This is the final part of a three-part article on
how a CSR based planning can develop a sustainable business strategy
The increasing demand for lifestyle products and services by the global Muslim community is not surprising given the purchasing power (of the community) and its young age. Is this an opportunity for entrepreneurs as well as global brands?. Whilst there are some well-known brands ‘communicating’ and customising the brands’ message and physical attributes for the Muslim consumer segment, by a large, such brand “avtaar’s” are not yet in mainstream marketing (at least not in the high-ticket items).
This final post looks at whether Islamic ethics and governance can aid a brand to develop loyalty and involvement?
The opportunity for a brand to use Islamic ethics and governance in brand marketing to project a socially beneficial identity is there. I’m talking about a business operation which conducts itself on the platform of Islamic ethics and as a result its reputation through its brand, in any activity, internally and externally, is always with the intention of benefitting the society, and both involved parties.
(Note: The organisation does not need to be a Muslim one. Personally speaking,Islamic ethics are ethical values, that I believe, are common in terms of needs of commercial interaction between two parties i.e. in any commercial transaction each party is always looking to benefit. Thus if transparency, committment and a ‘best-intent’ is already manifested within the offer, automatically, the transaction will benefit both concerned.)
For e.g: a Islamic banking institution can project the ethics to show itself head and shoulders above its competitors in its category as a corporate brand. ( Based on the ethical approach the financial instiutitions’ process vs another’s can be totally different. This, in effect, can become the competitive advantage for that financial institution and in fact be the key reason why consumers would want to associate with that corporate brand.
Strategically, the financial institution, (for its retail banking arm, or its customer service, or even a basic CSR program), can also do a “blue ocean” and approach the entire financial services business from the perspective of ‘being beneficial to the society” by virtue of enabling the citizen to be debt-free and/ or generate the habit of savings or prudent spending.
The question is “why not”?
It has its risks.
- Risks of not having immediate customer conversion,
- Not having immediate sales and therefore profit
Risks that are the way we know risks today.
Similarly in the consumables category, a brand can be profitable (and that’s not a sin) from utilising a transparent, honest and ethical approach in building “trust” with its target group.
In fact such a brand would generate a loyal base of customers which would be ever growing and the WOM (word of mouth through the customers own social media network) would lead to the brand expanding geographically.
But the issue is, “is this possible?”
This is a totally different perspective in marketing thinking (vis-a-vis what has been historically done).
It’s the beginnings of CHANGE.
One has to be convinced and brand owners and managers have to believe in the change and in its social benefit, in order, for change to manifest. In time, manifest it will as awareness, understanding and knowledge seep into the consumers. Into society as a whole.
This is when the brand that initiated the change, that provided the knowledge, that came across (and established itself) as having no “hidden agendas” would rule the hearts and heads of its community groups.
“Yes, We Can!”
Most companies undertake CSR (corporate social responsibility) programs as having to fulfill a corporate duty i.e. giving back to society. Often development of such a program is the onus of the corporate marketing team and is tied back to ensuring the brand is seen in good light.
On the practical side investments allocated to CSR programs used to be at the minimalistic. But times have changed and whilst corporate philanthropy maybe on the wane (or is it making a comeback due to the clamour for “transparency’?) There are, undoubtedly, strong advantages in aligning an organisations’ profitability objective with community development.
The question, that arises, is would such community development objectives become a primary driver in developing the business strategy for an organisation?
The example that comes to mind is that of Body Shop. A clearly defined set of values aimed at improving the community both, economically and in terms of quality of life, has given this brand a loyal customer base globally. A consumer group that relates to the corporate cause and commitment of the brand and is willing to aid that mission through their support (of the brand) in terms of preference, recommendation and product usage.
So is there learning in this for businesses that want to operate in the global Muslim segment?
Today, aside from the Islamic Finance and Halal (food) sectors, the need for mainstream brands (of other product categories) is enormous. Even within Islamic Finance–the retail sector–leaves a lot to be desired in terms of consumer marketing. But there seems to be light at the end of the tunnel as we are seeing slowly the evolving travel & tourism, healthcare/pharma and fashion products coming about.
The population numbers and purchasing power of the Muslim community justify a business case in having brand offerings for this vast segment. Coupled with that when you add the ever increasing numbers of the community of South East Asia and the growing youth segment (of this global community), with the increasing demand for lifestyle products , it’s amazing as to why such brand offerings (to this segment) has not yet come about. (There are some, but by and large their presence is, primarily, well known only in their specific geographical markets only.)
Is it an issue of approaching this segment based on classical (“Stakeholders’ profit maximisation”) business formulae or is it lack of understanding of the differing needs of this segment?
Whichever be the case, approaching this segment, strategically, based on a “community development” objective can provide a very strong platform for having a sustainable business strategy.
- A business strategy that would be competitive, sustainable and with very clear benefits all round thus ensuring long term engagement (amongst all stakeholders).
- Developing a commercial enterprise whose objective is to uplift a section of the Muslim community economically would resonate very strongly with the global Muslim community.
In essence, it would provide a cause for the Muslim consumer to ‘contribute’ his/her bit (for the community) as well as enable them to relate to the brand and thus have engagement and involvement.
- CSR provides “reputation insurance” when products fail (sustainablefutures.info)
Dec 31, 2012 has rolled around amidst all the cacophony that global crisis of all sorts created. Time continues its relentless march without missing a beat and we celebrate yet another New Year’s Eve tonight.
End of the year is always a period of introspection and resolutions. And I’d like to give my thanks to my readers for their support, comments, tips and their shares of the posts here. Many thanks. It’s heartening to know that you like the content that’s made available.
This end of the year post focusses on a snapshot of key learnings that has been shared over the year, on strategic business management, on leadership and, most importantly, on the importance of strategy that has continuity and community at its core.
Here’s a quick list of 4 key learnings each:
Strategic Business Management
- Manage your business division, unit or organisation as if its your own.
- Bring into your day-to-day management the ability to trust your team and to provide them clarity when required.
- Ensure clarity in all the business that you undertake– clarity in communication; clarity in the roles of the team members; clarity in the direction the business is to be taken.
- Communicate– Listen well and not just hear. Sometimes we miss critical communications due to noise created by simply keeping up with the ‘to-do’ list!
- Lead by example and not through position power.
- Be empathetic of your core team– understand their pressure points in order to assist them. Surround your weak areas with skills that others in your team provide.
- Use the Pause, effectively– Stop, now and then and check! Check how team mates are doing; Check for feedback on your leadership; Check for perception vs reality.
- Be grounded– Make time and roll up your sleeves and work at ground zero now and then to have a feel for what your team does in order to make you (their leader) look good.
Strategic Continuity & Community
- Involve yourself in developing the long-term strategy fully i.e. work the details. This way, the team,the organisation & you will have the entire strategy imbedded in your minds! This aids in the long-run, specially when key team members would have to be on ground for delivery, by ensuring your Ateam is on the same page and same line.
- Encourage community or the businesses eco-system to participate in the organisation’s strategic journey. Thereby you would ensure participation as well as consumption.
- Whilst developing strategic alternatives, never throw away the PlanB. Keep contingency planning a priority and remember Murphy’s law!
- In entering new markets, ensure strong relationships with key community circles, are present in order to create the positive perception that your organisation would need.
Signing off for this year, here’s wishing all my readers a very Happy New Year and may success & health be with you all through 2013.
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)
Continuing from my earlier post– Is Islamic Finance up to the Challenge– how do we bring about commitment from industry in making the required changes?
Let’s start with what Mr. Daud Vicary Abdullah– President & CEO of INCEIF in his article-”EPL in Islamic Finance: Education”– stated. He has, very correctly, shown highighted three key areas in which education on Islamic Finance needs to be implemented and implemented with the objective of ensuring clarity and comprehension.
To me, of the three areas, the single most important one is “General Mass Awareness”.
Improving mass awareness is critical in ensuring that Islamic Finance industry grows through acceptance of is value proposition. Specifically mass consumers would drive growth for the industry through acceptance of the retail products. But at present, the retail market has its own set of complexities. Depending on the geographical market, awareness and comprehension, of Islamic Finance varies from negligible to aware but not convinced and coupled with that comes specific biases based on socio-cultural conditioning. There is, unfortunately, not a “one-size’fit-all” strategy for educating the mass. In each end market one will have to adapt according to the needs of the consumer.
However, on a macro level and as a possible CSR activity, it is possible to undertake a financial literacy education campaign, that targets primary school children and upwards. A campaign that focuses on the salient points of investment, savings, individual financial management from the perspective of Islamic Finance and, most importantly, the value proposition of Islamic Finance.
The content (of this campaign) would be the key in ensuring increasing awareness and comprehension and would need to ensure it:
- demystifies Islamic Finance and clearly puts forth a rational value benefit
- highlights what is the benefit of key retail products
- simplifies the investment products and communicates transparently on how the ‘back-end’ works
In terms of delivery of the campaign a multi-media approach, with emphasis on social media utilization, would be necessary in order to allow the mass to interact with selected industry practitioners and enable:
- feedback–which would help measure improvements of the educational campaign–AND
- let the practitioners to know the ‘pulse’ of the mass i.e. what are their financial needs
Bringing it back to the industry and the benefits of such an undertaking for the industry:
- Strategically such a campaign will position the organisations suporting and leading it as the “go-to” source for the consumer. Thus creating a pool of potential customers.
- It would enable the Islamic financial institutions to identify what the consumers want in terms of investment and retail products and thus ensure product portfolio profitability.
However the question that goes begging at this stage is, To Be Consumer Centric or Not To be?
Whilst Islamic Finance continues its growth based on corporate business. Will this provide it a sustainable growth? Would global organisations want Islamic Financing? OR should the industry develop a strong retail base in order to ensure this sustainability?
Education of the masses can assist in the growth and, in fact, ensure preference for Islamic Financial products and it will lead to improving current perceptions about Islam thereby bring about the much required change in mindset.
- Malaysia aims to be human capital supplier for global Islamic banking (bikyamasr.com)
- Islamic finance shall be ethic model for global banking: banker (nzweek.com)
Halal today is big business. Spanning from food, to fashion, to finance and pharmaceuticals, more and more organisations, medium sized businesses and independent entrepreneurs are scrambling for a piece of the USD2 trillion market (as estimated by the global consulting group AT Kearney).
What drives their interest is purely the huge population numbers that the global Muslim segment offers. At first look, whilst the population numbers may justify venturing into this consumer segment, what’s vital is:
1) To know where the consumers with high-purchasing power are (geographical location)
2) To have absolute clarity in understanding their psyche and, thus, their specific needs.
This consumer segment, at 23% of the global population, whilst very appealing numerically, is a segment (unlike others), that needs massive amount of logical & emotional knowledge in order to bring about brand engagement. Only through well planned brand engagement (and perseverance) can profitability come about for an organisation in this segment.
The key difference of this global consumer segment is that its needs cannot be fulfilled with the old-fashioned “one-style fits all” business and marketing approach. The emotional needs of this segment change dramatically as one uses the age, income and cultural filter. This has to be taken into account whilst developing the strategic business plan, as it has far reaching implications in the operating costs for an organisation as well as in ensuring revenue generation.
Here’s my “N.O.W” model– a simple 3-step consumer-centric and consumer intelligence based business strategy development module– that enables a business to plan its market and consumer segment entry.
1. N: NEED (to know)
- Category: Understand the category (within the overall Halal industry) that you are operating in, with regards to the mandatory halal regulations, sharia compliance, governance requirements and category turnover.
- Consumer: identify clearly, in detail, who is the consumer. Their likes, dislikes, needs & wants, shopping behaviour and media usage habits. Use age segmentation to obtain social media usage habits. Identify, professional and personal, interest based social media groups that the target consumer is involved with.
- Communities: identify physical, interest based, communities and social media communities the consumer is interacting and participating in.
- Competition: identify what is the current product used, benefits of the product, its’ marketing process and availability.
This is the “keystone’ of the process. There are no shortcuts to obtaining this consumer knowledge.
In-depth research is a must (and preferably by professional market research firms) in order to obtain as much information as possible so as to help identify, clearly, the most potential consumer segments and markets.
2. O: OBJECTIVE ( what do you want to achieve)
- Goal setting: Clearly enumerate the objectives of the business, within a certain timeline and against clearly identified consumer target groups, in order to have focus for each set goal.
Once the consumer and competition has been mapped out i.e. One knows
- who we want to sell to,
- what do we want to sell,
- how to sell it and
- what benefit it would provide the targeted consumer vis-à-vis what he/she is using currently.
Then it’s time to review the business objective and set achievable and measurable goals as key objectives.
The business objectives should, ideally, be a combination, of logic (i.e. turnover, income figures, customer satisfaction percentage target, referral target, associate/partners percentage increase in business transaction volume etc.) and emotion (i.e. emotional benefit that the brand would serve, customer usage, blog membership by customers/partners/ associates, employee projection of brand image etc.)
3. W: WIN ( map out the strategy for achieving the goals)
- Against each objective:
- Identify the specific target consumer group.
- Map their needs and media habits.
- Put the product and its benefits and evaluate against the target consumers’ needs and competitive product available in the market.
- Draw up individual tactics for market availability of your product in order to be available, easily, to your targeted consumer group.
- Re-view target consumers media habit and detail out your product communication.
With the steps 1 & 2 in place, ideate and write down the most effective strategy against each business objective.
How will you know which is the most effective strategy?
Evaluate each strategy to see if it delivers successfully against the needs of the targeted consumer segment and provides a clear benefit over any competitive product.
Once the strategy is in place, develop the tactical activity necessary to have it executed. Each strategic direction should have a tactic or planned activity, within a timeline, to deliver the objective. Against each of these activities put in the cost for that activity vis-à-vis expected return (i.e. ROI). This will provide the benchmark for evaluating if the activity is financially viable and profitable. If not, then review and identify a fresh new tactic.
Against each tactic, whilst detailing it out (as a project map) implement a timeline in order to be able review and course-correct. This will aid you to manage as you implement each tactic in order to deliver against the strategy and achieve the objectives set.
The N.O.W model helps you keep your activities in step and enables you to develop an effective market-entry plan that helps you forecast revenue earnings and brand stability.
It’s that time of the year when most businesses get into their annual planning. NPO’s (Not for Profit Organisations) are no different. In fact, an NPO’s task is harder as one has to generate the required revenue to cover all costs & make enough to invest back into the business. In my current role, whilst looking at how best to market the institution and aid the service lines in achieving their financial and brand targets, I also delve into the organisational requirements in ensuring that the planned direction can be executed well.
The latter is extremely important and brought me to write this post.
“An organisation’s strategic success is totally dependent on its work culture & attitude”
I.E. the best of plans are executed by people. And getting all the people, all the time, on the same page can (and usually is) a bit of a ask. Whilst on paper a strategic plan, logically shows achievement, in implementation (and management) a lot of drops can happen.
So the question is how do we manage this?
Here’s my list of (what I call) critical “must-haves” that need to be in place in order to ensure that the planning exercise (in itself) is a success. After all without a strong foundation the entire exercise can be compromised resulting in ad-hoc-ism and a reactive approach to business opportunities.
- Team Structure: The right team structure needs to be in place.
- Debate: The C Level team should encourage discussion and debate (of course time-controlled else the exercise can simply go down the toilet) on key strategic issues and arrive at working directions. Debate helps in bringing forth innovative thoughts towards an issue at hand. After all—“two heads are better than one”.
Debating & discussing is very different from being argumentative. Culturally (in Asia), work cultures frown on debating a point with a superior. Whilst this stems from age-old cultural norms of respect, there are limitations to carrying this into work space given the requirements today.
Encouraging positive & constructive debate would enable the C level to obtain brilliant nuggets of insight into operational management which, in turn, would aid them to formulate strategy that is:
A) Owned by the executors and implementers—as they would have contributed to it through the debate.
B) The ownership would, automatically, bring about responsibility which then will ensure that the best is given to achieve the goals.
- Centralised Budgeting: The last item on my “must-have” list is budgeting. Whilst all business units and key function heads are great managers and subject matter experts, my opinion is that, the individual budgets should be drawn up in discussion with the CFO.
The CFO, next to the COO & CEO, is the person with full knowledge of an organisation’s planned investments, risk appetite and key financial milestones that need to be achieved to keep the meter ticking over. This helps a business unit head tremendously as the CFO will ask where the funds are coming from in order for a business unit to invest in required resources. In this process two things happen:
A) Prioritisation of resource need
B) Profit target milestone setting
Both, actually, are critical elements to the C level in terms of reporting to the board. Having it detailed out takes away the question the Board would, normally, ask.
To sum up:
- Identify the right people for the right job and empower them to use their skills, ability and intelligence. Don’t micro-manage them but debate with them. This will make the employees feel valued, responsible and part of a cause.
- Put aside prejudices and cultural norms and approach the task ethically i.e. Honestly and set time aside to have constructive discussions. Don’t instruct but request. You’d be surprised how far kindness (from a leader) goes with rank and file.
- Lastly make sure all key staff know who, where & how the entire organisational budgeting is being done. Provide clear communication so that staffs know what they have to provide to the CFO’s team and what responsibilities they have.