Core Business


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Excerpted from Hank Moore\'s latest book, "The Business Tree."

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Core Business

  1. 1. Business Monograph by Hank Moore Developer of Futurist the concept known as Corporate Strategist™ THE BUSINESS TREE™ The Business They're Really In Ranking by Priorities and Agendas... Theirs, Yours and the Customers' By Hank Moore Corporate Strategist™ Futurist, Vision Expeditor This Monograph is for organizations which wish to grow successfully, excerpted from Hank Moore's book series: The Business Tree™, The High Cost of Doing Nothing™, It's Almost Tomorrow™, Confluence, Secrets of the CEOs, Pop Culture Wisdom. © 1999 by Hank Moore Frame of reference is everything in business. Different people within the same organization have contrasting views as to the Business They're Really In. Organizations start out to be one thing, but they evolve into something else. In their mind, they're one thing. Other people think they are something else. The truth actually lies somewhere else. A company starts out to create the best widgets there are. After the art of building the first widget has been resolved, the harsh reality of running a widget factory appears. People need to be trained to make and process widgets through the production chain. Other people must find and develop the widget marketplace. The twain rarely meet within their own company. Turfs continue to be protected. Each constituency believes the Business They're In is and should be the one and only Business the Company Should Be In. Then come the onslaught of widget competitors, clones and wanna-be's. The widget regulators get involved, as do the special interest groups. Each camp sees the business differently. Then, the widget company decides to go public. Selling stocks, raising capital and working with the financial community becomes the priority. Constituencies start complaining that the company has veered from its initial mission. They're no longer the mom-and-pop widget maker that they once were. They've become a profiteering corporation, or a bureaucracy, or a bunch of marketers, or a technocrat institution...whichever constituency the critic does not belong to. The company, in their mind, is not in the business that the individual is in. Therein lie the inevitable conflicts. Rather than try to inter-mingle differing contexts, organizations continue to mean different things to different employees. Sadly, however, most organizations do very little to resolve conflicts of context. Thus, they begin paying The High Cost of Doing Nothing™ . Problems continue to simmer and fester...costing the organization several leaves, twigs and limbs on each branch of its Business Tree™ .
  2. 2. Ranking the Business They're In Priorities change. Dedicated providers of the service stated in the original company mission become frustrated when they don't understand the reasons for shifting priorities. Most often, what organizations say they do in external promotions to potential customers actually ranks low on the actual priority list. That occurs due to the agendas of individuals who guide the organization...departing from the core business for which founders were presumably educated and experienced. Add to that the harsh realities of doing business and staying competitive. Here is an average priority ranking for companies-organizations: 1. Revenue volume and its rewards (bonuses for key management). 2. Growth, defined as increasing revenues each year (rather than improving the quality of company operations). 3. Doing the things necessary to assure revenue (billings, sales, add-on's, marketing). Keeping the cash register ringing...rather than focusing upon what is being sold, how it is made and the kind of company they need to be. 4. Running a bureaucracy. 5. Maintaining the status quo. Keeping things churning. Making adjustments, corrections or improvements only when crises warrant (band-aid surgery). 6. Glory, gratification and recognition (for the company and for certain leaders). 7. Furthering stated corporate agendas. 8. Furthering unwritten corporate agendas. 9. Courting favor with opinion leaders. 10. Actually delivering the core business. Making the widget itself. Doing what you started in business to do...what you tell the customers that you do. 11. Doing the things that a company should do to be a good company. Processes, policies and procedures to make better widgets and a better organization. 12. Customer service, consideration or followup beyond the sale. 13. Looking after the people, in terms of training, empowerment, resources and rewards. 14. Giving back to those who support the company. 15. Advancing conditions in which core business is delivered. 16. Walking the Talk...ethics, values, quality, vision. 17. Giving back to the community, industry, Body of Knowledge. People in the organization who do things below the top nine priorities have vastly different perceptions of the organization, its mission, their role and the parts to be played by others: • Some jockey for make their priority seem to advance higher. • Some keep people on the lower rungs in check, assuring that their priorities remain low. • Some become frustrated because others' priorities are not theirs. • Some build fiefdoms within the organization to solidify their ranking. • Some do their job as well as possible, hoping that others will recognize and reward their contributions. • Some don't think that they're noticed and simply occupy space within the organizational structure. • Some try to take advantage of the system. • Some are clueless as to the existence of a system, pecking order, corporate agendas, company vision or other realities. Until such time as a concerted effort to establish commonalities of purpose is made (shared company Vision), organizational chaos perpetuates. This negatively impacts productivity, morale and the delivering of the product- service. Customers always suffer the side-effects.
  3. 3. Breakdowns Per Type of Company-Organization In addition to generic organizational priorities, each business, market niche and type of goods-services has industry- specific characteristics. These add further agendas-priorities to the general list. What they promote themselves as being externally is usually near the bottom of actual priority rankings...or perhaps a category unto itself. Here are some samples of organizational priorities, by industry: Retailers: 1. Keeping the cash registers ringing. 2. Moving case lots of merchandise, to justify negotiated prices and bonuses. 3. Sales of products. 4. Marketing of the store. 5. Making it difficult for customers to return merchandise. 6. Providing customer service, as it relates to making sales. 7. Overall customer goodwill service. In external promotions, they say they're: Giving customers all they want and need. Energy companies: 1. Marketing products. 2. Profiting investors and executives. 3. Perpetuating a system, mindset, industry, ideology, bureaucracy. 4. Engineering. 5. Energy production. 6. Research and development. 7. Serving the marketplace. 8. Issues advocacy. In external promotions, they say they're: Finding new sources of energy. Health care: 1. Revenues, billings, fees. 2. Maintaining the industry's pecking order of respect, status and deference. 3. Running bureaucracies. 4. Interface with insurance companies. 5. Patient care. 6. Professional association activities, publishing and image enhancement. 7. Health and wellness public education. In external promotions, they say they're: Offering affordable health care for all. School systems: 1. Raising funds through taxes, grants. 2. Perpetuating a bureaucracy. 3. Gaining acclaim and recognition. Priorities are directly commensurate to those of constituencies which the districts court. 4. Educating students. 5. Serving communities (taxpayer base). 6. Education for education's sake. In external promotions, they say they're: There to help students to learn.
  4. 4. Media: 1. Selling advertising. 2. Influence buying, selling, peddling, fostering myths-perceptions. 3. Entertaining audiences, in order to deliver numbers to advertisers. 4. Giving the appearance of serving the public, to create cause-related marketing revenue stream. 5. Informing-entertaining audiences. 6. Serving the public as a community-public service. In external promotions, they say they're: Caring and committed to serving communities. Elected public officials: 1. Power, prestige, influence. 2. Championing own pet causes-issues-agendas. 3. Serving pet issues of selected constituencies. 4. Fund raising and other details of winning elections. 5. Serving general issues of overall constituency. 6. Advocating for the rights of the those in need. In external promotions, they say they're: Championing the cause of freedom everywhere. Government bureaucracies: 1. Real estate trade, expansion, taxation. 2. Serving special interests, overtly or covertly. 3. Maintaining a bureaucratic structure. 4. Furthering the agendas of bureaucrat managers. 5. Serving taxpayer needs. 6. Providing a forum for taxpayer issues. In external promotions, they say they're: Running efficient government. Insurance companies: 1. Revenues from policy sales. 2. Policy renewals with minimum of marketing effort. 3. Paying for their organization to operate. 4. Paying a network of third-party administrators. 5. Denying as many claims as possible. 6. Serving clients. 7. Paying claims. In external promotions, they say they're: Protecting policy holders for all eventualities.
  5. 5. Unions: 1. Maintaining a constant of dues-paying members. 2. Programs-activities that lead dues payers to believe they've made an investment. 3. Programs and activities that will attract more dues paying members. 4. Advocacy of member interests. 5. Perpetuating a system, mindset, industry, ideology, bureaucracy. 6. Advocating-benefiting the business climate in which members work. In external promotions, they say they're: Earning pay raises and benefits for members. Consultants: 1. Generating billings. 2. Marketing to get work...making claims and promises. Telling clients they require what consultant sells, rather than overview of client needs-realities. 3. Hiring support personnel after the work is obtained. 4. Client service. 5. Professional development, in order to be all that was claimed in the marketing. 6. Running the consultancy as a business. In external promotions, they say they're: Improving businesses, per their niche definition. Airlines: 1. Filling maximum numbers of seats at highest negotiated rates. 2. Competing with travel agencies to get customers to book directly. 3. Influential forces in communities, government entities. 4. Well maintained fleets of equipment. 5. Well trained and managed employees. 6. Committed to continuing customer service. In external promotions, they say they're: The best transportation bargain around. Entertainment industry: 1. Selling tickets to events, copies of product and repeat business. 2. Image marketing, to attract customers, glamor and attention. 3. Revenue enhancement from sales. 4. Running companies to produce, package and market products. 5. Show business...often smoke, mirrors, egos and sizzle. 6. The entertainment product itself. 7. Customer enjoyment...putting more stock in customer wants, fancies and trends than most industries do. 8. People who produce, distribute and market the products. In external promotions, they say they're: Assuring that a good time is had by all. Technology companies: 1. Vendors of products and consulting time. 2. Developers of sellable products. 3. Teachers of how to use their products. 4. Offer backup support to continuing customers. In external promotions, they say they're: Providing full-scope business solutions.
  6. 6. Telecommunications: 1. Selling equipment. 2. Selling additional features. 3. Marketing company image, to help sell additional features. 4. Billing customers for add-on's. 5. Government relations, lobbying with opinion leaders. 6. Company agendas and administration. 7. Technology production-distribution-maintenance. 8. Customer it relates to selling more products-features. 9. Customer it relates to taking care of what was sold. In external promotions, they say they're: A public trust, a human motivator. Restaurant (one location): 1. Creating and serving food recipes they have perfected. 2. Making a fair profit, though driving force is food quality. 3. Taking personal care of customers. 4. Overseeing details to maintain restaurant consistency. 5. Marketing the restaurant. 6. Administration of the business. In external promotions, they say they're: A unique dining experience. Restaurant chain: 1. Opening new locations. 2. Realizing profits on all units. 3. Attracting investors for the next deals. 4. Edging out the competition. 5. Policies of uniformity and consistency. 6. Marketing of products, locations and chain image. 7. Ambience and atmosphere. 8. The food product itself. 9. Customer service. 10. Vendor-supplier activities. 11. Staff training, employee relations. In external promotions, they say they're: A dining experience that is standardized. Public lotteries: 1. Raising funds to pay for their own salaries, overhead and bureaucracy. 2. Selling false hope to people wanting to get rich quick. 3. Preying upon people who want instant riches. 4. Selling an addiction (buying tickets) to those who can least afford it. 5. Administering the process. In external promotions, they say they're: Raising funds to benefit education and other social-conscious and politically-correct causes.
  7. 7. Read Behind the Lines of What They Say When They Say They're Usually Proven innovative concepts Process upholders...nothing new or outside the box Mission Statement Setting their own barriers...not full-scope planning Growth opportunities Sales share is all that matters Solutions for business problems Suggestive selling for their products Partnerships Computer links to sales contacts Information for customers Sales promotions on their products The next generation Planned obsolescence of current-future models Business services Vendors of products Planning-management consultants Software vendors Fastest growing Oriented to sales, not service or customer followup Serving all your business needs Peddling one concept (their product-service) Fast, easy results Selling quick fixes...not longterm solutions Insightful advice Suggestive selling for their products Making life easy for the customer Quick fixes...not in tune with your true situation A perfect organization Not acclimated to continuous quality improvement The Business They Could Be In Within any industry and company, there is wide variance of priorities. Board members and line workers have different rank orders. Therein lies the rub...and the inevitable source of conflict within every organization. Rather than wish for what we think "used to be" or "ought to be," the challenge is to reconcile differences of opinion and create a unified organization. Since priority rankings will rarely be identical among employees, the purpose of shared company Vision is to build commonalities. Companies should establish a formal Visioning program. Part of that should be a Strategic Plan, updated every five years and containing annual benchmark goals. This process should be facilitated by an outside professional advisor. Do not make the mistake of assuming that the process will be skillfully and objectively conducted in- house. The formal visioning process should make the following assumptions, per each category on The Business Tree™: 1. The business you're in. Products-services reflect marketplace needs of today and the future. Processes are continually updating themselves. Expansion of business is a natural outgrowth of carefully-planned and well- implemented strategy. 2. Running the business. Though company leadership influences Vision, the process of implementing it must involve the total organization. 3. Financial. The company has a fiduciary responsibility to run effectively and profitably. All must respect this, though finance cannot govern all aspects of company activity. 4. People. Every employee of the organization must be accountable and trained. 5. Business development. Customer input must factor into all longterm planning decisions. External factors of the marketplace must always influence products-services. 6. Body of Knowledge. Each part of the organization must learn more about and how to interact better with each other. Departments living in a myopic vacuum is not acceptable. 7. The Big Picture. Shared organizational Vision is a road map for progressive growth. Things do not just happen without thoughtful planning and Big Picture thinking.
  8. 8. When a Business Changes Course ...Expanding into Other Areas. Paralleling stages in the corporate strategy known as Reasons why some want to grow beyond their current boundaries: 1. Prove to someone else that they can do it. 2. Strong quest for revenue and profits. 3. Corporate arrogance and ego, based upon power and influence (as well as money). 4. Sincere desire to put expertise into new arena. 5. Really have talents, resources and adaptabilities beyond what they're known for. 6. Diversifying as part of a plan of expansion, selling off and regrowing subsidiaries. 7. The marketplace dictates change as part of the company's global being. Circumstances under which they expand: 1. Advantageous location became available. 2. Someone wanted to sell out...a great deal was tough to pass up. 3. Can't sit still...must conquer new horizons. 4. Think they can make more money, amass more power. 5. Desire to edge out a competitor or dominate another industry. 6. Create jobs for existing employees (new challenges, new opportunities). 7. Part of their growth strategy to go public, offering stock as a diversified company. What often happens as a result of unplanned growth: 1. Original business gets shoved to the back burner. 2. New business quest gets proportionately more than its share of attention. 3. Capitalization is stretched beyond limits, and operations advance in a cash-poor mode. 4. Morale wavers and becomes uneven, per operating unit and division. 5. Attempts to bring consistency and uniformity drive further wedges into the operation. 6. Something has to give: people, financial resources, competitive edge, company vision. 7. The company expands and subsequently contracts without strategic planning.
  9. 9. 7 Measures of a Successful Organization Visioning Program Paralleling stages in the corporate strategy known as Only at such time as the Business You're Really In has been carefully studied, and a Strategic Plan is implemented to assure consistency in purpose, then the following components of a true company Vision may be expected to ring true: 1. The business you're in. You're highly dedicated, talented, resourceful and give customers what they cannot really get elsewhere. 2. Running the business. Business is approached as both an art and a science. Operations continue to streamline and are professional and productive. Demonstrated integrity and dependability assure customers that the team will perform magnificently. 3. Financial. Keeping the cash register ringing is not the only reason for being in business. You always give customers their money's worth. Your charges are fair and reasonable. Business is run economically and efficiently, with excellent accounting procedures, payables-receivables practices and cash management. 4. People. The company is people-friendly. Collaborations assure that top talent is assembled. The team is empowered, likeable, competent and demonstrate initiative and judgment. 5. Business Development. Customer service is always the focus...for and with clients. Communications are open, frequent, professional and with a deep sense of caring. 6. Body of Knowledge. There is a sound understanding of the relationship of each business function to the other. You provide leadership for progress, rather than following along. You develop-champion the tools to change. 7. The Big Picture. Approach business as a Body of Work...a lifetime track record of accomplishments. You have and regularly update-benchmark a strategy for the future, shared company Vision, ethics, Big Picture thinking and "walk the talk."