The Business Improvement Model was put together by Hearnshaw and Partners after many years of successful management in various companies ranging in size from a handful of staff to large multinationals. By the end of this course you will be able to use the techniques described with some confidence to dramatically improve your success at managing opportunities within your business as well as developing more successful and appropriate management systems to reduce cost and improve efficiency and visibility.In particular ‘Opportunities’ in the bidding and tendering process will mainly be focused on for the benefit of the current audience. Many examples are provided to allow users to fully appreciate how best to use the techniques to the maximum of affect.With a background in mathematics and cybernetics, the author has developed over the years a number of ground-braking techniques to improve businesses. This has resulted in the “Compendium of Corporate Games” which is the practical application of cybernetic methods into simple to follow and understand processes to ensure that businesses are as successful as possible. Opportunity Management and how it can be used in Business Improvement is just one aspect of this Compendium, but it does formulate the basis of many other techniques.
It is probably worth a few minutes covering some successes using the Opportunity Management techniques described in this course. The first example concerned a company which was developing technology into a number of markets and had to chose and differentiate between disparate opportunities to determine where best to use the limited business development funds. The system was used to assist in pre-determining expansion requirements and also to see where funds should be spent without waste.The second example is something which is still in use today at BAE Systems. The PRASYS - Project Resource Allocation System is based on exactly the same techniques I introduced in 1998. Its application allowed far better utilisation and also gave us a view on future requirements covering the next 3 or 4 years – making training and staffing that much easier.The third example is about using Opportunity Management to Gate Review opportunities and discard ones early which are likely to result in failure. By so doing the cost of undertaking the tender is greatly reduced and the hit rates are much higher.The largest transport call centre in the world applied techniques which enabled better staff utilisations by modelling the traffic characteristics within the call centre. Final example here concerned wasted R&D spend when the R&D department was out of control and not aligned with the sales team and the customer requirements. Massive saving in cost and better still faster-to-market result.
A number of issues are often faced by the directors and management team within an organisations. The most basic of these issues is money:-Shortage of cash to develop the business resulting in no time to sort out problems or to develop the business properlyThis leads to:- Poor planning Lack of understanding of Customer needs Not appreciating competitors and where they are going Incongruous product developmentWhich in turn creates:- Company Stagnation Being over taken by competitors Eventual Business Failure
The basic fundamental of business is MONEY. Without money nothing else can really exist. Business is an enterprise which typically creates opportunities that in turn create wealth for the owner. Symbolically it is the seat of a three legged stool which needs all the legs to be strong in order to grow and be successful. The three legs are driven by:-Customer Demand Distribution of the ProductDiscipline to ensure service.Without any one of the legs the stool becomes unstable and falls over. The Compendium of Corporate Games is about ensuring the three legs can support the stool through management techniques and processes that will not only improve the business, but will also save the business money on doing things more productively and not wasting time.
In the following presentation the above symbol will represent our Business Stool.The three legs are:-DEMAND – ensuring that the customers actually want or need the products we offer. DISTRIBUTION – aligning the customers with our ability to supply the products through a sales channel. DISCIPLINE – ensuring the two legs above are working as well as possible.
Demand for a service or product:-Driven by NEED, WANT and PRICE.Fundamental to any business is the need for the product or service. This can be through a desire or want or a need because of external forces through regulations or by physical needs. For example it is fairly easy to sell Tamiflu tablets when there is a perceived NEED not to get sick or worse still DIE. A desire or WANT on the other hand has many more influences and many are based upon the Benefits and or pure desire to own something. This is where the BRAND and the positioning of a product or service becomes key.Price is the final part and allows the threshold for demand to change – both up and down. Price of a product can be too high and too low. AND the level depends upon the market being targeted. For example, if a Rolls Royce cost the same as a Holden it wouldn’t have the same appeal to the rich and exclusive set. BUT if a Holden was the same price as a Rolls Royce it’s profile would be a mismatch and probably no sales would be made. Again the BRAND positioning is critical to the PRICE and they are linked. The COMPETITORS can disrupt your Demand, although they can also enhance it. Sometimes having competition is a good and positive thing!
Distribution is driven by Market Access, Supply Access and Benefits Distribution works when there is clear synergy between the company and the channel in terms of Market Access, timely access to the products and the benefits that the channel can obtain through the relationship. All very well having the DEMAND for a product but then means to access the sales channel. Holden cars aren’t popular in Europe since it is hard to buy them. However, other BRANDS such as Opel (a Holden look-alike) are available in Europe.Again the impact can be with COMPETITION, although now it is more likely to be negative than positive impact. The Competitor is likely to drive down your selling price or increase your need to provide improved support etc.
Discipline is about INTERNAL and EXTERNAL disciplines that can impact your ability to meet the DEMAND or DISTRIBUTION.Discipline is the final leg and supports the other two legs making the stool stable. However the DISCIPLINE leg is a little more complex and is being driven by a number of factors some of which are outside of your control. The external factors are typically INFLUENCERS on how the company conducts itself. They will impact a number of areas and most notably will impact the behaviour of our company and how it may react to a situation. As a rule however, these EXTERNAL factors are outside of the control of the company. INTERNAL Disciplines are things the company can do to improve its own position. This is where the advantage can be applied between a good company and a poorly managed company. Although luck will always succeed, generally luck is created and not given! Thus this is the area where the Compendium of Corporate Games promotes.Although management in terms of Finance and other standard processes is a-given in companies and is promoted strongly through fiduciary responsibilities and of course through annual returns and board reports, it is the less clear management processes that will always let a company down. Financial reporting is a backward looking metric in that it reports what has already happened and as a rule Forecasting is based on historical data. In the case of the cluster I call Opportunity Management – we are looking forward and we are developing management processes that will help us predict the future and thus create more certainty on our business. It also allows us to plan resources better and ensure that time and money isn’t wasted. With Opportunity Management running smoothly and the DEMAND and DISTRIBUTION legs working well the company WILL BE A SUCCESS.
I now introduce the concept of the Opportunity Cloud. This was provided on the following page as a means to visualise a range of forward-looking business drivers. This is the central part of the Compendium of Corporate Games (and Opportunity Management) and is the basis for Good Business Management. The Opportunity Cloud exists in our model of the Opportunity Market. It is affected by a number of factors such as Technology, Market Forces, Competition, Customers and several others. In order to be able to best predict and manage the future we need to get an understanding of all these factors and how the company is influenced by them so that we can adequately manage the uncertainty of business and be better placed to manage our future.These factors can vary and one of the first tasks in any assessment used in Opportunity Management is to define the various factors that will influence and their relative levels of importance compared to each other. This is done iteratively when we work on the Opportunity Management Factors part of the Course.
Opportunity Management is about managing our opportunities and therefore our business. It considers the markets and sales opportunities within the markets. The same processes are also used to assess our R&D and our product development life cycle.Central to the management processes of Opportunities are a number of management tools such as:-Business Planning – knowing where we are going and how to get to the destinations along the way.Competitor Analysis – what is the competitor doing to gain an advantage? We need to develop our views on the likely strategy of our competitors so we can counter or at least not be surprised.Opportunity Management – understanding how opportunities (all types) are managed and prioritised in the company.Client Analysis – understand your customer and his requirements in terms of Wants and Needs etc. Staff resourcing and skilling to optimise success.Brand management to ensure that the company and its products are in the front of mind.Finally Tracking and Reviews to ensure we have a way of checking where we are and what decisions are made and why.
So how do we do all that? Quite simply we build a model of our business and we build models of our Opportunities – regardless what type they are. We can then compare the Ideal Opportunity against our actual opportunities to determine how good a fit we have. A bit like Cinderella’s glass slipper. We are seeking a fit!What stands in our way are competitors, time and other market forces and these too must come into our modelling.
That ends the first part of the presentation and has set the scene by explaining the simple basis behind the Business Improvement Model and has introduced Opportunity Management principles. In the following presentations we shall consider the Opportunity Cloud in more detail and how it provides the basis of managing a range of applications.
Example Successes…<br />A company going through early stage development managed to expand by a magnitude per year over a 3 year period achieving a $20M turnover in the 3rd year without significant growing pains and without wasting money on poor developments.<br />A large Defence Company implemented the system for staff utilisations and improved utilisation of staff by around 3-4% as well as greatly improved forward planning. Resulted in a $12M improvement on the bottom line in the first year.<br />A systems company implemented the Opportunity Management system to control tender and partner selection which improved the normal success rate from around 30% to over 70%.<br />A transport company implemented systems that resulted in the EFT staff levels were reduced by 30% and productivity improved within its call centre.<br />Product Management processes were brought under control which reduced R&D expenditure by more than 60%, improved logistics support, reduced product manufacturing costs and created clearer vision and branding.<br />
The Basics…<br />If we assume that success in a business is based upon financial reward then the formula for improvement is based on the following function:-<br />∆$ = f (D1, D2, D3)<br />Where:-<br />D1 is Demand<br />D2 is Distribution<br />D3 is Discipline<br />$<br />D2<br />D1<br />D3<br />
The Model of the ‘Business Stool’…<br />Customers being able to easily and simply access products they need/want<br />Customers wanting to buy the products or services on offer<br />$<br />Internal systems and processes that enable products and services to be offered effectively<br />