Obsessive about Business Growth?

Companies are constantly monitoring their revenue. It is firmly believed that when the revenue growth slows down the enterprise is doomed forever. This has led to many business executives to focus on merely expanding their businesses and increasing their profits. But ultimately all growth comes to a standstill.

When faced with this dilemma of a stagnant income, businessmen often open new stores in the hopes of increasing revenue. Very few businesses actually focus on making operational and internal improvements. This strategy is not followed by most companies due to three reasons.

The capitalist economy demands growth

Slow growth is often shunned upon. When faced with declining growth companies are expected to go back to the drawing board and come up with a new strategy instead of making an internal improvement.

Companies never know when to make the transition

Many retail companies keep expanding their chains until they collapse from all the added expenditure.

Every company needs a different strategy

A growth company and a matured business, that has reached its peak, require different operating strategies. Companies that excel at growth lack the capabilities to make the switch.

Since slow growth is inevitable situation it is better to be prepared for a transition from a high- growth to a low- growth business strategy. This will help retailers to stay in the maturity stage of the life cycle for a very long time, forestalling decline. The following are some ways to make this transformation easier and effective.

  1. Use the right analytics

By tracking the right metrics business executives can detect when to transition to the maturity strategy. Studying the revenue from each store, the estimated revenue added per new store and the return on capital investment businesses will be able predict any shift in growth.

  1. Stop opening new stores

As much as retailers want to believe that expanding the business is the proper solution to a declining business, it is not so. Opening more stores might offer a temporary solace but eventually the prices rack up and the entire business might crash.

  1. Increasing the sales of existing stores

Through operational improvements a company can increase its revenues from existing stores faster than the expenses. This can be done in a few ways:

  • Ramping it up

Companies can close unproductive stores, expand and remodel stores in the best locations, and carefully choose locations for the few new ones.

  • Analytics

Many analytics tools are available today that help retailers decide what assortment of products to carry in what quantities, how to price those items, and how many sales associates should work in each store, at what hours.

  • Product Development

Sales at existing stores can be improved by developing a new product or improving an old one.

  • Staffing

Hire the right people and train them accordingly. Employees should also be provided with the proper incentives that make them more responsible.

  1. Allocate Capital Wisely

The available capital of a company should be allocated to the most promising initiatives. All new ideas that are generated should be properly evaluated before making the final investment.

The destructive obsession with high growth pervades virtually in all capitalist economies. Most companies do not see the negative side of high growth. But a slow- growth maturity plan is better for enterprises in the long run and ensures that the businesses run smoothly and effectively.

Working with an Idea Pitching Machine for a Boss

Bosses that have fun, new, and innovative ideas can be exciting, but can also be overwhelming. It can be hard to keep up with the new ideas especially when you are still working on the old ones. It is imperative to form a relationship with your boss with ultimate mutual respect. This way you can maintain a positive attitude while working

When your boss shares some ideas with you, do not automatically assume that they want you to do something about it. Individuals that have very creative minds can always spew out various ideas, however it can be incredibly difficult to keep up with them. A smart method to stay updated with what the boss wants is to note down all the ideas and keep them in mind. More often the boss just feels compelled to voice their thoughts and ideas out loud, and have someone acknowledge them. The rule in these type of situations is to make sure you understand what the boss wants and confirm which ideas are the next step that you should be taking. This rule helps avoid any confusion and only increases effective productivity.

Sometimes your boss might come up with an idea, but not consider how much time you have left to finish the task. If your boss is very serious on pursuing the new idea, but the time frame provided is not enough, it is vital to explain to your boss that it is not realistic and to think about the time and cost. This allows the boss to comprehend the measures to make things work and be more reasonable when it comes to pitching brand new ideas.

On the other hand, there may be times that the boss can get distracted with the new ideas and forget about the main ideas that were originally planned. Instead of crossing out the newly pitched idea, redirect the attention to the monthly plan. For example, ask questions such as: Are we able to fit the new idea into our current goals? Is this idea important enough to not include or delay the other planned ideas? Can we do this idea later or does it have to be done now? By asking these questions, the boss can become more aware of their priorities and help them figure out what makes the most sense tactically

What Exactly Is A Digital Strategy?

In a technologically driven world it is highly impossible to stay away from any form of digitalization. Business organizations have keyed into this transformation which ultimately led to the birth of digital marketing. This shift in focus from traditional to digital has been a great and profitable. According to Digital Strategy Conference (DSC), “Digital strategy is the process of identifying, articulating and executing on digital opportunities that will increase your organization’s competitive advantage”.

In today’s organization, there are many ideas of what constitutes a digital strategy. A marketing executive will see a digital strategy as social media and web channels. An IT person would see a digital strategy as cloud. An operations executive will see it as data analytics. An R&D executive would see it as online products. A financial person will see it as online revenue channels. This broad spectrum of division leads to a lot of confusion and business executives are often left wondering whether they have an actual digital strategy or if they are simply probing here and there with some digital projects.

A recent survey, sponsored by Progress, finds digital transformation is happening in small steps and not as a large concrete plan. Most of the 700 decision makers in the survey, who were executives in charge of digital initiatives, say they are still taking incremental steps (75%), rather than having a digital strategy fully rolled out or in production. The survey conductors also looked at those who weren’t pursing digital marketing. Of those surveyed, 96% acknowledged that digital transformation is critical or important, yet 48% feel that it is “not a top priority.”

The Progress survey’s authors say that these executives see digital “as proxy for website content, e-commerce, social media, mobile and email marketing”. These initiatives mentioned above have been around for years and is vastly used by all companies. But business strategy is an evolving process and this is where digital strategy steps in.

In the recent years, many new technological elements have been introduced that is a game changer in the world of commerce. Cloud computing has become a huge part of the digital equation. It offers a way to abstract, automate and add processes and capabilities that may have previously been beyond the organisation’s grasp. Another added benefit of this innovation is that it acts as a storehouse of accumulated knowledge that can be shared or accessed across the client base.

The other important piece of the digital equation, that only emerged in the past two or three years, is the adoption of data analytics and integrating analytical thinking into all levels of business decisions. This has provided enterprises with insights into their sales and production. They are also developing ways to run this data through algorithms and rules engines to deliver better, more responsive service.

It is important to remember that digital strategy is both a concept and a thing, that is, a digital strategy should eventually lead to the creation of a concrete plan or roadmap. By establishing a goal and understanding the purpose of a company, executives can adopt those technologies which will provide a competitive advantage. It is important to acknowledge that there is no “right way” to become a digital enterprise. Also there is no unified theory of digital transformation as of yet.

Meeting Mayhem – How to Find the Right Balance

Meetings are essential for enabling collaboration, creativity, and innovation. They often foster relationships and ensure proper information exchange. They provide real benefits.

This is what meetings are actually supposed to mean. But in reality, most employees define meetings to be painfully exhausting and arduous. Such opinions are supported by research showing that meetings have increased in length and frequency over the past 50 years, to the point where executives spend an average of nearly 23 hours a week in them, up from less than 10 hours in the 1960s. An abundance of meetings can also have certain negative effects on an organization.• Meetings reduce the time for individual work which is equally essential for creativity and efficiency. As a consequence, people tend to come to work early, stay late, or use weekends for quiet time to concentrate.

• Dysfunctional meeting behaviours can be associated with lower levels of market share, innovation, and employment stability.
• Badly run meetings limit communication and collaboration because happiness at work takes a hit too.
Fortunately, such bad outcomes can be avoided by changing the way your team and your organization approaches meetings. With a structured approach to analysing and changing meeting patterns throughout the team or unit, significant improvements can be made. In this article, a five-step process for escaping the meeting trap by working together is described.

1. Collect data from each person.
To get a clearer view of how meetings are affecting your group, use surveys or interviews to gather data and impressions from every individual. That will help you gauge the full extent of the problem.

2. Interpret the data together.
Next, it’s critical to come together as a team or a unit to digest everyone’s feedback and analyse what is working and what is not. This must be an open, non-judgmental discussion of the survey or interview findings. Neutral facilitators can help keep the conversation constructive.
3. Agree on a collective, personally relevant goal.
Personally benefiting from the group’s initiative is a great motivator. For example, designating a certain amount of time each week for people to focus on independent work—whether in the office or at home. Giving employees such flexibility and freedom can provide necessary relief in their schedules, along with an incentive to make the arrangement work. The additional “white space” in everyone’s calendar increases individual productivity.

4. Set milestones and monitor progress.
As with any change effort, it is important that concrete and measurable progress be assessed and discussed along the way. Small, tangible wins provide something for people to celebrate, and small losses provide opportunities for learning and correction.
5. Regularly debrief as a group.

It is critical to regularly and openly take stock of how people feel about the meetings they attend and about their work process more generally. Frustration, resentment, and even hopelessness are signals that people are falling back into bad patterns. Moreover, changing protocols and behaviours takes time, and sustaining momentum requires consistent attention and contact.
Meetings do not have to be a trap, they can be a conduit for change. A process such as this can improve communication, and integration of the team’s work, job satisfaction and work/life balance. After all, better meetings are directly proportional to better work lives.

Does your Facilities Management (FM) business have growth clarity?

Does your Facilities Management (FM) business have growth clarity?

The continued trend towards outsourcing is expected to ensure future growth opportunities for Facilities Management companies; those with bundled services and integrated solutions, in particular, showing the strongest growth potential. However, increased price competition can be expected to restrict a stronger value development with clients adopting a “more for less” attitude.

In the public sector, spending cuts will afford further opportunities through the new Crown Commercial Service (CCS) next generation FM framework although price competition is expected to remain intense. We believe however, that there is a changing culture among several public-sector bodies towards contracting out services.

CCS and related central government bodies will continue to benchmark essential services and will aim to increase the rate of commoditisation and standardisation of essential public services. Providers will be increasingly bidding for private sector opportunities. Competition will further intensify, especially in the £500k – £5m a year revenue projects.

In this series of articles we will address three key questions

Does your Facilities Management (FM) business have growth clarity?

How do you stand out in the FM market in 2018-19 and beyond?

Is your FM Company built to succeed?

We will address these issues using Baachu’s 3Ps model

Does your FM business have growth clarity?

To answer this question let’s use the first of Baachu’s 3Ps – Perception

Review your purpose closely and ask common sense questions

  • Why are you in the FM business?
  • What are your competitive advantages and USPs?
  • Are you building sustainable capabilities?
  • Are you aware of market trends, especially the decreasing profitability in the FM business?

It is very important to have good data and accurate perceptions about the market. The FM market increased by £10.7bn to £117bn in 2017, from a fairly static 2012 value of £106.3bn but is expected to be £129 billion by the year 2019. You must continuously track the trends and the issues related to FM industry. This will lead you to a good understanding on how to differentiate yourself in a crowded market.

Like any industry, growth in the FM business takes two formats – top line and bottom line growth.

A company’s bottom line is its net income, or the “bottom” figure on a company’s income statement. It is a company’s income after all expenses have been deducted from revenues. These expenses include interest charges paid on loans, general and administrative costs and income taxes. A company’s bottom line can also be referred to as net earnings or net profits.

The top line refers to a company’s gross sales or revenues. Therefore, when people comment on a company’s “top line growth”, they are making reference to an increase in gross sales or revenues. Both these figures are useful in determining the financial strength of a company, but they are not interchangeable.

Bottom line describes how efficient a company is with its spending and operating costs and how effectively it has been controlling total costs. Top line, on the other hand, only indicates how effective a company is at generating sales and does not take into consideration operating efficiencies which could have a dramatic impact on the bottom line.

As the saying goes turnover is vanity, profit is sanity but cash is reality! Just chasing revenue and not focusing on profitability or cash leads disaster.

Many business leaders focus on a year on year top line growth of some 10%. The average margin is less than 5% while some companies struggle to make 1% or 2 % margin. There are some providers who target a top line growth and go for 0% margin.

Many businesses in the FM sector focus on top line growth, resulting in 7 CEO changes among Top 10 support services companies in the year 2017. As we have seen with Carillion and few larger outsourcing companies, all it takes is few failing contracts and the entire business collapses.

However, this is not to say that a company cannot experience both top-line and bottom-line growth at the same time. It takes strong leadership and a value driven culture to achieve top line growth and bottom line efficiencies at the same time.

Baachu recommends balanced growth (sustainable top line and bottom line growth)!

As FM opportunities continue to grow rapidly and competition intensifies, you need to build strong knowledge partnerships that can help you build upon your strengths to capture market share. Baachu’s expertise in FM will give you the insight and advice needed to achieve growth clarity for your vision going forward.

You can benefit from talking to the FM experts, so get in touch with us by emailing baskar@baachu.com today.

Please subscribe to Baachu’s newsletter to receive news and updates on FM growth and strategy.

How do you stand out in the FM market in 2018-19 and beyond?

How do you stand out in the FM market in 2018-19 and beyond?

This is the next in our three series articles on FM growth strategy. In the previous article, we describe how Baachu’s 3Ps model can be used to examine whether your business has focus and clarity using the Perception parameter.

Here in this article, we will show you how we can use Baachu’s 3Ps models’s Position parameter to turn our vision outside of your company to examine its Position in the FM market.

How to stand out in the FM market in 2018-19?

To answer this question, we will use the 2nd P of the Baachu 3P’s framework – Position.

  • Are your assumptions around current growth and future growth markets, and the opportunities within your core sectors still valid?
  • Have you positioned your services based on market data against your own capabilities?

The Baachu team estimates sizeable upcoming opportunities in the UK public sector FM market over the next three years, with upwards of 800 contracts over £9 bn expected to be floated for rebids by 2020.

At this point, providers should be actively looking at ways to build the right contacts, capabilities, partnerships and differentiators to be well placed in the re-shaped FM landscape. Collaborative capabilities, localised supply chain, innovation and social value generation will be the key competitive propositions to be successful in the coming years.

Let’s look in more detail into how contacts and partnerships can be further developed further through networking.

Networking has always been a vital part of any business but never more so than today. This is because industries and markets are evolving and changing so quickly. Therefore a business cannot afford to be static. The good news is there has never been so many opportunities for networking, whatever be your business needs.

Networking opportunities include physical meetings organised by industry experts, presentations and trade shows. Today it’s easy to schedule face-to-face meet-ups in your city that are relevant to your interest using search portals such as Meetup.com. Often, if you don’t make it to the physical event, presentations and panels are live-streamed though sites like Facebook and YouTube, with live chat feature available too. In the internet age, there are of course many meetups, symposiums and Webinars taking place entirely online, where participants connect live through text, voice and video. 

Be sure to subscribe to the Baachu newsletter to be informed on notable upcoming meet-ups to attend.

Two other factors mentioned above are Capabilities and Differentiators.

In the past, FM professionals showcased experience rather than qualifications. BIFM’s Pay and Prospects Survey released in July 2016 showed a shifting trend in that an increasing number of employers will only consider candidates with a higher level of qualifications to underpin practical experienced gained. With changes to traditional working contracts and more flexible work arrangements, clients are also requesting further evidence of benchmarked transferable skills at all levels of the FM profession.

With techniques such as lifelong learning, investing in people, and mentoring, you can differentiate your company from others by showing enhanced skills, experience and qualifications.  Another way to differentiate yourself from your competitors is through using the latest technology, which we will discuss this in a companion article.

If you are a company which will deliver premium services, you will not compromise on quality but your prices will be higher and you must be very selective about the projects you will commit to. These advantages may be obtained organically or by acquisition. An alternative mode for delivery of operations is to ensure self-delivery of the majority of your services.

Overall you need to have clarity on

  • Are you a single service provider or a bundle service provider? Are you a regional player or a national player?
  • Are you going to self-deliver everything yourself or you will subcontract? If you are subcontracting, then do you know about the preferred supply chain?
  • Your identity – are you a TFM company or Hard FM company? Clearly define your standard operating model! What are the sectors you operate in and why?

To summarize, it’s important to know your own companies position on the map of the FM world. When you understand this, it will allow you to effectively build up your network, your strengths and capabilities, and allow you to develop your company using the latest skills and technological opportunities.

If you need advice on your FM Company’s position, make sure you email baskar@baachu.com today.