Anthony Davidson

Business Models

Trends to watch

If you understand which trends to watch, you gain important insights into how to adapt and innovate your business model. Important trends to watch As a business owner, you have to make sense of what is happening nationally and globally, especially the potential impact on business. Mega trends persist over a longer period of time. Australia’s CSIRO has identified seven global mega trends. They include adapting to climate change, the push to net zero, the growing health imperative, digitisation, advanced autonomous systems, and the importance of diversity, equity, and transparency in business. Macro trends have a significant impact in the short to medium term. The Reserve Bank of Australia is focused on four trends in its economic outlook for Australia. Reduced global economic growth will impact the economy particularly in terms of demand for exports. The current high inflation and cost-of-living pressures are affecting price and wage expectations, which may create an inflation mindset. Household consumption will be impacted by rising interest rates and inflation. Energy and supply shocks could boost inflation and lower growth. Another social macro trend that is a hot topic for business owners is remote working. Currently 40% of employees working remotely in some form. This is expected to rise to 79% by 2025. But it will be heavily influenced by the state of the economy and the extent to which flexible working arrangement become the norm. Micro trends are also important to understand. These are trends that have been around for some time but are still at an early stage. For example, transition from glass bottles to cans in the wine industry in response to rising material costs and resource constraints. Trends and lessons from the pandemic The pandemic has also taught us how to adapt and be more resilient. One important lesson is the reminder that necessity is the mother of invention (originally attributed to Plato). The pandemic has shown us that online shopping and service is here to stay, that supply chain reinvention is critical for managing risk, and that technology can be easily adopted to be more competitive. Taking advantage of trends By understanding mega, macro and micro trends, you can identify opportunities to increase the value of your business. Business value is driven by financial health, growth potential, management and governance, process and systems, and sustainable competitive advantage. Identifying factors that will impact each value driver make opportunities, challenges and roadblocks more apparent. Then develop strategies to take advantage or overcome them, and update business goals and priorities for the year ahead. Updated goals and priorities can be translated into KPIs or OKRs that are monitored on a monthly or quarterly basis. This enables your people to better align their activities to what is required for success. Finally, see uncertainty as an opportunity to increase business value.

Anthony Davidson November 30, 2022

Business

Reset your business for 2023

Later this month, I’m running a FREE Business Reset seminar for business owners and managers to get ready for 2023. With the current economic outlook, it’s a good time to rethink your strategy and business model, and reset for the year ahead. Why is a Business Reset important? The pandemic has shown us the importance of being innovative and agile. But it’s easy to become complacent as business conditions improve. Especially, if you’ve had a busy year! If you own or manage a small to medium sized business, the challenge is to continue to create a valuable business as conditions change. Which factors will impact your business and create new opportunities or challenges? Are there new business models or strategies you should be considering? How do you refocus and align your vision, goals and priorities? How will you engage customers, people and partners? Get a fresh perspective for 2023 A fresh perspective is always helpful to build a better business. With a new wave of COVID, an uncertain economic outlook, and ongoing people challenges, it’s a good time to reset your business for 2023. Taking time out to work on your business is essential for success. Even if your strategy and business model seems sound, you still need to test it against changing conditions and make necessary adjustments quickly. But if you’re unsure about how well your business is working, then it’s critical to act now. That’s why this FREE Business Reset seminar is so timely. It gives owners and managers the opportunity to step out of the business and look at the bigger picture. Identify factors that will have the most impact on your business. Explore ways to build a more resilient and valuable business. Register now Limited seats are available for this FREE seminar in Brisbane. Don’t miss out, register now!

Anthony Davidson November 18, 2022

Leadership

Build better leadership

What happens when 12 directors come together for a two day leadership retreat in the Blue Mountains? You build better leadership through deeper personal connections, alignment of values and goals, and commitment to effective leadership behaviours. Personal connections build better leadership Better leadership requires trust, honesty, and accountability. To achieve this, individual leaders must be self aware, true to their own values, and willing to improve leadership skills. Getting to know each other, and sharing events that have shaped your beliefs, builds trust and more honest conversations. It also reveals common experiences, highlighting our similarities as a team instead of our differences. Aligning personal values and goals Taking the time to reflect on your personal values and goals in life also enables leaders to appreciate the level of alignment with business values and goals, areas of potential conflict, and how to resolve this. Often leaders lose clarity about what they are trying to achieve and how the business can enable it. Sharing your personal values, goals and concerns with other leaders helps further build trust and shared understanding about what is important and what can be achieved as a team. Commitment to better leadership behaviours It is difficult to be effective as a leader unless you understand what leadership means at both a personal and business level. Assessing your leadership ability is a good starting point for understanding your leadership style and areas for improvement. But it is critical to explore and agree on the leadership behaviours that are needed as a team to reinforce business values and shape culture. Understanding the difference between managing and leading enables you to identify these desired behaviour. Then create a leadership team charter to build commitment and accountability within the team.

Anthony Davidson October 28, 2022

Engagement

Reset your business

A Business Reset is an opportunity to get clarity, focus and alignment within your business. But when should you reset your business, what is the best way to do it, and what is the best way to avoid it. When should you reset your business The pandemic forced many businesses to rethink their strategy and innovate their business model to deal with rapid change and uncertainty. However many scenarios exist where a business reset is required. Survival mode – when a business is just trying to keep its head above water. Doing more of the same makes no sense. It’s time to question why you are in business, whether you should be in business, and if the business can be turned around for the better. Unsustainable growth – when a business is experiencing rapid growth that is draining resources and profitability. Here the challenge is to find the economic sweet spot and focus resources on owning that market space and position. Turbulence – when a business becomes successful but very set in its ways. Success can often breed arrogance, leading to myopic vision, missed opportunities and even disruption by new entrants. A business reset challenges mindsets and assumptions and looks for better ways to do business. Key person absence – when an owner or leader loses interest, motivation or focus. Sometimes it can happen because of personal or family events. Other times it is the result of not having the skills or acumen to grow with the business. Either way, a business reset is required. The best way to do it A Business Reset is an opportunity to get clarity, focus and alignment within your business. It enables business owners and managers to: reflect on what is working well and what isn’t working well review performance, challenges, obstacles and roadblocks rethink strategies and business models for achieving goals recommit to the purpose and vision for the business reengage customers, employees and business partners The best way to reset your business is to take your leadership team offsite to explore, share and agree on the way forward. Last week, I facilitated a one day Business Reset with a business owner and his leadership team to review and clarify the vision for the next five years and refocus goals and priorities for the next 12 months to regain traction and momentum. This will enable each team within the business to set quarterly objectives and key results to achieve 12 month goals. The best way to avoid it While it is highly beneficial, you can avoid the need for a business reset with a clearly thought out engagement plan that reinforces your business purpose, goals and priorities. The engagement plan details that way that you will communicate and interact with key stakeholders. It often takes the form of a meeting structure to plan, enable or monitor business, team and individual performance. The challenge with meetings is that they often lack focus, direction and outcomes, or fail to effectively engage participants. Meetings must have a purpose, deliver beneficial outcomes, be time well spent, and logically link to other meetings that are conducted. To build clarity, focus and agility, I recommend a simple structure of meetings across the business: an annual retreat to set strategic direction, business priorities and KPI’s a quarterly plan to set team objectives and key results each quarter a monthly review to problem solve issues and plan the month ahead a weekly meetup to review progress and prioritise the week ahead a daily check-in to discuss the day ahead, any concerns or constraints Together with annual individual performance reviews and monthly one-on-one feedback sessions, this level of engagement can eliminate the need for a Business Reset.

Anthony Davidson October 11, 2022

Capability

Improving your business

How do you identify ways for improving your business and then successfully implement those changes? Any change will encounter resistance so you need to a framework for managing business improvement projects and an engagement plan to build ownership and adoption. Identifying ways for improving your business Your best starting point for identifying opportunities and priorities for business improvement is your business strategy. What are you trying to achieve? Which markets and customers are you focusing on. What are you offering and why does it offer unique value? Which capabilities and competencies do you need to do this? What type of management systems and culture will you require to support it. Then look at your current business model. How is your business set up and organised to do this? How different is it to the way your competitors operate? Where are the pain points from a customer, staff, supplier and partner perspective? Can you streamline, automate or eliminate processes or touch points? If a new player disrupted our industry, what would they do? Customer journey mapping and business process mapping are useful tools to shed light on ways for improving your business. Just remember your focus must be on how to build capabilities and core competencies that result in sustainable competitive advantage. Once you identify opportunities for business improvement, prioritise them in terms of impact, investment needed, and optimal timing. A framework for managing business improvement projects Most business improvement projects fail because they lack an effective Project Management Framework. Your Project Management Framework should comprises a Project Lifecycle, a Project Control Cycle, and a Supporting Methodology. The Project Lifecycle is the framework (stages and steps) you apply to all business improvement projects. Stages can include Project Initiation, a Project Definition or Scoping, Project Planning and Resource Allocation, Project Tracking and Control, Project Reporting, Project Reviews, and Project Completion and Assessment. The Project Control Cycle describes how you will plan and manage each stage. Based on a simple Plan, Do, Check and Act process, the project control cycle ensures that you have the appropriate plan, controls and corrective actions in place for each stage. The Supporting Methodology are tools and templates you use to execute the project. A Project Charter, Project Meeting Agenda, Project Report, Risk Register and Stakeholder Engagement Plan are common templates used for Process Control Documentation. So develop a Project Management Framework for your business. An engagement plan for improving your business Effective stakeholder engagement is critical for your business improvement projects. You need to get key stakeholders to appreciate the importance and benefits of proposed changes to build ownership. However getting key stakeholders to adopt these changes is your challenge. It’s not enough to communicate proposed changes to your people, customers, suppliers and partners. First, understand the context of the changes you are making. Who will be impacted and how they will be impacted? Think about how these changes will make it easier for people to achieve their goals. Consider the resources or new practices that will be required with these changes. Identify existing norms and rules that will prevent or inhibit adoption of these changes. Once you identify stakeholders directly impacted by the proposed business improvement and stakeholders who can influence the adoption of these changes, invite these people to be part of the solution. In other words, encourage them to be active participants in the design and implementation of the change. Cocreate a value proposition together with each stakeholder that gains their interest, trust and commitment. Different interactional strategies (bonding, bridging and linking) and influencing techniques can be used to do this. Your engagement plan details, maps and monitors interactions to maintain stakeholder interest, manage expectations, and build trust at each stage of the business improvement project. So ensure your Project Management Framework includes an effective Engagement Plan.

Anthony Davidson October 1, 2022

Capability

What is your core competency?

To succeed in business, you must address a specific market need in a uniquely valuable way for customers that competitors are unable to easily copy. Most businesses struggle to achieve this because they lack the core competencies needed for competitive advantage. What is your core competency? What is a core competency? A core competency is the way that you deliberately organise, integrate and coordinate resources to differentiate what you offer customers. It provides the perceived value that competitors find difficult to imitate. These skill sets reside in your people and processes and reflect the way you operate your business. Some of the best examples of core competencies are Apple, Netflix, and Singapore Airlines. What does Apple do best that customers value? Outstanding design and marketing. Netflix’s core competency is convenient content delivery. Singapore Airlines is stellar service. How to develop it Creating a core competency is a great achievement. But how do you do it. The starting point is to consider two questions: 1) Who are our ideal or preferred customers, and why? 2) Under what conditions would these customers choose us exclusively, without considering competitors? If you know why customers prefer you and how this could lead to “sticky” customers that become brand loyal, your value proposition becomes clearer. Then identify the foundations that underpin this value proposition: the specific skill sets, processes, systems and interactions to optimise what you offer. In particular, look at what your business does best and how this could be leveraged or improved to increase perceived customer value. A core competency is embedded knowledge A core competency is a valuable resource that you can turn into a sustainable competitive advantage if you know how to leverage explicit, implicit, and tacit knowledge and embed it across your business. Just remember that a core competency must be a resource that is valuable to customers, hard to find but in demand, difficult for competitors to copy or imitate, and something you can organise into your systems, processes, structure and culture. Many business fail to develop a core competency because they do not take the time to understand what customers really value. Those that do find new ways to offer customers unique value. But it takes time to develop a core competency. And many businesses will be lucky to have more than one. Choose partners who have one Why not consider partnering with companies who have core competencies in areas you don’t. Apple isn’t a manufacturer but needs to create high quality products at scale. So it partners with the world’s biggest electronics contract manufacturer Foxconn. Your value proposition and business model may be more attractive to customers if you find the right partners. Identifying like-minded businesses whose skills sets are complementary enables you to create a networked enterprise that can create network effects. Customers are drawn to ecosystems where their needs are better met. #strategy #corecompetency #capability

Anthony Davidson September 23, 2022

Capability

Knowledge without application is useless

The claim that knowledge without application is useless has been attributed to many people. But what does it mean in a business context? Knowledge is powerful if you can use it to change the way you think, act or operate your business. It can empower you and your people, especially if it is successfully applied. The challenge is overcoming the knowledge-action gap. Knowledge comes from different sources As individuals, we acquire knowledge from a range of sources. Family, friends, influencers and the media are important sources. Upbringing, education and life experiences also inform what we know and believe. In business, knowledge comes from your people, suppliers, partners, advisors, external consultants and customers. Knowledge with application is more valuable Knowledge is a valuable resource for individuals and businesses. It becomes even more valuable when we apply it to solve problems or make decisions. Storing knowledge until it is needed can be problematic. Individuals accumulate a lot of knowledge. Some of this knowledge is never used, lost, or difficult to remember. Business is the same. Knowledge is stored in our people, processes, systems and culture. Often when key people leave, the impact can be significant unless their knowledge has been properly transferred. In this way, knowledge without application is useless if it is not transferred or embedded. Overcoming the knowledge-action gap One of the challenges for business is knowledge overload, which causes a knowledge-action gap. We have access to lots of theories, frameworks, methods and tools for creating a successful business. Knowing how to leverage and manage different types of knowledge is essential for overcoming the knowledge-action gap. Let’s look at four types now. Explicit knowledge Explicit knowledge can be documented, transmitted, and learned by anyone because it is easy to share and understand. It can be stored in documents, books, video tutorials, whitepapers, and other forms of verbal or written communication. For example, when a new employee joins a business, the onboarding process and internal knowledge base is the way that explicit knowledge is transferred and shared. The greatest challenge is ensuring that people have access to what they need, that important knowledge is stored, and that the knowledge is reviewed, updated, or discarded. Implicit knowledge Implicit knowledge is obtained through experience and can be captured and transmitted. This form of knowledge is extremely important because business performance improves as people translate explicit knowledge into practice. For example, when onboarding new employees, it is not enough to just share explicit knowledge, you also want them to understand why it works and how it makes them more effective. Tacit knowledge Tacit knowledge is also gained through experience but cannot be recorded and stored like implicit knowledge. For example, great writing, pitching and leadership skills take time to develop and involve continuous training and coaching. Tacit knowledge is regarded as the most valuable source of knowledge because it can lead to to breakthroughs for businesses. But it is difficult to codify and store because it resides in the minds of people and their skills and expertise. Embedded knowledge Similarly, embedded knowledge is locked in processes, products, culture and practices. It can be embedded formally through management initiatives to formalise business practices, or informally through explicit or implicit knowledge. Both tacit and embedded knowledge provide the foundations for developing core competencies that lead to sources of competitive advantage. Next steps Start treating knowledge as valuable a resource that can improve business performance and lead to a sustainable competitive advantage. My Better Business Accelerator or Strategy Masterclass is designed to help businesses with this process.

Anthony Davidson September 14, 2022

Strategy

The right context for strategy

Sometimes you need the right context for strategy. Last week a quiet beachfront property was used to explore the goals and priorities for a market leader in retirement living. The outcomes were impressive. Over two days of discussion and reflection, a clear strategy emerged for doubling growth and the levers to achieving it. Often strategy is a deliberate process – following a series of steps and using specific tools to analyse and decide a course of action to achieve a set of goals. But strategy can also emerge – as a result of past experiences or actions that open up new ways of seeing opportunities for improvement, innovation and growth. The right context for strategy – deliberate or emergent? Deliberate strategy is typically used by established businesses with a long-term strategy and confidence in their ability to execute it. But unless everyone understands the strategy and their role in implementing it, success will be limited. This why deliberate strategy is so complicated and difficult to execute. Emergent strategy is often used by businesses whose future is uncertain and when the right long-term strategy is not clear. It is a more flexible approach to achieving goals because it allows for opportunities and priorities to emerge. This enables your people to look for opportunities to improve and grow rather than “being told what to do.” https://online.hbs.edu/blog/post/emergent-vs-deliberate-strategy A combination of both is best In my experience, a combination of both approaches works best. First, create a clear direction, set of goals, and strategic priorities with your teams for the next five years. From there, build a roadmap that provides the focus for the next twelve months and the starting point for the journey. Then empower each team to develop objectives and key results each quarter to achieve these 12 month goals. This agile approach enables each team to execute better, and to quickly adapt and respond to opportunities and challenges. But don’t forget context and location for strategy are critical. https://anthonydavidson.com.au/programs/

Anthony Davidson September 7, 2022

Governance

Effective board meetings

What creates effective Board meetings? Here’s five guiding principles: 1) Right mix of expertise; 2) Agreed rules of engagement; 3) Well-designed agendas; 4) Good preparation; and 5) Effective facilitation. Business owners often overlook the value of Board meetings because they are too operationally-focused. However, effective Board meetings provide the overarching framework for developing a great business. Last week I chaired the first Board meeting for a client as part of their rollup process into a new group. And we started to apply these five principles to create an effective Board meeting. 1. Right mix of expertise Before you form a Board, give some thought to the type of expertise you’ll need. As a minimum, you’ll need Board members with industry knowledge, financial literacy, and skills in marketing, HR, IT and legal. Also consider an external Chair who has no conflict of interest. This enables the Chair to act in the best interests of the business and be impartial when making decisions, especially in the event of deadlock. 2. Agreed rules of engagement For effective Board meetings, you need consensus about how to communicate and interact with each other as a Board. Ideally, these behaviours should reflect the values of your business and be formalised into a Board Charter. Then you are able to hold each other accountable for boardroom behaviour, especially when disagreement or conflict occurs. 3. Well-designed agendas Effective Board meetings have the right number of agenda items. Develop agendas aligned with the objectives and priorities for your business. Work closely with the management team to identify issues and initiatives for Board consideration. Prioritise agenda items in terms of importance and urgency. Ensure sufficient time is allocated to reach a decision. If an agenda item is important but not urgent, reschedule it for another time. 4. Good preparation There is simply no excuse for Board members turning up to meetings unprepared. Meeting technology makes planning and preparing for Board meetings easy. You can upload relevant discussion papers and reports well ahead of the meeting to give Boards members the opportunity to review and analyse. More importantly, you can record, notify, and remind Board members of motions, resolutions and actions. 5. Effective facilitation Well-facilitated meetings bring out the best from Board members and enable proactive and constructive thinking and decision-making. A good Chair is able to effectively engage members in discussions, encourage different points of views, challenge assumptions, and find common ground. Wrap up Obviously, there is a lot more to running effective Board meetings. But start with these five principles and you’ll be surprised. #board #meeting #effective #chair

Anthony Davidson August 30, 2022

Business

Better Business Accelerator

The Better Business Accelerator program is designed to help you build a more valuable business, identify opportunities for growth and innovation, and develop a roadmap and engagement plan to achieve it. What are the benefits for business owners? First, you get clarity about why you are in business, what you are trying to achieve, and how you can make your business more valuable. Second, you get the opportunity to learn from experts about how to improve your business and innovate your business model. Finally, you get to hear the experiences of other business owners who become your support network going forward. This program is a great way to get clarity, confidence and connections. Just two days every month for three months – to take your business to the next level. Better Business Accelerator program structure The first two-day retreat focuses on how to create a more valuable business: Learn how to increase business value Assess current state of your business Clarify your purpose, vision and goals The second retreat help you identify opportunities to improve, innovate and grow. Identify immediate improvement areas Generate and assess new opportunities Prioritise future business investments In the final retreat, you develop a business roadmap and engagement plan to make it happen. Finalise objectives and key result areas Develop initiatives to achieve objectives Engage stakeholders to deliver the plan Between each retreat, you undertake six practical tasks to analyse and improve business performance, and give feedback on your success. As part of the Accelerator, you get to meet other business owners and managers, learn from their experiences, and provide advice and support to each other. Once the program is over, you continue to support each other through a dedicated online forum. You also have access to monthly mentoring, quarterly reviews, and further Accelerator Extension programs. To find out more, simply click this link #business #accelerator #businessowner #anthonydavidson #betterbusiness #businessgrowth #businesscourse #businessprogram #businessbuilding

Anthony Davidson August 22, 2022

Weekly insights to help you run your business.

Trends to watch

Reset your business for 2023

Build better leadership

Reset your business

Improving your business

What is your core competency?

Knowledge without application is useless

The right context for strategy

Effective board meetings

Better Business Accelerator

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