The changing business landscape has resulted in many an organisation scrambling to evaluate, understand and use resources it has in-house and competencies competitively. There’s no one-size-fits-all sort of model in order to do this. It’s a painstaking process but one that’s’ really worth it, if you want to ensure long-term success.
In this post I’m putting forth three tips that would help you evaluate, understand your resources and competencies and help you develop a successful, long-term strategy.
- Clarity: Provide clarity to your senior functional heads and their teams on what are the business goals and how the organisation can achieve it. Clearly identify what are the key competencies available and ask your senior team members to evaluate if those competencies can deliver the service of the organisation, in market, by the resource available. By providing clarity on what are the business goals and the competencies that (as a leader) you see, the entire organisation knows what areas are their key strength and how to support the same to have the competitive advantage.
- Understanding: Evaluate the competencies on the basis of:
- Is there competent human resource in key functions?
- Is there a culture of cross-functional team work in order to deliver on time and with quality?
- Is there a need to invest in specific technology?
3. Cultivating: A competency mindset that:
- No Silos–Thinks of individual business units as profit centers yet has line of sight with the organisational business goals and engages cross-functionally, in order to contribute to the same positively.
- Accountability with Empowerment: Identify and empower staff, behind key competencies and ensure understanding that the competencies are a corporate resource and not of an individual business unit. Hold them accountable for performance deliverables.
- Responsibility: Empower your functional heads by giving them the responsibility of getting them to identify what are the investment requirements and to what extent should each unit contribute to it.
As you go through the process of evaluation and understanding of the competencies and resources available, you would be able to identify where (in your business units) you need to push in resources in order to support the existing competencies. This would lead to the ability to deliver substantially in market and thereby building image and stakeholder loyalty.
- Ditch Your Strategy, Keep Your Vision (inc.com)
Last week, I read an absolutely fantastic blog article on the above topic in Linked 2 Leadership that got me thinking about the “victim leaders“ in the corporate world.
Thinking, about the choices one has, if one is a victim leader and how to excercise those choices in keeping oneself happy at work and allowing the team (one leads) to flourish.
The choices elaborated in this post enable you to learn how to not pass your frustrations down the line to your team (if you’re a victim leader) and to use your energy to be a buffer for your team.
Here’s the post:
- The 11 Leadership Secrets You Never Heard About (forbes.com)
Just as shifting city and home and moving to a new place has its initial period of anxiety, a change in business direction, similarly, brings about a scenario of anxiety and with it a plethora of questions (and actions) within an organisation.
Change in any form is uncomfortable for us humans. We are creatures of habit and habit breeds its own sense of comfort and discomfort. Take for example our daily work day routine. If one of the items in our daily ‘routine’ goes out of whack, we get irritated and at times, are at a bit of a loss.
Business activities are managed by humans and thus when an organisation implements a change from what it had been doing; it brings about a fair bit of response. Some good, some not so good and some downright detrimental to the business. The ‘enthusiasts’ (or early adopters) latch on to the big picture that the changed direction portrays and willingly start to move forward in the new direction. The ‘yes sir/no sir’ (followers) go onto a ‘wait and watch’ mode to try gauge which way is the wind blowing. Lastly comes the ‘resistant brigade’! A group who clings on desperately to yesteryears and falls back on the achievements of the past years.
Each of these groups effect the brand’s identity in many ways:
1. Enthusiasts: In their eagerness to contribute to the new strategic direction rush into activity without deeply evaluating the ability of the brand to deliver on it and the long term benefit (of the activity) to the brand and recruiting necessary manpower to deliver on the new mandates. Often the enthusiasts end up being the “Lone Ranger”—working long hours and alone leading to quick burnouts when operating at very high stress levels due to continuous delivery demands of tasks.
2. Followers: This group’s indecisiveness and inability to ask for clarity (and understanding) leads them to either do the work activity wrong or to take too long over it and thus deliver well after the timeline is gone. In effect, making the task inefficient.
3. Resistant Brigade: Often the largest group, these try and push back through the “this is how it was done” process with the intention that if continuous resistance can be applied by using defunct processes and bureaucratic red-tape then the enthusiasts would either burn their fire out or leave (attrition). All the resistance group succeeds in doing is (i) wasting critical time and (ii) damaging the brand image.
So, how do we manage to bring group 2 & 3 around to see the positives in the new strategic direction or change that the business unit is undertaking:
- Transparency: Line managers have to understand the change and explain, at length, how that change is beneficial (or required) and tie it back to the individual roles of staff and their function with regards to the effect it has on the brand’s identity.
- Top-down Leadership: Senior management has to have, in place, a support ‘team’ selected from rank & file (so as to assist in the detail work) to ensure successful delivery of key projects that would help to bring about the required change. This team should be provided written mandate as authority to put in place new processes and work flow to enable work flow change to take hold.
- HR in the Forefront: HR needs to be at the forefront in terms of evaluation of staff’s skills and capabilities to deliver on the new work flow. Planning for training and skills up-gradation become a priority.
- Deadline: An end target date for achievement of certain critical projects needs to be up in front. Critical projects that affect the brand identity (and image) should be selected from the pool of projects that is in active stage and be project managed through specific project teams.
What is the benefit of doing this?
- Easier management of key projects that achieve success. Thus revenue growth coupled with establishing the desired brand identity and image.
- Establishing a core team, across critical functions, on which senior management can depend upon to take the brand forward.
- Having in place efficient work flow processes that aid in forward planning of daily work.
The other day I read a very interesting post in the Harvard Business Review Blog about ”Inclusive Business Models that Indian companies have (and are still) developing and delivering on, in order to – quote..”that can deliver affordable housing, healthcare, education, and financial services to those living in the middle and bottom of the pyramid.“
Reading the article set me thinking about why such “community benefit” oriented business models are not there.Through a discussion forum in Linked In some great points were provided.(My thanks to Anees Zaidi, Prakash Menon and Tuba Terekli for their perspective and thoughts). Perhaps it’s because we are, almost always, talking about stakeholders profit maximisation. Unfortunately, though the community is one of the stakeholders, it’s always at the bottom of the pile in terms of stakeholder priority. But is that where the community should be for a business?
Michael Porter’s The Competitive Advantage of Corporate Philanthropy provides a very logical formula as to why the corporates favour quick wins instead of basing their business objective on value creation for the community and how it comes back to haunt them. Whereas those who do focus on the community value tend to have sustainable businesses.Today the consumer environment has changed drastically. The global financial crisis and explosion of social media (as two immediate critical factors) has led consumers, geographically, to group together on the basis of common interests and sharing of information on anything (from personal status to their daily brands and the corporates owning these brands).
Consumers spending has undergone drastic change resulting from the lack of trust (between consumers and corporate brands). In sum, people are now not just communities (by traditional parameters) but by virtue of their needs, interests, opinions, thinking and pre-disposition towards the corporate world. And within this huge group of “people” are thousands of subsets(each with its own set of values, believes, perceptions) which make up the individual consumer clusters for all businesses, across all industries.
So, with such immense changes in the consumer landscape, wouldn’t a community value based business model be more efficient in achieving financial goals?
Developing a community value based business model would be sustainable, strong and profitable as it would clearly give benefits to the community and increase trust.Increasing trust would lead to increased transactions and thus to profits. The purpose of this post is to stimulate a discussion on how:
- such inclusive business models, delivering clearly identifiable value benefit to the community, can be developed
- and if such business models would change the way profit maximisation is achieved today
- and if these will come about from the entrepreneurial side or from the multi-national corporates.
Of course the question remains — do we want to give value to the community to build sustainable businesses or do we want to stick to the (age-old) stakeholder profit maximisation only?
The past week at work had been an exceptional one for a couple of reasons:
1. Realisation of the fact that there were just a few executives who were stepping up beyond the call of their current roles (yours truly included and sacrificing work -life balance in order to ensure quality deliverables on time for the benefit of progress).
2. The various work processes were, actually, hampering work flow and decision making.
Recounting the week, made me ask myself this question—“Are processes helpful”?
The answer is Yes.
Processes play a critical role in work flow management and output. However, the work flow and its respective components are as good as the people who manage it i.e. Human Resource. To ensure that the process is effective and efficient, it’s critical to have the right skills and attitudes in the right job functions so that the team works as one.
As a business planner and marketer (just two of the three hats I often have to wear at work), whilst planning for business growth and revenue, there are two specific areas that I’ve often found organisations overlooking in the process of detailing their business goals:
1. Focus: on the economic trends & key customer feedback and
2. People for the job: job fit i.e.—right skills & attitudes in the right function
This, continuous, over-dependency on the process is amazing!
The process is seen to be the job and not analysis of the information and logical fact based decision making.
But, in reality, what works is:
- Focussing: on the external and internal environment that affects the organisations’ ability to deliver with quality and competitively.
- Right People: having in place a select, small team of people who are the right fit to lead the implementation with various revenue units
By focussing on critical issues that needs to be addressed for the business to grow and having the right people in charge ( red that as-’empowered with authority along with responsibility’) the organisation gets the right attitude on the table.
People caught up in the “No. It’s not possible” line of thinking mistakenly think that having done the same process for years, it will still deliver and no change is needed. Unfortunately, this is a disguised form of negativity. And negativity sabotages the chance for success by keeping the team from innovating (within the process) and providing cost beneficial solutions. It creates an extremely unhealthy environment which in turn simply kills the process of ideation and thus any innovative approaches..
Secondly by having the right attitude people leading change it would bring in a work culture oflistening, discussions and simplistic evaluations.
These two functions, together, allow for implementing beneficial cross industry practices and strategic options that would enable growth and profitability.
This enables the organisation in having a motivated, passionate, engaged and objective oriented team of high performers who become brand ambassadors for the organisation.
I was on a short vacation earlier this week, and turned on CNBC on Tuesday with the main headline that Netflix stock futures were down 35%, and all the pundits were talking about the loss in its subscriber base and increased input costs due to more expensive content contracts. How fortunes of companies change in a fairly short duration? Only recently Netflix stock was a serious high flyer, and could do no wrong, and now it was down precipitously on announcement of loss of 800,000 subscribers. What happened?
Clearly its recent announcements of charging higher prices and carving out the streaming content into a separate business from its more traditional “mailing DVD’s” and watching movies online business didn’t sit well with its current customers. Big surprise there! Customers who were used to paying low monthly fees were now being asked to shell out more cash for the same service, and guess what they started leaving. I suppose the executives at Netflix forgot about the secret hand of Joseph Schumpeter, and his idea of Creative Destruction that has influenced the field of Entrepreneurship, Innovation and Capitalism over the past 50-60 years.
Originally coined by Karl Marx, the idea more associated with the Austrian economist Joseph Schumpeter from his book Capitalism, Socialism and Democracy, essential elements of creative destruction are:
1. Capitalism is a process of transformation and evolution that accompanies radical innovation and creativity where old ways of doing things get destroyed;
2. Entrepreneur and his or her zeal and innovation is the main force behind sustained long-term economic growth, but it destroys established models that previously enjoyed near monopoly pricing power achieved through technological, organizational, and regulatory management prowess;
3. A continuous evolutionary cycle develops where successful innovation creates temporary market power, eroding the profits and position of old guard firms, but ultimately succumbing itself to the pressure of new inventions developed by yet another competing entrants;
4. Creative destruction causes short-term economic disruption and distress for workers whose skills may become outdated very quickly;
Success of capitalism will lead to a form of arrogance, corporatism, elitism with values hostile to capitalism, change and entrepreneurship, especially among intellectuals. The openness needed to allow entrepreneurship to thrive will not exist in advanced capitalism, and will soon be replaced with resentment, socialistic ideals of equality and fairness. Isn’t that what’s happening with Occupy Wall Street protests where educated, unemployed people are protesting against banks and the wealthy due to their own worries about permanent loss of their quality of life?
So where does that leave Netflix?
Netflix pretty much ate Blockbuster and other movie rental companies’ lunch by replacing the need for consumers to go to a store to pickup movies with a simple envelope that could be dropped in the mail at a low, flat monthly fee to watch unlimited movies. Then they gradually introduced online and on-demand, streaming movie watching experience that Blockbuster didn’t offer, and became an industry standard, and resulted in Blockbuster selling itself to Dish Network. While Netflix was successful in changing the status quo thorough its’ innovative, price competitive product offerings, it still only was a distribution company, somebody else owned the underlying content.
Few years ago, all the old media companies and movie, TV studios were concerned about losing power to internet providers and made cheap deals with Netflix, giving it a huge advantage over its competitors. Similar to how people expected NY Times and other newspapers, magazines to vanish due to shrinking ad revenues, investors and pundits assumed that this relationship inequity would last forever. But concepts of vertical integration and creative destruction have their own way of rebalancing economic order. The movie, TV studios and newspapers like NY Times own their underlying, invaluable content and perpetual rights that could be distributed in a variety of ways either by acquiring or creating their own distribution network or partnering with someone like Apple’s iTunes or Goggle’s You-Tube or Amazon’s Kindle to create an alternative distribution channel that’s disruptive to Netflix model. Where Content is King, this innovative, entrepreneurial loop that gets created in the process is what creative destruction and economic progress is all about; disturbing the status quo and rationalizing the outsized profits.
Conclusion: Similar to how PC’s destroyed the main frame business, online jobsites changed recruitment process forever, product and service innovations change consumer behavior and motivation. Today’s leaders become tomorrow’s laggards, but that doesn’t mean they cannot become leaders again. Sitting on your laurels isn’t an option; both individuals and companies have to be nimble and watchful of their competition for both incremental and disruptive innovations. Netflix stock is still a little pricey for a potential acquirer, but that market cap has shrunk substantially recently. A little more bad news could start making it very attractive for Mr. Sumner Redstone of Viacom or Mr. Jeff Bewkes of Time Warner. Let’s wait and see what happens over next 6 months to a year.
Innovation in service… The Competitive Advantage
For businesses today, having a sustainable strategy which provides a strong competitive advantage, is critical.
More and more businesses have moved into having a ‘service based’ advantage in order to differentiate its’ ‘brand offer’. Across many categories this, at times, is tough to put in place. Tough, as it’s hard to identify or pin down the significant service offering or delivery which is unique to that brand itself and is sustainable enough for it not to be copied.
Reviewing a few product categories that the global Muslim community (as a important target group use), one category that emerges with a very strong opportunity of developing a truly sustainable competitive advantage is the Islamic Finance Industry (IFI).
From the little I’ve been able to study (publicly available consumer awareness and population penetration figures are quite low) the retail Islamic finance industry, it seems the operating principles have, primarily, been to re-package conventional financial products and make them sharia compliant. Across markets, the products IFI’s offer also do not have much variation (vis-a-vis conventional financial products) and all are tied up in a labyrinth of sharia compliance, conformity and confounding jargon. There are many reasons for this, but that’s not the purpose of this post.
This post looks at the strategic opportunity available to the retail Islamic finance industry.
Within the core consumer segment–Global Muslim Community–With a growing global ummah, that has strong disposable income and a penchant for utilising their money for ‘value for money’ products across markets, the lack of simplicity, and clarity of brand benefit of the Islamic finance retail products seems to be the key reason for the low acceptance (and maybe usage) of the products.
Having simplicity and ensuring comprehension (by the targeted Muslim community, as starters,) can, actually, provide the industry huge growth possibilities. Perhaps the lack of clarity can be attributed to the fact that finance was (or is that still is?) a B2B (business to business) function and from the realm of this sector emerged Islamic Finance as an alternative channel of financing and thus, the retail sector of Islamic Finance did not, actually, develop as an additional revenue source for the financial institutions.
Today, with the emergence of Islamic Finance into mainstream finance and the renewed interest in Islamic Finance globally coupled with the rising resurgence of the global Muslim community, it seems to present the Islamic Finance Industry a unique opportunity to develop a strong consumer centric sustainable competitive advantage.
In order to develop this advantage, a re-look at just the product make up or marketing communications or operational standards would not do.
To create and deliver a sustainable competitive advantage the entire process of business planning and operations would need to be reviewed. Such a review is necessary so as to ensure identification of key operational efficiency areas coupled with strategic development that begins with identifying the brand value benefit that the market needs, wants and can bear.
The starting point is outside the glass walls of the corporate office. It’s on ground with the Consumers.
By understanding what are the perceptions, awareness and comprehension levels of consumers for Islamic Finance products and services are, either the industry (as a body) or the businesses (that make up the industry)can develop products that are truly what the consumers need.
Having this vital information would allow the business to:
- Implement marketing programs which would increase the understanding of the benefits of Islamic Finance products amongst the consumers and thereby increase acceptance
- Assist in new product development as the development would be based on consumer needs. Thereby acceptance, of the new product, would be there thus guaranteeing revenue returns to the business.
- Re-design OR bring in innovation (through benchmarking using cross-industry practice) in its service parameters so as to fulfil the ‘expectations of the target consumer’
If the corporates making up the Islamic Finance industry, undertake this paradigm shift, a fundamental rule of the game would change:
–>Instead of operating their businesses on the current “stakeholder based profit- making” platform they would move on to the “consumer value oriented profit making” platform and (the surprising part is), many of the IFI’s, if they are transparent and up-front and communicate this business objective to the consumer, they will have consumer acceptance and develop strong life-time relationships which will enable them to generate profits.