How do some products achieve astonishing quality and functionality at affordable prices? The answer is in the discipline of Value Engineering.
Value Engineering is often tarred with the same brush as ‘cost-cutting‘. Although it has a similar role, it plays to a wholly different business strategy. So, let’s look at what it is and why it matters.
Franchising is a halfway house between being an entrepreneurial business owner and taking a job with all the certainty and uncertainty that entails.
Franchising is a common next-step for managers who leave their safe employment and want to set up and operate their own business. But they don’t have the ideas or the appetite for a wholly new business of their own. As a business model, franchising offers significant benefits to:
the person granting the franchise (franchisor)
the person operating the franchised business (franchisee), and
But with benefits come inevitable costs and risks. So, in this article, we’ll look at the Big Idea behind franchising, what it is and what it means for business people on either side of the transaction.
Key Performance Indicators – or KPIs – stem from an insight that is most often attributed to Peter Drucker, in his 1954 book titled, ‘The Practice of Management’:
‘What gets measured gets managed’
That attribution may be contested, but the central assertion seems pretty sound. If your organisation measures performance against a specific metric, then its managers feel an incentive to manage their parts of the business, so that they perform well against that metric. KPIs are nothing more nor less than the key – or most valuable – metrics.
I’m sure Multi-Level Marketing has been around since ancient days. Send out street urchins to sell stuff and take a big chunk of their income. Get them to recruit other homeless kids and let them have a share of what their protegé earns.
But Multi-Level Marketing (or MLM) is big business now, with one estimate* putting it at around the US$200 billion per annum mark, worldwide.
So, we have to ask:
What is Multi-Level Marketing?
How does it work?
Is it a good way to earn a living (here’s a spoiler: no)?
The Long Tail is the other half of the same chart we saw in an earlier Big Ideas article: the Pareto Principle. Vilfredo Pareto took an interest in the head of the chart, where a small number of people accounted for a huge proportion of wealth. In 2006, Chris Anderson published a book that looked at the huge number of products that form the remainder, when you exclude the few that account for the majority of sales.
Amazon lists more than 3 billion products across 11 marketplaces worldwide.
But most of their sales and revenue come from the top few highest performing goods in each category. A small number of books may sell thousands a month. But there are millions of books that rarely sell any in a given month… or year.
Like so many big ideas, Blue Ocean Strategy was not new when its founders conceived it. They just gave it a resonant name and started to flesh out the idea.
In this case, it was W Chan Kim and Renée Mauborgne. They gave their Blue Ocean Strategy concept a set of case studies to tempt new adopters, and some thinking tools to give them confidence. The result is an approach to developing new products and services with a 15-year track record.
If you’ve not yet encountered Blue Ocean Strategy and the concept of Value Innovation, it’s well worth exploring.
How can you be sure that your management team is balancing its attention across all the things that matter – rather than focusing solely on one thing: the money? The answer is that what gets measured gets managed. So you need to score yourself on a balanced scorecard.
That’s the insight that Robert Kaplan and David Norton gave us in a stand-out Harvard Business Review article, ‘Putting the Balanced Scorecard to Work‘. The article may date back to 1993, but it’s still one of HBR’s most-read must-read articles.
For hundreds of years, there has been little to challenge traditional hierarchies for their ability to organise at scale. Holacracy is doing just that.
It’s a form of Adhocracy, which we covered in an earlier article. But, whilst we are way past ‘peak adhocracy’, it seems that holacracy is is thriving.
Holacracy is a modern attempt to reform traditional hierarchies. It keeps the aspect of senior level overviews and subordinate focus. But it gives a far greater autonomy to individuals, and a more substantial decision authority to small teams at the focus of operations and change.