5 simple steps towards business efficiency and continuous improvement

Step 1 | Are you looking within?

Don’t be afraid to ask your employees.

First and foremost, you need to take a closer look at your business’s current situation.  Assessing the way you work will help you identify inefficient processes (currently) in your company.

Don’t be afraid to ask your employees. They will be the ones facing ineffectiveness every single day. Never underestimate the wealth of knowledge and ideas they have to share (about your own business!).

At the same time, be aware of what your competitors are up to. Overall knowledge of the market or industry you’re in can really help you understand your weaknesses and gauge what’s working well for them (potential opportunities for your own company) and what’s maybe not so hot.

Step 2 | How can you reduce some of your costs?

Time must be considered as a key factor in cost efficiency.

Reducing your costs doesn’t necessarily mean paying your employees less or scrimping on product quality. In fact, inefficiency costs money as well, AS WELL AS time! Time must be considered as a key factor in cost efficiency. For example, shaving five minutes off a process by making it easier or smoother will increase your performances and reduce your costs in the long-run.

Step 3 | How can you adjust your plan?

Incremental improvements are mostly inexpensive.

Think it out step-by-step. Don’t try to go (too) fast. One small change here and there, one at a time will lower your risk and increase momentum towards the improvement you’ve been planning for. Incremental improvements are mostly inexpensive and easily implemented, relative to large sweeping changes.

Step 4 | How do we measure and gather meaningful feedback?

Constant feedback is an important aspect of the continuous improvement.

As simple as it sounds, improvement means that something has been improved and worked on. You must be able to measure this improvement while using various measures, such as return on investment, employee satisfaction and engagement, customer satisfaction and so on.

Ultimately, constant feedback is an important aspect of the continuous improvement strategy. Keep in mind that an open communication channel during every phase of the process is critical to maintain engagement, at all levels of the company.

Step 5 | Rinse and repeat!

Once you’ve achieved and mapped your initial progress, already start to look for the next thing right away. It’s called “continuous improvement” for a reason: it never stops!

 

Source: 5 simple ways to build continuous improvement into your businessOperational efficiency6 Principles of the Continuous Improvement Model6 Ways to Make Your Business More Efficient.

The Importance of Strategy

A strategy is a method or a plan chosen to arrive at a desired future, such as the achievement of a goal or solution to a problem. A business strategy (on the other hand) is the firm’s working plan for achieving its vision and deliver value that customers are willing to pay for. In other words, a strategic framework focuses the company’s direction, ensuring resources and existing capabilities are used efficiently to achieve relevant objectives.

Why is it important?

Your strategy determines your company’s high-level direction, driving all internal decisions.   Investment, hiring, development, etc. decisions will be made in accordance with corporate strategy. It enables cohesive planning and decision making throughout the organisation, advancing common objectives.

An efficient strategy ensures business growth, the establishment and maintenance of a strong competitive position, as well as strong financial performance.

Hence, the absence of a strategic framework guiding and aligning lower-level decision-making, will result in different departments pursuing individual trajectories, wasting resources, time and money in the long-run.

Make sure you come up with a crystal-clear strategy and communicate it to lower-level decision makers.

Planning

The choice of objectives is at the heart of the strategising process, but an effective strategy also clearly outlines how the firm will meet these objectives. How will the strategy be implemented? This is planning. You should consider questions such as:

  • how does the firm differentiate itself from competitors?
  • what type of distribution facilities can it best take advantage of?
  • how are revenues generated?

The planning process is a challenging one, as both the company’s market strengths and weaknesses have to be considered.

Make sure your plan is relevant, realistic, and suits the market you’re playing in.

A clear set of goals, when combined with an honest appraisal of an organisation’s strengths and weaknesses, will reveal relevant and actionable opportunities within the current environment.

Source: Building the Business Case, Forbes: The Importance of Strategic Focus, Forbes: What the Heck Is A Strategy Anyway?

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Customer Insights Made Easy

Uncovering things you might not know about your business.

Market research, and more importantly, customer insights are extremely helpful in understanding what your business does well and not so well, comparatively in the market. Whether you’re a café owner looking for other avenues for income or a construction company looking to find out why customers are choosing the bloke across the road, getting to know your customers and their motivations can be an integral part of uncovering why your customers like what they like, or do what they do. At the end of the day, the customers are what define a business!

Let’s take a step back and think about it for a second. Customers are just like you and me, a fellow homo sapien. Now, you and I like certain things, do things a certain way, crave particular food items now and then and so on. Now picture your typical customer (profile) and imagine what it would be like to buy from your own business, for example:

  • Was it done quickly?
  • Did I spend too much money for what I was getting?
  • Was the quality of the product/service any good?
  • Was the service up to scratch?
  • Did I offer enough (or too much) choice?

These are some of things that customers (also both you and I) objectively and subjectively use to judge whether or not we buy again from a business.

But wait, that’s too hard.

Honestly, it really can be daunting for a small business owner and it’s why we have devised a little cheat sheet on how you can get started without the hassle of not knowing what to do in the first place!

We firmly believe that you don’t need complicated statistical software and algorithms to get started, on, what is traditionally, a very academic field of work, market research. Just sit down and use this example guideline to start on your journey of self-discovery.

Matching expectations with reality.

When starting for the first time, we encourage businesses to brainstorm what are the key criteria that your business’ life depends on. These are the things, when done collectively poorly, ruin a business and likewise, when done collectively well, flourish. All businesses usually sit within this spectrum.

Here, we limit it to five criteria, so that there isn’t an overwhelming list our brains can’t handle. It also keeps our minds focused on what matters the most.

For example, the five criteria we can look at are:

  • On-time delivery
  • Value for money
  • Quality of products and/or services
  • Customer service
  • Range of products and/or services

While it’s not an exhaustive list, depending on the business, some criteria may be different. Say you’re a hairdresser and “on-time delivery” doesn’t apply, something else may be more relevant.

 

PRO TIP
Try and choose criteria that encompasses the entire business as a single unit to start, then you can branch off into examining other arms of the business once you’ve wrapped your head around the bigger picture.

 

Part 1 | Mapping customers’ expectations

Once you’re done thinking about what areas of the business are important to its survival, now is the time to ask your existing customers to rank them 1-5 by importance to them when dealing with you, where 5 is most important and 1 is least important.

Here, we’re looking to find out what your customers expect of you and determining what matters the most to them. For example, maybe a customer values your quality products (gave a score 5) but price isn’t what matters when buying from you (gave a score 2). There are countless insights you can gain from simply asking customers to rank the importance they place on certain aspects of your business.

Part 2 | A reality check

Using the same criteria you’ve decided on, ask follow-up questions on how you ACTUALLY perform in each of those areas. Customers will rate your performance on a scale 1-5, where 1 is poor, 3 is average and 5 is excellent.

This will give you a more definitive health check on your business and find out where customers are and aren’t satisfied with your business.

 

PRO TIP
Use what you’re good at (competitive advantage) to boost your existing sales and marketing efforts. If your customers use more than one supplier for the same product/service, chances are they are thinking about how you weigh up against the competition!

 

Part 3 | Recommendations anyone, please?

As the icing on the cake, one could say, is the Net Promoter Score® (NPS®). This is a simple yet effective metric you can use to see if customers will refer any business to the friends and colleagues (more business, YES!). There is formula on how to do it (you can Google it for those wondering) but we won’t get into that here (that’s for another post).

Putting all the pieces together

Now you can really see how you’re doing with your customers. Work out how each of your criteria stacked up against the other criteria and map that against how you’re really doing with customers in reality. This should help identify areas of improvement at a glance as well as understanding how your customers’ expectations (Part 1: what’s important to them) are met with their current dealings with you (Part 2: your performance, Part 3: NPS®).

 

PRO TIP
Use this tool as an early warning system to flag down any potential problem areas before there’s irreparable damage: your customers go elsewhere!

 

So, what now?

“So, what now?” I hear you think. We’ve got you covered.

Here are a few extra tips and tricks to make this process much more valuable to you:

  • Use the above criteria to get you started, chop and change if you feel it doesn’t apply to your business
  • You don’t need a large sample size, 10-15 is usually enough to get an idea of how you’re tracking
  • Preferably, talk to customers you have recently done business with, the more recent the better
  • Keep the survey to the three questions and aim for no more than two minutes of someone’s time
  • If you find, as the owner, you don’t have the time to do so, have someone else who is close to the client and is familiar with your business to do it
  • After each round of surveys, brainstorm ideas together with your team and try and set recommendations for yourself
  • Make the necessary changes in your business
  • Rinse and repeat, preferably on a monthly, bi-monthly or quarterly, etc. basis

Be objective, be gracious.

Let’s be real here, don’t let the ego get in the way. It’s what stops us from growing and understanding ourselves personally and professionally. Customers don’t like certain aspects of your business? Embrace it. Change it. Reach out with open arms and customers are more than likely to give you constructive feedback to improve on.

When you sit down with your customers, just have a whole hearted and HONEST conversation about the current state of affairs. You are empowering them to help you provide a better product or service.

Stay objectively connected with the business and start a process of continuous improvement. It’s a long-term investment (emotionally and financially) that pays off in the end. Happy customers, happy business (isn’t that how the saying goes?).

PS. Now that you’ve made it this far, we’ve actually got the checklist for you here. Go get started and start making your customers’ voices heard!

 

What is inhwa?

Historically, ancient Korean dynasties adopted an extreme form of Confucianism, introduced by the Chinese around 108 BC, to control citizens and safeguard the government by discouraging individual thinking or acting. The Choson dynasty later formally introduced a class system and officially prescribed etiquette kingdom-wide. These mandated manners are the foundation of a circumstantial morality system. Only those citizens that followed the conduct prescribed by the Confucian government were regarded as morally upright and proper, while those neglecting to do so were regarded as immoral and socially sanctioned.

Korea is widely regarded as the most Confucian nation worldwide, an important factor when considering engaging or interacting with the Korean business world. A hierarchical structure is deeply rooted in Korea’s authoritarian and militant history. Today, Koreans still relate to each other in a class system guided and defined by particular etiquettes and customs.

When engaging with Korean people in a business context (e.g. a business venture), understanding and respecting local custom and cultural norms is directly correlated to that venture’s success.

In order to establish a positive relationship, Korean culture demands the maintenance of stable environment of kibun, which can roughly be described in terms of pride, face, mood, or state of mind. Disturbing others’ kibun, by disregarding social hierarchy, giving negative feedback, displaying emotions or openly criticising someone is considered extremely impolite, as it disrupts the harmony between people. Koreans are willing to go to great lengths to maintain their and others’ kibun. This conditional cultural reflex can have detrimental effects on business ventures, as negative information may be withheld or softened for the sake of maintaining inhwa and not disturbing the other party’s kibun. Furthermore, a violation of a business partner’s or one’s own kibun might make the development or sustaining of positive, long-lasting relationships impossible and could potentially be very costly to the business.

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Market Research + Political Risk

Many factors influence businesses but few pose as great a risk as political risk. Understanding and forecasting the political landscape and its risks should be an essential part of every business’ operations. Market Research enables management and decision makers to make informed decisions, identify opportunities and, importantly, mitigate risks.

Staying informed on political risk factors influencing and impacting your company is very time consuming. Market research streamlines this process by providing your business with insights tailored to your needs.

As political agendas are driven by market forces and informed by market research themselves, market research will give companies the most accurate and robust future prognosis.

This is an overview of major political trends, likely to affect a range of different industries.

In 2017, a number of issues have fractured the Australian political landscape, but not limited to: citizenship scandals; energy and climate crises; the continuous asylum seeker debate; increasing conflicts between moderates and conservatives; and the list goes on. These have weakened not only, the Labor Party but also the coalition and have ultimately affected the security of Malcom Turnbull’s leadership.

Energy and climate

The hope of a “lasting energy framework” after Alan Finkel’s investigation into the security and reliability of the electricity market was disappointing. Finkel’s “Blueprint for the Future”, outlined an action plan to repair the Australian electricity market by introducing a Clean Energy Target, to conform to the Paris Climate Change Agreement. This was starkly opposed by coal advocates and argued that 42% of renewable energy by 2030 was too ambitious and would put service reliability at risk. The Greens also criticised the Blueprint as a “short-term political fix”.

The government now supports the new proposal of a National Energy Guarantee (NEG), proposed by the Energy Security Board. The NEG recommends a reliability guarantee and an emissions guarantee.

The new proposal has already been criticised for renewables’ incentives being revoked and for the lack of penalties for corporate non-compliance. The details of this plan will be released in April 2018. It remains to be seen if the new proposal will withstand the challenges from different interest groups.

Asylum seekers

The decommissioning of offshore detention centres on Manus Island, Papua New Guinea and Nauru, as well as the forceful removal of the remaining asylum seekers has provoked global condemnation and affected our relationships with the rest of the world. However, the offshore asylum seeker processing topic remained one of few where the coalition was united under Turnbull.

Liberals’ ideological issues

The global phenomenon of a continuous split in the political right is very tangible in Australia. With Tony Abbot seeking to position himself as the new voice of a Liberal conservative Australia, in direct challenge to Turnbull’s leadership.

Tumultuous leadership

Last year was marked by an increasingly rebellious Coalition, with backbenchers openly defying Turnbull’s authority. An example of this breakdown saw Senator Bernadi openly defecting from the Liberals and establishing his own, the Australian Conservative Party.

With growing pressure from his own ranks, Pauline Hanson’s One Nation inspired the Nationals to publicly challenge the Turnbull government, forcing a Royal Commission into the banking sector against the Prime Minister’s will.

Things got a little heated when Turnbull recently and openly critiqued former Nationals leader Barnaby Joyce for his relationship with a former employee. The following resignation by Joyce might just place more strain on a fragile Coalition relationship.

The Australian Labor Party

Whilst Labor’s strategy of “sit[ting} back and watch[ing] the Coalition self-implode” saw the party in front of the Coalition in two-party polls, Bill Shorten still personally ranked behind the Prime Minister in a two-party preferred polls.

Section 44 – “The Citizenship Debacle”

2017 saw a record number of parliamentary resignations owing to a new interpretation of Section 44, which raised questions over constitutional ineligibility of parliamentary membership due to citizenship requirements. The High Court found five MPs constitutionally ineligible, followed by two members of the government’s ministry, the Senate President and finally two cross-bench Senators. This issue of eligibility is largely unresolved, as additional referrals to the High Court have already been lodged and will roll into 2018.

Aboriginal matters

Parliamentary eligibility issues will continue to dominate Aboriginal recognition matters. The rejection of the establishment of a First Nation’s Voice, recommended by the Referendum Council, was appointed to advise on meaningful recognition of First Nation peoples on civil rights grounds.  Any progress on the recognition issue is unlikely, as no goodwill remains between stakeholder groups and the government.

Same sex marriage

In 2017 Australia became the 26th country to legalise same sex marriage, following a 61.6% vote in favour. The postal survey was conducted despite harsh critique on the plebiscite strategy, for its non-binding nature, exclusion of oversea voters, security concerns, the constitutional eligibility of the ABS to conduct a plebiscite and the government’s justification to spend AUD$122 million of taxpayer money to conduct it. Despite the overwhelming vote in favour, the matter still seems unresolved, as the balance of marriage equality and religious protection remains highly debatable.

Risk Management and Market Research

Considering the volatility of the past year, the political future seems hard to predict. Major new policies seem unlikely in the near future, though past issues seem likely to continue well into 2018.

When seeking to establish an effective risk management plan, success is highly dependent upon the identifying relevant risk factors. Market research can identify firm- and country-specific risks and distinguish between instability and/or government risk, helping you determine relevant threats effectively.

This is particularly important, as the nature of risk varies from firm to firm and is dependent on different exposures. As companies are rarely able to influence country-specific risk or even governmental risk factors, such as subtle policy changes, these can pose a great threat to businesses. Hence, it is of utmost importance to identify and effectively manage these risks. Market research can provide those insights needed to make relevant risk mitigation and management decisions, so that operations and financial performance can be better safeguarded going in to the future.

Sources: Committee for Economic Development of AustraliaInternational Risk Management InstituteStable Research.

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