Its time to get ideas on developing new innovations and new leaders!
This month there are insights on exiting a business, inducting new executives
and finding new product, you have a shot to learn about the latest ideas
which are driving our success here at The Advisory Firm.
The
Characteristics of Intrepreneurialism
"What
makes people work is something to work for"
- Michael E. Gerber
The challenge is reasonably straightforward,
continuous competition drives a continuous requirement for elevating
performance through ground breaking innovation.
Counter intuitively however organisations are often been portrayed as exhibiting biases in their resource allocation decisions against intrepreneurship. A review of intrepreneurial literature suggests that intrepreneurship is largely ignored (not fostered) in established organisations.
Why is this the norm? Uncertainty avoidance
and myopia. As organisation’s face strong pressures from external
stakeholders for the reliable provision of goods and services and the
generation of a steady stream of profit. A conflict with deviance emerges.
The third conflict is the organisations localised search for improvements,
a narrow short term view that tinkers with evolution and precludes revolution.
Capable intrepreneurs exploit these varying demands by framing their
ideas in a way that they fit the current risk attitude of the organisation.
Thus, one would expect firms to support sometimes more and sometimes
less related ideas, depending on their current risk preferences and
depending on the existence of intrepreneurs who are able to sell their
ideas to internal resource allocators.
This article suggests a number of intrepreneurial character traits that allow prudent leaders to create policies that better foster cultures willing to at least accept of intrepreneurial exploration. For new ideas to survive in established organisations; they need to break a cycle, which is a very difficult task particularly as the commercialization process typically represents the antithesis to the typical organisational environment as just described.
The intrepreneurial developments can
be characterized by four key features:
- Are a major novel new product, technology or market.
- long term investments required to break even
- highly lucrative but uncertain, i.e. they typically fail a third of
the time
- characterised by a considerable degree of ambiguity of outcome
Kuratko and Hodgetts (Entrepreneurship,
2001) suggest that policy should foster better identification and understanding
of the following ‘confronting’ mindsets that intrepreneurs
possess, they:
- come to work each day willing to be fired for thinking and questioning
current processes
- circumvent any orders aimed at stopping the realisation of the innovation
- do any job needed to make the project work, regardless of their job
description
- network with the best people to assist in their effort
- build a spirited subculture
- work underground for as long as they can
- remember it is easier to ask for forgiveness than ask for permission
- are loyal only to their goals and often unrealistic about the resources
required to achieve them
- indoctrinate people to their vision
While analysis suggests that there are, not surprisingly, powerful forces that hamper the identification and sponsorship of intrepreneurs, this does in fact happen. Understanding these traits allows corporate leaders to have the ability to develop programs which identify and positively manage the value of such activists.
If you would like more information about a workshop for your firm on setting policy to foster intrepreneurialism. Just ask.
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The REVIEW :
The Characteristics of Intrepreneurialism
See how to foster the power
- Click here
The BUZZ:
Creating Powerful Value
Propositions?
See the insights to make it
happen - Here
Round The
TRAPS:
Steps to Mind Mapping
The 21st Century Power Tool
- Click Here
The THEORIES
REVISITED
The Pareto Principle, Value Curves and Jack Welch
The 80/20 Rule - Click Here
The Advisory Firm
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Melbourne (03) 8610 2400
Creating powerful value propositions
Now days to get customers
to even consider changing the status quo, you have to give them very
good reason. There is a central way to excite business decision makers,
through the tangible business results they'll get from using your product
or service.
This article provides the necessary insights.
One of the best ways to awaken prospective customers
out of their "everything is OK" slumber is to jolt them with
a statement about the significant difference that your offering can
make. The bigger the jolt, the better, that means you can't just say
"We help you increase sales," or "With our products your
service costs go down."
You need to be explicit, and the very
best way is through proven metrics:
• How much did sales go up?
• What kind of savings were realised? How fast?
• How much did you lower the cost of goods sold?
• What was the financial impact of the time saving?
Be exact. Customers don't believe rounded numbers anymore. Don't say you doubled sales. Say they increased 104% in 5.33 months, the more specific the number, the higher its credibility. So you have no statistics, right?
Here are three ideas you can use to create stronger value propositions—complete with metrics.
1. Use industry statistics
Leverage the research that someone else has already done. "Research
shows that over 75% of executives at companies whose new products failed
to achieve their objectives blamed poor value propositions as the root
cause"-HBR or "A recent survey of 669 executives from global
companies found that fewer than 25% of them felt that their innovative
performance was where it needed to be for success in hypercompetitive
markets."-MIT
Keep your eyes open, for relevant metrics, and enthusiastically cite the source.
2. Extend existing customer statistics
Companies today are already involved in tracking things within their
Organisation, your task is to uncover existing metrics. That means you
need to ask about what they track and how they measure results. Since
this tracking is ongoing, you will be able to see the impact of your
product or service on their business.
Specifically, a strategic management
consultant’s process improvements realised the following:
• 31% increase in productivity
• 12% decrease in scrap/unit
• 37% drop in labor/unit
Those statistics really strengthen our value proposition and make it
much more enticing to decision makers.
3. Engage new customers
in measurement
That's right! You can ask your customers to create a benchmark. If you're
confident your product or service will deliver positive business results,
get them to measure the success they're getting.
Some customers really like to do
this. They want to see whether their investment in your offering truly
did make a difference. And if it did, believe me they will be telling
everyone in the company about their great decision-making prowess. You
want people talking about you like that. Once you get those positive,
business-impacting metrics, your value proposition will be so much stronger.
In fact, it will be just what you need to get your foot in the door
of a whole slew of new prospects.
If
you want some feedback on your value proposition get in touch
Return
to the top menu - click here
Continuing this month’s
gift giving and innovation themes, we want to give you the very best
tool for idea generation: the Mind Map Power Tool.
If you are unfamiliar with how it works, you’ll be dazzled from
the results of your first try; it is an indelible skill for use when
ever you need to create fresh ideas.
1. Think of an issue of concern, I pretty
sure you’ll have a pressing on.
2. Take a large piece of A4 or preferably A3, white sheet of paper and
put it on its landscape view.
3. Gather a selection of coloured pens and highlighters.
4. Start by writing a brief description of the issue in the centre
5. Use dimension, expression and at least three colours in the central
image in order to attract attention and aid memory.
6. Fire branches of the central image and place relevant core concepts
along the branches, these act as basic ordering ideas (BOIs) or 'chapter
headings.' Fire off a few more an see if you can fill them with further
ideas and linkages.
7. Then branch thinner lines off the end of the appropriate BOIs to
hold supporting ideas relating to BOI branches.
8. Use images wherever possible.
9. The images or words should always be the same length as the line.
10. Use colours as your own special code to show people, topics, themes
or dates and to make the Mind Map more visual.
11. Capture all ideas (your own or others’), then edit, re-organise,
make more elaborate or clarify as a second stage of thinking.
12. What is the outcome? Surprisingly once you are able to conceptualise
all the relevant factors regarding an issue, there is great power and
insight into prioritising a solution, for many this activity is the
solution.
The Advisory Firm uses Mind Maps to solve
complex problems - if you have to investigate complex contraints click
here and we can show you how.
Return to the top menu - click here
The Pareto Principle, Vitality Curves and Jack Welsh
For the uninitiated the Pareto Principle is otherwise and more commonly known as the 80:20 rule, perhaps the 2nd most fundamental law of business (‘Cashflow is King being undisputed No.1’).
The Pareto Principle was named after its originator Vilfredo Pareto, (1848-1923) an Italian economist and professor of political economics at Lausanne University. Discovering the 80:20 'rule' of 'predictable imbalance', that (as far as Six Sigma is concerned) provides a basis for focusing on the 20% of activities that generate 80% of results, or the 20% of failures that are responsible for 80% of the waste, etc. Pareto first made his discovery while analysing wealth distribution, 20% of people make the 80% of the wealth in Britain circa 1890.
Where’s the connection to Jack? The ‘Vitality Curve’ evolved to become a leadership construct whereby certain proportions of the production population (workforce) are credited with certain proportions of the production. For example, the top 20 percent of sales people sell 80 percent of the product; the best 20 percent of investments produce 80 percent of the useful returns. The concept of a "vitality curve" has been used to justify the "rank-and-yank" system of management, whereby the bottom 10 percent of workers are fired at each evaluation, and a new set of optimised employees introduced.
A colleague recounts this in action, a tail found in both Car Yards and Call Centres, where each month the worst performing sales people are let go, regardless of their individual performance. In this way the ‘vitality’ of this leadership strategy is truly to keep people razor focused on results and certainly to keep people on their toes.
Chainsaw Jack, former CEO of General Electric,
used a "vitality curve" model in an attempt to justify his "rank-and-yank"
practices. Jack Welch's vitality model has been described as a "20-70-10"
system. In this concept, the "top 20" percent of the work force
is most productive, and 70% (the "vital 70") work adequately.
The other 10 percent ("bottom 10") are nonproductive and should
be fired. Welch's rank-and-yank system was part of the style which saw
GE create a 28-fold increase in earnings (and a 5-fold increase in revenue)
between 1981 and 2001.
What
is your opinion of the value of this well regarded theory? click
here to submit your experiences and comments.
This Edition's contributors:
Drew Le Grand - 03 8610 2401
T.A.F. Chairman
drewl@theadvisoryfirm.com
Brett Galvin - 03 8610 2404
Judge, Jury and Executioner - (The Advisor, Editor)
brettg@theadvisoryfirm.com
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