Many companies are telling us that business is growing, albeit marginally, after the challenges of the last couple of years. How can companies monitor and drive this growth deliberately and proactively, rather than relying on business improving by default?

An interesting model by Larry Greiner, who discussed growth phases that companies go through, should help us clear the fog.

Greiner suggests that organisations go through 6 stages of growth and need appropriate strategies and structures to deal with the changes as they happen. It also describes the appropriate styles you need to adopt as you go through the stages.

Firstly, there’s growth through creativity. This would be a start-up company, an entrepreneurial approach, progressing through hard work and long hours.

Second, growth through direction. This constitutes sustained growth, functional structuring of the business, proper budgeting and processes.

Then there’s growth through delegation. This involves management taking less responsibility, allocating profit centres, financial incentives, etc.

This is followed by growth through coordination and monitoring. This is where new product groups are developed, better planning is carried out, more capital expenditure is made, and more centralisation is developed.

Next, there’s growth through collaboration. This involves action-learning sets, cross functional or matrix team management, decentralised teams and advanced information systems.

Later, Greiner added a sixth phase to his growth phases model: Extra-organisational solutions, like mergers and networks of organisations.

By analysing what stage your company is at in the growth model, you can adapt your leadership style to match what is needed to produce results that will proactively drive you forward as growth continues.

Thanks again

Sean

Sean McPheat
Managing Director
MTD Management Course

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Michael Porter’s Competitive Advantage model sets out a strategy that creates a positioning in your market place based on sustainable advantages that you can build up in your industry.

Porter states there are basically two types of competitive advantage that results in a third viable competitive strategy and gives you your USP.

The two types are differentiation and cost leadership, i.e. the low cost producer.

The differentiation model determines those companies who look at their uniqueness in the marketplace, based on the viewpoints of their customers. These could be the product itself, service, brand image, marketing, service back up, etc.

But this doesn’t mean the company can ignore its pricing position. In areas that don’t affect its differentiation, costs should be kept to a minimum, says Porter. Only in the unique differentiation areas should the price premium paid by customers be seen as valuable to them.

The other competitive advantage is being the cost leader in the industry. This is often achieved by economies of scale, and the differentiators should still be considered important, even if you are attempting to offer lowest price. If price is your only differential, someone, somewhere will beat you short or long-term. And then what happens to your advantage?

Porter then states that the result of your first two competitive advantages is your focus. That is, you set out to be the best in a segment or niche market. This explains why some companies set out to differentiate themselves in the market, then lose their focus and fall behind the competition. You must look for other niches that will attract customers rather than become outdated by focusing in areas that don’t attract current customers.

Porter’s Competitive Advantage model offers an effective and important addition to your management portfolio by focusing on what your company should do best. That focus is better than trying to appeal to all sectors with some differentiation and average pricing. Customers will be unable to determine what you actually stand for unless you offer some kind of advantage to them.

It’s an interesting model that creates a firm strategic model for progress in your industry.

Thanks again

Sean

Sean McPheat
Managing Director
MTD Management Course

Click below for a:
FREE email course “Improve Your Management Skills”

W. Edwards Deming is famous for developing a continuous quality improvement model. It’s a sequence of four steps that can take you through any project successfully and creates a benchmark for you to follow.

It’s known as the PDCA model or cycle, the letters standing for Plan, Do, Check, Act

Of the many management models available, Deming’s is one of the most straightforward. Its analysis of how change can be managed has helped various businesses drive towards improved productivity and profits. The essential elements are:

PLAN: plan ahead for change. Analyse and predict the results.

DO: execute the plan, taking small steps in controlled circumstances.

CHECK, study the results.

ACT: take action to standardise or improve the process.

Each of these stages can be monitored for any project you’re working on, and create a great framework for you to assess your results.

Which stage is the most important?

They all link together, but if the plan isn’t laid on solid foundations for improvement, the results won’t drive the business forward. Executing a plan is important, but if the results aren’t measured and monitored, you are simply taking action for the sake of it, and can’t make contingency arrangements.

Results will occur whatever action you take, but if you want to get the same results again, you need to identify the recipe and standardise the actions you take, so you can get the same results again.

Deming’s model has been used effectively all over the world, and offers a sound basis for changing your approach to work.

Thanks again
Sean

Sean McPheat
Managing Director
MTD Management Course

Click below for a:
FREE email course “Improve Your Management Skills”

There are many motivational models that appeal because of their applicability to the real world. None more so than Victor Vroom’s Expectancy Theory

His theory assumes that all our behaviour comes from choices among alternatives whose purpose it is to maximise pleasure and minimise pain. He suggested that the relationship between people’s behavior at work and their goals was not as clear cut as others had imagined. He realised that an employee’s performance is based on individuals factors such as personality, skills, knowledge, experience and abilities.

The theory states that people have different sets of goals and can be motivated if they believe that:

– There is a positive correlation between efforts and performance,
– Favorable performance will result in a desirable reward,
– The reward will satisfy an important need,
– The desire to satisfy the need is strong enough to make the effort worthwhile.

This will only occur, Vroom states, if the following belief systems operate:

1. People actually want the reward, so managers must identify the value structures of their employees

2. People expect that they can attain the reward

3. The reality of the reward. Managers must ensure the promised rewards are carried through

Vroom suggested that an employee’s beliefs about these things interact psychologically to create a motivational force such that the employee acts in ways that bring about the conditions for the reward to actual come about. He stated that people will be driven and motivated by how much they want the reward on offer, the chances of them actually achieving the reward and whether the expectation of them receiving is is high.

This formula can be used to predict whether someone will actually be motivated to achieve goals set by management. And it answers the question why some people are more motivated than others; they simply want the rewards more than others.

Thanks again,
Sean

Sean McPheat
Managing Director
MTD Management Course

Click below for a:
FREE email course “Improve Your Management Skills”

The Balanced Scorecard method of Kaplan and Norton is a strategic approach and performance management system that enables organisations to translate a company’s vision and strategy into implementation, working from 4 perspectives:

1. financial perspective,

2. customer perspective,

3. business process perspective,

4. learning and growth perspective.

1. The Financial perspective:

Often, there is more than enough handling and processing of financial data. With the implementation of a corporate database, it is hoped that more of the processing can be centralised and automated. But the point is that the current emphasis on financial data leads to the “unbalanced” situation with regard to other perspectives. There is perhaps a need to include additional financial-related data, such as risk assessment and cost-benefit data, in this category.

2. Customer perspective:

Recent management philosophy has shown an increasing realisation of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good. In developing metrics for satisfaction, customers should be analysed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups.

3. Business Process perspective:

This refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements (the mission). These metrics have to be carefully designed by those who know these processes well. In addition to the strategic management process, two kinds of business processes may be identified: a) mission-oriented processes, and b) support processes. Mission-oriented processes are the special functions of directors and senior managers, and many unique problems are encountered in these processes. The support processes are more repetitive in nature, and hence easier to measure and benchmark using generic metrics.

4. Learning and Growth perspective:

This includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement. In a knowledge-worker organisation, people are the main resource.

In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be in a continuous learning mode. Many companies find themselves unable to hire new employees and at the same time is showing a decline in training of existing employees. Kaplan and Norton emphasise that ‘learning’ is more than ‘training’; it also includes things like mentors and coaches within the company, as well as that ease of communication among workers that allows them to readily get help on a problem when it is needed. It also includes tools such as the Intranet.

The integration of these four perspectives into a graphical appealing picture have made the Balanced Scorecard method a very successful methodology within the Value-Based Management philosophy.
Thanks again,

Sean

Sean McPheat
Managing Director
MTD Management Course

Click below for a:
FREE email course “Improve Your Management Skills”