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Understanding Your Business

BusinessContext (1)Whether you are taking on your first role as a manager, swatting up for a management position interview in a new business, or making the move from functional to general management, you will need to demonstrate that you understand the wider concerns of the business. As well as dealing with the day to day issues of your team you it is essential to rise above these parochial concerns and use that knowledge to engage, impress and perform. But where do you begin?

In our leadership programmes we ask the delegates to become a Shadow Executive Team, and the foundation for this exercise is that they must understand the business. We therefore set them some pre-work. First are some basic questions:

  • What are the goals of your organisation – its main aims, including why it was established, what it expects to achieve and whose needs and interests it intends to serve?
  • Who owns your organisation – who established it, who provides the main financial backing and who takes responsibility for its direction?
  • What sector is your organisation in – describe the industry or industries it is part of and other organisations in that sector, including competitors, partners, collaborators, or agencies?
  • How big is your organisation – staff numbers, size and number of premises, and in comparison to others in the sector.
  • On what scale does your organisation operate – the number and type of customers, and their geographical spread.
  • What’s the scope of your organisation’s activities – the breadth and range of products and services it offers.


Then we ask them to examine the environment in which their business exists. There a number of tools for doing this, but we use RESPECT analysis. An acronym for regulatory, economic, social, political, environmental, competitor and technological factors.

 Regulatory/Legal factors refer to national employment laws, international trade regulations and restrictions, monopolies and mergers’ rules, and consumer protection. This is particularly important at present with the regulatory uncertainty surrounding Brexit and in what form British access to the single market may continue.

 Economic factors represent the wider economy so may include economic growth rates, levels of employment and unemployment, costs of raw materials such as energy, petrol and steel, interest rates and monetary policies, exchange rates and inflation rates.

 Socio-cultural factors include demographics, age distribution, population growth rates, level of education, distribution of wealth and social classes, living conditions and lifestyle. An important consideration in this dimension is ethics and how individuals and organisations act when faced with moral dilemmas. In the business environment this includes corporate social responsibility and the growing interest in social purpose within business.

 Political factors refer to the stability of the political environment and the attitudes of political parties or movements. This may manifest itself in government tax policies, or government involvement in trading agreements. In short, how business friendly is the political climate?

 Environmental factors focus increasingly on the issue of sustainability, with businesses beginning to see sustainability as a competitive advantage, not simply compliance or a way to reduce costs. The forces driving this are resource scarcity, which threatens the viability of some businesses; demand from customers for eco-friendly and healthy solutions; regulators demanding greater sustainability from companies; and employees, who want their companies to care for the environment.

 Competitive factors provide an assessment of the strengths and weaknesses of current and potential competitors. Competitors may be organisations in a related product/market; organisations using related technologies; organisations already targeting your prime market segment, but with unrelated products; organisations from other geographical areas with similar products; or new start-ups, perhaps organized by former employees and/or managers.

 Technological factors refer to the rate of new inventions and development, changes in information and mobile technology, changes in internet and e-commerce or even mobile commerce, and government spending on research. The tendency here is to focus on technological developments in digital and internet-related areas, but it should also include materials development and new methods of manufacture, distribution and logistics.

Thinking broadly and deeply about their business helps our leadership delegates to think more strategically and align their team purpose with broader organisational goals. Hopefully, this analysis will help you do the same and ensure that you rise above the other candidates.

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Christmas Conversations

It’s Christmas, does your heart sink at the thought of interminable small talk with distant cousins and great aunts? If so, “Let us,” as Mark Twain suggested, “Make a special effort to stop communicating with each other, so we can have some conversation.” By conversation I mean an interaction between two or more people, in which thoughts, opinions, ideas and feelings are exchanged, within the informal boundaries of polite give and take.

If you’re struggling to get answer, treat the conversation as a journey, go from place to place, but
not necessarily with any particular destination in mind. Use open ended questions like: what did you get for Christmas? What did you think of the Queen’s Speech? What was pudding like? How did you knit those wonderful socks? Why did you do it that way, are there alternative sock designs… or perhaps colours?

Alternatively if you are battling to get a word in edge ways, try raising your hand. It worked in school after all. But if Great Aunt Jemima refuses to desist and continues to lack the power of conversation, but not the power of speech, console yourself with the words of the great Roman orator Marcus Tullius Cicero that “Silence is one of the great arts of conversation.”

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Why Corporate Social Responsibility is not enough

‘The purpose of business is business’’

Milton Friedman (1962)

In the last 20 years income inequality has risen with household wealth of the top 10 per cent of society now more than 100 times the wealth of the poorest 10 per cent;  The major institutions, such as central government and banks have been found wanting; trust is at an all time low and financial institutions are seen as a key part of the collapse. The big government institutions of the post war era seem unable to work; the NHS, Social Services and Benefits seem are political hot potatoes.  There is a growing need for change in the world.

The neat divisions of public, private and third sector are falling away. Charities are filling the gap left by failing public services.  The demographics of society are shifting as the ageing population become simultaneously more dependant and more socially active; with the availability of time, ability and a pension.  Young people, saddled with student debt and no hope of home ownership remain living with their parents, insecure and frustrated, with diminished job prospects.

Social media hold individuals and governments to account; this rise of the ‘connected society’ drives the need for better conversation rather than state control.  In this era of fiscal austerity, the moral volume is turned up.

To date some organisations have responded through Corporate Social Responsibility initiatives, each with a laudable purpose and demonstrating how organisations can improve their world.  In the new world order this is no longer enough.  Organisations are being challenged to rethink their essential purpose.  The narrowness of self interest and share holder value replaced with a wider social activism and moral purpose.

Corporate Social Responsibility is no longer relevant and instead is replaced with a new understanding of the world that drives the moral and social purpose of an organisation.  No longer is it enough to focus on our customers; it is about recognising the wider number of lives that we touch.

From customers to the lives we touch; from transactions to relationships;  from shareholder value to societal value; from short term profit to sustainable profit; from high street presence to community asset; from wealth creation to creation of the common wealth.

How will institutions redefine their role in rebuilding community, stimulating social activism and engagement for the next 100 years.

‘The purpose of business is to create shared value’

Michael Porter 2011

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My Generation!

The sad fact is that in the UK and the developed world, we are slowly depopulating ourselves.  Birth rates are falling whilst longevity increases; in 2006 there were more 55-64 year olds than 16-24 year olds for the first time.  Whilst the ‘grey pound’ is a great opportunity for some businesses and the increasing need for related services this is an opportunity that is well catalogued.  At the same time the emerging next generation of future business joiners are proving to be very different to previous generations.

The Baby Boomers are the post war era generation, born between 1946 and 1964; whilst Generation X’ers were borne between 1965 and 1980.  The latest generation, ‘Generation Y’, are just coming into the working population and born between 1985 and 1995.

Each generation has different aspirations and ruling ideologies.  For the early Baby Boomers, growing in the optimism of the post war era and the sense of making the world a better place they continue to strive and believe that duty and patience pay off; often driven by an ethic that can best be summed up as ‘work hard and you will do better than your parents’.  For the late Baby Boomers they grew up in a world that saw its heroes crumble, be it Nixon or Kennedy; empires retracted and the cold war bred suspicion and a need for freedom; Woodstock and Flower Power were the anthem of the generation.

The Generation X’ers added disrespect for authority to the need for freedom and disregarded the need to accumulate wealth and position.  A generation that had been told that they could have it all now actually decided to take it!

It is perhaps too early to tell what Generation Y will bring to work; early indications suggest independence, social conscience, confidence and technological savvy.  They have new heroes that are more likely to be sporting than musical; they have embraced the democratic principles of the internet and are driven by brand and not loyalty; the free availability of credit means that they want it now and can have it too!

We face a world in which the Baby Boomers control the institution; Generation X are the managers and Generation Y are the consumers and new joiners.

Effective organisations need to look inside themselves to tap the rich source of ideas and energy.  To think about how they are defending themselves against another generation and to nurture and develop new talent.

The questions to ponder are:

  • How am I defending my generation?
  • How are we appealing to a new generation of employees?
  • How do we recruit and train them?
  • Once we have them, how do we manage and keep them?

Finally, try this, judge a generation by its heroes:

Churchill, Kennedy, Thatcher, Bob Dylan or Ellen Macarthur?

Who are your heroes?

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