Lean Wednesday Tip: Why you are in business

“Effective leaders are motivated by why they started their business instead of the financial rewards. They strive to solve real industry and consumer problems coupled with the integration of¬† employee and customer-centric philosophies in their culture. They are not me-too leaders, they are innovators.”

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E.O.W(End of the Week) Notable Tip: Reduce RFP Lead Times

Happy Friday!

I hope you’ve had a great week.

Today, I will discuss how you can optimize your CRM management process for reducing RFP (request for proposal) lead times while increasing profitability. By developing a client quality plan it becomes easier to vet prospects which makes RFP analysis much easier. RFP lead times (time taken to secure RFP) can be reduced by filtering high quality requests based on your quality plan filters which have lower proposal cycle times, higher profit/margin potential and higher probability of attainability.

Lower proposal cycle times can be attained by collaborating with team members and creating proposal templates that require minimal updates based on average or common project requests. Proposal templates, quality plans, historical and competitive analysis will allow you to budget resources for the purpose of optimizing profits and customer satisfaction. Read our article on Strategic Customer Analysis.

I hope you’ve enjoyed this E.O.W!

As always, “Success is continuous improvement!”

E.O.W (End of the Week) Notable Tip: R&D Spending

Happy Friday!

I hope you’ve had a great week.

Today, I would like to touch upon R&D spend. Research has shown that highly successful innovative businesses have a lower R&D spend to sales ratio compared to their competitors. For example, Microsoft has one of the highest R&D spend to sales ratio but poor innovative value-creation; however, Apple with one of the lowest R&D spend to sales ratio has continuously acquired market space with iPods, iPads and iPhones. Another great example is 3M’s post its, which were developed with resources that were already available at the company.

Spending less on R&D is not the only factor to consider when you are looking to create innovative products. You must also understand all your potential customers, their pain points and preferences. This information will help you identify and solve a problem that your competitors are not targeting.

I hope you’ve enjoyed this E.O.W!

As always, “Success is continuous improvement!”

 

E.O.W (End of the Week) Notable Tip: Unprofitable Factors in the industry

Happy Friday!

I hope you’ve had a great week.

Today, I want to discuss unprofitable activities/factors that your company may be utilizing a great deal of resources on.

“By understanding your customer’s priorities you are able to shift resources to activities that drive value and profitability, in turn, eliminating those factors that yield no profits and realizing opportunities to create new factors that have not been offered before. It is critical that your accounting team is aware of the activities and customers that offer the most profit by creating and maintaining a Customer P&L sheet. “

 

As always, “Success is continuous improvement!”

Strategic Customer Analysis

It is common practice to determine your target customer when developing a business. However, this tunnel vision buyer group mentality leaves money on the table for businesses. To truly optimize profit and revenue a company’s leadership must be well aware of the many buyer groups (purchasers, actual users, and influencers) that can offer opportunity to enter into a new market space with high profit potential.

For example, say you are leather shoe manufacturer who usually focuses on retailers as its main buyer group. Through analysis of your current, similar and alternative products coupled with identifying the pain points of using your product you can realize a low-cost profitable opportunity to reel in your end users; essentially entering into a new market space.

A more effective strategic customer analysis would require you to understand the following:

  • Why buyers choose to buy your product; aka purchase criteria
  • What are the factors that cause customers to become angry with your product or company
  • What are the factors that keep potential customers at bay (you must understand their priorities and create solutions to meet their needs)
  • The preferences of your customers
  • The decision making process of your customers
  • Customer behavior
  • Why they choose to buy at a certain time (holidays, birthday, graduation, et cetera)
  • Time, travel, hassle and money the customer is willing to pay for buying and using your product or service
  • What functional needs need to be met
  • purchasing power

Businesses must also understand what factors motivate buyers to purchase based on price or quality. However, it is imperative that you just focus on the buyer group that has the highest profit potential at a lower cost and your company’s capabilities are able to meet their priorities.

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E.O.W (End of the Week) Notable Tip: Redesigning Business Models

Happy Friday!

I hope you’ve had a great week.

Today, I want to discuss business models. As we all know, changes in trends and customer behavior affects profit. Therefore, it is important that leaders stay abreast of trends that could affect their bottom-line and have solutions at the ready. They should also include non-customers into their value chain spectrum for the purpose of realizing profitable opportunities.

“Companies should redesign their business model every 4 to 5 years.”

 

I hope you’ve enjoyed this short tip and as always, “Success is continuous improvement.”

Lean Wednesday Tip: Mitigating High Growth Challenges

“When you have a high growth atmosphere there are sure to be inefficiencies that start creeping up into operational processes. Effective leaders ensure value is maintained and/or optimized instead of lost, they create efficient workflows and make decisions by fact as a way to manage the increased challenges brought on by high growth, and don’t stray away from the profitable target customer.”

The Anatomy of an Effective Strategic Plan

What is a strategic plan? In short, “a strategic plan defines the business the organization¬† intends to be in, the kind of organization it wants to be, and the kind of economic and non-economic contribution it will make to its stakeholders, employees, customers and community.”

To create an effective strategic plan an organization’s leaders must first clearly understand their business and what business they really want to be in. They must also conduct and have SWOT Analysis, customer research (including non-customers), economic, government (industry laws and regulations data), and technology (current and forecasting trends) accurate data available.

Once this information is available and carefully analyzed, leaders must discuss their intention to shift strategy with their team. All company departments should be given the opportunity to share ideas and express concerns. After the Voice of Employee has been acquired the strategic plan can begin.

An effective strategic plan is composed of the following:

  • Vision Statement
  • Mission Statement
  • Key Customer Value Factors
  • Goals
  • Objectives
  • Visual KPI Metrics
  • Contingency and Preventative Plans

To be effective, a strategic plan must be visual and are not meant to be paper documents that sit on shelves nor Word or PowerPoint documents that are only seen once. The CEO (top management) must also gain support from respected and persuasive key personnel that will drive buy-in to the new strategic plan and discourage opposition. Effective leaders align the strategic plan with daily business activities by translating what needs to be accomplished into how it will be accomplished. They give each department clear responsibilities and performance expectations instead of sending out a memo company-wide that this year they want to increase revenue by $10 million. In short, strategic goals are distributed in small batches.

Effective leaders ensure employees are given clear responsibilities and performance expectations; and are given timely rewards for achieving goals. They also ensure that the strategic plan contains clear objectives, provides and utilizes measures of performance, clear due dates and is visual.

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