realisedevelopment.net

Just another WordPress site

Minding the Assets

by

It is deeply ingrained in most enterprise professionals to try to fix things. Business plans, cash flows, products and people.

We listen to our clients for signs of weakness or difficulty and then we try and fix the problem, usually by referring them to a course or another expert.

Much of our work is biased towards exposing and managing deficiencies rather than uncovering and celebrating strengths. This has become a deeply embedded part of our work – an almost medical approach to helping.

Think ‘Inform, Diagnose, Broker’. Think ‘Best Practice Business Diagnostic’.

We become just another part of the system that has for years highlighted and exposed weaknesses.

How would our work be changed if instead of this focus on the weaknesses we spent our time helping our clients to recognise what they have done, what they can do and what they can do to use these strengths to make progress?

The Development Trust Association exists to help communities to take control of the physical assets in their community and use them for public good.

Is there a similar service that helps individuals to uncover their assets (skills, passion, energy, talent, anger) and reclaim them in pursuit of progress?

So why not spend some time trying to avoid highlighting the problems – and instead accentuate the positive.

Developing a healthy pre-occupation with what is right, rather than re-emphasising all of the things that are wrong is likely to hold the key to building really constructive relationships in support of more enterprising individuals and communities.

Enterprise Professionals Missing the Point?

by

I am amazed by the wonderful work done by so many enterprise professionals that is not:

  • recognised
  • valued, or
  • paid for

Sometimes the only things that seems to count in the world of the Enterprise Professional are:

  • businesses started/expanded/retained
  • jobs created/retained
  • GVA (Gross value added)
  • Percentage of people who have ‘thought about’ starting a business/going self employed
  • numbers engaged in 6 hours (or more) of training

Sometimes even obviously important measures are no longer tracked because they are not directly called for in the policy frameworks within which enterprise work is commissioned and delivered.  These include measures such as the survival rates of the new businesses and also the number of people who thoroughly investigate a business idea and then decide to walk away from it because it is not ‘right’ for them at this time.  These are the clients who put their enterprise dreams ‘on hold’.  It is likely that they will have learned a lot about enterprise on the journey and they will often return with a better business idea after a while.  They will have got the enterprise bug and should certainly be counted as successes.  By putting the ‘dream on hold’ they have almost certainly been saved from future misery and debt.  It is ‘dreams on hold’ clients that we should really be counting as the percentage of the population who have really thought about enterprise.

Failure to collect data on survival rates can lead to an increase in poor start-ups destined to struggle or fail, often leaving a trail of debt, despair and depression with enormous social costs.  Indeed there are often perverse incentive schemes that ‘reward’ enterprise professionals for the facilitation of such start-ups as they are seen as ‘countable’ successes in the short term at least.

However these are not the main points I want to make in this rant!

There are a ream of other measures that are valuable in both social and economic terms that many enterprise professionals fail to track and remain unrecognised.  These often relate to the development of social capital in the course of the enterprise journey.  Tracking social capital or social return on investment is not a massively difficult task – but it does need some planning.

The kind of indicators that could be tracked  and reported on by enterprise professionals include:

  • number of social groups belonged to and frequency and intensity of involvement
  • perceptions of ability to influence their own future
  • feelings of self worth and self esteem
  • how well informed they are about enterprise opportunities
  • frequency of engaging with relatives/friends/neighbours/professionals to explore aspirations and dreams
  • invovlement in virtual networks and frequency of contact
  • exchanges of help and advice
  • perceived control of, and satisfaction with, life
  • trust in people of similar backgrounds
  • trust in people from different backgrounds
  • confidence in ‘institutions’ that might help
  • engagement with crime and anti-social behaviour
  • health gains (reduction of reliance on prescription drugs, mental health improvements etc)

I am sure that the list of good work done by enterprise professionals could go on and on (feel free to let me know any you think I have missed).

The important challenge is how we go about recording the true impact of our work – both socially and economically and making sure that the full value of this is recognised and paid for.

The Role of the Enterprise Coach or Outreach Worker

by

It seems to me that there are an awful lot of enterprise coaches/outreach workers/community motivators /enterprise enablers out there all of whom are tasked with the similar roles:

  • to promote an enterprise culture in the community that they work in, and
  • to help individuals to start their own businesses by providing 121 support and signposting them to specialist service providers

The roles are beset with many and varied challenges, including how to:

  • engage individuals in using the enterprise service that they offer
  • help people to move forward and to be more enterprising
  • effectively help people to access specialist support
  • recognize when progress is being made and when it is not
  • develop a service that provides a demonstrable return on investment to funders and other stakeholders
  • manage the diversity of people, ideas, interests and motivations

If you are in one of these roles what other challenges are you facing?

If you have been a customer what other challenges do these enterprise workers need to consider and work on?

I think it is true to say that no-one has yet really bottomed out all of these challenges and that we need to find a mechanism for sharing what works.

Understanding Your Organisation – Part 1

by

Most of the managers that I work with have an incredibly detailed knowledge of the organisations that they work in – or at least of the parts of it that they come into regular contact with. Far fewer have a good understanding of what their own organisation looks like from a more strategic or higher level perspective. This imbalance in perspective can cause too much focus on the here and now and not enough consideration of the medium and longer term. This deceptively simple, yet powerful model can help to restore a bit of balance.

It starts of with a recognition that every organisation does something (operations) for someone (customers). Whether the operation is about providing a service or a product – understanding what you provide to your customers – and their level of satisfaction is clearly important.

Customers and Operations

Just considering these two parts of the organisation can raise a host of powerful questions:

  • Who are our customers?
  • Why do they choose us?
  • What do they love about we do?
  • What do they hate?
  • What do they pay for? What else might they pay for?
  • What do they use? What else might they use?
  • How are our customers changing?
  • How efficient are our operations?
  • How effective are they?
  • Where is there most scope for improvement?
  • Who is responsible for managing operations?
  • Who is responsible for managing customers?
  • How effective is the working relationship between them?

Now let’s add a third component to the organisation that will help us to thrive into the future – a cunning plan – a strategy.

Customers, Operations and Strategy

The strategy loop invests time and money in thinking about what the organisation should be doing today if it is to continue to thrive in the future. In simple terms the operational loop is about earning today’s bottom line. The strategy loop is about ensuring tomorrow’s. In many organisations the strategy loop is almost vanishingly small. Only a few people ever think about it – and acting on it is even rarer! Sometimes ‘strategy’ is done on an annual basis usually tied up with the planning process and budgeting. Often it is done in a top down way – strategy is conceived in the board room or the chief execs office and handed down for implementation. Frequently it does not exist at all!

This strategy loop opens up some further challenging and potentially very valuable questions:

  • What is our strategy?
  • How is it developed?
  • Who is responsible for developing it?
  • How is it communicated?
  • Who is able to shape it?

This gives us a fuller picture of the organisation – but it is still not complete. A final component is required to link strategy and operations together. A component to ensure that operations inform strategy and that strategy is put into practice in operations. This component is management.

Customers, Operations, Strategy and Management

This is just about the simplest complete model of an organisation that I can imagine. A manager who is able to develop well founded knowledge of customers, operations, strategy and management is well placed to succeed.

A management team that is able to ensure balanced development of operations, management and strategy – driven by a thorough understanding of customers and their changing needs should be unstoppable.

  • Is management equally effective at developing both operations and strategy?
  • Does management make sure that what happens (operations) takes full account of strategy?
  • Who is responsible for management in your organisation?
  • How could management be improved?

This simple model of the organisation can provide a powerful catalyst for diagnosis and improvement.

Building a Better Business?

by

Most start-ups have, probably quite rightly, an almost myopic concern with their own operation and its customer base. 

‘What are we going to do?’ and

‘Will enough customers pay for it?’ are questions that obsess the would be entrepreneur.   

‘Will we have fun doing it? is a question that is taken much less seriously – but is just as critical.

The first of these questions is, without doubt, one over which we can exert absolute control – and therefore is worth much consideration, conversation and exploration.  If you rush this piece of thinking you can expect to have plenty of time to repent later – and not neccesarily at leisure.

The second of these questions we can really know very little about – until the product or service is out there – and our operation is up and running.  [Market research is notoriously inaccurate – not least because customers lie (‘of course if there was a gym closer to my home I would use it more…’) and are often blissfully unaware of their real wants and needs (Sky and Sony both spent vast fortunes on expensive market research for subscription television and the Walkman.  In both cases the research came back with a resounding NO!  In both cases it took visionary and powerful leadership to create markets for products and services that customers could not ‘see’ becoming a part of their lives.)].  This does not mean that we should not worry about understanding the marketplace.  But for most entrepreneurs investing much more heavily in understanding the customers response to your product and service in practice – rather than in theory allows the operational changes to be made that lead to success.   This is counter to much of the business development orthodoxy which pretends that it is possible – through the bsuiness planning and market research processes to provie a business idea in theory before you tkae the risk of putting it into practice.  The orthodoxy is seductive – but wrong.

The third question is also difficult to answer.  The fantasy of entrepreneurship is often very different from the reality.  I remember working with a young entrepreneur who thought he could wash cars for a living.  The financials could be made to stack up if he managed to wash 12 cars each day.  Five and a half days a week. 46 weeks a year.  On top of this he also had to do the marketing and book-keeping.  Three weeks into the new business and 140 shiny cars later this guy had fallen out of love with his idea – BIG TIME! 

‘Will I have fun doing it’ is a massively important question and one that rarely gets the attention it deserves.  However until you are up to your elbows in sponges, buckets, chamois leather, book-keeping and marketing leaflets you can never really know.  It is sensible then to also think about ‘If I don’t love it – how will I get out of it in one piece?  This leads to early consideration of an exit strategy from the business.

In many start up businesses then the thinking about the business looks, in essence, like this:

Operations and Customers

Thinking is around ‘How can I finance the operation’ and ‘Will the customer buy it?’  Understanding the Operations Loop is vital.  Providing things for customers that we believe they want and will pay for.  In return getting their money – and if we are wise a whole bunch of other information on how our product and service could be made even more attractive to them.  Designing this operational loop to get as much as we can from the customer in terms of both cash and intelligence is a vital component of successful entrepreneurship.  Most businesses do this really badly.  Talk with your customers – don’t leave them satisfaction surveys to fill in!

Most standard business planning processes can make some contribution to thinking through the operational loop of the business.  However they NEVER give enough consideration to the importance of having FUN!  And they can also horribly accelerate the process of thinking.  As long as we can get the numbers to work…  Entrepreneurship is about much more than numbers.  It is about livelihoods, ambition, aspiration, skill, passion and commitment.  In the process of business planning these are what we really need to developing.  They will determine our future more than a theoretical cash flow!  [I believe that the business plan has become a simple tool of policy for much publicly funded business support.  Business plans have become synonymous with ticks in boxes for funders.  Many of them are very poorly developed and end up in businesses starting and failing pretty soon afterwards.] 

This provides some ‘food for thought’ in supporting entrepreneurs to develop well formed thinking about their busines idea.  But it is not enough.  If we are smart the operational loop will deliver an excellent product or service, wonderful marketing and sales and first class financial management and controls.  And what is more the operational loop will be self correcting.  Feedback from customers and intelligent discussion within the operational team (this will not just happen – people will need to be given time and space to do it and may need to be trained as well) will ensure that prices remain fair and profitable while product and service quality reflects customers changing requirements.  But there is another set of questions that has to be developed that seldom get the air-time that they require in the hustle and bustle of ‘operations’.

These are questions about:

  • Should we grow the business?  Can we? How?
  • Is the operational team performing as well as we would expect?  What can we do to help them improve efficiency and effectiveness?
  • How is our marketplace changing – and how do we need to change to ensure that we stay in the game?  Customer preferences, technology, regulations can all shift to leave a businesses in trouble.
  • How can we develop the business so that it provides us with more of what we want and less of what we don’t?
  • How can we reduce the harmful aspects of what we do and increase the positive impacts that we have on our community?

These are essentially questions of ‘Strategy’.  They are questions that require us to work on the business rather than in the business.  A second loop is needed that will require more time and energy to develop.  Once we start thinking about strategy our business looks more like this:

Customers, Operations and Strategy

A good way to think about this is that the operations loop takes care of todays’ (triple)  bottom line.  The strategy loop is about doing the right things today to look after ‘tomorrow’s’ bottom line.

The operational and strategy loop overlap.  Much of the data that will drive strategy should come from customers via the operations loop.  However other data will have to come from the wider business and social environment.  This ‘environmental awareness’ is vital to effective strategy.   Being able to make the transition from operational to strategic practice is, in my book, the mark of the real entrepreneur.  They are able to stand back from the business and work on it.  The crafts-person, the artisan, falls so in love their operation that they find it very difficult to stand back and develop it strategically.   They spend all of their time and energy working ‘in’ the business and not enough working ‘on’ it.

When we are thinking through the development of a business idea it is rare to plan in the time and expertise to ensure that both operational and strategic loops are well resourced.  And even when we do – still this is not enough.  We need to think about a fourth component of business.  A component that will ensure that strategy gets reflected in action and that experience at the front-line informs  strategy.  This is the function of Management.  It serves to integrate the strategic and the operational components and ensures that information from both  is used to drive the effective development of the business both operationally and strategically.

So now our enterprise is starting to look more like this:

Customers, Operations, Strategy and Management

I have used this model for many years to help a wide range of enterprises in the private, public and third sectors to think about their own development and the functions that need to be strengthened to ensure continued success. [The model presented here is a simple, private sector, for profit model.  Slight variations help to illustrate the very different enterpise dynamic in the public and third sectors – but they will have to wait for another day.] 

I am increasingly now using it with entrepreneurs to help them think through much more broadly the nature of the work that has to be done if they are to establish an enterprise that will successfully make it through the early years with success designed in from the start.

I think that a serious consideration of this model has real implications for the way we provide support to would be entrepreneurs.  It forces consideration very early on about the necessity of a team based start-up and of the changing role of the founder as different components of the model demand attention over time.

The model has been heavily influenced by the work of Bob Garrett on the development of effective company directors.

Your comments, thoughts and especially suggestions on how the model could be improved would be very welcome.