Management Blog

Effective strategy workshops depend on a clear idea of purpose

Strategy workshops figure highly in most UK companies' agendas, but their effectiveness depends on having a clear purpose.

An event aimed at fostering internal communication of the board's current strategic thinking is different from one where the object is to reconsider or challenge existing strategy or generate new ideas.

Research funded by the UK's Advanced Institute for Management Research shows that nearly 80% of UK organisations run regular strategy workshops. The study reported that 46% of organisations carried out strategy workshops at least once yearly. The majority (90%) of the workshops spanned up to two days, were run away from the office (73%) and facilitated by senior directors (61%).

Four ideas for increasing sales productivity

In a recent Businessweek article focusing on small business strategy, Chris Butler describes how four companies have lifted their sales force productivity:

1. Ensynch, an IT consulting company based in Arizona, has built a tailored pre-hiring 400-question online test for sales candidates. Sales force attrition has dropped to 20% from 50% and sales have almost doubled.

2. Datatrak International has shifted sales incentives from sales people so they only get incentivised on new business, and now every member of the customer delivery team gets incentivised on the value of the business they deliver. Both sales and customers have doubled.

3. The Polling Company provides services to political campaigns. A recent shift from selling new business to selling more services to their existing customer base has grown revenues by 20%.

4. When Foster's Promotional Goods needed to jump start sales growth they tried newsletter emails to their existing 3300 customer base, which prompted quick action. Sales jumped 30% and the sales force doesn’t have time to make cold calls anymore.

Generational attitude adjustments

Nigel Brown writes an analysis in The Bulletin about the significant attitudinal shifts occurring with Australia's Gen-Y and Baby Boomer generations.

Commenting on the recent release of the Clemenger BBDO study, Tomorrow's Parents Today, which reports that "young people are significantly more conservative than their peers of 1978", he stresses that at the very time of the Gen-Y shift, Baby Boomers have themselves retreated significantly from their 1978 libertarian ways.

On the hunt for alternatives to plastics

US packagers are looking for alternatives as the cost of raw materials for plastics soars.

Of all the price hikes since the Gulf Coast hurricanes, none have been as much as the rise in prices in the plastics industry, which uses natural gas twice - once to generate the power needed to run the plastics factory and a second time as the key ingredient to make the plastic resin.

Analysts and trade publications indicate that prices for the three most common resins used to make plastic have risen between 20 percent and 30 percent since August - compared to post-Katrina increases of 1.8 percent for cement, 2 percent for plywood and 6.5 percent for structural steel.

Small businesses remain positive despite tougher times

Small businesses maintain a positive outlook about the coming months even though conditions have become tougher as sales and profits have fallen.

Though small business confidence in the national economy fell in the September quarter after reaching an all-time high earlier in the year, the sector is positive about the next quarter, says a survey by the Australian Chamber of Commerce and Industry-St George.

However, small business does not expect the national economy to be as strong over the next year compared with the past 12 months.

Research shows impact of health on employee productivity

New research from Medibank Private has shown that the healthiest employees surveyed were nearly three times more productive than the least healthy, working 143 effective hours per month versus 49 effective hours worked per month.

The research found that employees with poor health and lifestyles have higher levels of "presenteeism" or working but doing so unproductively. The survey of over 3500 Australian workers revealed, among other things, that:

• 28% are clinically obese and 34% are overweight
• 21% smoke daily
• 53% report feeling overwhelmed with pressure and stress a "significant amount of the time"
• 56% of workers get less than seven hours sleep per night and 22% report feeing unrefreshed or exhausted at work
• 12% suffer depression

Simon Blair, Medibank Private COO, said these factors are contributing to absenteeism and lost productivity in Australian organisations.

"Employers have got to stop thinking that absenteeism is something they can't control because it's caused by random illnesses such as viruses. The survey results suggest that many workplace absences are the result of workplace stress and lifestyle factors – things we can influence through regular physical activity, healthy diets, stress management and adequate sleep."

Innovation a top issue for CEOs

Innovation was regarded as one of the top three strategic issues in 2005 by executives in all industries, according to a survey by the Boston Consulting Group. Deloitte found in another survey that manufacturing executives rated innovation as their top growth catalyst.

Consultancy firm Innovaro estimates that 30 percent of organisations' resources are focused on significant innovation.

"Innovation is a major driver of organic growth," says Innovaro principal Tim Jones. "Other than mergers and acquisitions, and shifting existing products into new markets, innovation is increasingly seen as the only way to grow a business.

"Ten years ago, the only people who focused on innovation were research and development and marketing, and each had a different take. Now innovation is a chief-executive issue," he said.

Advice for candidate directors

Board specialist recruiters and consultants agree that becoming a director is still valuable, but the carrying out thorough pre-acceptance research is increasingly important.

Specialists in a recent Forbes article suggest the following due diligence steps by director candidates:

1. Meet and talk with company's management, the outside counsel, auditors, and the insurer of director liabilities
2. Study the CEO's compensation agreement to understand its key drivers
3. Find out the nature of corporate culture
4. Avoid a dominant CEO, especially if he/she's a colleague
5. Always ensure you have enough information to address every board meeting agenda item

E-ready Australia

The Department of Communications, Information Technology and the Arts has released its Current State of Play document [PDF] this month which reveals IT trends in Australia.

The reports notes the significant take-up of broadband services in the home (57% in July 2005). SMEs using broadband has increased from 43% in 2004 to 63% in 2005.

On the world stage, Australia has been ranked 10th of 65 countries by the Economist Intelligence Unit in its "2005 e-readiness rankings". E-readiness is a measure of a country's e-business environment, a collection of factors that indicate how amenable a market is to Internet-based opportunities. Factors include mobile phone penetration, Internet infrastructure security, and levels of innovation and entrepreneurship.

Innovation race to those who invest and learn consistently

The innovation race is most likely to be won by those who invest and learn consistently, according to innovation guru Gary Hamel and his associate Gary Getz, whose research reveals five key strategies for dramatically enhancing innovation efficiency:

1. Raise the ratio of innovators to the total number of employees   
2. Raise the ratio of "radical" innovation to "incremental" innovation   
3. Raise the ratio of externally-sourced innovation to internally-sourced innovation 
4. Raise the ratio of learning over investment   
5. Raise the ratio of commitment over time