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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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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 + Economic Trends

To successfully operate a business and grow profits, it is important to have a thorough understanding of the economic opportunities and, equally, threats. Market research provides decision makers with strategic, high quality, objective and comprehensive insights, ensuring long-term, sustainable growth for business.

The economic landscape offers great financial opportunities, as foreign investment fosters local growth on one hand and labour costs, exchange and interest rates and increase competitiveness on the other.

Global economic growth supports Australian economy

The Australian Economy has just completed its 26th year of continuous growth, setting an international record. Australia’s economic future looks promising, while growth has accelerated in around 75% of Australia’s major trading partners. Favourable conditions, such as low interest rates, a relatively weaker Australian Dollar and low unit labour costs, boost Australian competitiveness. This means that expanding manufacturing and service sectors ultimately support domestic financial markets.

Only US trade restrictions, tensions with North Korea and Iran, as well as rising global government debt could potentially cause growth disruptions.

Guaranteed Growth – commodity headwinds support economy growth

The acceleration in economic growth in 50% of countries worldwide (IMF) translates into increased infrastructure spending and consequently fuelling demand for more Australian commodities. This growing demand is strong enough to offset against a slowing Chinese demand, safeguarding the national economy.

A booming Indian population combined with urbanisation and the “Made in India” campaign seeks to grow India’s manufacturing base, fuelling the need for more infrastructure. Furthermore, China’s “One Belt One Road” initiative is estimated to be one of the largest infrastructure projects in history (TIME) while Trump’s US$1 trillion infrastructure program will significantly contribute to commodity demand and set an end to the downturn.

Additionally, LNG contract agreements has commenced multi-year infrastructure projects (0.5% of GDP) and Asian economic and demographic momentum is pushing Australian tourism and education demand upwards (0.5 – 0.75% of GDP), all looking to boost Australian economic growth.

Tightening labour markets and weak wages keep inflation under 2%

Possible growth in wages, as a result of a positive economic outlook, might bring inflation closer to the Reserve Bank of Australia’s (RBA) 2-3% target. However there still are very few upward pressures on wages or prices. The government’s focus on budget repairs makes tax cuts or welfare increases appear highly unlikely, meaning that an increase in household spending could only come from either wages growth or an increase in small to medium enterprise (SME) profits.

However, Australia is currently experiencing the lowest wages growth on record (only 2% p.a.), a reality of a highly competitive product and labour market.

RBA Governor Dr. Philipp Lowe expressed his hope for a “pickup in wages” and declared it would be “a good thing if workers asked for a pay rise”. Australia could miss the next wave of global economic growth if consumer spending does not increase.

Households – macroeconomic risk?

Weak income growth, decreasing consumer spending and high levels of household debt are posing a serious financial risk to the Australian economy.

It is not just the fact that the average household debt has increased, but more households have debt and carry it for longer. Increasing living costs combined with weak income growth and job security concerns are creating delicate environment sensitive to interest rate fluctuations. This evokes exaggerated consumer responses to economic news. However, it should be noted that unemployment, interest rates and mortgage rates are decreasing and the labour market is picking up. This means at least in the short-term, nothing will trigger any major financial risk factors. If companies recognise the booming economic headwinds in the future and offer their employees higher wages, consumer spending will increase and the Australian economy will once again prosper.

Does your business strategy incorporate opportunities related to economic growth?

Knowledge is power, and market research provides your organisation with business intelligence tailored to your needs and reduces risky decisions on strategic direction

Source: Euromonitor International

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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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