Tag Ideas

Business planning rationale & considerations

Strategic & Business Plans Are Critical

Primary Reasons To Develop A Business Plan

  1. To map the future in order to get where you need to be “on-time”
  2. To support growth & funding or the “investment” of others in the project
  3. To develop & communicate a course of action
  4. To help manage a budget & cash
  5. To support a strategic launch and or exit
  6. For organization, accountability & leadership

Key Considerations When Developing The Plan

  1. Write from an external perspective with analysis and clear thinking
  2. Understand & plan for internal & external challenges
  3. Research/understand supply side (mfg. & demand side issues thoroughly)
  4. Understand your competition
  5. Attention to detail—credible projections and assumptions
  6. Focus on the opportunity—unique business propositions/will it work
  7. Ensure all areas are covered
  8. Attention to detail in economic models and financials
  9. Executive summary must stand on its own
  10. Formalize a robust review process
  11. Assign clear and logical accountability

Key Components of a Valuable Strategic Business Plan

  1. Objectives
  2. Executive review
  3. Technology/Manufacturing/Engineering
  4. Market analysis
  5. Supply & demand analysis—vetting & advance contracts where possible
  6. Environmental analysis
  7. Company analysis (mgmt./org./IP/funding/history/needs/success factors)
  8. Competitive analysis
  9. Business & market strategy to manage the immediate items above
  10. A carefully developed and answered SWOT assessment
  11. Business model [definition]
  12. Financial analysis/ Economic model
  13. Tactical implementation for all Strategies

Upping the ante

Action step

Translate these transformation activities into specific steps your team can use to demonstrate clear leadership, create enthusiasm, and build momentum.

Challenge 1: Lead differently

Transformation demands that functional leaders demonstrate a new set of skills. Help your team identify what they should do and say differently to help move their organizations forward.

Challenge 2: Find hidden synergies

Ask your team to identify synergies that could be created within their functional areas. Challenge them to go beyond the obvious growth and cost savings.

Challenge 3: Cultivate patience while driving performance

Transformation is an iterative process that can seem chaotic or disorganized to many. Ask your team how they will set realistic expectations with their people to help dispel potential anxiety and frustration that can interfere with effective performance.

Melville on method

Melville on Method

Herman Melville said: “There are some enterprises in which careful disorderliness is the only true method.” This contrasts sharply with Descartes who meant by method: “… certain and simple rules, such that, if man observes them accurately, he will never assume what is false as true.”

Good management requires both at different times—or so it seems….

Great writing …

CLARITY, PERSONALITY, SIMPLICITY, WARMTH.

Author William Zinsser, in his 1976 book On Writing Well, identified these as the four indispensable qualities of great writing. Why indispensable? Because the best writing is an expression of the writer’s humanity. These qualities allow that humanity to shine through. As a writer, I find Zinsser’s argument persuasive.

The telltale signs of corporate fraud

A new working paper (abstract; PDF) by Tanja Artiga Gonzalez, Markus Schmid, and David Yermack looks for the telltale signs of corporate fraud. The paper is called “Smokescreen: How Managers Behave When They Have Something To Hide”:

We study financial reporting and corporate governance in 216 U.S. companies accused of price fixing by antitrust authorities.  We document a range of strategies used by these firms when reporting financial results, including frequent earnings smoothing, segment reclassification, and restatements.  In corporate governance, cartel firms favor outside directors who are likely to be inattentive monitors due to their status as foreign or “busy.” When directors resign, they are often not replaced, and new auditors are rarely engaged.  Cartel managers exercise their stock options faster than managers of other firms.  While our results are based only upon firms engaged in price fixing, we expect that they should apply generally to all companies in which managers seek to conceal poor performance or personal wrongdoing.

The authors are wise to note that these findings aren’t necessarily generalizable, and it is also worth wondering if this method could be applied prophylactically to identify fraud. Note: Yermack is the same man who brought us “Tailspotting: How Disclosure, Stock Prices and Volatility Change When CEOs Fly to Their Vacation Homes.”

Reimagining the convenience store

A Promising Investment Opportunity?

Here is a viable scenario that is based on recent trends (e.g., Macro Demographic Changes, Lifestyle Shifts, Technological Tends, New Business Models, and Intensified Competitive Dynamics):

Reimagining the convenience store. C-stores are uniquely positioned to exploit new demands for convenience and increasing urbanization. They’re already closer to con­sumers than any other type of physical store, but there are still opportunities to improve the experience and assortment.

First, margins and consumer loyalty can be improved by growing private-label offerings beyond packaged goods. C-stores are already starting to more closely resemble quick-serve restaurants in their offerings. For example, Casey’s General Stores recently started offer­ing fresh pizza.

But there is still tremendous opportunity to expand c-store private-label offerings to in­clude more general merchandise, transform­ing c-stores into one-stop shops for modern urban consumers. For example, 7-Select at 7-Eleven in the U.S. includes more than 250 food items from donuts to frozen pizza. But in Taiwan, 7-Select also includes a much wider assortment of general merchandise, including clothing, laundry detergent and light bulbs. And the strategy is paying off, with 7-Eleven’s operator in Taiwan reporting a 27% increase in net income in the third quarter.

And new technologies can also help make the c-store shopping experience easier and faster. For example, retailers could deploy RFID tags to let consumers check them­selves out. Or, U.S. c-stores could take a page from Tesco’s book and build virtual stores. Finally, online ordering and in-store pickup would help make the experience even easier and give first adopters an incredible compet­itive advantage. Retailers to watch: 7-Eleven, Alimentation Couche-Tard, Pantry, Casey’s General Stores and Wawa.

We have worked with all of these players, and know them intimately.