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The Forms of Business Risks and Practical Ways of Managing Them

Business risks are the likely dangers that a business enterprise may encounter if preventive measures or safety precautions are not put in place to avoid them. When an enterprise experiences a particular business risk, the entrepreneur should not point finger at witches, ghosts or enemies. They happen as a result of poor planning and failure to set out measures in managing these risks. There are two main types of risks that a business enterprise is likely to face.

These are Direct risks and Indirect Risks.

1. Direct risks- This is a type of business risk that could entirely collapse a business enterprise. They directly affect the enterprise and halts down all of its business activities. Due to the severity of direct risks, entrepreneurs should set out preventive measures of curtailing them. Examples of direct risks include theft, fire, bankruptcy, misuse of capital through irresponsible expenses etc.

2. Indirect risks- This type of business risk slowly causes the collapse of the enterprise. If extreme care is not taken, it can be hidden from entrepreneurs. Like a slow poison, indirect risks if left unchecked can ruin a business enterprise. They are quite difficult to control and account for greater portion of business losses. Examples of indirect risks are lack of sales due to faulty or low quality products, wrong business locations, currency inflation, introduction of new taxes, changes in labour laws etc.

Business risks whether direct or indirect can be managed or controlled. The entrepreneur should be very vigilant and alert in his supervisory role. There should be regular or routine check of stocks and finished products. Only the entrepreneur cannot do this work. An accountant or book keeper should be employed and assigned to check the accounts of the business every month or even daily depending on the size of the enterprise or the rate of purchase of products.

Also, the entrepreneur has to increase vigilance and security by beaming up the security such as employing security personnel and installing security devices. These measures would help minimize or entirely stop the cases of theft.

Most of the fire outbreaks that occur in the enterprises are as a result of faulty electrical connections and appliances. The entrepreneur must employ a qualified electrician to do all the electrical connections or wiring in the enterprise. He has to replace all weak or faulty wires and other electrical appliances to avoid the likelihood of fire outbreak.

Low sales and patronage of the products of an enterprise can be as a result of several factors. Paramount among these is due to the low quality nature of the products and wrong business location. The entrepreneur must undertake training for his staff members while constantly checking for product quality. He has to use quality and durable materials for the manufacture of his products. Furthermore, if wrong business location is causing the drop in sales of products, the entrepreneur should relocate the business to a more promising area where there would be high patronage for his products.

Inflation and constant changes in labour laws can affect the success of a business enterprise. An entrepreneur should be always alert to these changes. He can do this by keeping in touch with the relevant ministries to know what new changes have been planned that may affect one’s business.

It takes a great deal of time and efforts for entrepreneurs to set up enterprises. Owing to this, they must vigilantly guard against any internal or external dangers that might result in their collapse. Identifying and controlling potential threats to businesses is the guaranteed way to succeed.

Managing Your Working Day in Inside Sales

To CRM or not to CRM – that’s the question

Most organisations I work with have some form of customer database or CRM – customer relationship management – system in place. If you do, then you should learn every aspect of it and use it to run your working life. Simple.

A good CRM will allow you to track every contact with a customer, what you said, what they said and the progress you made along your company’s sales process. CRMs can be useful in curating data such as key performance indicators – KPIs and many of them have calendars and email management built in.

If you don’t have a CRM system either buy one, lease one that’s in the cloud such as Salesforce or use the latest version of Microsoft Outlook with the CRM add-on. Better still, obtain Office 365 for yourself and your team, add the CRM bolt on and you’re cooking on gas. If you’re familiar with Outlook and the Office suite of products then your learning curve for Office 365 will be negligible. I’m going to show you how you can do this and finally get to grips with time and email management.

Office 365 is an Inside Salesperson’s dream. Add on Dynamics CRM Online and you have the perfect intuitive solution. Your emails, tasks and appointments from Outlook can automatically be synchronised into the database. Your Word docs and Excel files can be stored there too. Your conversations will be noted and saved. And not just for you – but for your whole company.

There’s nothing worse for a customer than when he or she calls a company and they’re treated like a stranger. That doesn’t happen with a good CRM system. You and your employees are sharing all interactions with your community in the system. You have the system integrated with social media sites like Facebook and LinkedIn. You have emails, activities, notes, conversations and documents linked to every contact and account. Let’s get into Office 365.

Use the Cloud

Office 365 sits in the cloud, in other words, it can be accessed from any device via the internet. It doesn’t sit on an old fashioned hard-drive. This means you can pull data from any device, so set them all up first. Your phone, laptop, PC, tablet. Whenever an entry is made on any device, the database is updated in the cloud in real time so anyone can see the information from their devices.

365 Contacts

The best feature here is the merge option where you can link your social media accounts to your contacts. So when you link in with a new contact, their details automatically transfer into your contacts, with a picture too.

If you get into the habit of photographing people you meet with your phone, incorporate this into the contact details. So when they phone your mobile, their name flashes up and a photograph too. A picture brings back memories far quicker than text.

Emails from new contacts can be dragged into the contacts box and a contact entry is automatically made with all the details harvested from the email.

365 Calendar

Firstly set the options so your calendar looks like you want it to. Decide you working week, which may include Saturday, mine does. Sort out the default view for your calendar.

Now decide colours for differing items. Here’s my suggestion:

Red – making money
Blue – marketing activities
Yellow – administration
Green – self development
Orange – personal activities

You can then see at a glance whether you’re being productive or not.

Microsoft provides an enterprise quality web meeting software platform called Skype for Business. It uses the Skype engine but it’s not connected to your personal Skype. It allows you to run a web meeting with anyone or any group at the click of a button. Make sure you obtain this and link it into Office 365. It’s far better than GoToWebinar and more cost effective too.

365 Tasks

Office 365 comes with a stable task management engine which is underused. Many people just list all their tasks into one giant “to do” list and this can be very bewildering.

There’s a couple of ways you can convert your tasks into something more digestible. The first manner is to put dates on each task – start and end dates – so they appear at the bottom of your calendar for the relevant day. Handy if they must be done on that day.

I do it differently. I categorise each task so I can group them on my calendar. I believe I’m more productive when I’m doing similar tasks in clusters rather than free-wheeling.

Firstly, I’m crystal clear as to my objectives, supporting projects and goals I need to achieve. I’m sure you are too. With that in mind you should be choosy whether you add an item into tasks. You should only do this if it moves you forward in your objectives. If it does, it’s known as a Tactical Next Action – an TNA.

I have TNAs for:

TNA: Calls
TNA: Online
TNA: Do
TNA: Write
TNA: Someday maybe

The last one is true; I have 35 items in that category at the moment but none are deal breakers, but the first four are what my calendar carries most.

When a new task comes into your task list, put it in as unassigned – it will automatically find its way to the top, so when you do your task management, you can allocate an TNA to it. Use your phone to add tasks whenever you think of something or someone gives you a job to do. Don’t rely on the brain to remember, it won’t, but the phone will. The task will whiz into the cloud and synchronise across all devices.

365 Email

The foundation of all communications and one of your collection points. I’ll talk about collection points shortly. But let’s tame your email once and for all; I’ve known salespeople to drown in it. Here’s how.

Before we go any further, turn off your email alert feature. This has to be one of the worst distractions known to the Inside Salesperson.

You are allowed to check email regularly for important items but it’s best to do this every couple of hours – say 9am, 12 noon, 3pm and 5pm. But only to deal with urgent ones, leave the rest till later when you clear your inbox. For a quick reminder of urgent versus important you won’t do worse than Stephen Covey’s Time Management Grid. You can see below that he creates four boxes which determine whether a task should be done or delayed or even ignored.

If you really do need to keep tabs of urgent email as they come in, buy yourself a smartwatch and Bluetooth your inbox. I have a Microsoft Band which does this for me, it vibrates and you glance at the tiny screen without accessing email.

And you must clear your inbox every day. Here’s how.

Choose a 60 minute window every day at some time, best before the close of play. Start with the first email. Can you handle it in less than 2 minutes? If so, handle it. If it’s going to take longer than 2 minutes, then put it into a task to be dealt with at another time. You can simply drag the email into the task area on Office 365 and it will automatically populate a task, which remains unassigned to be assigned an SNA later.

If it’s something you don’t want such as a subscription, see if you can unsubscribe. Be ruthless with these.

If it just needs filing somewhere, just drag it into the folder on your PC where it belongs.

Work your way through your emails in this manner and you will clear your inbox. And you must do this every day. Believe me, you’ll feel good when you do.

Collection Points

This is my term for where information and communications come into your business. Have a quick think about what collection points you have. Here’s mine when I first did this exercise:

Texts
Email
Post
In tray on my desk
Desk
Car dashboard
Post-it notes on my computer screen
Unassigned tasks on my phone
Mobile voicemail
Land-line voicemail
Social Media direct messaging
WhatsApp communications
Ideas stored in my brain

The aim is to reduce them, I was ruthless because the more collection points you have, the more difficult it all becomes to keep in control and you’ll soon be overwhelmed. Here’s my culled list:

Texts
Office 365 Email
Unassigned tasks for ideas etc.
In tray on my desk for all paperwork including post
Plastic folder in brief case for receipts etc.

Email is king for me, so I channel everything through to my email inbox and because I can access this on my phone, I don’t miss a thing. All social media messages come through to email, eBay notifications everything. It does mean I have a full inbox every day but I do clear this each day.

Do all these things and you too will manage your time really effectively so you can concentrate on selling. I do.

The CEO’s Guide To Succession Planning – Managing Risk & Ensuring Business Continuity

Introduction

Once reserved for the upper echelons of senior management, and often viewed as replacement planning should catastrophe strike, today’s succession planning is being redefined. The discipline has broadened in both breadth and scope to become a central component of board-level strategy.

Succession planning focuses on managing risk and ensuring continuity across all levels of the organization – risk of untimely departures of critical personnel, risk of retirees taking their skills and knowledge with them and leaving nothing behind, and risk of losing high value employees to competitors. It does so by helping your business leaders to identify top performers within the organization, create dynamic “talent pools” of this critical talent that other leaders can leverage, and prepare and develop these high performing employees for future roles.

If this was easy, everyone would be doing it. The problem that exists today is that succession planning is barely automated, let alone optimized. This CEO guide provides five key tips for jump starting your succession planning efforts.

1. Automate and Reduce Costs

Today’s succession planning efforts are characterized by fragmented, inconsistent, paper-based processes. Indeed, 67% of companies are still primarily paper-based, according to a global survey conducted by SumTotal.

Conventionally, business and HR leaders will spend weeks or even months manually scouring different parts of the organization for information needed to build lists and pools of nominees and successors for specific job families or positions. The information required to generate the lists often includes self assessments, past performance appraisals (often paper-based), and 360 feedback. After a lengthy period of information gathering and aggregation followed by manual analysis (e.g., nine-box, gap analysis), the results are printed and collated into large three-ring binders for use in executive planning meetings. This time-consuming, inefficient, and costly process is still commonplace today.

To effectively transform succession planning from a manual, paper-based process to one that is systematic and technology-enabled, CEOs must focus on laying a solid foundation supported by strong executive leadership.

Program & Process Foundation

Establish dedicated management function (e.g., program management office) with CEO-sponsored executive leader or council (with senior representation from line-of-business, geography, and corporate HR)
Define core succession process along with key constituents and tasks at each step of the process; Clearly articulate touch points to other business processes (e.g., performance management, career development)
Understand implications of change with emphasis on managers & employees
Align program with broader business strategy
Determine initial scope (e.g., enterprise-wide, divisional)
Define processes independent of technology

Technology Foundation

Must support and enable key processes
Must integrate learning and development
Must link seamlessly to other business processes, especially performance management
Must be flexible and configurable to meet unique needs
Must centralize and consolidate key information and data
Must be easy for managers and employees to use

2. Drive Succession Planning Deeper into Your Organization

Many CEOs still view succession planning as replacement planning to designate successors in the event of a catastrophe befalling senior company leaders. Indeed, succession planning penetrates only the highest levels of the organizational hierarchy, according to survey data. Only 35% of companies currently focus their succession planning efforts on most critical roles within the organization.

Yet a most dramatic transformation is underway: 65% of the organizations surveyed plan to extend succession planning to all critical positions within the two years. Applying succession planning beyond the top layers of management is critical to retaining high performers across all levels of the organization and mitigating the risk of untimely departures of personnel in high-value positions.

The key to extending succession planning into the organization is to provide career development planning to employees. Indeed, fully 97% of business and HR leaders believe that a systematic career development process positively impacts employee retention and engagement. These leaders also believe that providing career advancement opportunities as well as dedicated development planning to employees are the two most important mechanisms for retaining high performers.

Retaining existing employees not only has the potential to minimize the effects of talent shortages, it also provides significant and tangible cost savings (since replacement costs range from 100%-150% of the salary for a departing employee).

3. Establish Dynamic Talent Pools to Improve Pipeline Visibility

Centralized talent pools provide CEOs with global visibility into their talent pipeline and overall organization bench strength. They provide a mechanism for ensuring that the organization’s future staffing plans are adequate, thereby reducing risk and ensuring continuity. To be truly effective, talent pools need to be dynamic in nature. For instance, if an employee is terminated, that person should be automatically removed from existing successor pools. Alternatively, if an employee closes a key skill or certification gap that had previously kept her from being considered as a successor, the pool should be updated appropriately. Talent pools that are inaccessible or not up-to-date are of little use to decision makers.

A key element of making talent pools accessible is in-depth searching for talent exploration. A talent pool is not much good if managers cannot easily view, track, update, and search for potential successors. Dynamic talent pools should take the guess work out of succession planning by aligning employee assessments, competencies, development plans, and learning programs. Proactive system monitoring ensures that as employees learn and grow, talent pools are dynamically updated to reflect the changes. It is this element in particular – supported by robust reporting and analytic capabilities – that helps CEOs make more objective staffing decisions and better plan for future staffing needs.

4. Promote Talent Mobility to Retain High Performers

Industry analyst firm Bersin & Associates defines talent mobility as “a dynamic internal process for moving talent from role to role – at the leadership, professional and operational levels.” The company further states that “the ability to move talent to where it is needed and by when it is needed will be essential for building an adaptable and enduring organization.”[1]

Talent mobility is:

A business strategy that facilitates organizational agility and flexibility
A mechanism for acquiring and retaining high performing and potential talent
A recruiting philosophy that favors internal sourcing over costly external hiring
A method for aligning organizational and individual needs through development
A proactive and ongoing approach to succession planning rather than a reactive approach

A systematic talent mobility strategy enables business leaders to more effectively acquire, align, develop, engage, and retain high performing talent by implementing a consistent, repeatable, and global process for talent rotation. Without a cohesive talent mobility strategy, CEOs face several risks:

Focus on costly external recruiting vs. internal sourcing
Wrong hires (cost can be 3-5x person’s salary)
Increased high performer churn
Reduced employee engagement
Reduced flexibility as business conditions change

CEOs should consider the following integrated processes – and a complete technology platform to support them – to promote and enable talent mobility:

Current workforce analysis:Includes detailed talent profiles, employee summaries, organization charts, competencies, and job profiles.
Talent needs assessment: Assess employees on key areas of leadership potential, job performance, and risk of leaving.
Future needs analysis:Development-centric succession planning to create and manage dynamic, fully-populated talent pools.

5. Integrate Succession Planning to Broader Business Processes

Succession planning is not a silo. It implicitly relies on other talent processes and data, especially assessments that provide a performance and competency baseline. Yet unlike a performance management process, which can be executed in a relatively self-contained fashion (assuming it has access to core employee data), the same is not true for succession planning.

Succession planning requires foundational data (e.g., competencies, job profiles, talent profiles, and employee records) and inputs (e.g., appraisals, feedback). Outputs include nominee pools, successor pools, development/learning plans, and reports. To facilitate the level of integration required to get succession planning right, a single, natively-integrated technology platform that centralizes key talent processes and information is required. With this single platform, the time to develop succession plans can easily be reduced from weeks or months to mere hours. The benefits can be significant: reduce costs, reallocate personnel from tactical activities to more strategic endeavors, and mitigate the risk of untimely departures of essential personnel.

Additionally, a single technology platform promotes the linkage of learning and career development to succession planning. By bridging these processes, nominees who are not ready for advancement can be assigned detailed development plans that guide them to improve the competencies and skills required for new job positions. Learning paths and specific courses can be established for employees to facilitate their career growth. By providing learning opportunities and development plans to employees, CEOs can take a more active role in promoting employee growth, retention, and engagement.

Finally, with a single system of record, reporting and analysis is vastly improved, since all relevant talent data resides within a single data structure. Strategic cross-functional metrics can be readily established (e.g., measure the impact of learning and development programs on performance). Reporting and analysis are key to the CEO’s success in managing employee resources and implementing strategies that support corporate objectives and initiatives.

Conclusion

Organizations can realize significant efficiency gains and cost savings by moving from a manual, paper-based succession process to one that is fully technology-enabled. The shift to a single technology platform facilitates extending succession planning deeper into the organization, since a well-architected solution seamlessly links succession to career development and learning. A complete platform improves senior management’s global visibility into the talent pipeline and bench strength, and promoting talent mobility to retain high performers becomes a viable engagement strategy. Succession planning, done correctly, is all about process and supporting technology integration. Without integration, succession planning becomes just another organizational silo.

Endnotes

[1]Lamoureux, Kim. “Talent Mobility: A New Standard of Endurance.” Bersin & Associates, November 30, 2009.

Managing Global Supply Chains – Striking a Strategic Balance

Global supply chains are facing difficult times as the marketplace shifts to a more global environment. Companies want to enter new markets with lower costs and better speed. However, many executives are struggling to meet goals in the face of new challenges.

Factors such as higher transportation and energy costs are enough to throw a wrench into a company’s supply chain. Building a strong strategic plan can assist executives in achieving their goals.

Evaluate Higher Transportation Costs

It’s no surprise that energy and transportation costs have experienced a sharp increase. Companies are scrambling to balance these costs while staying competitive in current market conditions. Striking the right balance can add up to increased efficiency and profit gains.

Manage Product Lead Time

Although producing oversees offers less expensive labor, this may also result in longer lead time. This slows down the process of bringing a new product to market. These factors need to be carefully considered when planning production.

Review Exchange Rates and Tariffs

Tariff and exchange rate challenges are introduced when a company manufactures overseas. Senior managers should carefully evaluate these components and identify opportunities to increase efficiencies.

Manage Complex Products Closely

Consumers are demanding more sophisticated products. Companies are working creatively to meet these needs, but sometimes production gets left in a lurch. Producing more complex products can slow down production, leaving the supply chain out of balance.

The solution to this issue is forming strong communication channels between marketing and operations. Working closely will provide a synergy between launching a new product and meeting production demands.

The Challenge of Reducing Costs

Senior mangers are always evaluating strategies to increase efficiencies and lower costs. Managing global supply chains in this demanding market requires strategic oversight. Leaders from all business units need to come together to create strategic goals that are measurable and realistic. A systematic way to measure these goals should be established so results can be tracked.

Evaluating Ways to Get Products to Market Quicker

Once a company discovers an innovative product, marketing and sales push hard to bring the item to market. Operations is the business unit that can best provide knowledge on capacity to produce a product while maintaining a high level of customer service. If production is slammed with orders, angry customers will surface, creating a lasting affect on a business’ reputation.

A strategic plan for getting products to market in the most efficient way should be created. Senior managers should meet regularly to strike a balance between bringing a product to market while persevering production and customer service. Discovering this balance will positively affect the global supply chain.

Find Communication Efficiencies in Manufacturing

Companies serving a global marketplace may have manufacturing facilities spread out all over the world. The communication flow across such a large area may become challenging for some businesses. This can be addressed by creating formal procedures for sharing information across all locations. The results of making this change are improved consistency and performance.

Examine the Benefits of Centralization

Many companies are moving away from local management to a centralized model. The manufacturing may be accomplished overseas, while the home office is charged will managing those tasks.

Retaining Employees in a Global Marketplace

As your company goes abroad, attracting and retaining talented employees may be challenging. Spend time and resources on creating an attractive work environment for employees. The time and effort invested initially will payoff with a decreased turnover ratio.

Managing Compatibility Issues

Managing technical infrastructure can be challenging enough in the local market. But once you introduce vendors from around the world, the issue becomes more complex.

Spend time working with vendors to ensure technology works seamlessly across all channels. Frontloading your investment will minimize issues down the road. This will also improve your efficiency and profit potential.

Acknowledge the Environmental Effect on the Global Supply Chain

Consumers are becoming more aware of their carbon footprint. Companies are facing the challenge of finding a balance between being environmentally responsible and maintaining profitability. Working with leaders in your company to discover a harmonious solution will impact your business positively in the global marketplace. You’ll benefit from an environmentally conscious image, while preserving profits.

Forming a Partnership between Operations and Marketing

Executives from marketing and operations need to meet regularly to review goals. They need to form a partnership to improve the global supply chain process. This will enable a quicker response to change when working to bring products to market.

Most company executives agree that global supply chains have room for improvement. While facing economic changes and rising fuel costs, there will be opportunities to review processes and maximize efficiencies. Investing time and resources into maximizing the efficiency will preserve and grow your profits.

Resources:

July 2008 McKinsey Quarterly Survey on Global Supply Chains