Help Your Business Succeed

by Pat OSullivan on / No Comment

Category: Leadership, Mentoring Questions, Strategic Change

Pat-OSullivanSPECIAL GUEST BLOG By Pat O’Sullivan, Strategic Development Mentor, Mentors.ie

Start-up businesses often require the advice of those with experience in their field or industry. Existing businesses don’t always meet their goals. Both of these businesses can benefit from having mentors. Mentors have long been associated with encouraging, steering, and advising. Mentor.ie has taken that concept to the next level as it relates to the business world.

It doesn’t matter, what size business or company you have. A mentor can offer you helpful tips, organizational advice, and strategy assistance. This is a good way to get your business on track to success. You will discover veteran professionals among the mentors at Mentor.ie. There are also individuals who were former executives here. With their assistance, you will be able to choose a better business model and to meet your goals.

Years of Experience

Mentors at Mentor.ie have years of experience and expertise. The working knowledge offered by mentors is a benefit to your business. If you need help tackling challenges, mentors can be effective. They can share proven techniques, as well as, advise you on direction. These veterans can also serve as board members for businesses.

Strategy Expertise

Some businesses need to define their strategy. Other businesses will find that it is necessary to re-define strategy. With the help of a qualified mentor, you can do just that. The approaches applied through Mentor.ie focus on business, people, sales, and operations. Expertise in this area can prove invaluable. Your strategy should be designed to lead to your overall success.

Long-Term Objectives

Long-term objectives are important when it comes to business success. This is especially essential when it comes to start-up business models. Mentors offer experience that will aid you in making plans for the future. These are long-term methods with on-going objectives. Mentor.ie works to share experience that requires action-oriented techniques.

Mentor.ie is staffed with individuals that have worked in various fields. They have both national and international experience. Their expertise can be a great benefit to your business. It is possible to meet your goals and productivity. At the same time, business owners can plan for the future with mentors at Mentor.ie.

What’s Your Strategy?

by Pat OSullivan on / No Comment

Category: Leadership, Strategic Change

Pat-OSullivanSPECIAL GUEST BLOG By Pat O’Sullivan, Strategic Development Mentor, Mentors.ie

Strategy is essential when it comes to setting up a successful business model. This is the case no matter what field or industry you are working in. It is not always easy to define what your strategy is. Many businesses struggle with this type of concern. Mentor.ie offers you the assistance that you need for defining and re-defining your business strategy.

Mentor.ie takes a proven approach at conducting business. This model looks at components like business, people, sales, operations, and strategy. Each component is valuable and necessary for you to accommodate. A qualified mentor will help you to better organize your business. The mentors at Mentor.ie offer years of professional experience. They also have expertise in a variety of areas. This experience and expertise are resources for you when you start to define your strategy.

Looking at Your Field

One of the ways to best compose a strategy is to look at your competition. Who are the players in your field? Are they successful? Mentors can assist you with this sort of information. They often apply their own professional experience with consulting duties. A look at your field will help you to adjust and to apply a winning strategy.

What Has Worked

Mentors don’t have to reinvent the wheel when it comes to composing a strategy. Strategies that have worked in the past are good models. Fortunately for clients of Mentor.ie, mentors have worked and served in diverse fields of expertise. They know how to help start-up companies and businesses. Taking notice of the current climate and proven tactics and strategies, you can put together a successful model.

Utilize Mentors

No one wants to repeat the mistakes that other businesses have fallen to. Avoiding mistakes is a big part of conducting business. Mentors are resources to help you to avoid pitfalls in business. Utilizing them is a smart way to plan ahead in your strategy.

The veteran business professionals at Mentor.ie are skilled at corporate governance. These are individuals who have served on boards of multinational companies in some cases. Mentors offer you decades of knowledge and experience. It is possible to define a strategy with their help that will transform your business and how it performs. This is invaluable expertise at its best.

The Evolution of Strategic Planning

by Pat OSullivan on / 67 Comments

Category: Finance, Leadership, Strategic Change

“Meticulous planning will enable everything a man does to appear spontaneous”.

-Mark Caine

In the workplace, the words “strategic plan” tends to either energize people or drain them, depending on their past experience with the discipline. There is immense value in having a strategic plan that aligns people and processes to achieve shared goals.

Sounds like common sense, right? Doesn’t every organization have one? No, some companies do not have one, says Pat O’Sullivan, Strategic Change Mentor, Mentors.ie

Misperceptions about what is involved in creating a practical and effective strategic plan can create false barriers to undertaking the process. Some of those misperceptions may be rooted in business practices that were popular many years ago.

In the 70′s and 80′s, during the peak of the TQM (total quality management) movement, people would spend hours upon hours developing lengthy, detailed 5+ year strategic plans that often ended up in someone’s files, never to be seen again. Strategic Planning was viewed as a dull and laborious task that quickly became outdated.

In the 90′s, the speed of organizational change revved up to a pace that dictated strategic plans be shorter and relevant for just 6-12 months. Later, during the dot-com era, strategic planning became almost non-existent or perhaps too “old-school” to be perceived as adding any value to an organization.

Fast forward to 2011. The economic downturn has provided time for leaders to reflect, recalibrate, and strategize for the future. What made organizations successful in the past may not be what will keep them successful in the future. Today, more organizations appear to be taking time to develop simple strategic plans as an inclusive process, and one that may combine the best of all lessons learned from the past.

The strategic plan has six core elements:

Vision- A Vision Statement: defines the optimal desired future state – the mental picture – of what an organization wants to achieve over time; provides guidance and inspiration as to what an organization is focused on achieving in five, ten, or more years; functions as the “north star” – it is what all employees understand their work every day ultimately contributes towards accomplishing over the long term; and, is written succinctly in an inspirational manner that makes it easy for all employees to repeat it at any given time.

Mission- A Mission statement: Defines the present state or purpose of an organization; answers three questions about why an organization exists –

WHAT it does;
WHO it does it for; and
HOW it does what it does.

Is written succinctly in the form of a sentence or two, but for a shorter timeframe (one to three years) than a Vision statement; and, is something that all employees should be able to articulate upon request.

Core Values- Once a Mission, Vision, and Core Values are defined, it is critical that senior leaders consistently communicate them: the “why we exist,” (Mission), the “where we are heading in the future,” (Vision), and “what behavioral norms are expected to be upheld by all when interacting to accomplish work together” (Core Values).

Strategic Areas of Focus (SFAs) – These help a company to sustain or grow in order to create competitive advantage. The conditions and nuances that affect SFAs are used to determine in which direction a particular SFA is moving and how a company can exploit unrealized opportunities.

Strategic Goals- Strategic goals are statements of what you wish to achieve over the period of the strategic plan (e.g. over the next year, five years, ten years.) They reflect the analysis you do that starts with creating a vision, a role statement and a mission statement, and then your analysis of your environment, strengths, weaknesses, opportunities and threats.

Action Plans- Having a great idea is one thing, taking action and having a step by step process is what will make your business succeed. The problem is nobody ever showed you where to start in your own small business. The mistakes which need to be rectified by small business owners are:

  1. Disorganization- As a business owner and entrepreneur, you probably have many creative ideas but you don’t have a system and step-by-step action plan to make these things happen.
  1. Too Busy-The average small business owner has an endless list of possible tasks to complete every day. You need a system to identify what small actions you can take today to create massive results. It’s called leverage.
  2. Undefined Goals- Without a clearly defined set of goals, you will struggle to make business decisions and create a powerful business. The end result is mediocrity and a drain on your resources.

Simple strategic plans can be created collaboratively, updated frequently, and most importantly, implemented to ensure a Return On Investment for companies.

Schedule a Complimentary 2-Hour Business Review Session with Pat by clicking here.

Operations Management:Effectiveness and Efficiency

by Pat OSullivan on / 3 Comments

Category: Strategic Change

SPECIAL GUEST BLOG By Pat O'Sulllivan, Strategic Change Mentor, Mentors.ie

There are many different definitions out there for what operations management is, but for the purposes of this article we will sum it up as:

"an area of business that is concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient and effective.”

In a simplistic definition this is the role of operations management, doing the right thing, at the right time, for the right price. I short the role of operations management is to protect the profit margin and keep the costs in line to deliver what was promised, when it was promised and for the price that was promised. Rest assured that unless you are in a rather unique industry if the costs of making the good or service exceed the quoted costs, your company will end up bearing the burden of the increased cost. 

Business comes down in short to 2 factors- Sales Price and Cost. Each part of the above equation has a dramatic impact on the continued operation of your business, and in effect how long you are in business. Effectiveness will have a dramatic effect on the sales price of your product, as customer perception and your relevant place within the market will determine whether or not you can charge a premium price within your field. On the contrary efficiency controls cost variables that can dramatically impact the profit margin of the business without having to go after your customer for an additional cost up. 

So how do you know that your operation is effective, and more importantly how do you define effective? Many companies use KPI (Key Process Indicators) measures to determine effectiveness, Six Sigma uses VOC or Voice of the Customer to determine the CTQ (Critical to Quality) requirements that will spell out whether or not you are effective in your operations. Effectiveness is more however about meeting the contractual requirements in all areas, and this equals a perceived value in the marketplace. 

Efficiency on the other hand is optimizing the use of all your resources to deliver the goods or service at the best level. Efficiency will dictate whether or not as an operation you will be able to deliver consistently at the profit margin and deal with the fluctuations of your industry in a way that keeps you on top as an effective entity. Efficiency is about resource optimization, but without being effective it is irrelevant how efficient you can be, because it is not sustainable in the long term. Efficiency without effectiveness will develop a perception in your industry as a cost cutting bottom-feeding organization and cannot lead to sustainable profits. 

12 Ways to Reduce Costs in Business

by SeanDonnelly on / No Comment

Category: Finance, Sales & Marketing, Strategic Change

SPECIAL GUEST BLOG By Sean Donnelly, Financial Management Mentor, Mentors.ie

The manner in which costs are reduced can either greatly help or seriously damage a business. Cutting the wrong costs or failing to reduce the appropriate

costs could endanger prospects for getting through the down-turn and the recovery prospects for a business. Irrespective of the organisation size the principles remain the same. The challenges for management are:

1. Not just about reducing costs in absolute terms but reducing unit operating costs.

2. Increasing efficiencies and competiveness.

3. Retaining the right staff and bringing the organisation with you.

4. Do it responsibly and with respect.

In summary there are at least 12 ways to reduce costs:

  1. The simple approach: Cutting all discretionary spending on advertising, recruitment, training, delaying payments etc. This approach is simple, direct & effective at stemming cash outflow quickly.
  2. "Bureaucratic" cost reduction: Centralised, imposed, rule-based cost control with strict budgetary controls.
  3. "Equitable" cost reduction: Setting cost reduction targets e.g. 10% for every department. This approach frequently brings out the "departmental/functional" mentality.
  4. "Stretch targets" – This is similar to the “equitable” approach but "stretch" targets means that the target varies by each functional area so that those areas where there is believed to be greater cost reduction opportunity can be asked to stretch towards a more demanding cost reduction target than other areas.
  5. "Sweat the assets" approach: e.g.. cutting debtor days, reducing stocks, selling assets, delaying supplier payments.
  6. Relocate: moving to a cheaper location.
  7. "Changing the way we do things": Reviewing and re-engineering business processes, reviewing the way we service customers, reviewing overhead and IT effectiveness.
  8. "Changing the mix of what we do": Trimming bad products/services, trimming poor customers, reviewing & changing routes to market & distribution channels, reviewing cost drivers. Activity analysis, data collection, challenging the way we do things are key steps of this process.
  9. Simplify/rationalise the company structure: Review the organisational effectiveness including delegation, accountability, job specifications and performance targets.
  10. Strategic purchasing – working with suppliers, buying smarter etc.
  11. Outsourcing.
  12. The strategic option – This incorporates all the proactive elements of the above including restructuring the company in line with a strategic plan to fulfil customers requirements.

Any approach focused taking only the first few steps alone will be unlikely to yield sufficient advantage over competitors taking a more strategic view. In summary, the most effective way to gain long-term advantage from a cost-reduction process is through squeezing all costs, eliminate all waste, changing strategic shape, playing to and building on strengths, maximising efficiencies from all necessary processes whilst eliminating unnecessary processes. A properly implemented cost-reduction programme offers a business a chance to re-position itself for a better future, re-focus on customer's real needs and to re-define how value is added.

The first step in increasing efficiencies is a thorough analysis of the role of all activities in the achievement of the strategic plan and of how value is created for the company & customer. Research suggests that c. 40% of operational expenses result from wasteful activities that add no value to the customer and therefore should be eliminated. There are 7 types of process waste that can be identified in virtually every organization: 1) Transportation. 2) Inventory. 3) Excess movement. 4) Waiting. 5) Over-production. 6) Over-processing and 7) Defects. Those activities that are not relevant can be eliminated or modified, thereby reducing costs, redirecting associated resources to more relevant tasks, and maintaining a high quality of service at the lowest unit and total operating cost.

The KPIs That Matter For Your Business

by SeanDonnelly on / 2 Comments

Category: Finance, Sales & Marketing, Strategic Change

SPECIAL GUEST BLOG By Sean Donnelly, Financial Management Mentor, Mentors.ie

“Navigating our way today in a more competitive environment cannot be accomplished merely by monitoring and controlling financial measures of past performance.” Robert Kaplan.

Traditional financial performance measures are insufficient. Future success will be increasingly influenced by increased focus on intangible assets such as customers, employees, product innovation and systems. Measuring the right things, the right way and taking the right action is the key to running a successful business. This entails defining long term objectives, translating the overall business strategy into a linked set of short-term measures and the mechanisms for achieving them. Linking of departmental & individual responsibilities with systems for feedback, learning and process improvement is key. It is critical to identify those factors which will drive performance (causes, leading indicator) from outcomes (effects, lagging indicator) factors. Unless you can successfully identify, measure and improve the correct key drivers you may be chasing at the outcomes rather than the actual causes.

Three types of performance measures:
1) Key result indicators: these tell the board how management have performed in terms of a critical success factor eg. customer satisfaction, net profit, return on  capital employed.
2) Performance indicators: that tell staff and managers what to do, eg. profitability of top 10 customers.
3) Key Performance Indicators: KPIs that tell staff and managers what to do in order to increase performance dramatically eg. analysis of reasons for sales leads not converted.

Typical characteristics of true Key Performance Indicators:

  • They are measured frequently, sometimes hourly, daily or weekly depending on the KPI. Monthly measures may be closing the stable door after the horse has bolted.
  • They include many non-financial measures.
  • They are acted upon regularly by owner/Chief Executive & top management team.
  • All employees understand them and what corrective action they indicate.
  • Responsibility for KPIs can be attributed to teams or individuals.
  • They have a significant impact on the organisation – eg. they affect most of the core critical success factors.
  • Positive results on KPIs affect other measures positively.

Examples of KPIs:

  • No of orders won, new leads opened, leads progressed to order stage, no of customers trading.
  • Market share & trend analysis.
  • The cost and effect of marketing, in terms of the numbers of enquiries or leads being generated, orders won and the cost of the leads/orders.
  • The conversion rates from prospects and enquiries to secure new business.
  • Percentage of customer deliveries on time and in full.
  • Customer satisfaction rating, complaints, returns etc.
  • Sales breakdown with gross margin by market sector. This could also be shown by product group.
  • Key efficiencies of operations processes, including waste & re-works.
  • Overhead spending vs budget, sometimes broken down into two or three elements or functions.
  • Staff/labour turnover figures.
  • Key financial management figures such as debtor days, creditor days, stock levels and cash liquidity.

KPIs may be classified as past, current or future measures. The most important KPIs are current and future measures. The prime purposes of KPIs are to provide knowledge of how to improve the processes and to motivate management and staff to constantly improve processes and performance.

The Myth of the Rational Executive

by Harley Murphy on / 1 Comment

Category: Strategic Change

SPECIAL GUEST BLOG By Harley Murphy, Strategic Change Mentor, Mentors.ie

When, on 10th July 2007, Chuck Prince, the CEO of Citigroup Inc, then the largest global financial services company, was asked whether he had any fear that the financial boom might be coming to an end, he was infamously quoted as saying:

"When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you got to get up and dance. We’re still dancing.”

It turned out that the music stopped pretty soon for Chuck Prince and in November 2007 his last dance was a two-step out the door of Citigroup. Citigroup’s share price went from around USD $55 in Jan 2007 to under USD $4 in September 2010. We know, of course, that Mr. Prince was just one of many bank CEOs that were ejected once the hangover from the wild dancing on Wall Street and elsewhere took hold.  In Ireland, the Lord of the Dance was, of course, Sean Fitzpatrick of Anglo but he had a major cast of others with him.

How could so many apparently bright and experienced senior executives, across much of the globe, make such a series of stupid ‘irrational’ decisions? Particularly when history provided contrary facts and when even signs of major cracks in the whole financial fabric had begun to appear.

In this piece the focus is on the decision process itself and how our understanding of this has developed, particularly in relation to advances in neuroscience.  Unfortunately, it would seem that many of those in powerful positions in business and our society still operate on the basis of the old paradigm as it relates to decision making.

That old paradigm was outlined in the 17th century by Rene Descartes, who is considered the father of modern western thought and the founder of the rational method.  He championed the concept of dualism as it relates to mind and body. He believed that the mind was non-material and only existed in humans. Our passions or emotions were associated with the body and were therefore seen as animalistic.  Man differentiated himself from other species by reasoning, so this was considered of a higher order than emotions, which consequent ‘feelings’ only distracted us from greater clarity in our thought and decisions.

The archetypal model of rationality was Mr. Spock from Star Trek, an alien being of higher intelligence, who was not hindered by emotions or subjective feeling in arriving at decisions. This was then the model to aspire to, if one wanted to make better decisions. Being highly rational and being very intelligent was one and the same thing. Better decisions, including those relating to business, came from putting our emotions firmly to ‘one side’.

Well this view or belief structure can now rightly take its place beside Ptolemy’s geocentric model of the universe, of the sun circling the earth.

In the new paradigm we now know from various scientific sources that emotions play a central and crucial role in our decision making. To be even more definitive, we know that without our emotional capacity we actually struggle to make decisions at all.  This has been shown most dramatically through case studies of individuals who have suffered severe damage to their limbic system (emotional brain) caused by accidents or brain surgery.  The brilliant neuroscientist and writer, Antonio Damasio, in one of his books  ‘Descartes Error’, deals with real life clinical examples, particularly the case of Elliott.  He was a young man of high IQ who had major surgery to remove a brain tumor that unfortunately damaged part of his frontal cortex, central to emotional functioning. Elliott could still discuss the pros and cons of various scenarios (his IQ remained intact) but he could no longer choose between them. Reason without emotion is ineffective.

Through the work of Antonio Damasio and others we know that our decisions rely not only on immediate facts but on our experience/memories of previous similar events and that these memories are both cognitive and emotional.

In his excellent 2009 book – ‘The Decisive Moment’ Jonah Lehrer explains that while the emotional brain is capable of astonishing wisdom, it is also vulnerable to certain innate flaws. These cause the horses in the human mind to run wild, so that people gamble on stocks, acquire investment property and run up excessive credit card bills etc. Lehrer makes the point that the relatively primitive reward system of our brains was not designed to cope with situations like the random oscillations of Wall Street. When the markets keep going up people/executives are led to make larger and larger wagers in the market. Our ‘greedy’ brains are convinced they solved whatever market we are investing in and we don’t think about the possibility of losses. We often hear that fateful statement on such occasions – ‘but it is different this time. ‘Not to invest/wager was to drown in regret, to bemoan all the profits that might have been earned. These neural signals emanate from a particular area of the brain rich in dopamine, the neurotransmitter chemical linked to the brain’s complex system of motivation and reward.  In a sense we are biologically programmed to create and participate in market bubbles.

What are some of the things we can do to assist our decision making now that we better understand the mental process?

  • Executives should recognize that the old dictum ‘Should I go with my gut feeling or be more analytical ?’ is not the complete question. Your intuition or ‘gut’ is only as good as the experience that informs it, –  this must be brought into the equation and executives should hone their intuition by reflecting on their past experiences;
  • Value others experience highly and ensure this is shared in a meaningful way through mentoring or other such practices. This not only assists the mentee but also assists the mentor in clarifying what is often implicit knowledge;
  • Pay more attention to exceptional or odd cases ;
  • Take a written note of the times when your decisions were wrong and refer back to this log on a regular bases:
  • Rely not only on postmortem sessions to learn from past mistakes but hold pre-mortem sessions to avoid future mistakes.

What Ireland Can Learn from Iceland. And About Trading Tomorrow for Today.

by Micheal O Callarain on / No Comment

Category: Economy, Finance, Strategic Change

With Ireland in the grip of an economic meltdown and intense nationalization it is easy to slip into the lull of “economic bailout is the only way” but if we look back in recent history Iceland went through what was once perceived as the worst economic crisis in history and is now coming out the other side stronger than when they went in. So how did they do it, the simple answer is they let the banks fail, agreed not to bail out investors and then devalued their currency to take advantage of the status of being a “low cost country”. In effect Iceland created a simple arbitrage situation and in effect created the crisis to lure in investors with an attractive opportunity. Iceland has turned to face the monster that they had created and went straight through it. This actually led the way to solve their woes through a plan that did not involve adding excessive debt and eroding the financial future of the country through paying interest on a long term loan.

This is a brilliant example of not trading tomorrow for today, something that Ireland is signing up for through the acceptance of EU funds to ease their current short term suffering. As the third world expands and narrows the gap between the “haves” and the “have-nots” the idea of cheap labor and a new frontier will shrink as the standard of living rises and education leads to knowledge work being not just the domain of established developed economies. Iceland’s strategy is a great move for Ireland to begin a new push toward recruiting firms into the country though devaluing their currency similar to a “loss leader” in a supermarket, luring potential investment into the country and then hooking them into doing business through their competitive advantages.

The alternative is to trade tomorrow for today, and face the possibility of a slower economic recovery that erodes the bottom line 5.7% at a time. This means that for generations to come Ireland may be crawling out of the mountain of debt that the current administration has burdened future generations with. An economic recovery will be slower than expected and will also have the businesses struggling for scraps that are left after the EU and the IMF take their shares off the top similar to the garnishment of wages, leaving only enough to make life that much harder to dig yourself out. A country should not trade tomorrow for today, because inevitably there will always be another day, and you will have to face it one way or another.

What Happens When the Money Runs Out?

by Micheal O Callarain on / No Comment

Category: Economy, Finance, Strategic Change

With so many people talking from so many different angles on the Irish banking and financial industry it is hard to tell what all the hype means. This becomes increasingly important going into a year in which some feel the housing market is nearing the bottom of the curve and cash is being injected into the Irish economy like an intravenous drip. With the EU going all in on the heels of Greece’s bailout early this year Ireland is under increasing pressure to cut their deficient to around 3% in the coming years. The question that this raises though is the same for every domestic household in every corner of the world… where is the money going to come from? I every household, in every country you really only have two options to balance the budget, spend less or earn more.

For Ireland this becomes a balancing act of protecting the precious income that comes in from foreign entities attracted by lower than average corporate taxes and protecting the very population that threatens to offer a change of government as early as this March. To complicate this the EU is going to discontinue funding in 2013, leaving Ireland to fix its own capital issues and raise its own money (most notably at a higher and higher rate at each successive bail out from each lender). It has been mentioned more than once that this is not a unique problem, as several monetary funds have been created and there is an expected 24 billion dollars ready to be shelled out to cover short term lending issues. But like any household, where is the money coming from, and who are we going to have to ask when the funds run dry? Many have mentioned that the existence of these “bail out” funds encourages credit heavy wild lending that sets a country up for failure knowing that there is a safety net in the event that they cannot pay.

But where does the bailout end, who must be the “father figure” that exercises financial responsibility that provides a stable base for those that should be taking risks. A business should be allowed to take appropriate risks through access to secure capital. The underlying bank should be taking less risk to assure that they can be a bedrock for the appropriate businesses that can drive the economic engine. If the EU stops providing the fiscally responsible access to capital and the national banks have not more discretion than a start-up then what happens when the money runs out? As a company grows , so does a government and the higher levels of the organization have a responsibility to provide for those at the lower levels to go after the big gains.

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