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Strategic imperatives of running a successful business in nigeria by S. S. Afemikinghe Consult

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Strategic imperatives of running a successful business in nigeria by S. S. Afemikinghe Consult

  1. 1. Strategic Imperatives of running a successful business in Nigeria S.S. Afemikhe Consulting ©
  2. 2. 2 Mission PURPOSE Why the company exists VALUES What the company believes in STANDARDS AND BEHAVIOURS The policies and behaviour patterns that underpin the distinctive competence and the value system STRATEGY The competitive position and distinctive competence Includes four elements – Purpose, Strategy, Behaviour Standards and Values. The Ashridge Mission Model A strong mission, we believe, exists when the four elements of mission link tightly together resonating and reinforcing each other.
  3. 3. 3 Vision Warren Bennis and Burt Nanus, authors of Leaders: The Strategies for Taking Charge, identify vision as a central concept for their theory of leadership. • To choose a direction, a leader must first have developed a mental image (Vision) of a possible and desirable future state of the organization. • This vision, may be as vague as a dream or as precise as a goal or mission statement. • The Critical point is that a vision articulates a view of a realistic, credible, attractive future for the organization, a condition that is better in some important ways than what now exists. Please note that vision and mission are not fully overlapping concepts. • Vision refers to a future state “a condition that is better… than what now exists”, • whereas mission more normally refers to the present. Marks and Spencer’s mission “to raise the standards of the working man” was being achieved throughout the 1950s and 1960s and is still being achieved today. • This is a timeless explanation of the organization’s identity and ambition. Vision, Mission, Leadership and Success
  4. 4. 4 When a vision is achieved, a new vision needs to be developed. But a mission can remain the same and members of the organization can still draw strength from their common and timeless cause.  A vision is, therefore, more associated with a goal whereas a mission is more associated with a way of behaving.  Mission is the more powerful concept.  Vision is valuable because goals are valuable. But it is the clarity of mission rather than mission that is the strength of a great leader. In times of change, a new mission will be difficult to distinguish from a vision because the new mission will be a mental image of a desirable future state. Two concerns with vision as a concept.  a vision begins to lose its power when it is achieved. It is no longer a driving force for action and the organization can begin to lose direction. This can happen to companies that strive for market leadership. Once achieved, the ambition that drove the company drains away, leaving it directionless.  if a vision is so ambitious that it is unlikely to be achieved in the next five or ten years it loses its power to motivate and stimulate. It becomes too ambitious and unrealistic. Vision, Mission, Leadership and Success
  5. 5. 5 A corporate mission is much more than good intentions and fine ideas. It represents the framework for the entire business, the values which drive the company and the belief that the company has in itself and what is can achieve. Colin Marshall, Deputy Chairman And Chief Executive, British Airways Mission is the cultural glue that enables an organisation to function as a collective unity. This cultural glue consists of strong norms and values that influence the way in which people behave, how they work together and how they pursue the goals of the organisation. This form of mission can amount to a business philosophy that helps employees to perceive and interpret events in the same way and to speak a common language. Key Points on Mission
  6. 6. 6 • Commercial and Cultural glue A management team capable of defining a clear mission will have advantages over a team that has defined only its strategy. The mission team will have values as well as strategic concepts to guide it through important decisions: the strategy team will have commercial logic only. • Better recruitment and promotion decisions Companies with clear missions are more choosy about the people they hire and promote. They use a border range of criteria than the traditional measures of education, experience skill level and leadership qualities. This is because they have a clearer ideal of what sort of company they want to be and what sort of people are likely to do well in the culture. By defining the values that form the organisation culture, managers with a clear mission are better able to judge who fit with the culture and who will rub awkwardly. The Benefits of Defining Mission
  7. 7. 7 Strategy is about shaping the future Igor Ansoff Manager & Mathematician (described as Father of Strategic Management published Corporate Strategy in 1965. “How managers could plan for a more successful future.” Success is made when the organisation moves towards a strategy that leans its lesson and adopts to new opportunities Strategy to survive business in Nigeria
  8. 8. 8 WARNING! About 50% of SSMEs fold up within their first year ...only 20% survive beyond 5 years
  9. 9. 9 Why do Businesses Fail? • Lack of access to Capital • Inability to separate business and personal transaction • Inability to determine if the business is profitable or not • Absence of good business planning • Weak management structure and lack of internal control • Non compliance with corporate affairs and tax laws • Refusal to seek advice from financial experts • Not keeping proper books of accounts and records • Poor management of stock and credit sales • Inability to foresee business challenges and deal with them
  10. 10. 10  Vision, Mission, Culture  A balanced organisation  Understanding the environment  Long term repositioning  Compete successfully Superior Strategies for Survival
  11. 11. 11 A balanced organisation Mc Kinsey’s 7s Model • Strategy: future plans, what the company intends to achieve, how they intend to achieve it as well as how we can improve on these plans. • Structure: organisational structure, hierarchy and co-ordination with a view to ascertain its effectiveness how it can be improved and how changes to these can affect it positively or negatively.
  12. 12. 12 A balanced organisation (contd.) Mc Kinsey’s 7s Model • Systems: The different divisions or teams. • Shared Value: Those values that support the very reason for the…. The beliefs, the expectations the employees, culture. • Style: An element of culture with their employees and clients are a good. • Staff: The people in the organisation • Skills: team Knowledge
  13. 13. 13 Critical Success Factors CRITICAL SUCCESS FACTORS Client People Financial Operational Excellence Targeting • New Clients • Increased client satisfaction • Improved Client service • Improved Service Delivery • More aggressive marketing campaign Targeting • Presentation skills training • Marketing skills training • On the job training • Technology training Targeting • Delivering more than is promised • Improved client turnaround Targeting • Revenue per existing client • Revenue from NEW clients • Revenue per service
  14. 14. 14 “Manage for Liquidity and for financial strength” – Peter Drucker  In turbulent times, liquidity is more important than earnings.  A business can survive long period of low earnings or low revenues if it has adequate cash flow and financial strength  In the long run, productivity is the source of economic value. Making resources productive is the specific job of management Keys to Survival
  15. 15. 15 - Carry out SWOT analysis regularly  Get everyone to think hard and imaginatively about the whole organisation and its external context  Consider the links between the four boxes. What strengths will allow you to take advantage of opportunities Environmental Sensing - Practice wisdom of the crowd Strengths Weaknesses ThreatsOpportunities
  16. 16. 16  How does your industry (or sector) work?  What does success look like for your organisation?  What would it take to do it ten times better?  What is the most important issue you face?  What would you do with no limitations?  How many of those limitations are real? Strategic SWOT Focus
  17. 17. 17  See beyond the obvious to new possibilities for the big picture.  Understand how to break down a situation into smaller pieces.  Know how to play with individual parts and reorganise them.  Be aware of the most important strategy tools and principles.  Gain the ability to create vision and goals beyond the short-term.  The people around you acknowledge you as a strategic thinker. Strategic SWOT Focus
  18. 18. 18  Does this problem let us start again and do it better?  What can we do today that was impossible yesterday?  Is our plan still working? How can we take advantage of events? Remember the Paradigm question: “What can you not do today that if you were able to do it will extensively change your output” Strategic SWOT Focus
  19. 19. 19  You know what could threaten the survival of your business  Everyone is looking for warning signs and discussing them openly.  Potential delays to responding to threats are understood.  Marketing and innovation are improved to keep the company adapting  You know the basic steps of avoiding failure and getting sustained growth. Key Survival issues
  20. 20. 20  What threats could cause the failure of the company?  How will you recognise the warning signs of failure in your business?  Are there replacement products and new competitors?  Have you been putting off important decisions?  What are customers saying about your products and services? Key Survival issues
  21. 21. 21  Are you growing too fast? Are getting sloppy with your expansion?  Are your financial controls adequate?  Is bureaucracy getting in the way of action?  Which new competitors are more innovative? Or growing faster?  How will social trends change demand for your products or services?  What are your colleagues saying in employee surveys?  Have you got the management skills necessary to be effective? Key Survival issues
  22. 22. 22 All decisions are made about the future thus injecting uncertainty. “Sweet are the uses of adversity which like the lead wears yet a silver jewel on its head – William Shakespeare in As You Like it” Uncertainty can only be reduced by committed decisions and actions. You can’t wait for uncertainty to disappear but you can choose to create certainty of purpose and direction. You can’t remove risk but you can think about how to create a culture and processes to adapt to unexpected problems. • How high are levels of uncertainty in your industry? • What uncertainty surrounds a particular decision? • What are the risks in making (or not making) certain decisions? • How could things go wrong? What would you do next? • Which risks are outside your direct control? • Which risks are within your direct control? • How can you deal with changes outside your control? • How can you anticipate external changes? Management task: Recognise the cost and benefits of Risks (Risk/Reward Matrix) Your strategy will have uncertain outcomes but you can try to assess the rewards and how to gain them. Taking risks in an uncertain environment
  23. 23. 23 Get competitive advantage • Identify how you compare in cost, differentiation and focus. • Find new ways of competing in these three generic areas. • Consider how these sources of competitive advantage can be combined • Seek to create virtuous circles or chains of advantage that create new opportunities for you that are difficult for competitors to imitate • Find ways of protecting your advantages. A word about competition
  24. 24. 24 - Too little: Too late: Too few.. Strike a balance - Create confidence - Motivate - Reward your winning team Develop your winning team Communicate to achieve Extraordinary Performance • Vision • Mission • Culture Communicate endlessly
  25. 25. 25 Get lucky, Achieve success. So what is Achievement - Preparation - Accident of time, place and birth (opportunity) - Practical intelligence. Summarised into [Preparation + Opportunity] When a person is prepared and is given an opportunity and he seizes it, the result is success.
  26. 26. 26 Avoid the “Knowing and Doing Gap Just Do it: made popular by Nike  Translate Knowledge into action  Knowledge acquired by doing trumps that of learning  Engage in thoughtful action ….taking action will generate experience from which you can learn  Break the barriers to internal and external knowledge transfer 16/05/2014 26
  27. 27. 27 Great victories are won when ordinary people execute their assigned tasks.
  28. 28. 28 THANK YOU

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