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Online Serialisation
- Journal of Business Strategy serialised Clean Business Cuisine from 2004
to 2006. The Journal of Business Strategy is one of 17 in Emerald's Management First 'Strategy' collection. Written for senior managers, the Journal of Business Strategy provides
in-depth articles that help the reader develop successful business strategies.
Each issue focuses on the practical applications of business theory, covering a
host of topics in areas such as strategy, business development, global branding,
forecasting, and competitive intelligence). Columnists are respected thought
leaders who comment on topics from marketing and governance to performance
measurement. At last, for the reader who does not want to be seen with a little red book
about cooking, this online serialisation serves the same function as
a brown paper wrapper.
PROLOGUE :
Z/YEN THINGS YOU ALWAYS WANTED TO KNOW ABOUT BUSINESS
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CHAPTER ONE : CENTRALISATION/DECENTRALISATION -
CONFEDERAL UNITY
Whether to centralise or decentralise is a perennial strategic choice. Sometimes
managers follow centralisation theories that lead them to standardise, seek
economies of scale and eliminate duplication. At other times, managers
decentralise in order to motivate local management, respond rapidly to changing
customer needs or eliminate wasteful bureaucracy. Yet centralisation and
decentralisation are not opposites, as the following tale illustrates.
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There is no right or wrong choice in centralising or decentralising. Often the
choice is a reaction against the status quo. Many businesses successfully use
‘pendulum management’, i.e. repeating sequences of centralisation followed by
decentralisation, in order to achieve near equilibrium over the long-term. The
most costly mistakes are made by managers who think there are scientific answers
to this choice.
CHAPTER TWO : TECHNOLOGY -
GIZMO’S BIG ADVENTURE
Technology can be a competitive advantage or an uncompetitive disadvantage.
Sometimes it’s just a problem. The difficulty is discerning the benefits of the
technology from the features of the technology. Salesmen “sell the sizzle, not
the sausage”. Some folk want the jazziest toys around. Yet, without simple
emotional enthusiasm for using technology to beat the competition, few advances
would occur. How far should enthusiasm be allowed to influence choice?
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It is difficult to remove emotion from many decisions, including ones about
technology. Managers need to be enthusiastic about technology’s potential,
otherwise they won’t spot opportunities for improvement. However,
returns-on-investment are frequently unclear. Many technologies benefit
customers, but customers may not pay more, buy more or be more loyal. Businesses
have to deploy some technologies just to maintain competitive position. Managers
should make technology investment decisions based on customer benefits and
business needs.
CHAPTER THREE : HUMAN RESOURCES -
PEOPLE ARE FOR TURNING
Carrots and sticks – the fundamental tools of motivation? Well, sort of.
Businesses want to establish ways of working that often treat people as inputs
to a system. People want procedures that recognise their human behaviours,
desires and aspirations. Once ways of working are established, businesses often
find it difficult to get people to change working habits. Sometimes businesses
need to implement change rapidly, for example in the face of an aggressive new
competitor. Groups also define our identity – where we fit and what is expected
of us. Which tools should businesses use in such circumstances – carrots, sticks
or, is there a third way, trout???
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Human beings, in the roles they assume individually and collectively, are the
ultimate causal factor in business. We assume risk in order to develop rewards
by playing ‘roles’. When things go well, the roles are working in harmony. The
contrary implication is simple – when things go wrong, we have only ourselves to
blame. Our misunderstanding, miscommunication, or worse, our own misconduct
causes the failure. Understanding ourselves, both as individuals and
organisational folk, is where we need to start in order to understand business
success.
CHAPTER FOUR : CONTINUOUS IMPROVEMENT -
QUALITY IS FREE
Quality is a slippery concept, but crucial to competitive advantage. From the
many sects of quality, two broad schools emerge. The first school is based
around detailed measurement and process, e.g. Six Sigma or ISO9000. The second
school is based around culture and resolve, for instance the philosophy of Total
Quality Management. Quality is everywhere and nowhere. That’s where it’s at. You
can’t deconstruct it from the whole – like the grains of sand that make a beach
– nor can you always convert the non-believer.
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Quality is key (you know it when you see it), but it surely isn’t free. Too much
separation of quality as a distinct process or characteristic can divert people
from the fact that quality is an intrinsic part of all work. Quality is greater
than the sum of the activities. Quality is a total, pervasive characteristic,
and therefore quality not just resists direct management, but can be destroyed
by direct management. Don’t let quality become separated from real work.
CHAPTER FIVE : MANAGEMENT INFORMATION -
THE QUESTION OF HU
How can managers decide what information they need? Too much information can be
as bad as too little. One popular business model distinguishes information that
validates assumptions from information that assesses decisions from information
that measures success factors. Too many managers are scribes, recording what
happened; too few are seers, thinking of the questions they need to answer.
Managers are in most danger when they lack the knowledge of what they need to
know.
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Organisations react to mistakes. A typical reaction is to collect information
that would have prevented the mistake. Over time, quantities of information
based on old assumptions, decisions and success factors overwhelm managers.
Amidst the information deluge, managers need to spot new anomalies in old
patterns and discern new patterns in old anomalies. The business challenge is to
incorporate dynamic anomaly and pattern recognition into structured management
information systems.
CHAPTER SIX : LEVERAGED GROWTH -
BROTHERS IN ALMS
A franchise is a special privilege to deal with a special group or territory,
but subject to specific obligations. Businesses compete organically on product
differentiation or better service. Businesses compete acquisitively on access to
finance or merger skills. Successful franchising leverages itself on the
structure of the organisation by thinking about how a proper ‘constitution’
among the stakeholders benefits everyone. Franchising allows the organisation to
reuse, repackage and replicate itself through pre-defined packets of rights and
obligations, thus growing more easily. In successful franchising, the franchisor
ensures that the franchisee benefits though, as a certain Alm once said, “advice
ain’t easy if it’s free”.
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Is franchising a serious way to make money, or just a pyramid scheme? All types
of organisation benefit from thinking about ways of turning regular operations
into ‘franchises’. Too often businesses fail to define the rights and
obligations implicit in their operations, i.e. their internal franchises. Too
often businesses try to expand through command-and-control, without considering
how they could grow via a more federal structure. By looking at all operations
as franchises, the ‘constitution’ of the business can be made clearer and more
effective. For instance, “you, the customer complaints department, have the
right to act in the best interest of the customer, subject to keeping us
informed in a structured way and…” The efficiency and effectiveness of franchise
structures, when well-defined, is compelling. Thoughtful business people
struggling to grow should ponder how all or part of their business constitutes a
franchise.
CHAPTER SEVEN : STRATEGY -
GREEKS HAVE A GENERAL WORD FOR IT
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