Anthony Davidson

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Improving your business
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.

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What is your core competency?
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

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Knowledge without application is useless
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.

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