Friday 18 March 2011

Values matter in BUSINESS more than ever as Ikea have found out

In today’s information driven world, how you do business matters as much as the business you do as Ikea the iconic Swedish furniture retailer has just found out. Its green credentials have been dealt a massive blow.

Ikea only 16% sustainable wood
Ikea’s failure to achieve its own most modest target of 30% of its wood products to be from certified sustainable wood, will damage it its credibility heavily with its key audiences. The fact that it only hit 16%, has a massive blow on the values it professes as promoting sustainably sourced materials and to its environmental positioning, compared with Homebase (78%) and B&Q (77%), which won the best green award 2010.

The excuse given in its defensive press statement is that it has sacrificed the values of sustainability for rapid growth and protecting its profitability (£2.3billion), but short term greed like this can cost dearly on both growth and profitability over the long term.     

Ikea’s staff not telling the truth
This corporate failure was made worse by staff telling customers in store that its products are from sustainable sources, when they are from illegal logging in places such as Russia. This insatiable drive for growth, which so often undermines trusted names, may damage the Swedish brand’s position as the leader in the flat pack market significantly, as it will now undergo microscopic environmental and customer scrutiny.  

Ikea’s soft “long term” aspirational statements on their website with links to the Rainforest Alliance are unlikely to be seen as enough in the modern world where green wash marketing such as this are quickly exposed and penalised. When the spotlight of the green world is turned on, it is difficult to hide in the shade.

The World Bank suddenly in the late 1980’s promoted its ‘green credentials’ by promoting itself as having employed ‘an environmentalist’, to offset its image of chopping down forests for cash crops. This green wash story was quickly exposed when it was pointed out the World Bank employed some 5,000 economists, what difference would/could one environmentalist make?          

Values must be transparent
The way you provide your product or service and to whom, says more about you than how much business you do. Being big in a highly segmented world is no longer the determination of success. How you do your business now determines your current credibility and future success. Credibility is as much about your values in becoming successful as about the success you have. Mohamed Al-Fayed for example, despite buying Harrods, never shook off questions about his background.

Your values as an organisation as demonstrated by everyone inside your organisation matter to both existing and potential customers in choosing to do business with you. People have choices and they can now exercise them more freely than ever before, and that means customers can access information instantly to make choices that are more informed. Ikea’s staff misinforming undercover Times reporters about their sustainable and certified sourced products at a number of shops are one symptom of Ikea’s rapid growth boardroom culture.     

Values Must Live the Moment
Almost everything in life is in real time and instantly communicated to circles of influence and beyond. A restaurant having  bad night can have a poor reputation before the starter has even been cleared away as customers post live feed back to sites such as Qype or Trip Advisor . Therefore, before the waiter, maitre d’ or chef knows what’s happening the world outside already does by Twitter and Facebook and are cancelling their reservations in their droves.

Why clean lavatories matter?
The old adage that if you want to know how clean the restaurant kitchen is, inspect the lavatories, because they tell you how the restaurant values cleanliness, is a great example of modern customer awareness. Do you live your values or just post them on your website? Is the question customers want to know in establishing and experiencing trust with you and your brand.   

Rail companies learning fast
The recent story of the man on the train talking too loudly causing enraged customers to Tweet  complaints about his behaviour which was picked up by a duty manager hundreds of miles away who then contacted staff on the train to track down the loud caller and asked him to quieten down. 

This story is very much testimony to the growing demands of customer expectations, immediate online response, not waiting for passing train staff to react. This story is part of the reputation shift that train companies are actively pursuing.    

Values are in the detail
Values matter, they define the real differences between companies. How British Airways treats its customers through the values it embeds in its entire organisation is what makes it different to other premium airlines and distinguishes it from them, and from the bucket providers such as Ryanair.

However, as everyone de-layers in response to changing business models, cost and modernisation requirements, values can be lost in the rush to modernise and compete in new ways. BA’s changes to its premium dinner menu, introducing exotic main courses such as crocodile and ostrich sounded good but simultaneously cutting the After Eights, so there was not to go around 1st class passengers was a classic example of getting its values wrong in its customer’s eyes.  

Values Must Involve Everyone
If you value your customers then remember everyone needs to smile in their role, if you believe in providing excellent customer service then don’t cut your front of house staff numbers.

Too many companies’ ideas of communicating values are to place a statement on a website, brochure, at reception and on the induction training programme. How many companies look at the strategic advantage of values and embed it into people’s roles, asking staff to define their role by those values by redefining their role to live those values?  How many companies review those values as outcomes in winning and retaining customers?
     
Values as seen by Customers
Customers, potential and existing, are drowning in choice what makes you stand out to them is the values you own and can demonstrate. Statements on walls and websites always sound good, (possibly, because they are written by marketing people who do not work there) but unless the company lives them then they do more damage than good. Over promising and under delivering is a growing experience for everyone today.

Whether it is a London hotel, stating it’s exclusiveness, as evidenced by its 5 star, pretty pictures on the website of its presidential suite and over the top statements such as “sumptuous 5 star accommodation” the jaw dropping price tag. When you turn up and find a broom cupboard with not enough space to turn around in let alone swing a cat, and you are one of 500+ rooms filled with bus loads of tourist on a package holiday then company values are under pressure.  

The same is equally true for staff, why should people stay loyal to you if you don’t live those values and enshrine them in every one of your people. Do they live it or lip service it?

New company’s creating values
New companies have the unbridled opportunity to define their values from the start. By building them into their business model throughout the entire process from the beginning, providing value and clarity with every new role and new person, they can use their values to maximum leverage for attracting their chosen customers and staff.

So Googles' “DO NO HARM” value won many plaudits, breaking down the concern about the is was then rightly questioned by their policy in China of being seen to be supporting censorship (try typing Tienanmen Square Massacre into Google in China it never happened!). Now there is a good argument that rightly says any Google is better than no Google, but the contradiction against their stated values upset many Google Supporters elsewhere in the world.

Your values should come from within. What do you stand for? What does your company do? How should everyone do it? What does excellence look like? Some classic questions to understand the values you offer. I often ask people to think of an animal or car which best describes there organisation   

Keeping Values Alive       
 Established companies inherit values, often without realising they have them in place, “its how we do it around here” type phrases are often values hidden inside everyday activity. Keeping values alive is often hard in rapidly changing under-pressure environments. Changes in leadership, particularly when cross industry leadership is introduced or when new pressures are introduced from changing ownership for example often end up throwing out the hidden value of a brand in the race to achieve short-term results.  

Everyone entering a company, particularly top executives, must understand the core heritage values any organisation has, how they are owned and expressed. The best way to achieve that is for new people to present those values back under peer group review and add to them with the changes they intend to introduce. New products/services need to incorporate core values and learn to demonstrate them in new ways as new channels of communication are opened up.  

Values checklist
  1. Are your values visual to your team and customers?
  2. Does everyone know your core values, have you checked?
  3. Can all your people translate them into their daily role?
  4. Do people see the company values in other people’s roles within the organisation?
  5. Do customers comment on those values in their dealings with your company in formal and informal feedback channels?
If you can only answer confidently to only points one and two then you are not living your values. If you cannot hand on heart even answer those two them its probably time to look at your values in a lot more detail.

Wednesday 2 February 2011

Do you have a vision or are you just a dreamer?

No matter how big or small your business is without a clear vision of where you are going owners and directors often fall into the classic trap of just managing from day-to-day.

Envisioning, the ability to see into the future and imagine how things could be, is as important for success as having real passion for the business and the determination to create something new. These three personal qualities of leaders are vital for successful companies and a vision statement, sometimes called “a picture of your company in the future”, but it’s so much more than that.

Your vision statement is your inspiration, the framework for all your strategic planning. A vision statement may apply to an entire company or to a single division within that company.

The vision statement answers the question, “Where do we want to go?” What you are doing when creating a vision statement is articulating your dreams and hopes for your business. It reminds you of what you are trying to build. A vision statement is for you and the other members of your company, not just for your customers or clients.

Visionary goals should be longer term and more challenging than strategic goals. Collins and Porras describe these lofty objectives as "Big, Hairy, Audacious Goals." These goals should be challenging enough so that people nearly gasp when they learn of them and realize the effort that will be required to reach them.

Most visionary goals fall into one of the following five categories:
  1. Targeted - quantitative or qualitative goals such as Nike: "To bring inspiration and innovation to every athlete in the world" “If you have a body, you are an athlete.”
  2. Common enemy - focused on overtaking a specific firm, becoming the number one in that sector, such as Amazon: "Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online."
  3. Role model - to become like another in a different industry or market, the mirror role, Victoria Beckham (Posh Spice) "Right from the beginning, I said I wanted to be more famous than Persil Automatic”.
  4. Internal transformation – creating internal vision, GE set the goal of “Becoming number one or number two in every market it serves”
While visionary goals may require significant stretching to achieve, many visionary companies have succeeded in reaching them. Once such a goal is achieved, it needs to be replaced; otherwise, it is unlikely that the organization will continue to be successful. The second most dangerous place for a company is to have achieved its only goal, the most dangerous place is never to have had one. 

Simple steps to creating your vision, ask some simple questions:
  • What will our business look like in 3 to 5 years from now?
  • What new things do we intend to pursue and how?
  • What future customer needs do we want to satisfy?
Write the answers down and focus on developing them into a coherent, motivational and purposeful message which can connect with everyone. 


Then Question:
  • Does our vision statement provide a powerful picture of what our business will look like in 3 to 5 years from now?
  • Is your vision statement a picture of your company’s future, which everyone can interpret into their role?
  • Does it clarify the business activities to pursue, the desired market position and capabilities you will need 
If your statement answers these questions then you have a vision worth owning and sharing. A vision must be motivational to everyone inside an organisation. 

The classic apocryphal story to demonstrate the effectiveness of great visions is about the time President Kennedy visited NASA. During one trip he came across a cleaner sweeping the warehouse floor, and asked him what his job at NASA was. The cleaner replied “My Job is to put a man on the moon, Sir.” 

Now I don’t know if the story is true, but it’s inspiring. In a facility full of high-powered individuals and great minds, even the cleaner was completely on board with the strategy. While you may not be planning to put a person on the moon, we can learn a lot from the story. It may sound ridiculous, but every business needs to be a little like NASA.

Great visions can create an unstoppable company


Every organisation needs to have a clear goal, owned by everyone inside and outside it. An owned and shared vision creates and sustains great morale and internal strength for companies, which can become a powerful and unstoppable force in any market no matter how competitive.  

At Cowden Consulting we focus on ensuring companies can successfully compete in their chosen or desired market.



Friday 7 January 2011

Are you on a MISSION or just a dreamer?

One of the most important pieces of any good business plan is to define what you do and where you are going as a business. If you do not define what you do and where you are going then why should people work with you or for you? Defining your purpose as a business is the clearest statement of intent any director or owner of a business can make, and yet one of the most misunderstood and avoided pieces of any business plan.

Why is it avoided? In my experience directors are most often frightened of making a commitment of what they stand for so as not to alienate any existing or potential customers who may not fit the proposed mission statement. This contradiction, not wanting to say what the primary goal of a business or organization is, means that many companies try to be everything to everyone, ending up being meaningless to everyone.

This failure to define a mission is also one of the biggest limitations companies and organizations have in creating clear blue water between them and other players in their market. It is why so many companies struggle to stand out and then expect someone in marketing to try to answer that question sometime later. It is not up to marketing to define the purpose of any business or organization, they must influence it but it takes leadership from the top for a mission statement to be successful.  It may also be why so many companies have to spend so much on marketing to define them.  

A good mission statement is clear, unambiguous, engaging and relevant to all its key audiences: namely its leadership, senior management, employees, shareholders and customers. A mission and a vision (but more of that later) provides a central definition of what a business or organization delivers.  

Here’s a quick-step guide to creating a mission statement. Creating a Successful Mission Statement

1.     First identify your organization's "strategic advantage" what makes you successful. This is the idea or approach that makes your organization stand out from its competitors; the reason that customers prefer you and not your competitors, what makes you unique, what are your core competencies?

2.     Secondly, identify the key measures of your success. Key success measures by which you can measure, Key Performance Indicators (KPI’s), typically pick 3 to 5 headline measures of performance.     

3.     Thirdly combine your strategic advantage and success measures (KPI's) into tangible and measurable goal.

4.     Define the wording, using clear language, until you have a concise and precise statement of your mission, which expresses your ideas, measures, and desired result.  

5.     Now communicate it effectively so everyone owns the mission statement within the company, make it public and ensure it is owned from the top with passion.

Communicating mission statements effectively to everyone is a defining piece of making the mission live. After all the hard work in having one so often they are filed away, or framed and stuck on the wall and forgotten. Instead successful Mission statements are launched to everyone and owned. 

I’ve run embedding program within companies to ensure that everyone inside businesses and organizations “own” the Mission and build it into their everyday activity.   

If you don’t follow through then all the effort is wasted and the opportunity is lost, so remember to focus on making your mission statement memorable and relevant. The leadership also needs to own the mission statement and make it live throughout the company.

If you do this businesses and companies can achieve significant improvements which can include: building higher loyalty from staff, higher levels of customer service; improved stakeholder and channel support and lower costs for winning new higher value customers. These are just some examples of the benefits from having and using a mission statement successfully at the front end, one other major advantage is that you have a foundation upon which to build your business plan.  

Richard Gourlay









Wednesday 5 January 2011

Successful People Plan Their Business

Business planning often gets a bad press, yet those who do sit down and plan their business are so much more focused, confident, and successful than those who float along with the economic tide. Over the past ten years as a strategic planner we’ve worked with hundreds of business owners and seen how those that create a plan and implement it, do so much better then those owners who try aimlessly lead their business on a wing, a prayer or a dream.  
According the latest BERR report, Small and Medium-sized Enterprises (SME’s) together accounted for 99.9 per cent of all enterprises, 59.8 per cent of private sector employment and 49.0 per cent of private sector turnover. SME’s really do matter to the British economy, and yet they receive little effective support from Government agencies despite being the backbone of the economy, employment, and innovation.     


Why Businesses Don’t Plan       

“If you don’t make things happen, things will happen to you” Lanes Company
Having questioned business owners over the last decade the reasons why owners have not put a plan in place and executed it, the excuses range from not having the skills, make the time, or have the conviction of their thoughts. The number of owners  who know they should have a plan ‘we had one when we first started, but have not looked at it since’ is a common theme, as is being too busy fire fighting to realise that preventing fires starting is the best way to not have to fight them.  
Do business owners not see the value in developing a plan for their business? On the other hand, is the classic perception for business owners that frenetically staying alive is seen as being successful? For many not knowing how to plan is one major reason why people haven’t and don’t plan their business. Where to start and how to know what they are trying to achieve immediately puts people off planning. Business planning is also often at fault, the most common reason people have a plan is to secure funding from banks, that’s when banks did fund business start-ups (now they just offer a high interest mortgage backed by the Government). Therefore, once people have received funding they no longer see the main advantages of planning (and the real advantages are not around money). 


Planning Skills – Have some GOALS

"The discipline of writing something down is the first step toward making it happen." - Lee Iacocca
Planning takes time, resources, (grey stuff) not the executive trip to some exotic away weekend planning, but some time allocated to review where you are as a business, how your sector and industry are performing and what you want to achieve in the future. Whether it is looking at the next year or planning the next five years, everyone who owns or directs a business is responsible for setting its direction. However, just having a plan in your head, with the classic defence of ‘its flexible at the moment’ is either ducking the responsibility or deluding themselves.
The only way to have a plan rather than a dream is to have it written down, turned (if it is not already) into an action plan which is resourced and owned by someone to deliver. Only then do businesses go forward in a deliberate purposeful way. Only then do the right things happen because you made them happen and only then can everyone, employees, shareholders, customers, channel partners and even other halves, see your dream, share your dream, deliver your dream. That’s when planning works. It is a written document, which lives within your company, and it doesn’t matter if you are a one-man (woman) band or running a multi-national Plc.


What Planning Delivers

"In the absence of clearly-defined goals, we become strangely loyal to performing daily trivia until ultimately we become enslaved by it." – Robert Heinlein


Planning provides focus in strategic direction, its provides clarity of where the business is and where it is going as well as a vehicle for getting from where you are to where you want to be. Planning time provides time to reflect on personal and corporate goals, time to share and channel new ideas while reviewing existing activities.
Planning in a structured and open format develops clarity of purpose and a clear understanding of the organisational and individual skills people have and can use to leverage advantage. Bringing in outside views widens the planning horizon, which can drive businesses forward, which is why many successful businesses use non-executive directors or outside specialists to help drive their business forward. That is one reason why so many people volunteer to get support from people like the Dragons from Dragon’s Den, they are looking for expertise and advice which gives them confidence to go forward as much as the money.   
British business owners need to plan, more often to keep being successful. Good planning creates and sees opportunities as owners and directors lift their heads up from the daily grindstone. How often should you plan? Well it all depends on the speed of your market’s evolution, but even stable and stagnant businesses should review their business every year, and not just a light dusting (add ten percent and change the year) but strategically review what and how well they are doing.
It is only by looking for fresh opportunities and how to take best advantage of them, by planning your business around those opportunities that companies successfully compete in today’s business environment.
  


Planning is not a four letter word

“An organization’s ability to learn, and translate that learning into action rapidly, is the ultimate competitive advantage" Jack Welch
The old adage, compete or get beat, is more relevant today than it has ever been. The rise of the Internet means there are no secrets, competitive advantage lies with those who can see an opportunity and adapt fastest to take advantage of it. Those owners and directors who see and go for opportunities become the stronger ones, and that is where good strategic business planning provides it real advantage.
By orientating a company to where it can retain better, win new and develop existing customers companies that plan their success out compete in their sector, and equally importantly have everyone focused on where they are going. From the smallest to the biggest every business needs to have a plan that is written down, owned and guiding your business in the direction you want it to go. 
Good Luck
Richard Gourlay








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