Archive for the 'Business Planning' Category

Are All Companies Tech Companies?

Published
by
Michael McKay
on 29 May 2009
in Business Planning, Information Technology, Management and Strategy
. 0 Comments

When we think technology and business, we naturally think products.  But it is not always so.

I recently met a friend and we were discussing venture capital and the state of commercialization in Canada for tech companies.  Part of the conversation stuck with me - every company is a tech company to some degree.

Technology is know-how and every company must have some special processes, knowledge and capabilities that make them unique in the market.  This technology usually ends up in the proceses and data stored in the IT.  Even if the provision of the IT services is outsourced, the data and processes still are part of the core competence of the company.

The technology, then, can be any part of the business - logistics, business planning, financial wizardry, marketing, partnerships, … as well as product related.

While this may be a semantic argument about the meaning of the word, it is an interesting point for all those of you who think you aren’t running a tech company.

Unaware of the Rut

Published
by
Michael McKay
on 28 October 2008
in Business Planning, Management and Strategy
. 0 Comments

Are your business processes stuck in a rut? How would you know?

I’ve been driving my daughters to the same daycare for the last several years. First my oldest, who now takes the bus to school, and now my youngest who will spend at least two more years with this daycare. We’ve moved once during these years but the final portion of the route I drove each morning remained the same. I choose this route based on the stop-lights, trying to spend the least amount of time at each light. There was one intersection in particular where I needed to cross four lanes of traffic. The light was lengthly and long ago I decided to turn right and then left at the next street. At the next street, I was only turning left so I had to wait for the light and traffic to clear. It was a short light and I never had to wait long. Then the traffic patterns changed and the number of cars turning left increased. It frequently took two lights to get the chance to turn. I got used to the wait.

Recently driving with my wife, she asked the obvious - why not go straight through the main intersection? So stuck in my habits, I started to explain but managed to stop myself. Things had changed and I had not adapted. My carefully planned route was no longer optimal. I was wasting time. I started to drive through the main intersection, enjoying a shorter over-all trip.

Its a small example I know, but applied to business, it begs review of your processes. Are your processes still optimal? Has technology changed? Are you doing things because that is the way you have always been doing them? Are you stuck in the rut of working business processes? Perhaps its time for a review.

Innovative Aid: The Afar People of Africa

Published
by
Michael McKay
on 24 October 2008
in Business Planning
. 1 Comment

At the last Innovators Alliance meeting, I attended a presentation by Warren Creates and Irena Dule on the Afar People of Africa. It was an interesting presentation on the efforts being made by Warren and his team at Can-Go-Afar Inc.to help this ancient nomadic tribe. The presentation can be viewed here and the Can-Go-Afar website has a lot of additional information.

The presentation was partly aimed at informing us of the issues involved in this tribe but Warren also asked us some key questions:

  • What do you think of the work we’re doing?
  • How do we make what we have started sustainable?
  • How can we improve our fund raising efforts?

The Afar people live in a region of Africa called the Afar triangle which is extends from the coast of Eritria and Djibouti into the heart of Ethiopia. It includes the Danakil Desert, a wasteland of salt and one of the Cruelest Places on Earth. 200 feet below sea level, it is home to vast salt plains and active volcanoes. Temperatures reach 50ºC.

There are approximately 3 to 5 million people in the Afar tribe. The average life expectancy is 45 years. As nomadic tribe with an aural tradition, 94% of the people are illiterate. They are a tough people that have lived off this land for ages. Still, there are issues that prompted Warren to get involved.

Warren was working as an immigration lawyer and was representing the Afar people in Canada. In 2006, he was invited to attend a development conference in a remote town of Assayati in northern Ethiopia. At the conference, a number of issues were raised including assisting the Afar refugees from the neighboring countries of Eritrea and Djibouti, to providing food security, addressing health issues and HIV/AIDS, education and literacy, provision of fresh water and, last but not least, women’s issues and Female Genital Mutilation (FGM).

On his return to Canada, Warran organized fund raising efforts with the aim of providing aid to these nomadic people. Along with raising awareness, health, litereacy, and food aid were the main goals.

One of the interesting projects was the provision of water filters to the help treat water. Many people in the region get their water from seeping wells such as this one.

Seeping well used for drinking water
Seeping well used for drinking water

The water filters are an unique design by Manzwaterinfo.ca. Called the Biosand Water Filter (BSF), it uses a cheap concrete vessel to hold sand and stone which filters dirty contaminated water to remove up to 99% of contaminates and disease causing bacteria and viruses. It is a neat idea.

Water Filter cutaway

Water Filter cutaway

Construction of the filters can be done on site by local people using readily available materials and reuseable molds.

Building a water filter
Building a water filter

We had lost of comments and suggestions mostly aimed at focusing the aid efforts of his small organization on a key area they could have impact. As a small group, they do not have the capability or track record to work with the large government aid agencies and either have to work alone or will have to partner with NGOs to get access to government funds. The water filters, since they are a relatively cheap (about $100 each) and can be constructed on-site, could be branded or sold as charitable contributions. I could see a Christmas campaign with information cards and a small token ornament sold in return for a contribution towards the construction of a filter.

As an example of what an individual can do to organize and actual influence people in the world, you have to give Warren credit for his efforts. It is truely inspiring.

If you have any suggestions, or want to get involved yourself, please comment here or contact Warren directly through Can-Go-Far.

Building a Lead Development Program

Published
by
Michael McKay
on 16 October 2008
in Business Planning and Marketing
. 0 Comments

Craig Rosenberg - The Funnelholic - has written two good blogs and promises a third on Lead Development. These are good reading for anyone who is designing a sales marketing plan. Here are the links:

MJM Consulting - Strategic Business Consulting - Helping Companies Grow

Venture Capital is Still Out There

Published
by
Michael McKay
on 10 October 2008
in Business Planning and Financing
. 0 Comments

In the last few days there have been a number of posts about a venture capital crisis yet there are still venture capitalists out there, looking for good opportunities. Here are a few of the doom and gloom posts from Michael Arrington at TechCrunch:

On the positive

Despite the positive tone, getting financing these days is going to be tougher. The WACC has gone up. Plan accordingly.

The Law of Unintended Consequences

Published
by
Michael McKay
on 9 October 2008
in Business Planning and Management
. 0 Comments
CF-18 in high-g pull-up
CF-18 in high-g pull-up

Akin to Murphy’s Law, the Law of Unintended Consequences is a warning against the belief that you can control the world around you. As well as the direct consequences, any action will also have other consequences which were unintended and which may be counter to the original intent.

As an example, in my early military career, I was an aeronautical engineer, a maintainer, working with CF-5 and CF-18 aircraft in Cold Lake. In the early years of the CF-18 introduction, the maintenance community became concerned with the stresses imposed on the airframes by high-g loads. Repeated stresses would shorten the life cycle of the airframe and could possibly create a flight safety issue. To prevent these over stresses, the aircraft was modified with a g-limiter which would limit the g-loads in normal operation to about 7.5g. The pilots could override this in emergencies and pull up to the aircraft’s limit which was above 11g.
Prior to the addition of the g-limiter, the maximum g pulled on any flight followed a statistical bell curve that averaged about 5g for all flights. At the high end, there was a small percentage of flights with maximum g loads above 7.5 g. After the g limiter was installed, the average g for all flights went up despite the fact that there were fewer cases of high-g maneuvers. This higher average, the unintended consequence, represented more danger to the aircraft structural life than the small number of high-g maneuvers.
How did this happen? The pilots, informed about the g-limiter, started to use it as a guide. They no longer judged how much acceleration was required, they just pulled until they hit the limiter and felt safe doing so. The statistics of the flight loads became very skewed towards 7.5g and the stress on the fleet went up not down.
What does all this have to do with business? It is just an anecdote to highlight the need to always be measuring the results of your strategic decisions and to look for the effects of the unintended consequences. In the story above, the maintenance community was tracking the aircraft stress loads and was intent on extending the life of the airframes. The analysis of the data showed that the opposite effect was occurring so action was taken - not to remove the limiter, but to better inform the pilots about the original problem so that they could use their judgement as well as the limiter.
In business, many strategic decisions and tactical actions are taken but once taken, leaders and managers need measure the results and ensure the actions are having the intended results.
MJM Consulting - helping companies grow.

Alternatives to Layoffs

Published
by
Michael McKay
on 8 October 2008
in Business Planning, Financing, Information Technology, Management and Virtual Corporate Desktops
. 0 Comments

If you are preparing for the downturn by cutting costs, consider the advice of Mike Elgan. In his article on “Three Ways SMBs can Survive the Economic Meltdown“, Mike highlights three alternatives to layoffs that can help reduce the overhead costs of running a business:

  1. Send people home. Companies often consider transport and associated costs as included in employee pay. Consider cutting a portion of this pay and let employees work from home.
  2. Use all the on-line tools to travel virtually and collaborate without actually leaving home.
  3. At the extreme, consider closing your office and becoming a Bedouin organization.

I like these ideas but I have to ask, why wait for a downturn?

Remember the Dollar?

Published
by
Michael McKay
on 8 October 2008
in Business Planning, Financing and Management
. 0 Comments

It wasn’t long ago that the strength of the Canadian dollar compared to the USD was a source of major concern for Canadian manufacturers. With the recent turmoil in the markets, the Canadian dollar is weakening again as traders speculate that the recession will reduce demand for the commodities, oil in particular, that are the backbone of the Canadian economy.

USD/CAD currency exchange prices over the last few years.

USD/CAD currency exchange prices over the last few years.

I’m sure many in the manufacturing sector are torn between the impacts of the recession and the benefits they will get from the weakening dollar. To survive the plunge in the US dollar from the heights of 2002 when it was trading at over $1.50 CAD to the lows in November 2007 when it hit nearly $0.90 CAD, manufacturers that sold into the US economy had to become very efficient. It was essential to manage Canadian dollar costs to ensure profitability. If goods were sold in US dollars, there was a double impact of falling revenue in Canadian dollars. Many were forced to raise the prices of the goods they sold into the US. A strengthening of the US dollar will reverse these impacts and the now efficient firms will benefit.

For most of 2008, the dollar has been trading near par but it has risen nearly 10% to $1.10 in the last three months. [Update: As of the 10th October, the USD/CAD rate had increased to over $1.18] That has to be a relief to manufacturers that sell into the US. It represents free revenue in foreign exchange as well as the opportunity now to reduce US prices in the face of a recession.

The question is whether the recession will have more of an impact than the dollar. My own guess is that the coming year will be a bad one and that the Canadian economy will again start to look good compared to the US which will reverse the trend in the dollar. So enjoy the bump while it lasts but don’t depend on it. More belt tightening will be required in the future.

Pragmatism Always Wins

Published
by
Michael McKay
on 3 October 2008
in Business Planning and Management
. 0 Comments

Pick your niche and stick to it. Focus focus focus. Stand for something. Don’t waiver. Stay on message. Stay on target. Damn the torpedoes. And while you’re at it, go down with the ship.

Following the tech crash in 2001, Sun Microsystems did not change its strategy. It continued to invest heavily in R&D at a rate nearly twice as large as its competitors. It did not adapt its product lines to meet the customer demands for cheap off-the shelf products. They stuck to their strategy but they lost their competitive advantage.

Now consider the Republican move to shore up the financial system. (Shore-up is a much better description than bailout, don’t you think?) This is a clear departure from their message. It is a socialist move that is not consistent with Republican values. Does that make it wrong or is it more likely that these extraordinary times do not fit nicely with the policies of any political party. New thinking is required because sticking to the message in times like these does not make sense.

Being dogmatic about your strategy in the face of external changes that affect your business is wrong. Predict, plan, adapt is better advice. There are things that happen to businesses that require you to change. Being stuborn and dogmatic about it won’t help you. In these cases, pragmatism always wins.

Thanks to Seth Godin for getting me on the soap box.

Network Governance: Sharing the load of decision making

Published
by
Michael McKay
on 1 October 2008
in Business Planning and Management
. 0 Comments

Can a single board of directors, informed by a single CEO effectively manage a corporation and avoid ethical risks? According to Dr. Shann Trunbull, a Principal and the International Center for Self Governance in Australia, the answer is no. Firstly, with only one board and with only one source of information, the board is both overloaded with information and poorly informed - despite the best efforts of the CEO - leading to a situation where decision making is fraught with risk. In addition, the single line of oversight can lead to conflicts of interest that are incredibly hard to resolve without a separation of operations and oversight.

Dr. Turnbull suggests changes to the governance structures that will enforce this separation by creating multiple boards and ensuring multiple sources of information feeding into the boards as well as the CEO. The different boards would have various roles aimed at the decomposition of decision making labour, the reduction in information overload, increased quality of decisions, and a reduction in conflicts.

The governance model is not that different from the model being used by several open source communities.

His full paper can be downloaded here. All his papers can be found here.