Defining Issues & Priorities

Ensure that the key issues facing business have been realistically defined in light of the current and rapidly changing business environment. There is nothing new about this requirement, but the fact is that very few management teams actually take the time and apply the discipline necessary to objectively define and prioritize the key issues that can make or break their business. The issues of inferior quality, higher cost products, lower productivity, and nonresponsive service plague manufacturers for the better part of the recent past. Many companies in industries such as steel, automotive, machine tool, textile, farm and construction equipment suffer badly as a result. Only few companies address these issues in effective ways. Most are unable to clearly identify the key issues, set priorities, and develop the necessary business plans to overcome the underlying problems.

While the specific issues vary for different companies and industries, the management mindset should not vary. To deal effectively with an increasingly turbulent environment, priorities must be set so the business can survive unexpected blows, adapt to sudden dropping changes, and then capitalize on smaller windows of opportunity that develop and close much more quickly than they have in the past.

Many progressive managers kick off their planning process with a session aimed specifically at getting agreement on key issues and priorities. Accepting these priorities require a shift in the way most managers think and act, such as:

• Liquidity becomes a more important objective, often more important than reported earnings. It provides the flexibility to deal more effectively with unexpected events than is possible when everything is tied up in fixed and slow moving assets.
• Productivity gains per dollar of capital and per employee must be achieved annually. These reductions must exceed inflation and achieve demonstrably lower costs.
• Innovation must never stop. Demonstrable product and process improvements must be achieved year after year.
• All cycle and response times must be continuously reduced.
• A “frightened” sense of urgency must be the way of life in all parts of the business.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Behavior and Organizational Strategies

A competency model can be an effective way of communicating to the workforce the values of the senior management and what people should focus on their own behavior. For example, a competency-based appraisal system helps to distinguish individuals with the characteristics that are required to build and maintain an organization’s values (teamwork, respect for individual innovation or initiative) from those who do not exhibit the behaviors that will support these values. In this way competency models can translate general messages about needed strategy and culture change into specifics. There are two principles that can be followed:

• Focus on the superior performers without making an assumption.
• Focus on what they do to perform the given role.

Following are various developed models that are used as a basis for selection, training, promotion and other issues related to human resources:

• Job Competence Assessment Method—this is developed using interviews and observations of outstanding and average performers to determine the competencies that differentiate between them in critical incidents.
• Modified Job Competence Assessment Method—this also identifies such behavioral differences, but to reduce costs, interviewees provide a written account of critical incidents.
• Generic Model Overlay Methods—organizations purchase an off-the-shelf generic competency model for a specific role or function.
• Customized Generic Model Methods—organizations use a tentative list of competencies that are identified internally to aid in their selection of a generic model and then validate it with the input of outstanding and average performers.
• Flexible Job Competency Model Methods—this seeks to identify the competencies that will be required to perform effectively under different conditions in the future.
• Systems Method—this demand reflecting on not only what exemplary performers  do now, or what they do overall, but also behaviors that may be important in the future.
• Accelerated Competency Systems Method—this places the focus on the competencies that specifically support the production of output, such as an organization’s products, services or information.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Capabilities of a Firm

A firm can offer lower cost or more differentiated products than its competitors if it has capabilities that are not easy to imitate. A firm’s ability to exploit an innovation, thus, is a function of the extent to which it owns scarce, difficult to imitate capabilities that are central to its value chain.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

The Aging Crisis

Not a company exists whose management doesn’t say, at least for public consumption, that it wants an organization flexible enough to adjust quickly to changing market conditions, lean enough to beat any competitor’s price, innovative enough to keep its products and services technologically fresh, and dedicated enough to deliver maximum quality and consumer service.

So, if managements want companies that are lean, nimble, flexible, responsive, competitive, innovative, efficient, customer-focused, and profitable, why are so many. Companies are bloated, clumsy, rigid, sluggish, non-competitive, uncreative, inefficient, disdainful of customer needs, and losing money. The answers lie in how these companies do their work and why they do it that way.

Corporations do not perform badly because workers are lazy and managements are inept. Just the same, the record of industrial and technological accomplishment over the past century is proof enough that managements are not inept and workers do work.

Inflexibility, unresponsiveness, the absence of customer focus, an obsession with activity rather than result, bureaucratic paralysis, lack of innovation, high overhead—these are the legacies of industrial leadership. These characteristics are not new; they have not suddenly appeared. They have been present all along. If costs are high they can be passed on to customers. If customers are dissatisfied, they have nowhere else to turn. If new products are slow in coming, customers will wait. The important managerial job is to manage growth, and the rest doesn’t matter. Now that growth has flattened out, the rest matters a great deal.

The business problem is that in 21^st century with companies designed during the nineteenth century to work well in the twentieth—we need something different.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Macro-Marketing System

A macro-marketing system delivers goods and services to consumers. It also allows mass production with its economies of scale. Also mass communication and mass transportation allow products to be shipped where they’re needed. In addition to making mass production possible, a marketing directed, macro-marketing system encourages innovation—the development and spread of new ideas and products. Competition for consumers’ money forces firms to think of new and better ways of satisfying consumer needs. Marketing activity is especially open to criticism because it is the part of business most visible to the public.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

21st Century Competition

The fundamental nature of competition in many of the world’s industries is changing. The pace of this change is relentless and increasing. Even determining the boundaries of an industry has become challenging. The companies compete not only among themselves, but also with companies in other sectors. The pace of change among once-stable phone companies is as relentless as it is in the “traditional” grocery industry.

Still other characteristics of the 21^st century competition are noteworthy. Conventional sources of competitive advantage such as economies of scale and huge advertising budgets, are not as effective in the 21^st century competition.

The traditional managerial mindset cannot lead a firm to strategic competitiveness in the competitive landscape. In its place, managers must adopt a new mindset—one that values flexibility, speed, innovation, integration, and the challenges that evolve from constantly changing conditions. The conditions of the competition result in a perilous business world, one where investments required to compete on a global scale are enormous and the consequences of failure are severe.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Who Innovates?

Schumpter first suggested that small entrepreneurial firms were the sources of most innovations. Later he changed his view and suggested that large firms with some degree of monopoly power were more likely to be the sources of technological innovation. He argued that large firms have the production and other complementary assets that are necessary to commercialize an invention; have the size to exploit the economies of scale that are prevalent in R&D; are more diversified and therefore more willing to take the kind of risk that is inherent in R&D projects; have better access to capital that smaller firms; and, as monopolists, do not have competitors ready to imitate their innovations and therefore are more likely to invest in them. By shifting the focus to the type of innovation, however, whether incumbents or new entrants are able to introduce and exploit innovation is a function of whether the innovation is incremental—a function of how new knowledge and the new product are.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Product Development Strategy

A product development strategy dictates that the organization create new offerings for existing markets. The approach taken maybe to develop totally new offerings (product innovation) to enhance the value to customers of existing offerings (product augmentation) or to broaden the existing line of offerings by adding different sizes, forms, flavors,  and so forth (product line extension).

Companies successful at developing and commercializing new offerings lead their industries in sales growth and profitability. The likelihood of success is increased if  the development effort results in offerings that satisfy a clearly understood buyer need.

Important considerations in planning a product deployment strategy concern the market size and volume necessary for the effort to be profitable, the magnitude and timing of competitive response, the impact of the new product on existing offerings, and the capacity (in terms of human and financial investment and technology) of the organization to deliver the offerings to the market(s). more importantly, successful new offerings must have a significant point of difference reflected in superior product or service characteristics that deliver unique and wanted benefits to consumers.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Technological Change and Diffusion

Both the rate of change of technology and the speed at which new technologies become available and are used have increased substantiality. Perpetual innovation describes how rapidly and consistently new, information intensive technologies replace a competitive premium on being able to introduce new goods and services quickly into the marketplace. In fact, when products become somewhat indistinguishable because of the widespread and rapid diffusion of technologies, speed to market may be the only source of competitive advantage.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Beyond Customer Satisfaction

Satisfying the customer is no longer the ultimate business virtue. Companies need to look for ways to create and increase customer loyalty. The key to this new loyalty-centered approach to customer relationships is creating and managing the customer value package – the combination of factors (price, product quality, innovation, and company image) that creates what the customer perceives as superior value. Five steps are recommended:

1. Clearly define and communicate your objectives. The company needs to make sure that every stakeholder clearly understands the importance of  creating and delivering customer loyalty and knows how to make it possible.
2. Let customers define, in their own words, their criteria for quality, price, image, and value. The company needs to distinguish between basic requirements and loyalty builders. Meeting the basic requirements will get the company on the approved vendor list, but generating loyalty will encourage a customer to stick with the company during difficult times.
3. Conduct a critical need and value assessment. The company must set priorities among important customer requirements and determine the relative importance of these aspects of the customer value package.
4. Develop an action plan and move to implementation. This turns management of customer loyalty into a way of doing business. The company must make sure that the voice of the customer becomes the principle around which the business processes are organized.
5. Monitor the marketplace and organization results. Managing customer value is not a one-time effort, so all the loyalty-building components of customer value have to be monitored regularly with a focus on the relationship between customer value, customer loyalty, and financial performance.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.