addition of new and different items in your range of available products and services.

Facing an opportunity, need or challenge is a great catalyst for accepting that what and who you already know is either inadequate or inappropriate if your intention is to take up the opportunity, address the need, or respond to the challenge. Given a specific context, it is then possible to address either the depth or breadth of additional learning and knowledge needed to do so.

3.Deal with each problem or difficulty as soon as you are aware of it

This can be as simple as identifying the effects or symptoms and then locating the cause – or as complex as needing to make a public or market acknowledgement, or talking through options with your financial advisor.

4.Ensure effective and efficient feedback

Let’s take the example of a quality system – which, simply put, is a series of actions designed to ensure consistency in approach, process and output.

Feedback is the evidence you are able to gather as a result of measurement or assessment. It contributes evidence that may indicate the need to remedy a deviation, or introduce an improvement. Feedback can be facilitated by surveying or sourcing opinions, assessing levels of satisfaction, sourcing responses to new or intended initiatives, or assessing the needs and interests of customers/clients, employees, volunteers or suppliers.

The extent to which you integrate feedback into your methods of planning and improvement is the extent to which you will have control over these core functions.

Jean’s A-Z of Critical Success Factors

A critical success factor is a key factor which, if not functioning or operating to the desired level of quality, effectiveness and performance, may place your key decision-makers or your business at risk. When formally identified and positioned, Critical Success Factors can be monitored to ensure successful business outcomes, and form the basis for risk management and continuous quality improvement. Check through this list, and mark those for your early attention.

Jean’s A-Z of Critical Success Factors are offered in alphabetical order – they are all of equal value and importance in ensuring that your business is healthy, and your product or service is hitting the mark:

a) 1-year business plan
b) business methods and systems
c) cashflow management
d) debt avoidance or management strategy
e) decision-making, particularly complex or contentious decisions
f) external advisors – financial, accounting, legal, marketing, product, innovation, etc
g) financial viability
h) government support, subsidies, advice, mentors, courses, etc
i) innovative approach
j) investment strategy
k) legislative, statutory and contractual duties and obligations
l) marketing strategy
m) objective monitoring systems
n) operational functions appropriate to the achievement of your vision
o) premises and facilities
p) product or service reliability and improvement
q) project management tools
r) quality system, quality improvement, and continuous quality improvement
s) risk register and risk management system
t) sales strategy
u) self-respect, and self-support system and strategies
v) setting priorities for employing staff – including employ (full, part-time or casual), contract (hiring a person for a specific purpose for a specific period), outsource (invite quotes from suppliers for whom the activity or competency is their core business), using a temp (this person is employed by the Personnel Service, therefore all on-costs are covered but included in the hourly rate) – and most importantly, choosing the right time to employ
w) supplier relationships
x) task and time management
y) technical and business confidence, competence and development
z) using IT/technology as a ‘tool’, a ‘means to an end’ – as separate and different to IT/technology as your product/component/service

Greater details on the tools listed are provided in:

• One Man Show – the smallest of small business (Jean Roberts, 2008)
• Managing Governance in Nonprofit Organisations in Australia (Jean Roberts, 2004)

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