Become a Market Leader Using Best Practice : A Simple Formula
Eyes Wide Open works with business owners to help them think and act strategically. We are about to let you in on one of our trade secrets; a formula for becoming a market leader.
The formula is based on our work and also inspired by a book published by Arthur Andersen, a global accounting firm. In 1998 the now defunct Arthur Andersen published a book called 'Best Practice: Building Your Business with Customer-Focused Solutions'. In this book, the authors from Arthur Andersen developed a very simple model for how to drive process innovation in business. It is based on Andersen's Global Best Practice database which draws on the case studies of hundreds of corporations worldwide and the expertise of its 50 000 consultants.
How does this help you? We are about to show you how to take the ideas presented in the book and apply them to your business to achieve market leadership.
(editor's note: You might be wondering why we are featuring a company that clearly didn?t achieve best practice in its own industry. The fact that Andersen failed to walk-the-talk doesn't negate the outcomes of their research and the contribution they made through thought leadership. It's their findings we're interested in rather than replicating the way they conducted their own business.)
About: 'Best Practice: Building Your Business with Customer-Focused Solutions'
- Is by Robert Hiebeler, Thomas B Kelly, Charles Ketteman, published Simon & Schuster, 1998
- All quotes shown in this article are extracted from the book. We have included page numbers after each quote for your easy reference.
- The book has a strong corporate focus but still provides useful food for thought no matter what size business you have.
- Each section of the book has a Best Practice Agenda and Top Ten Best-Practice Diagnostic Questions, which are very useful.
- It's the type of book you have on your shelf for when you need some inspiration about what next with your business. The introductory chapters clearly communicate the concept. Then it is easy to jump around the other chapters and look at whatever is capturing your interest.
Using Best Practice to Become a Market Leader
Most business owners working with Eyes Wide Open want their business to demonstrate leadership, that is, become a market leader. That may be leadership in terms of market share, ethics, innovation or a range of other drivers.
'Simply defined, Best Practices are the best way to perform a business process.' p7
To be a market leader you need to unlock the 'Best Practice' formula for your business before your competitors do. You need to find a superior way of doing your core business processes ahead of the rest of the market. This principle applies whether you are a team of 1 or 1000. The advantage of small and medium sized businesses is we can adjust and move quickly. We are able to adopt Best Practice at a rate that far exceeds our corporate counterparts.
Now we will show you through a very simple method for uncovering the Best Practice for your business.
Step 1: Adopt a Process View of Your Business.
Your business is made up of a series of processes that continuously to deliver your business outcome. Those processes maybe formally designed and documented or happen quite informally in your business. It is important to recognise that the core business processes are universal, that is, they appear in every business. In their book, Andersen suggests there are 13 high level processes (p22). Here are 6 processes that focus on customers:
1. Understand markets and customers
2. Design products and services
3. Market and sell products and services
4. Produce products and services
5. Deliver products and services
6. Provide customer service.
Take a moment and see how these processes fit your business. What are the specific activities you do in relation to each process? You will find that all of your 'customer facing'activities fit into one of these processes. Now think about a friend's business that is in a different industry. See how their business can be categorised this way as well?
Becoming conscious of these universal processes is what we mean by adopting a 'process' view of your business.
Step 2: Prioritise Processes for Improvement.
Which of the core processes is going to most profoundly impact your ability to achieve your business strategy and goals?
For instance, you may be going through start-up and therefore the more effective you are at understanding your market and customers the more capable you will be of achieving success. Perhaps you are an established business and improving the effectiveness of customer service will profoundly impact your ability to retain customers and maintain profitability. Use this logic to rank and prioritise your core processes for development.
If you are unclear about your business strategy, goals and development priorities then do the EWO Strategy Identification process.
Step 3: Map Your Processes.
The next thing to do is map out the steps involved in each process. For instance 'understand market and customers' might look like this:
1. Conduct market research
2. Analyse results
3. Draw conclusions and implications for business
4. Feedback insights to customers and get their reactions and recommendations
5. Develop action plan for implementing changes
Do this for each core process.
Step 4: Understand Stakeholder Needs
Who are the stakeholders in this process and how do you want to serve them better?
Processes in a business exist for a purpose. That purpose is to achieve an outcome for the stakeholders. The stakeholders in a business include people such as customers, staff and their families, suppliers, business owners, community etc.
Concentrating on the process you have prioritised for improvement, ask:
- Who are the stakeholders in that process?
- Who benefits from its existence?
Then once you have made a shortlist of stakeholders you can then ask:
What improvements are you trying to achieve for each of these stakeholders?
How do you want the process to serve them better?
Write a list of your responses. It may look like this:
- Process: Market & Sell Products
- Stakeholder 1: Customers - Make it easier to buy
- Stakeholder 2: Staff - Make it easier to sell
- Stakeholder 3: Business Owner - Make business more profitable
Note: All relevant stakeholders should be incorporated into any planning and changes you are making in the business. Make sure you open dialog with them as soon as you recognise they are a stakeholder. This will help ensure your decisions and changes are effective.
Step 5: Look for Best Practices in Other Industries
There is one core principle you need to be clear about if you want to use Best Practice to develop your business as a market leader. To become a market leader you need to look beyond your own market for inspiration and ideas. As the book explains:
?It was all well and good to inform a client company about best practices in its own industry, but we knew that was nothing more than a catch-up game. It could not move the company ahead of the pack, allow it to leap frog over its competitors.? p20
If you want your business to achieve market leadership then the most powerful ideas for your business will come from other industries, not your own. The universal processes outlined in Step 1 become the basis by which you can compare what you are currently doing with what businesses in completely different industries are doing.
Let?s say your business wants to improve its sales & marketing process to make it easier for customers to buy. You start by thinking about experiences you may have had, or heard about, where its been extremely easy to buy. What were the characteristics of that sales process that made it so easy? For instance, when you go into a supermarket is hard not to walk out with more than you initially planned. Supermarkets are expert at making it easy to buy. Next think about the characteristics and events that made it so easy to buy at the supermarket. What enabled the easy purchase?
- Product accessibility?
- Attractive branding?
- Your beliefs around what are essential items?
Once you have brainstormed a list of characteristics think about how those characteristics or practices might apply to your business.
Step 6: Incorporating into Your Business
After you have completed Step 5 for each stage of your process and each stakeholder you will have a significant list of potential changes. The next step is to assess what changes are going to provide you with the greatest return on investment.
- Which changes are likely to provide payback to more than 1 stakeholder?
- Which changes are going to be the easiest to implement?
- Which changes are going to provide short, medium and long-term benefit?
Once you have asked these questions it should be evident which direction you need to head with your changes. If you haven't had the opportunity to include stakeholders in the planning to this point at least make sure you test your conclusions with them. This might be through conducting some customer research and holding a workshop with your team to get their input. Everyone who is in and around the process has a unique perspective and highly valuable insights to offer that can only benefit the business.
Finally once you have shortlisted your changes you are in the home stretch for the planning phase. Write an action plan for making the changes. An action plan always includes who is going to do what, how and by when. Again where possible include all stakeholders in this planning process.
You know you have discovered the 'best way to perform a business process' when it effortlessly and reliably delivers your business strategy and goals.
The fact that Best Practice is defined by your business strategy and goals also makes it a moving target. Your goals and operating environment are continuously changing and therefore what is considered 'Best Practice' also changes. Therefore it is important to not only focus on Best Practice by recognise that it is a process of continuous improvement, not something that can be done once and put on the shelf.
Now you have a formula for developing your business into a market leader. Gradually work through your core processes one at a time. Make a habit out of thinking about business improvement. Its easier if you put some structure around the improvement process such as monthly business improvement meetings and rewarding people who show leadership in business improvement.
Achieving market leadership takes time and requires constant, methodical improvements so get started and stick at it and consistently look for inspiration beyond the boundaries of your own industry.
You might also like to read:
Setting Sales Targets: The Biggest Mistakes
Eyes Wide Open works with owner-operators to help them set and achieve their sales targets. At this time of year a lot of businesses are revisiting their sales goals and target. We thought it wou..Read More