In evidenza

Mismanagement

virus

Mismanagement is a virus affecting all kind of organizations, in every state of their growth. Mismanagement is a real plague of entrepreneurship,

Mismanagement can be seen as a degeneration of leadership, when leaders stop producing added value for their firms and literally feed on their own organizations, sometimes causing its death.

Why is that?  There isn’t probably a specific reason, but a combination of many causes.

Bringing competition inside the organization instead that concentrating outside is one of them; excess of self-confidence is another: just because once you were  successful, that doesn’t make you all of a sudden a world’s expert on everything. (Know one’s limit is the key for success: as a manager and leader you should know that is exactly there, reaching the limits of your abilities, where you should find partners and teammates ready to help you integrating your skills)

Mismanagement is often connected with the trend of over-simplifying problems; not considering possible alternatives and assuming that compromise in necessarily negative.

As a matter of fact, a good manager, a leader, is one able to recognize a mistake, and transform it into an opportunity of improvement: sometimes instead is easier to blame someone else for your problems, bring into play “external factors” for misfortune (Yes, Napoleon used to ask, before promoting someone at his service “I know he’s a good general, but is he lucky?”, but I think that a manager should mainly be architects of their company’s fortune).  This is very often associated with ambiguous internal communication/talking company’s jargon: then communication within the company is meant only for initiated members, excluding the rest of the world.

Finding/inventing an (imaginary) enemy” is a common strategy adopted when motivation or enthusiasm is on the wane, but this is good only if we are discussing about healthy competition. Healthy competition provides motivation but this is not the case if a leader is constantly managing the firm against something or someone looking for destruction rather than construction.

Somehow this is about self-deception; mismanagement uses information asymmetry inside the organization to focus the attention of middle management and human resources towards fake targets; it’s always easier to deceive ourselves than someone else.

But the “find an enemy” syndrome attacks the organization too: mismanagement brings into the organization the culture of suspicion, an overall and contagious lack of confidence in each other’s skills, and this is sometimes able to jeopardise company’s ability to take decisions; Due to this general feeling of mistrust is easier:

  • Taking too quick decision, trusting only your own faction opinion;
  • Deciding not to decide, when in doubt that a certain decision might be favourable to “internal enemies” (the other faction);
  • Looping the decision process

When an organization breaks up into factions, you are missing the big picture: instead always act (professionaly) local but feel global: give the best highly specialized contribute to your company, but never miss the big picture. Just because you’ve got done properly your piece of the puzzle it doesn’t mean your job is over. Final success depends also on how conscious and respectful you are of the colleague who’s in charge of putting the last piece.

Let’s put this way: “Don’t ask what your company can do for you, ask what you can do for your company”!!!

Mismanagement has sometimes huge consequences:

  1. Improper use of resources;
  2. Bad (or even impossible) strategic planning;
  3. improper use of datas;
  4. Loss of company’s identity .

Here a test to perform in order to avoid mismanagement practice and discover its early symptoms:

  1. Is internal training efficient? There are enough investments on this process? And in measuring effectiveness of delivered training?
  2. Management invest and improves internal communication? How long it takes for bottom-up communication? Hoe many “filters” there are? (f.i. is possible that a message/suggestion form the base reaches the attention of CEO?)
  3. Is company investing in R& D as it happened before? What happens next to projects? Is the time to market of relevant ones in line with the past?
  4. Is management conducting routine company’s organizational climate surveys?
  5. Is company measuring (when possible in many active and alternative ways) customer satisfaction and listening to the “voice of the customer”?
  6. How you will define overall company’s transparency?
  7. Is turnover trend under control in your company?
  8. From time to time, is company performing surveys on suppliers/evaluating possible new ones?
  9. Concerning communication and decisional processes: is possible to define and to keep under control an overall “crossing time”, expressed as time needed for an information to be delivered crossing all company’s organizational and decisional levels or for an authorization to be given to someone into the company? Is this time proportional to the importance of a certain decision?
  10. Is your organization feeling comfortable with the concept of recognizing a mistake? F.i. is taking care of internal and external claims? There is space for submitting complaints or simple suggestions? Is internal communication using only words like “success”/“challenge”/ or also words like the concepts of “issue”; “difficulties”, “experience”; “challenge”? Sometimes apologize is an act of courage and true leadership.

Annunci
In evidenza

Is every entrepreneur a storyteller?

CANTASTORIE

Is startupping a mission or a call?

For some aspect, is probably both.

Whatever are your company’s values and vision/mission and your point of view about entrepreneurship there’s  little doubt about the fact that being an entrepreneur has some relevant impact on society and not just within the business world and that an entrepreneur can create many different startups keeping for all his carrier distinguishing characteristics related to his personality, approach, personal values and so on.

So probably, being an entrepreneur is a call that may be characterised from time to time by different, sometimes highly connected missions.

In my personal experience, there is something that connects all startuppers I’ve ever met.

Is not necessarily the attitude to take a risk, because not all entrepreneurs know how to handle risk or have a clear perception of it; but is not necessarily dynamism, or the leadership, because sometimes entrepreneurs do not display excellent qualities in this field.

The quality that connects them all is the ability to tell a story. They are entrepreneurs because they are willing to tell something about their experience and concerning their vision of the future. They love to tell stories because when you tell a story to somebody else, suddenly your relationship with the audience changes forever and so does your mutual understanding of the world. That experience is not anymore just yours, ma is immediately belonging to a whole community.

Teling is sharing.They know how to tell stories because they are trained by the endless meeting they have to face with stakeholders, clients, investors.

And most of the times, they tell a story into another story: their personal story, in facts, is most of the times the necessary prologue for effectively telling their company’s story.

So if telling a story is the unifying quality, in how many ways it can help you developing a startup?

STORYTELLING

HELPS BECAUSE
YOU AS ENTREPRENEUR IT ESTABLISHES PERSONAL CREDIBILITY
YOU AS ENTREPRENEUR IT MAKES CLEAR BOTH YOUR CALL AND YOUR MISSION AS ENTREPRENEUR
YOU AS ENTREPRENEUR OFTEN A STORY REPRESENTS THE SOURCE OF THE FOUNDER’S CALL/PASSION
YOU AS ENTREPRENEUR IT TELLS TO EVERYBODY NOT JUST WHY YOUR COMPANY IS SPECIAL BUT WHY YOU ARE UNIQUE.
EXPLAINING YOUR COMPANY’S MISSION IT MAKES CLEAR ITS UNIQUENESS
DESCRIBING YOUR COMPANY’S ROOTS IT MAKES POSSIBLE FOR AUDIENCE UNDESTANDING NON JUST YOUR ORGANIZATIONAL CHART (F.I. ROLES AND RESPONSIBILITIES) BUT THE WAY YOU ARE, THE PLACE WHERE YOU WORK, THE ATMOSPHERE ETC
FULLY DESCRIBING YOUR BRANDING POLICY EVERY BRAND NEEDS/HAS A STORY BEHING, SOMETIMES A GREAT STORY TO TELL
DESCRIBING YOUR BUSINESS PLAN IN A FEW WORDS BECAUSE BY DEFINITION EVERY STORY, NO MATTER HOW SHORT, IF IT’S A GREAT STORY HAS A BEGINNING, A MIDDLE AND AN END …EXACTLY LIKE YOU BP!
CREATING COMPETITIVE ADVANTAGE IN PITCHING, IT MAY HAS THE SAME VALUE THAT A SIGNATURE SONG HAS FOR A SINGER.  EVERYBODY, RECEINVING THE PROPER TRAINING CAN TALK ABOUT ECONOMICS AND/OR TECHNICAL DETAILS…BUT NOBODY CAN TELLA YOUR STORY THE WAY YOU DO IT. IF IT HAPPENS…THE SONG NEVER SOUNDS THE SAME!
INVESTORS DECIDING A STORY IS NOT JUST DESCRIBING YOUR IDEA (LIKE EVERY GOOD BP ALREADY DOES QUITE EFFICIENTLY) BUT WHY YOU FIRST CHOSE FOR IT. BECAUSE YOU ARE, AS ENTREPRENEUR, THE VERY FIRST CUSTOMER OF YOUR OWN COMPANY!!
COMMUNICATION TELLING A STORY IS THE MOST VALUED AND LONG TERM (AND DIFFICULT!)  WAY OF COMMUNICATING WITH COMPANY’S STAKEHOLDERS
GIVING CUSTOMERS SOMETHING NICE TO PLAY WITH
IF THE STORY IS GOOD THEY WILL SPREAD IT ALL AROUND, MAKING YOUR COMPANY POPULAR FAR BEYOND YOUR WILDEST DREAMS. ABOUT THIS SPECIFIC POINT, REMEMBER THAT, WHETHER YOU WANT OR NOT, THAT WILL HAPPEN ANYWAY. WE ALL CREATE CONTINUOSLY STORIES AND RITUALS ABOUT EVERY ASPECT OF OUR DAILY LIVES. SO  CUSTOMER NEED TO CREATE A STORY AROUND YOUR COMPANY, AND THAT CAN EITHER POSITIVE OR NEGATIVE, BUT DEFINTELY NOT UNDER YOUR CONTROL, SO WHY NOT  TO USE IT TO YOUR OWN ADVANTAGE?
In evidenza

For efficient planning startups need to bridge the forecasting gap

 

sfera di cristallo

Business world is experiencing an evident schizophrenia which is causing considerable damage. In Italy (as well as to a greater or lesser extent, in many other countries) about 98 percent of the total amount of active firms have less than 20 employees. A cluster  made up of over 5 million small and micro  business that produce 40% of the annual national value added.

For those who are willing to manage a firm in the right way, first of all is necessary to plan, because nowadays the entrepreneurial intuition without planning and organization skills does not lead anywhere.

Planning of course means a lot of different things:

  • Strategic planning, played around the entrepreneurial vision, with a time horizon ranging between three and five years;
  • Marketing and commercial planning, for conquering new markets for their services and products, with times horizons sometimes short, seasonal or anyway generally between one and three years;
  • Financial and fiscal planning, necessary to ensure the company a sufficient and above all constant cash flow injection;
  • Risk and IT planning more and more necessary to keep up with a fast moving market and with the huge technological progress;
  • Planning of training, increasingly decisive for long-term success on the markets, but which often requires some time to appreciate its impact in terms of value production;
  • The planning par excellence, that is the one concerning research and development, which according to the various product fields, can absorb resources for many years to come;

Challenged with this growing demand for planning skills (and related investments), the reality that entrepreneurs are facing is constantly changing, almost ungraspable.

It is not just the markets that oscillate dangerously between unbridled globalization and a neo-protectionistism that is often illogical and counterproductive, it is the whole society at the global level. As a victim of something very similar to a sort of sociological and political “greenhouse effect”, the social and cultural climate seems to “overheat” everywhere, with phenomena of political instability and local virulence that are equally unpredictable and difficult to read as weather events.

So companies are faced with a clear schizophrenia, if on the one hand the market demands more planning skills (and therefore ultimately an increased forecasting capacity able to lead the investments that these plans always accompany) and on the other hand it always provides less certainty on how and in what direction the needs and aspirations of consumers will move ahead, as well as the socio-economic government policies, the possibilities of supplying resources and raw materials, etc, etc

In this context data are definitely not missing, rather we are submerged of numbers, often lacking the ability to classify, order, analyze this avalanche of data, in an aseptic way, free from prejudices or from ideological strabism deriving from the use and the abuse of theories and economic and entrepreneurial ideas.

There is therefore a need to moderate this evident asymmetry, to bridge this “forecasting gap”, endowing companies with reports that aim to reduce this huge uncertainty back into clear trends and scenarios with which the company can become step by step familiar (if at the same time we can also provide them with the appropriate interpretative keys), reducing at the same time the risk and instead increasing their possibility of success on the markets.

Therefore entrepreneurs and most of all startuppers should select structures, advisors and incubators able to provide these forecasting services too because not only  large companies should benefit from it.

Scenario planning helps reducing risks in many ways:

  • It compensates common and frequent errors in decision making
  • It’ very different from any other plan (f.i. contingency, risk, etc) because it connects all different uncertainties a form daily has to face

The scenarios and trends on the evolution of the international landscape and market that SME’s and startups need to have at their full disposal, in facts help to create that substrate on which the above described planning needs can consistently grow, finding confirmation and inspiration and, above all, the most necessary thing: a concrete reduction of the entrepreneurial risks.

In evidenza

The naked pitcher, strategy unveiled. The book.

cropped-triplo-infinito.pngThe Naked Pitcher will be soon available as a Manual, with a totally new,  easy and ready-to -use approach!!!!

“The Naked Pitcher is a practical blog that is surely to entertain, educate, and challenge our common understanding of what it takes to be an entrepreneur.”
Abdelhamid El-Zoheiry -President of the Euro-Mediterranean University, Slovenia (http://www.emuni.si/).

Are you a circular or straight start up?  And your entrepreneurial style is Kipling or a Parsifal- like? Following the experience of many years of consulting and teaching Prof. Massimiliano Bellavista proves an enjoyable and back –to-basic approach to strategy.  The naked pitcher is a “low cost”, simple and fast approach to strategy that proved to be successful with many different startups in the Euro-Mediterranean region: it is not a manual neither a book about strategy but a ready -to -employ vademecum for your entrepreneurial journey.

  • If you are somebody interested in understanding how strategy can be effectively applied to start up management, this is probably your book.
  • If you are an entrepreneur, and you want to get the basic concepts necessary to have a successful one avoiding the usual pitfalls, this is your book.
  • If you are in a multi-ethnic or in a multicultural team and you want to transform it into a successful firm, this is definitely your book!!!

“Initiatives such as the Naked Pitcher are of great importance, allowing to create a
cradle and an environment where those entrepreneurial gems can grow and prosper locally, without dispersion towards the dominant nations, increasing the intellectual potential of our peoples.”
Willy Burkhardt- founder and CEO of Arcares SPA (https://arcares.lutech. group/), the IT leading company for Factoring and SCF Management Systems in Italy

Copertina

Vision is about Red and Blue

vision words verbs

A good vision is blue and red

Nothing is probably more difficult to address than writing a good vision.

There are endless ways to accomplish the task: when it comes to explain what an effective and inspiring vision can be and represent, everybody has is his own theory.

In the end, there are some points in common between the various approaches:

-it has to be short (between 1 and 20/30 words, somebody says no more than 7)

-it has to be original

-it has to be clear

-it can be the basis for communicating company’s goals internally and externally

If you look at the vision statements standing on line and you analyse the most commonly used words in those texts you can reach some certain conclusion:

A) Mission is about words, that define either one of more of the following 4 areas:

  1. a scenario,
  2. a target
  3. a competitive advantage
  4. a stakeholder

In facts the most widespread words are related to concepts like: service, customers, quality, growth, environment, leadership, champion, value, being the best, profit, future, employees.

4 words categories

 

B) Mission is about verbs, that define either a process or an action related to some or all of the following 9 categories:

  1. time (accelerate, advance, end, start)
  2. growth (boost, enhance, broaden, enlarge, develop, exceed, grow, increase, extend, expand, enrich)
  3. challenge and fight (defend, preserve, defy, dominate, eliminate, engage, maintain, save)
  4. change (change, make, shape, revolutionize, review, disrupt, transform)
  5. progress (advance, improve, elevate, transcend, prevent, resolve)
  6. creation (build, activate, craft, feature, generate, invent, establish, construct)
  7. communication (formulate, highlight, illustrate, inform, instruct, persuade, promote, reveal, inspire, coach, claim, facilitate, imagine)
  8. operations (collect, delivery, produce, make, distribute, enable, equip, execute, validate, work, produce, organize, test, measure, offer, launch)
  9. human resources/human factor (honor, encourage, empower, educate, celebrate, care, sustain, motivate, entertain)

9 categories

Vision can therefore shift from a “soft” one like a combinatio of scenario words together with creation or communication categories to a “hard” one, where target words together with challenge and fight or time verbs.

So in the end a good mission is about a balanced combination of RED and BLUE.

Try to combine these categories to find your own.

There are probably many other words that can be used next to those we tried to list, those are just the most common ones. But they can provide some useful hint (one of them could be also to avoid all of them in order to produce something really original!!!)

When startup…started up!

 

timescale

1200: the word appears with the meaning of “to rise up”

1550: first evidence of the word “upstart” meaning “beginning, start”

dizionario

1590:  it means (something that) “come suddenly into being”

1845: the word appears for the first time with the meaning of “action of starting up“, as the act or an instance of setting in operation or motion, and as a fledgling business enterprise.

1976: the word appears on Forbes 15 Aug. 6/2   “the … unfashionable business of investing in startups in the electronic data processing field.”

1977: on Business Week (Industr. edn) 5 Sept. “An incubator for startup companies, especially in the fast-growth, high-technology fields

1990/2000: the word becomes highly popular thanks to the “dot.com” economy

2002: Google N-Grams, a service that measures the frequency of a word’s use within Google’s collection of scanned books shows that the usage of “startup”  peaked around 2002, shortly after the burst of the “dot-com bubble”

word startup

Is 9001 2015 viable for startups?

 

ISO 9001 STARTUPS

Not many young entrepreneurs are familiar with ISO 9001 standard.

All they think they know is sometimes is that:

-it may be useful on a later stage…but definitely not now!

-it’s most of the times an expensive obligation, a condition to have access to certain markets or for approaching some industrial partner that compulsory require the application of this standard in order to do business with them

-it’s somehow perceived as against the spirit of a startup… a pioneer doesn’t shave to spend times drawing maps, his task I conquering unexplored territories. Startups process are liquid and constantly changing, it’s against this flexibility-mantra to tighten-up processes like ISO 9001 seems to suggest

– …ISO 9001 what?

Well, an expert will probably tell you (There are endless articles like that on the net) that ISO 9001 certification is really essential because:

  • Brings into your organization a continuous improvement culture
  • Helps you to formalize and document your processes; the idea behind is: if you can do that, then you can easily explain them to third parties/stakeholders and if a process is formalized, is also under control
  • Teaches you how to approach the concepts of risk and opportunity management
  • Makes you sensitive to customer needs and issues because with ISO 9001 you have to pay attention to customer satisfaction and customer experience, having therefore the chance to boost your sales
  • Shows you the importance to setting goals and objectives for all your processes…in the end performance is everything

NO. Is too simple and unrealistic. That’s just part of the truth…when it comes about ISO 9001 certification you have to think carefully about the following aspects:

SUPPOSED ISO 9001 ADVANTAGE ISO 9001 PROS ISO 9001 CONS SUGGESTION FOR IMPLEMENTATION
PREVENTING COMPANY’S FAILURE ? Startup fail for many reasons, but they are definitely Not failing because they don’t have ISO 9001 certification! First contents, then the framework….if processes are working you are always in time to formalize them into procedures. Start with knowing the standard, and then with applying internally its principles. Your firm will benefit from it.  Undergoing a certification process request defining a clear certification-purpose and having in place a consistent organization… both thing request a mature and well aware organization, with a strong identity and company culture.
CONTINUOUS IMPROVEMENT It’s ISO 9001 DNA, through the plan-do-check-act approach, that is naturally improvement .oriented Improvements can be defined and realized with many alternative methods Get familiar as soon as you can pdca continuous improvement cycle: in the end is a very good management method in every stage of your startup development. Is the best way to get in contact with ISO 9001 world  (and also with other standards of the ISO family such as ISO 20000, 14001, 27001 etc)
PROCESSES DESIGN AND FORMALIZATION It’s true, this represent a weakness for many startups…they just don’t document and write down enough their processes; but establishing uniform and well defined process is essential for:

– transform a craftsman, like sometimes a startupper really is (producing products with sometimes unacceptable erratic quality) into a business man (able to guarantee always the same quality standard)

-make yourself understood and appreciated to potential partners and investors

Process design and formalization is costly, takes a lot of time and needs to be kept properly updated and therefore well understood by everyone into your organization. Briefly, it needs also a lot of (expensive and time demanding) training Do it in steps:

-set this point as, f.i., a specific Business plan’s goal

-start with core processes, the “heavy ones” that really make your organization looking unique and special… that’s a good point for developing a good business plan too!

-get gradually to reach a full documentation of primary and secondary processes in a two years approach

 

RISKS AND OPPORTUNITY Getting familiar with the concept of risk since the early development stages is very important. Not being enough  risk-aware is a very significant reason of failure for many startups. ISO 9001 tell to perform a risk analysis, but it doesn’t tell you how to do it, which kind of techniques are appropriate for a startup. Performing a risk analysis and using it as a management tool on a regular basis request time and a mature and consistent management culture. A startup is by definition a risk taking organization. Use first the ISO 9001 risk approach in developing some parts of your business plan (f.i 5 forces model) and get familiar with it. Then fully develop it with the help of some skilled advisor who can provide the most appropriate frameworks and tool to perform the risk analysis
GETTING FAMILIAR WITH CUSTOMER ISO 9001 is, since the very beginning of its history, customer oriented. Being aware of the importance of developing skills, processes and tools to hear the “customer voice” is certainly extremely important Sometimes customer voice can be hard or too expensive to be detected by a startup alone; sometimes can be even misleading, especially when it’s about bringing to market some potentially disruptive and unexperienced change There are many methods and chances (direct, f.i. asking questions directly to your customers, and indirect, like f.i. analysing claims and behaviours) to detect customer satisfaction and the effectives of the provided customer experience.

–          Start with simple and not too much structured methods, gathering timely the first basic feedbacks.

–          Learn how to use it in improving your organization

–          Refine your research and analysis from time to time investigating some specific elements (f.i. connected with some commercial initiative such as the launch of a new product

SETTING GOALS AND OBJECTIVES ISO 9001 provides a really important  and widely used framework for setting, reviewing, and taking action against objectives etc etc It can be difficult, especially in an early stage, to follow efficiently the many changes and the variations a startup  may have to undergo; moreover, goals and objectives may be enforced by partners, investors, customers etc Use first the ISO 9001 just as a framework able to inspire and make your work consistent. Then refine your work from time to time, following the progressive formulation of your firm’s identity

 

It can be concluded that:

  • the implementation of ISO 9001 standard into your organization is important but probably not in an early stage of development: at this stage training (also about ISO standards) is instead essential to get familiar with this specific world;
  • at an intermediate stage, you can use ISO 9001 framework for internal application to build your quality system and trying to organize people, resources and process inside your business;
  • you can then think about ISO 9001 third party certification when your firm is sufficiently mature to implement and most of all improve and maintain such a quality system growing consistently and coherently with your business development; you can also think, in order to make costs sustainable, to obtain ISO 9001 certification as part of a cluster, a joint venture or a network of firms.

 

 

 

 

 

Making a beeline for market

 

What is eternal is circular, and what is circular is eternal said Aristotle

Not your business, probably.

Common knowledge it that a person who gets lost in unfamiliar terrain often end up walking in circles. It looks to the most of the people like an axiom.

                                                   retta cerchio

It may be true but in facts is just part of the truth. We imagine ourselves in the middle of an unfamiliar terrain, like a forest or maybe somewhere in the ocean during a storm: but let’s add an external directional reference to this scenario, such as the sun or the stars, and everything changes. Science proves that our previous assumption is completely wrong…humans are perfectly able to walk on a straight course even in an unfamiliar terrain if you only give them the chance for a reliable reference point able to eliminate the accumulating noise in their sensorimotor system.

If this reference point exists, then we can “make a beeline”, common expression to say that we are able to head directly and quickly toward something or some place.

For a startup is more or less the same thing, if we are able to look for those reference points in the landscape we’ll conquer 3 important targets:

  • Avoid losing unnecessary resources in order to accomplish our business targets
  • Understanding that those points may vary according to circumstances and therefore a continuous assessment process is requested to understand which reference point may be viable, consistent, feasible…
  • Changing/choosing some reference point (either a partner, a product, a service, a leader, a vision etc) doesn’t mean at all to lose your identity: that should help you to classify their relative importance. In the middle of a journey, the top of a mountain can represent a momentary reference point that can lead you out of a valley, where instead the sun represents the key to reach your final destinations. Then probably the first is a mission, the second is about setting values and/or a vision

Is your startup running the risk of walking in circles or instead is able to make a beeline for market?

Here the most typical signs:

CIRCULAR STRAIGHT
No leadership Clear leadership (whatever leadership model..)
Follow the leader Being inspired by the leader’s vision
We are right We want to prove that we are right
Going ahead Planning
Past Future
Time is endless Time is a precious and scarce resource
Gathering data Gathering knowledge
Analysing data Forecasting, making scenarios
Comfort zone Accepting risk
Having an idea Having a vision
Working  together Collaborating and sharing
Believing in a white knight We have to do it ourselves.
Rigid tasks Flexibility
Changing is a drama Change is a normal process
Reactive Proactive
All or nothing Rome wasn’t built in a day…success may be reached adopting a stepwise approach
Our firm is forever We don’t know…we will be there till we’ll be useful to someone
Being always sure Managing uncertainty
Driving onto train tracks Cut out your way
Destination is everything Present position is important
Creating borders Exploring
Interested only in the firm Interested in the competitive landscape
Exclusive company culture Inclusive company culture
Talking  and announcing Communicating
Improvement Improvement and/or disruption
Focused on effectiveness Focused on efficiency

 

So in the end we can argue that strategy can be defined as the set of activities and resources that can make an organization shift from walking in an unproductive circle to moving on a straight and efficient path

 

Feasibility study: how and why

by Ouijdane El Arabi (A graduate of the national school of management and trade Oujda Morocco, a current student in EMUNI University Slovenia in Euro-mediterranean entrepreneurship diploma (EMED). Worked previously in several non profit organizations but also interned in many businesses.)

What is a Feasibility Study?

 

feasibility study

The feasibility study is a concept that gets mixed quite often with the concept of business plan. The feasibility study however it is not a business plan, regardless of the fact that much of the informations are in the business plan do exist in the feasibility study. The feasibility study tends to answer a single major question: Is it a viable idea to proceed with?

In other words, the feasibility study is intended to answer if the business idea makes sense and profitable (narrow the alternatives and provide the focus to highlight the opportunities that might be hiding or not showing to the entrepreneur), Cash flow, profit with  reasonable risk, long term viability and long term business goals.

On the other hand, the business plan is a detail plan of how to achieve success, goals, targets,….

The feasibility study’s process goes through determining 3 major analysis:

  • Market analysis : Composed by :
    • Demand: on this level we need to answer the following questions: Does the demand exists? If Yes, how much is its level? How much of the product the customer will purchase and how often?
    • Target market: at this level we need to have an accurate targeting of customers in addition to defining elements related to them (where do they live, their revenues…)
    • Competition: how many competitors do we have? What they do well? and what are their weaknesses? And how our business and product(s) will be different than them     ?
    • Market channels and outlets: What channels are we going to use? Ex: Retail, grocer market direct sales (knock on the customer’s door for example) … Do they require specific distribution?
  • Production analysis : We need to determine:
    • Facilities and equipment: What are the required equipments? Where to retain them? Can we repair them? if not how close is a reliable technician?
    • Labor and management: by identifying the number of employees, knowledge and skills they need to have, and our ability to train them. On the other hand, determine the skills needed in our side to manage and weaknesses that can happen to us as well.
    • Inputs all material: From where to have them? Is our schedule aligning with the schedule of obtaining the inputs?
  • Financial analysis : It has 4 main levels to precisely plan as well, we can present:
    • Startup costs: costs required for land, facilities, machines, licenses and all elements to start the venture. We need to determine also how our venture will be financed.
    • Operating costs: Gathers the fixed and variable costs to run and produce and how they change over time,
    • Financing: how to finance the venture: it is about knowing the requirements to fiancé the venture.
    • Revenue and profitability: It is essentially the price, profit and results.

Key advices for creating a good feasibility study:

Elaborating a feasibility study is not always a piece of cake, however every entrepreneur is capable of doing it by using one or many of these tools:

  • For the Market analysis:
    • Data collection: First and secondary data using observation, surveys, focus groups, interviews.
    • PESTLE, SWOT, Porter’s five forces, Blue Ocean Strategy Analysis ( you can find more about in this site )…
  • For the production and financial analysis:
    • Distinguish between the operating and investment activities (define long term and short term assets)
    • Define the risks and uncertainties to try to manage them ahead.
    • Best case, worst case and “most likely” scenarios.
    • Proceed with the cost/benefit analysis (define the break even point in units and in timing)
  • General directives:
    • Call for the help and assistance of the specialists in each field but also business angels that can offer moral support as well as the financial one.
    • Engage the whole team in elaborating the feasibility study.
    • Being open to changing some aspects of the business to have the best results on the longer term.
    • Be flexible.
    • Don’t be afraid to let go an idea if it is not fruitful for you as an entrepreneur!

Strategy and the six honest serving-men

I keep six honest serving-men / (They taught me all I knew);

Their names are What and Why and When/And How and Where and Who.

I send them over land and sea,/  I send them east and west;

But after they have worked for me,/ I give them all a rest.

I let them rest from nine till five,/ For I am busy then,

As well as breakfast, lunch, and tea,/For they are hungry men.

But different folk have different views;/ I know a person small

She keeps ten million serving-men,/Who get no rest at all!

She sends em abroad on her own affairs,/From the second she opens her eyes

One million Hows, Two million Wheres,/ And seven million Whys!

Rudyard Kipling

5 W+1H

This elementary rule may represent the anchor of salvation for many issues.

Take strategy for instance; basically crafting a strategy represents a way to:

  •     analysing a problem
  •     finding a way to fix it
  •     designing a plan to accomplish the task
  •     keeping such a plan under control (and improve it)

How are you going to make it?  of course, there are many methods that may help you assessing the landscape, checking the feasibility of a certain idea but, back to basics, in the end the only thing you really need is a bit of common sense.And is exactly at this point that Kipling’s serving men come to help you with their soft power. Apply the 5 w + 1 h rule.

WHY: why is everything. Is probably one of the few words in the universe that becomes more interesting and deeper everytime we repeat it.  There are methods in strategy that lead to a deep analysis of an issue simply through a continuous iteration of the word “why?” taking always a bit further and deeper problem’s exploration. But the very first why is also scary because is the very beginning (“Start with why” is Simon Sinek’s famous mantra)

WHO: who is related with identification of roles, finding identities, defining responsabilities. Who is in charge? who is going to fix it? Who is carrying on a specific task and last but not least, who’s generating a specific problem?  Who in the end is the very precious human factor that can make the difference in your business life…only if Mr Who answers your call!! (who may be also your customer…in the end is not that strange: the “human factor” inside (employees) and outside (customers) the firm seem progressively to become two faces of the same big thing…think about the most innovative/internet based companies)

WHAT: what is about defining both your problem and your goal. And that’s definitely an art. What is defining borders; what falls into the borders is something to be proud of (uniqueness, competitive assets) or to be worried about (issues to fix, vulnerabilities); what falls outside is competitive landscape. (So is the area of research which should identify direct or indirect competitors and at the same time, give us the comprehension of their mission, vision, core values, niche market, strengths and weaknesses);

———WHY, WHO AND WHAT are  ALL YOU NEED FOR A BASIC BUT EFFECTIVE STRATEGIC PLAN———-

 

FIRST PERIMETER

WHEN: when is an interesting but tricky question. When it comes to time-scale…when is strategy, defining a horizon for developing your mission, but also tactics, giving a deadline for every single phase of your plan. But when is also about deepening the knowledge of frequencies and cycles in your business

WHERE: where is somehow ambiguous. It can be the right question for deciding the most favourable location in order to establish a new business; but it may also represent the occasion to assess what exactly (process, value, asset, etc) lies inside and outside your organization (and if it should stay like that). It can be also a chance to ask yourself the position you actually occupy in the market (and what kind of positioning task are necessary to change the status quo)

HOW: how is important because is about elaborating a method: a method for measuring your strategic plan results, a method for accomplishing your goals. How is about consolidation and formalization of a brilliant idea or a successful action into a method and in a process.