Digitization 101: CIL2007: Digitization workshop resources
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Friday, February 12, 2010
Wednesday, March 7, 2007
Management is like " Eureka7"
Risk Management
Introduction
All projects and enterprises are fraught with uncertainty, arising from a multitude of sources related to technical, management, project and commercial issues, and the need for major projects to assess risk early in the programme has been recognised for some time. An increasing number of organisations are beginning to reap the benefits of the proactive management of uncertainty.
Risk management involves balancing risks and rewards. It is therefore vital for any successful organisation to undertake detailed risk assessments early in the life of any project as the implementation of identified risk reduction measures are likely to be less costly than future remedial action. The subsequent management of risk through the life of a project aims to maximise the chances that equipment will be delivered within the planned time, cost and performance goals, and maximise the opportunity for increased financial rewards.
Risk management has a key role to play in the effective evaluation of technical options, cost/benefit trade off analyses, in the submission and evaluation of bids, as a basis for commercial negotiations and in the assessment of the impact of change proposals. As a result, risk management is a key to the success of all endeavours and should be embedded throughout any organisation that wishes to succeed in today’s competitive environment.
There is a growing demand for assistance in the development of effective processes to help in the identification, assessment and management of risk at both the project and business level. The purpose of this paper is to identify why, for any organisation, “Risk Management is Your Business”. A mechanism for assessing the effectiveness of any organisations current approach to risk management will be presented together with mechanisms for selecting the most appropriate future implementation. Finally, a brief introduction will be given as to how risk management can be introduced at all levels of an organisation, from a strategic overview of total business risk down to detailed assessments of the risk associated with individual projects.
Background
The essential aim of risk management is to improve decision making by reducing uncertainty and minimising its effect. It also makes clear the relationship between risk management and project success, since risks are measured by their potential effect on the achievement of project objectives. Failure to manage risks effectively will lead to problems meeting some or all of these objectives.
Effective risk management involves a comprehensive identification of all sources of risk, an objective assessment of their significance, planning of responses to reduce the risks, and management of the responses in order to achieve the desired outcome for the project. The overall aim is to ensure effective proactive management as opposed to waiting for risks to occur and fighting the resultant fires.
There are a number of proven techniques for risk identification and assessment, at a variety of degrees of sophistication. The analysis of identified risks may purely be qualitative, making an assessment of probability and impact together with determining owners and responses. The next stage may be to use quantitative analysis in order to assess the combined effect of the risks, using powerful simulation tools to predict potential outcomes in terms of schedule, cost or performance. Whatever depth of analysis is chosen it is essential that the risk process moves on to plan responses that results in actual management action to deal with the risks.
There is a clear link between risk management and the success of projects. Risk management must form part of the project culture and be an essential item in the project managers toolkit. The effective tackling of risk will distinguish between an effectively managed project and one that stumbles between crises. Project management must always be forward looking, constantly identifying issues that pose a potential threat to success and focusing attention on reducing, avoiding or controlling risk exposure before it has a chance to effect the project.
Having identified how risk management can be applied, the next step for any organisation is to identify whether its existing processes are adequate and what can be done to ensure that its current chosen methods of identifying and managing risk compare favourably with best practice or that of any direct competitors.
Assessment of Risk Management Capability
The Risk Maturity Model (RMM) has been developed to met these needs. This model, first developed at HVR Consulting Services (Dr D A Hillson, International Journal of Project and Business Risk Management, Spring 1997, and others), has been used by a number of organisations to benchmark their risk processes and to identify the means to enhance their risk capability. It has also been used as a means of assisting organisations with the introduction of risk management in-house, as the RMM provides a measure for the effectiveness of the changes made.
It provides a clear understanding of the current approach to risk management as well as a guide to the intended destination. Any organisation must be able to benchmark its present maturity and capability in managing risk and define progress towards achieving increasing risk maturity. The RMM provides clear guidance to organisations wishing to define, develop or improve their current level of risk management maturity, identifying realistic targets for improvement and helping to develop action plans for increasing risk capability.
The RMM describes four levels of increasing risk capability, from Naive through Novice, Normalised and, eventually, Natural. The aim is to provide a structured path to excellence with identifiable milestones along the way against which organisations can be measured.
• The Naïve risk organisation is probably unaware of the need for the management of risk and has no structured approach to dealing with uncertainty. Management processes may be repetitive and reactive, with little or no attempt to learn from the past or to prepare for future threats or uncertainties.
• The Novice organisation may have begun to experiment with risk management, perhaps through the drive of interested individuals, but has no formal or structured process for risk management in place. At this level the organisation may be aware of the potential benefits of risk management, but without systematic implementation of processes and tools, are not gaining the full benefits.
• The Normalised organisation is the level to which most probably aspire. The management of risk is established within normal business processes and risk management is conducted on most projects. Risk processes are defined and in use at all levels of the organisation although there may be shortfalls in some areas.
• The final level in the RMM is defined as Natural. At this stage the organisation is risk aware with a proactive approach to risk management at all levels of the business. The information generated by the risk process is actively used to improve the business and gain competitive advantage over rivals.
The brief descriptions of each RMM level indicate where an organisation stands in terms of the relative maturity of its risk processes, but a more detailed diagnosis is required for consistent and objective assessments of standing. Therefore each level within the RMM is further defined in terms of four attributes, namely Culture, Process, Experience and Application. These allow an organisation to assess its current risk processes against agreed criteria, set targets for improvement and demonstrate progress towards enhanced risk capability.
• For the Naive organisation the attributes are probably at the lowest level, the culture is resistant to change and the need for change is not recognised. There may be no risk processes, no experience of using risk management and no application within the business.
• The culture of the Novice organisation may not be fully convinced of the benefits of risk management and tends to see it as a necessary overhead. Processes are probably not well defined and their effectiveness is dependent upon the limited experience of a number of key individuals. The application of risk management is likely to be inconsistent.
• The Normalised organisation will have a culture that recognises risk and expects to realise benefits from its management. Formal processes are in place, resources are available and staff have experience in undertaking effective risk management. Its application is routine and consistent across all projects.
• The Natural organisation is a risk aware culture that operates proactive risk management and that strives to gain the full benefits. Best practices process are implemented at all levels of the business with regular updating and active learning from previous projects. All staff are experienced in using risk processes and the application of risk management is across all spheres of the business.
It is recognised that some organisations may cross the boundaries between successive RMM levels, but the granularity between levels is such that there should be a clear distinction in most cases, and it should prove possible to allocate most organisations unambiguously to a single level. The assessed RMM level can be used in a number of ways. For example, organisations may wish to enhance their level of risk capability, devising strategies to ensure more effective management of risk. Alternatively they may want to rate themselves against key competitors in order to gain a business advantage.
Once risk maturity is assessed, steps can be taken to develop action plans for moving towards the next level. Given the increasing profile of risk management, and the growing awareness of the business benefits that can be gained, many organisations are seeking to implement formal risk processes. It should be noted that there are different barriers faced by organisations at each of the RMM levels which must be overcome if progress is to be made to the next level of risk maturity.
The implementation of risk management into an organisation is not a minor challenge and cannot be undertaken in a short period of time. It is also not a simple process of identifying techniques, sending staff off on training courses, buying software and getting on with it. Use of the RMM will enable those who offer support to organisations to diagnose the current position and will aid in the development of specific strategies for progressing the implementation effectively. Used jointly with an organisation, the RMM can help managers to recognise their current position with respect to risk management, identify their current strengths and weaknesses and focus attention on the key attributes for change.
Assessment and Implementation
The next stage is to identify how the RMM can, and has been, applied in practice by discussing in some detail how risk management capability can be transferred to an organisation. This discussion will be related to real ‘technology transfer’ projects that have been undertaken by HVR-CSL for a number of major clients.
Companies striving to set up, or enhance, their own risk management ‘centres of excellence’ often use external consultants in order for them to achieve their goals. This work can involve reviewing the particular requirements of the organisation, helping to establish and custom suitable risk management processes, carrying out their implementation and conducting the training of staff. Subsequent involvement can be through periodic reviews of the process to ensure quality is maintained and any shortfalls identified and rectified.
A four stage process is required for any successful assessment and implementation of risk management within an organisation, namely
• Definition
• Diagnosis
• Demonstration/Validation
• Delivery
However, before any work can begin in earnest, strong direction, leadership, commitment and a champion from senior management are required. Ideally a risk management co-ordinator should be appointed from within the organisation to act as the focus for the direction of the implementation and its subsequent control.
However, before any work can begin in earnest, strong direction, leadership, commitment and a champion from senior management are required. Ideally a risk management co-ordinator should be appointed from within the organisation to act as the focus for the direction of the implementation and its subsequent control.
• The purpose of the Definition phase should be to agree the scope and objectives of the transfer process, how risk management is to be applied effectively to the company business. At this stage it is essential that the commitment of senior management is obtained and that the changes to be introduced are seen at all levels to be essential for the future success of the company.
• The Diagnosis phase should be used to assess the current position and approach to risk management. It should incorporate a review of existing processes, if any, for project and risk management and it should result in the identification of any changes and improvements necessary.
• Demonstration/Validation will involve the selection of pilot projects to demonstrate and validate the revised approach. This will prove the process, methods and tools and will allow the eventual delivery and roll out to be effectively tailored and customised to meet the specific needs of the organisation.
However, before any work can begin in earnest, strong direction, leadership, commitment and a champion from senior management are required. Ideally a risk management co-ordinator should be appointed from within the organisation to act as the focus for the direction of the implementation and its subsequent control.
• The purpose of the Definition phase should be to agree the scope and objectives of the transfer process, how risk management is to be applied effectively to the company business. At this stage it is essential that the commitment of senior management is obtained and that the changes to be introduced are seen at all levels to be essential for the future success of the company.
• The Diagnosis phase should be used to assess the current position and approach to risk management. It should incorporate a review of existing processes, if any, for project and risk management and it should result in the identification of any changes and improvements necessary.
Demonstration/Validation will involve the selection of pilot projects to demonstrate and validate the revised approach. This will prove the process, methods and tools and will allow the eventual delivery and roll out to be effectively tailored and customised to meet the specific needs of the organisation.
• The final Delivery of the technology transfer process will result in the development and delivery of formal risk management processes and tools, staff training on the revised techniques, a planned and phased roll out across all aspects of the organisation and the provision of on-going support.
The RMM has proved invaluable for use throughout the four phases. It has assisted in the setting of objectives for the technology transfer process by objectively diagnosing the current capabilities of the organisation with respect to risk management. In practice the model can be used independently by both the organisation management and the external consultants to arrive at a consensus view of the current position. It is then used in assisting with the definition of the changes required to existing procedures, processes and tools in order to achieve the required risk management capability and, finally, it is used again during Delivery to monitor progress against the original objectives.
Tools and Techniques
The actual implementation of risk management into an organisation will clearly call for the application of specific tools and techniques. Any tool must be relevant to the manner in which it is to be used, must be relatively straight forward in use, not impose an unnecessary burden on staff, and must produce tangible benefits.
Traditionally, the use of tools in Project risk Management has centred around two approaches. The first has been the use of a Risk Management Database, often referred to as a Risk Register, (although strictly speaking this is a database output) for recording of risks identified, for qualitative assessment of these risks in term of probability of occurrence and scale of potential impact, and for the definition and monitoring of actions necessary to control the risks.
The second revolves around the use of sophisticated software tools that allow quantitative risk analysis to be undertaken. These allow the combined effect of all identified risks on the project schedules, budgets and technical performance requirements to be modelled and the range of potential project outturns identified.
Whilst these tools are essential components in the successful risk management of any one multi million pound project, they are clearly not applicable to all situations. They require detailed expenditure in time and resources and do not assist, without significant investment, in assessing the overall level of risk inherent in the total business at any one time. Similarly for a manufacturing organisation that may, at any one time, be running with many tens of small to medium sized projects, detailed risk assessment of every project is neither appropriate or affordable.
Having recognised this current shortfall, and the need for organisations to assess risk in total across the business, HVR-CSL have produced the Top Down Risk Model (TDRM) in an attempt to address the situation.
Tuesday, March 6, 2007
Performance Tips
What is the unit about?
This unit is mainly about making sure you have the personal resources (particularly knowledge, understanding, skills and time) to undertake your work role and reviewing your performance against agreed objectives. It also covers identifying and undertaking activities to develop your knowledge, skills and understanding where gaps have been identified.
Who is the unit for?
The unit is recommended for team leaders.
Links with other units
This unit is linked to unit A2 Manage your own resources and professional development in the overall suite of National Occupational Standards for management and leadership.
Skills
Listed below are the main generic skills which need to be applied in managing your own resources. These skills are explicit/implicit in the detailed content of the unit and are listed here as additional information.
Setting objectives
Communicating
Planning
Time management
Evaluating
Reviewing
Learning
Obtaining feedback
Self-assessment
KNOWLEDGE AND UNDERSTANDING
You need to know and understand the following:
General knowledge and understanding
1 Why managing your resources (particularly knowledge, understanding, skills and time) is important.
2 How to identify the requirements of a work-role.
3 How to set work objectives which are SMART (Specific, Measurable, Achievable, Realistic and Time-bound).
4 How to measure progress against work objectives.
5 How to identify development needs to address any identified gaps between the requirements of your work-role and your current knowledge, understanding and skills.
6 What an effective development plan should contain.
7 The type of development activities which can be undertaken to address identified gaps in knowledge, understanding and skills.
8 How to identify whether/how development activities have contributed to your performance.
9 How to get and make effective use of feedback on your performance.
10 How to update work objectives and development plans in the light of performance, feedback received, any development activities undertaken and any wider changes.
11 How to record the use of your time and identify possible improvements.
Industry/sector specific knowledge and understanding
1 Industry/sector requirements for the development or maintenance of knowledge, understanding and skills.
Context specific knowledge and understanding
1 The agreed requirements of your work-role including the limits of your responsibilities.
2 Your agreed personal work objectives.
3 The reporting lines in your organisation.
4 Your current knowledge, understanding and skills.
5 Identified gaps in your current knowledge, understanding and skills.
6 Your personal development plan.
7 Your organisation’s policy and procedures in terms of personal development.
8 Available development opportunities and resources in your organisation.
9 Possible sources of feedback in your organisation.
OUTCOMES OF EFFECTIVE PERFORMANCE
You must be able to do the following:
1 Identify and agree the requirements of your work-role with those you report to.
2 Discuss and agree personal work objectives with those you report to and how you will measure progress.
3 Identify any gaps between the requirements of your work-role and your current knowledge, understanding and skills.
4 Discuss and agree, with those you report to, a development plan to address any identified gaps in your current knowledge, understanding and skills.
5 Undertake the activities identified in your development plan and discuss, with those you report to, how they have contributed to your performance.
6 Get regular and useful feedback on your performance from those who are in a good position to judge it and provide you with objective and valid feedback.
7 Discuss and agree, with those you report to, any changes to your personal work objectives and development plan in the light of performance, feedback received, any development activities undertaken and any wider changes.
8 Check, on a regular basis, how you are using your time at work and identify possible improvements.
9 Ensure that your performance consistently meets or goes beyond agreed requirements.
BEHAVIOURS WHICH UNDERPIN EFFECTIVE PERFORMANCE
1 You recognise changes in circumstances promptly and adjust plans and activities accordingly.
2 You prioritise objectives and plan work to make best use of time and resources.
3 You take personal responsibility for making things happen.
4 You take pride in delivering high quality work.
5 You agree achievable objectives for yourself and give a consistent and reliable performance.
6 You find practical ways to overcome barriers.
7 You make best use of available resources and proactively seek new sources of support when necessary.
This unit is mainly about making sure you have the personal resources (particularly knowledge, understanding, skills and time) to undertake your work role and reviewing your performance against agreed objectives. It also covers identifying and undertaking activities to develop your knowledge, skills and understanding where gaps have been identified.
Who is the unit for?
The unit is recommended for team leaders.
Links with other units
This unit is linked to unit A2 Manage your own resources and professional development in the overall suite of National Occupational Standards for management and leadership.
Skills
Listed below are the main generic skills which need to be applied in managing your own resources. These skills are explicit/implicit in the detailed content of the unit and are listed here as additional information.
Setting objectives
Communicating
Planning
Time management
Evaluating
Reviewing
Learning
Obtaining feedback
Self-assessment
KNOWLEDGE AND UNDERSTANDING
You need to know and understand the following:
General knowledge and understanding
1 Why managing your resources (particularly knowledge, understanding, skills and time) is important.
2 How to identify the requirements of a work-role.
3 How to set work objectives which are SMART (Specific, Measurable, Achievable, Realistic and Time-bound).
4 How to measure progress against work objectives.
5 How to identify development needs to address any identified gaps between the requirements of your work-role and your current knowledge, understanding and skills.
6 What an effective development plan should contain.
7 The type of development activities which can be undertaken to address identified gaps in knowledge, understanding and skills.
8 How to identify whether/how development activities have contributed to your performance.
9 How to get and make effective use of feedback on your performance.
10 How to update work objectives and development plans in the light of performance, feedback received, any development activities undertaken and any wider changes.
11 How to record the use of your time and identify possible improvements.
Industry/sector specific knowledge and understanding
1 Industry/sector requirements for the development or maintenance of knowledge, understanding and skills.
Context specific knowledge and understanding
1 The agreed requirements of your work-role including the limits of your responsibilities.
2 Your agreed personal work objectives.
3 The reporting lines in your organisation.
4 Your current knowledge, understanding and skills.
5 Identified gaps in your current knowledge, understanding and skills.
6 Your personal development plan.
7 Your organisation’s policy and procedures in terms of personal development.
8 Available development opportunities and resources in your organisation.
9 Possible sources of feedback in your organisation.
OUTCOMES OF EFFECTIVE PERFORMANCE
You must be able to do the following:
1 Identify and agree the requirements of your work-role with those you report to.
2 Discuss and agree personal work objectives with those you report to and how you will measure progress.
3 Identify any gaps between the requirements of your work-role and your current knowledge, understanding and skills.
4 Discuss and agree, with those you report to, a development plan to address any identified gaps in your current knowledge, understanding and skills.
5 Undertake the activities identified in your development plan and discuss, with those you report to, how they have contributed to your performance.
6 Get regular and useful feedback on your performance from those who are in a good position to judge it and provide you with objective and valid feedback.
7 Discuss and agree, with those you report to, any changes to your personal work objectives and development plan in the light of performance, feedback received, any development activities undertaken and any wider changes.
8 Check, on a regular basis, how you are using your time at work and identify possible improvements.
9 Ensure that your performance consistently meets or goes beyond agreed requirements.
BEHAVIOURS WHICH UNDERPIN EFFECTIVE PERFORMANCE
1 You recognise changes in circumstances promptly and adjust plans and activities accordingly.
2 You prioritise objectives and plan work to make best use of time and resources.
3 You take personal responsibility for making things happen.
4 You take pride in delivering high quality work.
5 You agree achievable objectives for yourself and give a consistent and reliable performance.
6 You find practical ways to overcome barriers.
7 You make best use of available resources and proactively seek new sources of support when necessary.
Monday, March 5, 2007
Business Tips
All businesses have the potential to make savings, sell more, streamline processes and boost profitability.
You can uncover this potential by finding out what makes other businesses effective and then introducing this best practice into your own operations. Evaluating how your operations compare with the most effective and profitable enterprises, and then using the most successful elements in your own business, can make a big difference.
This guide explains what best practice is and how identifying it and introducing elements in your business can bring significant benefits.
What is best practice?
Best practice applies to every aspect of your business - from how you recruit staff to how you market your business or use new technologies. It involves keeping up-to-date with developments in your sector and measuring your performance against market leaders.
Best practice is based on the principle that the best way to learn is through the experience of others. One way of doing this is through benchmarking. Benchmarking allows you to compare your business with other successful businesses to highlight areas where your business could improve.
What are the benefits to my business?
A best practice strategy can help your business to:
• become more competitive
• increase sales and develop new markets
• reduce costs and become more efficient
• improve the skills of your workforce
• use technology more effectively
• reduce waste and improve quality
• respond more quickly to innovations in your sector
By monitoring these key areas, leaders are able to compare their performance with that of competitors to ensure they remain competitive today, and to help them plan and manage future changes.
Management best practice
Many surveys have revealed that the most successful businesses are those which adopt best practice methods and are managed by inspirational leaders.
Management best practice involves:
• the communication of a clear mission and strategy
• leadership by example
• the setting of demanding but realistic targets
• an open and communicative management style
• clear and careful strategic planning
Successful leaders harness a number of business tools to improve their business, including:
• benchmarking
• forecasting
• financial planning
• strategic planning
Best practice in people management
The cliché about people being your most valuable asset is true. The most successful businesses have realised this and have actively looked at how they can get the most from their employees.
Key issues include:
• involving employees in the development of the business
• communicating with employees
• adopting flexible working and policies that encourage equality and diversity
• offering employee development and training
Employees are often in a position to see where improvements to working methods can be made or when market demands are changing. For example, production staff are most likely to be aware of inefficient production processes while customer service staff are most likely to be aware of common sources of complaints.
Involving employees in reviews and developing open channels of communication can help ensure that you are not overlooking obvious improvements. It can also help you gain employee trust, commitment and buy-in when implementing changes, if employees have been involved in the process.
Good people management should extend across all areas of your business. Recruitment, training and people development, working practices and the working environment are all areas where best practice can benefit both the business and your employees.
Improving business operations through best practice
Most businesses have some operational issues that can be improved through the introduction of best practice methods.
Areas that could offer potential for improvement include:
• quality management
• stock control, delivery and supply chain management
• purchasing and ordering
• information management
Improvements could include the introduction of quality management systems, automated stock control or just-in-time ordering and delivery. However, knowing where to start is not always easy. Benchmarking can help identify the areas where there is room for improvement
Once you have identified the areas for improvement, you can look to implement changes and improvements. You might want to consider joining an organisation such as the Business Process Management Group (BPMG), through which ideas are exchanged on best practice in business.
Best practice in sales and marketing
Businesses that use best practice management processes are often among the first to use new technologies to improve the reach and effectiveness of their marketing. Developments in technology mean that marketing techniques that harness the power of the Internet, email and mobile telephony - often referred to as e-marketing - can be used to market the products and services of even the smallest business.
There are a number of benefits to e-marketing including:
• worldwide reach - a website can be seen by visitors from all over the world
• lower costs - a website can cost much less to set up and run than a traditional shop and hundreds of email marketing messages can be sent for the price of a local phone call
• a level playing field - small businesses can compete alongside the websites of much larger businesses
E-marketing methods have also made it easier for businesses to target new markets that were previously out of reach. For example, a website might allow a business with one outlet to sell its products and services to customers nationally.
Encouraging innovation
Fostering a culture of innovation and creativity can help you stay one step ahead of your competitors by allowing you to work flexibly and proactively. Innovative businesses are able to react quickly to changing markets, customer expectations and needs and are often able to see changes coming before others.
Innovative businesses are always looking at their existing products, processes and procedures for possible improvements and developments to help them stay at the cutting edge.
These businesses are typically entrepreneurial in nature. They have strong, inspirational leaders and management and skilled, involved employees. To learn more about the contribution innovation can make to your business and the global economy
Innovation may come in the form of small changes to existing products or services -for example increasing the number of mega-pixels on a digital camera - or in the form of a whole new product or service. The innovation may come from internal sources such as a product development team or be inspired by external forces such as customer requests or developments in related technologies.
Using technology to achieve best practice
It is possible to give your business a distinct advantage over your rivals by making good use of information technology.
Consider the following:
• The Internet has revolutionised the way businesses communicate with customers and suppliers, market themselves, access information and buy and sell products.
• Broadband is an always-on high bandwidth Internet connection. The high bandwidth makes sending and downloading information over the Internet much quicker than a dial-up connection, and so improves business efficiency. In addition, users pay a fixed monthly fee, which makes it easier to control costs.
• Wireless and mobile technologies mean that you can now work from anywhere. This can lead to increases in productivity, improved communication and more flexible working methods such as home working.
• Integration of your databases and systems can bring significant cost savings and improvements in efficiency.
Develop the culture of my business
Excellent performance in this area results in being able to:
• agree values and assumptions that encourage behaviour that is consistent with your business' overall vision and strategy
• make sure your personal behaviour, actions and words consistently reinforce these values and assumptions
• communicate agreed values to people across your business and motivate them to put these into practice
• put in place policies, programmes and systems to support agreed values
• continuously monitor and adjust values and assumptions and the ways they are applied
In order to improve in this area, you may want to get some advice on:
• different definitions and types of business culture
• the importance of values in underpinning individual and business performance
• internal and external factors that influence business culture
• the relationship between business culture, strategy and performance
• the principles and methods of managing culture change within businesses
Provide leadership for my business
Excellent performance in this area results in being able to:
• develop and clearly communicate the business' purpose, values and vision
• steer the business successfully through difficulties and challenges
• develop, select and apply leadership styles that are appropriate to different people and situations
• motivate people across the business to achieve their objectives and reward them when they are successful
• through your performance, win the trust and support of staff and key stakeholders and get regular feedback on your performance
In order to improve in this area, you may want to get some advice on:
• the differences between management and leadership
• how to create a compelling vision for an area of responsibility
• how to apply different communication methods and leadership styles to different situations and people
• how to successfully apply different methods for motivating, rewarding and influencing people
• how to get and make use of feedback on your leadership performance
• how to develop the leadership capability of other people and follow their lead
You can uncover this potential by finding out what makes other businesses effective and then introducing this best practice into your own operations. Evaluating how your operations compare with the most effective and profitable enterprises, and then using the most successful elements in your own business, can make a big difference.
This guide explains what best practice is and how identifying it and introducing elements in your business can bring significant benefits.
What is best practice?
Best practice applies to every aspect of your business - from how you recruit staff to how you market your business or use new technologies. It involves keeping up-to-date with developments in your sector and measuring your performance against market leaders.
Best practice is based on the principle that the best way to learn is through the experience of others. One way of doing this is through benchmarking. Benchmarking allows you to compare your business with other successful businesses to highlight areas where your business could improve.
What are the benefits to my business?
A best practice strategy can help your business to:
• become more competitive
• increase sales and develop new markets
• reduce costs and become more efficient
• improve the skills of your workforce
• use technology more effectively
• reduce waste and improve quality
• respond more quickly to innovations in your sector
By monitoring these key areas, leaders are able to compare their performance with that of competitors to ensure they remain competitive today, and to help them plan and manage future changes.
Management best practice
Many surveys have revealed that the most successful businesses are those which adopt best practice methods and are managed by inspirational leaders.
Management best practice involves:
• the communication of a clear mission and strategy
• leadership by example
• the setting of demanding but realistic targets
• an open and communicative management style
• clear and careful strategic planning
Successful leaders harness a number of business tools to improve their business, including:
• benchmarking
• forecasting
• financial planning
• strategic planning
Best practice in people management
The cliché about people being your most valuable asset is true. The most successful businesses have realised this and have actively looked at how they can get the most from their employees.
Key issues include:
• involving employees in the development of the business
• communicating with employees
• adopting flexible working and policies that encourage equality and diversity
• offering employee development and training
Employees are often in a position to see where improvements to working methods can be made or when market demands are changing. For example, production staff are most likely to be aware of inefficient production processes while customer service staff are most likely to be aware of common sources of complaints.
Involving employees in reviews and developing open channels of communication can help ensure that you are not overlooking obvious improvements. It can also help you gain employee trust, commitment and buy-in when implementing changes, if employees have been involved in the process.
Good people management should extend across all areas of your business. Recruitment, training and people development, working practices and the working environment are all areas where best practice can benefit both the business and your employees.
Improving business operations through best practice
Most businesses have some operational issues that can be improved through the introduction of best practice methods.
Areas that could offer potential for improvement include:
• quality management
• stock control, delivery and supply chain management
• purchasing and ordering
• information management
Improvements could include the introduction of quality management systems, automated stock control or just-in-time ordering and delivery. However, knowing where to start is not always easy. Benchmarking can help identify the areas where there is room for improvement
Once you have identified the areas for improvement, you can look to implement changes and improvements. You might want to consider joining an organisation such as the Business Process Management Group (BPMG), through which ideas are exchanged on best practice in business.
Best practice in sales and marketing
Businesses that use best practice management processes are often among the first to use new technologies to improve the reach and effectiveness of their marketing. Developments in technology mean that marketing techniques that harness the power of the Internet, email and mobile telephony - often referred to as e-marketing - can be used to market the products and services of even the smallest business.
There are a number of benefits to e-marketing including:
• worldwide reach - a website can be seen by visitors from all over the world
• lower costs - a website can cost much less to set up and run than a traditional shop and hundreds of email marketing messages can be sent for the price of a local phone call
• a level playing field - small businesses can compete alongside the websites of much larger businesses
E-marketing methods have also made it easier for businesses to target new markets that were previously out of reach. For example, a website might allow a business with one outlet to sell its products and services to customers nationally.
Encouraging innovation
Fostering a culture of innovation and creativity can help you stay one step ahead of your competitors by allowing you to work flexibly and proactively. Innovative businesses are able to react quickly to changing markets, customer expectations and needs and are often able to see changes coming before others.
Innovative businesses are always looking at their existing products, processes and procedures for possible improvements and developments to help them stay at the cutting edge.
These businesses are typically entrepreneurial in nature. They have strong, inspirational leaders and management and skilled, involved employees. To learn more about the contribution innovation can make to your business and the global economy
Innovation may come in the form of small changes to existing products or services -for example increasing the number of mega-pixels on a digital camera - or in the form of a whole new product or service. The innovation may come from internal sources such as a product development team or be inspired by external forces such as customer requests or developments in related technologies.
Using technology to achieve best practice
It is possible to give your business a distinct advantage over your rivals by making good use of information technology.
Consider the following:
• The Internet has revolutionised the way businesses communicate with customers and suppliers, market themselves, access information and buy and sell products.
• Broadband is an always-on high bandwidth Internet connection. The high bandwidth makes sending and downloading information over the Internet much quicker than a dial-up connection, and so improves business efficiency. In addition, users pay a fixed monthly fee, which makes it easier to control costs.
• Wireless and mobile technologies mean that you can now work from anywhere. This can lead to increases in productivity, improved communication and more flexible working methods such as home working.
• Integration of your databases and systems can bring significant cost savings and improvements in efficiency.
Develop the culture of my business
Excellent performance in this area results in being able to:
• agree values and assumptions that encourage behaviour that is consistent with your business' overall vision and strategy
• make sure your personal behaviour, actions and words consistently reinforce these values and assumptions
• communicate agreed values to people across your business and motivate them to put these into practice
• put in place policies, programmes and systems to support agreed values
• continuously monitor and adjust values and assumptions and the ways they are applied
In order to improve in this area, you may want to get some advice on:
• different definitions and types of business culture
• the importance of values in underpinning individual and business performance
• internal and external factors that influence business culture
• the relationship between business culture, strategy and performance
• the principles and methods of managing culture change within businesses
Provide leadership for my business
Excellent performance in this area results in being able to:
• develop and clearly communicate the business' purpose, values and vision
• steer the business successfully through difficulties and challenges
• develop, select and apply leadership styles that are appropriate to different people and situations
• motivate people across the business to achieve their objectives and reward them when they are successful
• through your performance, win the trust and support of staff and key stakeholders and get regular feedback on your performance
In order to improve in this area, you may want to get some advice on:
• the differences between management and leadership
• how to create a compelling vision for an area of responsibility
• how to apply different communication methods and leadership styles to different situations and people
• how to successfully apply different methods for motivating, rewarding and influencing people
• how to get and make use of feedback on your leadership performance
• how to develop the leadership capability of other people and follow their lead
Busines consultancy services
Business consultancy services is a field where we deal and provide with complete support to our potential clients for their business growth and process improvement.
The first step in your consulting career is to define carefully ---for yourself and then for others . consultants commonly have quite the same personalities, backgrounds, interests, and skills even it can be enriched through experience.
Secondly, there are new fields popping up everyday either because of our fast changing world or because some body with special interest has a good, new idea abut what they want to do.
So finding your niche is as much a matter of making your niche as anything else-deciding who are, what interests you the most (which is likely to be where your skills are-and is sure to where you are the most interesting to others). Basically, you have to clarify for yourself very carefully just what it is you want of like-just what is true and right for you.
Personally, We must have a craze & strive for excellence whatever may be the sector we involved. Even it is a new field, We should have the nature to update for best practices and proven strategies. Ofcourse he should have a background on managerial & leadership qualities.
The first step in your consulting career is to define carefully ---for yourself and then for others . consultants commonly have quite the same personalities, backgrounds, interests, and skills even it can be enriched through experience.
Secondly, there are new fields popping up everyday either because of our fast changing world or because some body with special interest has a good, new idea abut what they want to do.
So finding your niche is as much a matter of making your niche as anything else-deciding who are, what interests you the most (which is likely to be where your skills are-and is sure to where you are the most interesting to others). Basically, you have to clarify for yourself very carefully just what it is you want of like-just what is true and right for you.
Personally, We must have a craze & strive for excellence whatever may be the sector we involved. Even it is a new field, We should have the nature to update for best practices and proven strategies. Ofcourse he should have a background on managerial & leadership qualities.
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