- Getting Your Strategic Focus Right in 2020
- The question all CEOs should ask?
- Navigating Challenging Times: Myer – A Case Study on Growth Profit and Cashflow
- 2020 Mindshop Business Leader Survey – Business Leader Insights for Success
Getting Your Strategic Focus Right in 2020
By Tony Monisse
Clarity on who your target customers are, your value proposition and your unique key capabilities are the foundations for your success now and in the future.
It is that time of the year when business owners start planning for and thinking about their strategic focus for the next financial year.
We regularly work through an exercise with business owner clients, where they address what I believe are the most important strategic questions:
- Where will you play i.e. who is your target customer?
- How will you win in the market where you will play i.e. what is your value proposition?
- What are the unique capabilities you require that will allow you to win i.e. what key processes, resources and alliance partners are required to win? I also like to add to this Jim Collin’s (“Good to Great”) question: what can we be best in the world at?
These questions can be best illustrated by the pyramid below.
My observation is that businesses that are not clear on the answers to these questions focus on activities outside of the pyramid. Instead of focusing on high payoff activities that support their value proposition, they engage in wasteful undertakings that can be costly to the business.
Two examples of business clients who have gone through the process of re-evaluating their operations based on the above pyramid model are a fabrication business and an advisory business. As a result of this exercise, one of these businesses decided to focus on complex, short lead-time project work for blue-chip customers and offshore less complex long lead-time project work. The other business chose the opposite direction by deciding to focus on routine services, which gave them the opportunity to scale their business and outsource the complex work. In both cases, once the questions were answered each business was able to create the processes, acquire the resources and engage with external partners to deliver on their “how to win” for their specific target customer.
These important strategic questions are what business owners should continue to answer each and every year.
The question all CEOs should ask?
By Tony Monisse
We are seeing more and more that businesses are challenged today by the rapid rate of change and disruption, both technological and societal. For many of our business clients it is really difficult to get out of the business and gain that big picture perspective as to what the future holds and what the business needs to do to adapt and evolve.
I am reading a book on Intel and their CEO at the time Andy Grove (for anyone interested, the book is “Measure What Matters” by John Doerr). In the early days Intel made significant profits from memory chips. However, the company was in denial about the threat of a new product, a microprocessor that might replace their memory chip business. The result was that in mid-1980s its profits in one year plunged nearly 99% from $198m to $2m. In the crisis that ensued, the president Andy Groves asked the then CEO ‘If we got kicked out and the board brought in a new CEO, what do you think the CEO would do?’. The answer to this question was to get out of memory chips and avoid the impending disaster. So Groves and the CEO decided why not do it themselves. Intel did switch from memory chips to microprocessors and went on to create an enormously valuable business.
In these rapidly changing times, where businesses are under threat from societal and technology changes, I think this is a good question to keep asking ourselves, “If we brought a new CEO into our business what would the CEO do?”. Once you come up with the answer, the next question to pose is “Why not do it yourself?”.
I have used this question with a number of clients in our quarterly business review meetings and found that it has been the catalyst to take action. I encourage you to think about the challenges to your business and ask the same question to get action in your business.
Navigating Challenging Times: Myer – A Case Study on Growth Profit and Cashflow
By Tony Monisse
It was interesting to read an article which highlighted that Myer had grown its profits for the first time in nine years under their new CEO, John King (read the article here). Given the disruption that is taking place in the retail industry, it is a good outcome for what is a substantial business. Although it is early days, I have listed some of the tactics Myer employed to grow sales, increase profit and improve cashflow.
- Dumped unprofitable brands like Apple, which were occupying space but not contributing to profit
- Focused on exclusive and home brand lines which allow them to better control prices and obtain better margins
- Invested in online sales which now account for 10% of sales
- Reduced expenditure in IT, marketing, procurement and corporate
- Looked at better rostering systems to reduce labour costs
- Used their size to renegotiate with landlords to reduce their footprint and close unprofitable stores
- Reviewed their supply chain and were able to reduce the amount of inventory and improve cashflow
My experience is when looking at strategy, it is important that a business looks at the opportunities in these three areas (Growth Profit and Cashflow) to maximise the return for shareholders. It will be interesting to see how the Myer turnaround unfolds.
2020 Mindshop Business Leader Survey – Business Leader Insights for Success
By Chris Mandzufas
Business leaders continue to face a challenging business environment in 2020. However, opportunities abound for leaders who can effectively manage the changes required, harness their leadership skills and deliver strategies for sustainable success.
Mindshop has once again completed a survey of global business leaders – the 2020 Mindshop Business Leader Survey, which has revealed unsurprisingly that business leaders are continuing the perennial search for higher performance, with 94% of respondents wanting to improve their leadership capabilities and adapt to change for higher performance.
The survey findings show that after many years of experiencing increasing pace of change and volatility, change is becoming the new norm. Many business leaders no longer find change overwhelming, but they are not necessarily change ready.
Growth is back on the agenda in 2020 for many businesses, coinciding with a shift from developing complex, ‘game-changing’ strategies to nurturing team productivity and supporting successful implementation. On the other hand, the biggest hurdle most leaders continue to face is a lack of capacity and simply being too busy.
It will be a year of opportunities for leaders who align the unique strategic needs of their market, customers and organisation, as well as continuously improve their capability and embrace new habits and mindsets in the quest for higher leadership performance.
The Mindshop survey findings identified five opportunities for higher leadership performance which are summarised below:
- Identifying an annual ‘theme’ as a leader in 2020. This becomes a focus for the attributes to work on during the year (e.g. profitable growth, empowering teams or agility)
- Alignment rather than perfection of leadership attributes ensuring all pull in the same direction towards the common theme
- ‘Less is more’. Slowing down to speed up, focusing on the 20% providing 80% of the impact and identifying what to stop doing or delegate
- Get things done by avoiding being too ‘busy’ and instead aiming to be more ‘productive’. Rather than a laundry list of tasks always ‘in progress’, leaders should spend time completing strategically important tasks before moving onto other things
- Reduce complexity. Where can leaders simplify complexity in the business and within the team? What barriers will get in their way?
‘Authentic Leaders’ applying these five high performance opportunities are paving their own path to success.