[The 4-phase approach]
1. Finding the best strategy for your business
To answer those questions and more, Entrepreneur interviewed Michael Canic, business consultant and author of Ruthless Consistency: Aligning Your Organization to Win…or Else!
Entrepreneur One of a leader’s many responsibilities is to have a ‘strategic plan’ for their company.
Does a strategic plan produce sustained focus for
the leader, their management team and the company’s employees?
MC Actually, a strategic plan doesn’t produce sustained focus for anyone. What typically happens is that well-intentioned leaders go off-site for the annual ‘strategic planning’ retreat. They plaster the walls with flip chart notes and discuss at length big-picture issues such as mission and vision. When it’s over, everyone breathes a sigh of relief and gets back to the ‘real work’ that’s stacking up back at the office. The strategic plan is documented and distributed, and then it sits on a shelf and collects dust.
Entrepreneur So why don’t strategic plans become strategic reality?
MC Because strategic planning is all about creating ‘the plan’. Plans don’t implement themselves. Strategy, right through implementation, needs to be approached as a process. That’s why we created the four-phase strategic management process — to focus on turning strategy into reality.
Entrepreneur The idea of strategic management sounds good because it puts the strategic plan into action. What are the four phases of your plan and why are they important?
MC The four phases are assessment, positioning, planning and implementation. The reason they’re so important is because ignoring any single phase can lead to disaster. Failing to conduct a thorough assessment can mean making decisions based on faulty assumptions. Failing to establish the positioning of a company can result in plans that focus on the wrong things. Failing to plan leaves you with a destination but not a roadmap. And failing to implement means your efforts at everything else are wasted.
1. The assessment phase
The key here is that leaders have to be willing to attack their assumptions — to overcome their egos, to come to grips with reality, warts and all. So you start with a question the company needs to comprehensively answer: What is our current situation?
There are three things to look at here. One is the organisation itself, from an operational, financial, structural and people perspective. Two is market data — current and potential markets and current and potential customers. You want to look at your performance feedback and value drivers. Third, and this is the one that’s most often neglected, is what I call the ’STEEP’ factors: the sociocultural, technological, economic, environmental and political factors that can greatly impact a business.
Consider a fast-growing software company. Suppose their growth rate over the past three years has averaged 44%. Customers are happy. Investors are happy. It might be tempting to feel a little self-satisfied, perhaps become a bit complacent. But what’s happening to the industry? For example, if the trend is for ‘on demand’ rather than ‘on premises’ software, failing to recognise this and adapt could put you out of business.
2. The positioning phase
The question to ask here is: what do you want to accomplish as a business? Forget the manicured mission and vision statements. Most of these are too vague, too long and not remembered. Boil it down: come up with one, simply worded sentence that captures what you do as a business so that a stranger who heard this sentence could gain a basic understanding of what you do.
Then develop another simply worded sentence to capture what ‘winning’ would look like. Think of the early days of Apple when the overarching goal was to create the most user-friendly operating system for personal computers. Or recall that more than 30 years ago, Nike had a single, laser focus: ‘Crush Adidas’.
3. The planning phase
The general question to ask here is: how do you get
there? This is the phase that has to be information-driven.
How much capital is required to support the infrastructure for growth? How rapidly do you have to grow to survive a consolidating market? Which distribution channels do you need to dominate?
Think of how many promising start-ups have died because they underestimated both the time to establish a significant market presence and the capital required to achieve it.
4. The implementation phase
Here you must answer the question: how do you ensure it happens? This is the most important phase and the phase where strategic plans fail.
A critical and underestimated part of any implementation is alignment — ensuring that the factors that impact people (from skills, authority, resources and incentives to processes and structure) are all aligned with the overarching goal. It’s alignment through the eyes of the people, not just leaders, that counts.
A second critical aspect of implementation is commitment building. Here we like to structure leaders’ regular communications and engagement with employees. Our underlying belief is that information, input and involvement together help to build commitment.
The last part of this phase involves execution management. Every month, the leadership team should meet for a few hours to track and manage the implementation of the plan. I strongly believe that every 90 days, the leadership team should also meet to recalibrate the plan. Reality changes, and the plan or elements of the plan can become irrelevant. Every 90 days, it’s critical to question the assumptions upon which the plan was built and make adjustments as necessary. Have you lost a key customer? Has a new competitor come into the market? Has a promising investor bailed out on you? What has changed to the reliability of your supply chain?
Unsurprisingly, when a company vigorously adopts a disciplined strategic management process, they’re much more likely to achieve their ambitions — the right ambitions.
2. Five structural elements of strategy
Strategies fail over and over again for the same reason: businesses ignore the five key structural elements of strategy. Miss one and your strategy is doomed to fail.
By Nilofer Merchant
How many times have you experienced this situation: you, your partners and your managers develop a plan, hold meetings, and achieve alignment. Yet during the execution phase, the strategy falls apart. During the inevitable review process, the causes are all too familiar: no defined key players. No consideration of the decision-making process. Too many ideas generated, too few killed. A laborious process or no process at all. The wrong people engaged or poor team collaboration. There’s a reason that the causes of failure are repeated. It’s because strategy has a unique structure, and if you overlook one of the five key elements of that structure, you’ll fail. Add elements that don’t support that structure and you’ll fail. And the failure will look familiar every time.
1. Power distribution
Power distribution dictates who’s involved, how much information each individual can access, and the decision-making process.
It’s crucial to know who you’re working with from their track record on complex strategy projects to basic strengths and weaknesses. Talk to other people in the organisation who have worked with them to gain more information. Vet people to avoid surprises and to understand the best ways to support and motivate team members.
How much of your strategy is confidential? What can — or should — be shared with other groups? Set the boundaries and share them so that everyone agrees and has the same expectations. Make sure that the inner working of the group matches the culture and values of the parent organisation. If your company is as free-flowing as Google, don’t bind people with conservative rules that eliminate communal sharing of ideas or the development of innovative solutions.
The way that decisions are made in organisations determines how ideas are generated and which ideas are considered. The way decisions are made influences how these ideas are carried out later.
Does decision-making in your organisation flow top-down or bottom-up? Who are the holders of the power to decide which ideas advance and which are eliminated? If ideas are valued in your culture, there’s a strong likelihood that it might not matter who generates the ideas.
3. Idea generation
How ideas are generated affects the quantity and quality of these ideas, which directly affects the number of viable strategy options.
A company that has an annual strategy meeting with a brainstorming component that encompasses input from many directions within the company uses one type of idea generation. The Google model involves having employees use 20% of their time for innovation. They test and grow projects. Some projects are nurtured and provide the company with revenue. Others are killed off. It’s even possible that original projects may mutate into something different.
Process is the way that ideas are handled and consumed within organisations. Process defines the way that agreements and commitments are made and managed, and how well people understand what is happening and what to do. The process-driven organisation avoids wasting employee time and energy. People in this type of company reach agreement that an action is valuable, develop a process around it, and set it in motion.
Process may be communicated to a team in writing, by word of mouth or in other ways. Agreement is critical to the understanding of process within an organisation.
In an organisation of any size, people bring their domain knowledge, talents, and perspectives to strategy creation. Often people are viewed as the first point of strategy failure, but they are actually the last point of failure in a long series of cascading interactions.
Put another way, very bright, creative, motivated people can fail if they are embedded in a strategy creation structure process where power, decision-making, idea generation, or process are broken.
Each of the five elements is critical to the strength, balance, and practicality of the proposed strategy. Tighten up around these five and watch your team’s next strategy
succeed beyond your plans.
3. Plotting your path to business growth
Growth strategies are not cast in stone. You need to be flexible to maximise opportunities as they present themselves.
By David Meier
ost entrepreneurs, from time to time, have more than one way to grow their businesses available to them. The process of deciding on a growth strategy is ongoing, and the decisions that result can be critical to the future success of any business.
The search for real business growth, by creating permanent increases in profit as a direct result of measurable and sustained increases in sales volume, may not only be a reaction to opportunities in the marketplace, but also a requirement in order for your business to maintain market share. The right decisions can conceivably have a major positive impact on your business’s bottom line, thereby creating real growth. However, if you choose unwisely, or decide to do nothing when action is clearly warranted, the results can lead to a loss of growth potential, or even a period of negative growth (decreased sales and profitability).
Invest in growth
As with so many issues in business, your growth decisions should be based on objective financial data, consisting of relevant estimates and projections. Not every growth strategy can be expected to impact your business in the same manner, and over the same time period. Your ability to compare growth options is the best way to make informed decisions.
Think of your decisions in the context of ROI analysis. Each growth opportunity has an investment component, money that you would be required to spend as a part of the process of implementing a specific growth strategy. The corresponding return that you can expect from your investment in business growth can be represented as the increased profit your business is projected to incur, directly as a result of the sales increases created by your business’s growth strategy. For example: a retail business is considering growing by adding a new product line. The required investment to add the line is R1,2 million. This addition is expected to add R800 000 in annual sales, and as a direct result, a corresponding R200 000 increase in annual net profit. Therefore, the anticipated ROI from this additional (product) line is in excess of 16% (R200 000/R1,2 million).
Evaluate growth plans
If the business is currently enjoying an overall 25% ROI, the question the owner must answer is, ‘Should I invest R1,2 million in the addition of the new product line to earn an ROI that is nearly 9% less than my business is currently earning (25% – 16% = 9%)?’ The correct answer may appear to be an obvious ‘no’, but there may be other business reasons that would cause the owner to decide to add this product line, such as the presence of a strong market demand for the new items.
In any event, once each growth strategy is converted into an ROI percentage, you can compare dissimilar growth options, and ROI can be used as a critical financial component in any business growth decision. Furthermore, just as ROI analysis can be used to evaluate these additional growth strategies, it also can be used to evaluate business ideas, such as those of entirely new businesses. And fortunately, ROI analysis can be applied to these new business ideas well before an owner ever decides to invest in that new business.
How TomTom Telematics Can Keep Your Business Moving Forward
Successful businesses need to find ways to improve their margins while still delivering excellent and efficient customer service. VDM’s CEO, Deon van der Merwe, explains why this wouldn’t be possible in his business without TomTom Telematics’ solutions.
When TomTom Telematics entered the South African market in 2010, the local team took a deep dive into the different industry verticals they were servicing.
The more they got to know their customers, the more they realised a different solution was needed to address local conditions, and a subscription model was introduced whereby customers didn’t need to invest a large capital outlay into TomTom Telematics’ technology, but would receive the tech and software, including installation, at no extra cost, in exchange for a monthly subscription fee.
This model gives SMEs affordable access to TomTom Telematics’ solutions, but it’s had another benefit as well: As TomTom Telematics introduces new innovations, existing customers can benefit — without the costs associated with replacing all of their existing technology themselves.
An indispensable tool
For a transport and logistics business like VDM Group, which has more than 160 vehicles on the road, this means they have access to incredible new offerings, without needing to replace their TomTom units themselves.
“TomTom plays a critical role in our business,” says Deon van der Merwe, CEO of VDM Group. “It’s an indispensable tool in ensuring quality customer feedback and the management of KPIs for all supply chain stakeholders.
“Earlier this year, TomTom Telematics launched their New WEBFLEET product. We were very satisfied with what we had, and yet they still approached us and offered to replace all our existing units with new tablets, and they’re covering the installation costs,” explains Deon.
“New WEBFLEET is the result of TomTom innovating their product based on customer feedback from around the world, and the local team wanted to ensure we had access to the additional functionality and innovations that had been introduced.”
Seamless integration with your network
According to Deon, the new TomTom PRO 8275 units seamlessly integrate VDM’s fleet scheduling software with information they extract from TomTom, including individual vehicles’ standing time and arrival notifications.
“The software from TomTom is open API, which means that all our various applications can communicate and interact with each other,” he explains. “From a productivity perspective, we no longer need to manually capture any trip information.
In addition, we have every conceivable piece of data available that will assist us to run a leaner, more cost-effective fleet, enabling us to ensure that we are delivering on all our KPIs — particularly with regards to meeting our customers’ needs.”
VDM is a large transport business, but Deon believes the benefits for SMEs are as great, if not more so. “Many SMEs don’t have the back-office support that we do. The ability to capture and use this information without a team of admin specialists at your disposal is a huge competitive advantage for smaller businesses,” he says.
Offering you the competitive edge
VDM offers a specialised logistics service that creates custom-made options for clients. In order to ensure the most optimal and cost-effective solutions, while still ensuring top quality delivery, they need to consider special and complex individual customer requirements, from the point of origin to the point of destination, before finalising a customer-specific solution.
“We take into account a host of factors, including inventory carrying costs, volume requirements, product specific factors and route to market,” explains Deon.
“Road transport significantly impacts total supply chain costs, and if not managed properly, can have a severe impact on the sustainability of any particular channel. We try and manage this risk by continuously improving our service through innovative logistical solutions, the use of advanced technology, vertical integration and a team of passionate and talented experts.
TomTom assists in creating differentiators
“This focus has helped us to develop a market offering that includes dedicated and completely flexible inter-modal solutions, which is a big differentiator for us. TomTom Telematics plays a key role in our total productivity, helping us measure the performance of road transport across our supply chain.”
Deon believes that what you don’t measure you won’t know.
“TomTom provides updated fleet statistics that allow us to constantly benchmark our fleet against pre-defined route surveys and, in so doing, enables massive savings in fuel and total turnaround time.
Communicating via the WEBFLEET platform also helps us save time and creates a formal trail of correspondence with our drivers. I don’t believe it’s possible to successfully run a business like ours without a solution like this.”
Sasfin Continues To Support SME Growth
Sasfin’s equity stake in fintech lender Payabill set to enhance SME growth.
In another major step forward in supporting growth in SMEs, Sasfin today announced that it has acquired a strategic stake in fast-growing fintech lender Payabill.
Payabill, a 100% digital lending business, provides working capital and/or trade finance to small businesses. The collaboration between Sasfin and Payabill accelerates financing opportunities for customers.
Sasfin, South Africa’s leading business challenger bank, last year successfully launched its digital platform, B\\YOND, for SMEs.
“Sasfin has been investing in fintechs, building digital capabilities (such as B\\YOND) and working with third parties (such as XERO Accounting) for a number of years with the aim of adding value to our business and wealth clients. Payabill has made huge strides in giving businesses access to digital finance and we are thrilled to announce this investment,” says Sasfin CEO Michael Sassoon.
Payabill CEO Eli Michal launched the pioneering fintech start up in SA in 2017. Payabill settles suppliers directly for its clients and allows clients to select their own extended payment terms. “We are incredibly excited by the opportunity afforded to Payabill by having Sasfin as an equity and debt partner. Sasfin will provide access to new channels and much needed funding that enables us to support the growth of small business finance in South Africa,” says Michal.
Michal started the fintech as he “wanted to enhance access to finance for small businesses in South Africa. We all know that boosting small business creates jobs and enables growth. Traditional lenders have neglected this segment of the market due to the high costs associated with on-boarding and assessing these customers, as well as managing their credit risk. It made no sense to us that a retail consumer could get multiple forms of credit, almost instantly via electronic channels, but small businesses could not. They were being neglected. With this in mind, we set out to build a completely paperless, digital solution to address this market’s unique requirements.”
Currently, Payabill offers loans of up to R150 000 to businesses. The intention is that with the investment made by Sasfin, Payabill will be able to offer larger loans to SMEs in the near future.
The alignment of Payabill’s aims and Sasfin’s long-term focus on small business in SA made for an ideal partnership. “SMEs can now borrow digitally, via Payabill, and bank via B\\YOND from Sasfin – reducing admin and costs which often stifles small business growth. Both B\\YOND and Payabill are gaining meaningful traction in the SME market and there are a host of additional digital initiatives that we are working on to further help small businesses thrive,” says Sassoon.
“While Sasfin has always offered a trade and debtor finance solution, this was largely for more established businesses. The new offering speaks to smaller businesses that are passionate about growth, and our larger Trade and Debtor Finance offering will be there to support businesses that reach the next phase in their development,” says Sassoon.
Sasfin Holdings Limited (“Sasfin” or “the Group” or “the Company”) is a bank-controlling company listed in the “Financials: Investment Services” sector of the JSE Limited (“the JSE”). Sasfin and its subsidiaries provide a wide range of complementary banking, financial and related services.
Driving Your Business Growth Towards More Customers
Designed to help its customers get the most from their businesses through the right telematics solution, New WEBFLEET can help you reach your customers quicker, get more done, improve efficiencies, save costs and boost your revenues.
Europe’s highly regulated operating environment has made telematics ubiquitous in business. On the one hand, this means industries across the spectrum have become safer, more efficient and highly productive across the EU. On the other, it’s much harder to stand out from the crowd when everyone follows the same best practice standards.
“We don’t have those same stringent regulations in place,” says Justin Manson, Sales Director, Africa at TomTom Telematics. “Our clients have realised what a huge competitive advantage this actually offers them though.
“Locally, everyone understands the role that telematics plays in tracking what your drivers are doing right and wrong, and use it as a tool for encouraging good driving practices, but there’s so much more to this solution, and we’re making it our mission to help business owners really use it to their benefit.
“When deployed across the organisation to its full capabilities, a telematics system can radically improve productivity and workflow. Done correctly, a business can save up to 10% on its bottom line, and redeploy that cash into the company’s growth, thanks to drivers reaching customers quicker and getting more done. The right data also increases productivity and ensures better turnaround times.”
Thomas Schmidt, MD of TomTom Telematics, loves visiting South Africa for this very reason. “Because so many business owners aren’t using telematics to their full extent, there’s such a huge opportunity for us to assist businesses in their growth here,” he says. “We deliver a high-value stack of products that can change the way companies operate, and most importantly help them save money and make money. The challenge for us is educating our customers so that they understand what our solutions offer, and the incredible impact they can have on a business. We consistently improve these solutions based on customer feedback as well, making them very much from customers for customers.
“Anyone can buy a map for less than R100. Why invest in such expensive devices? The answer is because we’ve developed solutions that change lives. With the right data — and access to that data — you increase safety, simplify your business, drive efficiencies, increase your output and customer service, and ensure you are always productive and reliable — across the organisation. And that impact can be measured, and given a real ROI value.
“Imagine the impression companies that operate at that level make on their industries. They stand out from their competitors. There is so much room for growth in South Africa as we deploy these solutions.”
As an organisation, TomTom Telematics is focused on continuous growth and innovation as well, constantly learning from market conditions, its customers and industry needs to improve its product offerings.
The result is the launch of New WEBFLEET in February 2018. “We’ve increased the value we offer our customers,” says Thomas. “We’ve collated data from hundreds of thousands of customers around the world who gave us their feedback through surveys, and New WEBFLEET is a window into easy-to-use, smart fleet management that is a game changer for companies.”
“TomTom Telematics is in the business of helping businesses,” agrees Justin. “Our goal is help our customers master their challenges. The right data at your fingertips will help you change the way you operate. That’s our goal. How much cash is being left on the table in an organisation because of inefficiencies?”
Introducing New Webfleet
The smartest way to manage your vehicles and mobile workforce
TomTom Telematics’ state of the art Software-as-a-Service (SaaS) fleet management solution, with best-in-class user interface, is inspired by two decades of working together with customers to achieve more for better fleet management. New WEBFLEET is everything you need to manage your vehicles in the cloud, in real time. It allows you to monitor reports and dashboards, manage orders/workﬂow, and improve driving behaviour, safety and service, helping you save fuel and reduce costs.
Best-in-class user interface
- A future-proof platform with a completely renewed interface, based on the latest HTML5 technology and driven by continuous innovation.
- Simple and clean interface, with minimised clicks for faster working.
- Intuitive functionality, means it is more accessible for greater impact across your business.
- User rights management and state-of-the-art data handing ensures the highest level of data privacy and data security.
- Fast access to the right information.
Know where your vehicles are and where they have been. Different map options such as Google, Google Street View or satellite map are enriched with traffic information, giving you a more detailed view on what’s happening on the roads. Toggle between different types of information on the map such as traffic, addresses and areas and create specific views, so you only see the information you need.
New WEBFLEET’s dashboard gives an overview of performance at a glance. Up to 27 KPIs can be used to track the performance of vehicles, individuals, benchmark teams or give a simple overview. This helps you to track real-time performance against your pre-defined KPIs.
New WEBFLEET gives you instant access to the information that matters, meaning you can spot trends over time and use real-time information to make smarter and more informed decisions. You can instantly download or schedule reports to help you stay on top of everything — from fuel efficiency and legal compliance to quality of service.
Manage on the move
New WEBFLEET is optimised so you can manage your fleet on any device by entering WEBFLEET through a web browser or by downloading the WEBFLEET Mobile app on your smartphone.
Send routes direct to drivers
- Plan accurate routes in New WEBFLEET by adjusting multiple variables such as location, time of departure/arrival, traffic and vehicle type.
- Get a choice of alternative routes, as well as suggested fastest route with traffic.
- Customise your route by simply adding new waypoints, or dragging and dropping existing waypoints on a route. Then choose from guided or forced route* options.
- Send planned routes directly to a TomTom PRO driver terminal to keep your drivers on the right track.
Personalised Map views*
- Create your own saved map view to reach information you need fast.
- Switch between vehicle groups or areas, without needing to adjust the map filters and zoom levels. n
Many ways to customise WEBFLEET to suit individual requirements from personalised views to adding information to make what you see more informative on one page.
Plan a route the way you want it
Use multiple variables (including waypoints) to give fastest or most efficient routes.
Across different device types, allowing you to always stay on top of business.
Simple, clean and easy to administer
Toggle between views to get the right information to focus on the task in hand. Get the right information to the right people at the right time, keep data secure and in the right hands.
Send routes to driver terminals
In real time, ensure drivers follow or avoid specific routes.