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Managing the Numbers (Australian Anthill)

There is an old adage in management circles that “what gets measured gets managed.” For all its apparent simplicity, this maxim is actually very difficult to implement, as it requires you to know what to measure, how and by whom. Key performance indicators (KPIs) vary from business to business, depending on their overall goals and key business drivers, so blindly following the metrics applied by other businesses could spell disaster.

First, why is “managing the numbers” so important?

Successful performance management helps extend accountability throughout the business, ensures day-to-day activities are in alignment with your strategy and financial targets, enables faster and more confident decision making, and helps both management and staff to prioritise tasks, identify market changes and spot opportunities. It also ensures broader transparency of business issues, drivers, and impediments to success.

Understanding the What

It takes significant management resources to measure, plot and track performance indicators, so it is imperative to measure only what matters. How do you determine what matters? The answer requires an accurate understanding of how value creation occurs in your business.

Technorati Tags: KPIs, Performance Management, Value Creation, Measurement, Long-Term Focus, Key Performance Indicators
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By |October 14th, 2007|Australian Anthill|0 Comments

Success Can Be Dangerous

All too many would-be entrepreneurs engage in ‘me too’ entrepreneurship. They see that one or more companies are experiencing success with a specific product or service, and quickly enter the market with a similar offering. This “fast follower” strategy can in some instances lead to triumph. However, in many cases it leads entrepreneurs down the market equivalent of a cul-de-sac.

Wayne Gretzky is regarded as one of the all-time great hockey champions. When asked the secret to his success, his response was “Some people skate to the puck. I skate to where the puck is going to be.”

While most sporting metaphors are overused in the business context, this is a very powerful insight. There are two reasons why adopting a fast follower strategy is dangerous. First, markets are dynamic and constantly moving. In the time it takes you to develop a similar offering, the market may well have moved on (that is, the puck is no longer there).

Second, initial market leaders rarely secure sustainable market positions. Search engine pioneers, like Alta Vista, now stand in Google’s shadow. Early leaders in the social networking space, like Friendster, are losing market share, while late-to-market MySpace and Facebook achieved billion dollar valuations.

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By |August 15th, 2007|Australian Anthill|0 Comments

Creating Culture (Australian Anthill)

This is an excerpt from a regular column that I write – Neely Ready – which appears in a magazine called Australian Anthill.

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The Importance of Culture

Every organisation has a culture. Spend time observing the day-to-day goings on within, say, a medical practice, a law firm, an airline and a fast food franchise, and you will notice some stark differences. While each business might have common objectives – serving clients, generating profits – it is very likely they go about these objectives in vastly different ways.

Culture, broadly defined, is the personality of an organisation. It is the collective, learned behaviour of its staff (“the way we do things around here”,) and the values, norms and beliefs that shape that behaviour.

Culture drives the behaviour of people. It drives how your staff choose what is done, and what is left undone; what is valued, and what behaviour, actions and outcomes are rewarded. Culture operates (and can be influenced) at three levels:

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By |May 30th, 2007|Australian Anthill, Culture|0 Comments

Effective Leadership (Australian Anthill)

This is an excerpt of a regular column I write – <strong>Neely Ready</strong> – which appears in Australian Anthill.

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While it may be heretical to some, I believe great leaders are made, not born.

Undoubtedly there are those among us who inherited certain traits that naturally lead them to leadership roles. But any individual with the right character, willpower and discipline can become a great leader.

Leadership is important in all areas of life, but given the array of challenges faced by start-ups, including the need to marshal and sustain a team’s enthusiasm and drive in the face of set-backs, the calibre of leadership is one of the most significant determinants of success or failure.

For the most part, companies large and small are over-managed but under-led, so it is important to distinguish between leadership and management. Management is concerned with planning and organisation (the ‘how’). Leadership, on the other hand, is about direction (the ‘why’).

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By |May 15th, 2007|Australian Anthill, Leadership|0 Comments

Cash is King (Australian Anthill)

This is an excerpt from a regular column I write – <strong>Neely Ready</strong> – which appears in <a target=”_blank” href=”http://www.australiananthill.com/” title=”Australian Anthill Magazine Web site”>Australian Anthill</a>.

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While sometimes apocryphal, start-up failure rates tell a sombre story: most start-ups don’t see their third anniversary. There are many causes of this high attrition rate, but a primary factor is poor cash flow management.

Some founders simply miscalculate how much capital is required to get their business off the ground. Others are overly optimistic when forecasting key milestones (such as the date of first sale or break-even point). Still others allow the heady exuberance of a new project go to their heads (and cheque book).

By following a few simple rules, you can stretch your dollar further, and enhance your chances of success:

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By |April 30th, 2007|Australian Anthill, Cash, Uncategorized|1 Comment

How Creative is Your Business? (Australian Anthill)

I write a regular column – Neely Ready- which appears in an (exellent) magazine, Australian Anthill.

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How creative is your business?

Entrepreneurs and scientists use the concepts of ‘creativity’ and ‘innovation’ interchangeably. This is not surprising, as both play an integral role in the new product development process. They are not the same, however they do have a symbiotic relationship: each is largely useless without the other.

Creativity is the process of coming up with new ideas. Everyone is capable of being creative, and there is no single, definitive methodology for generating creative ideas.

Innovation, on the other hand, is a broader process of implementing a creative idea – or ‘applied creativity’. Innovation is intrinsically harder than creating ideas, and there is again no definitive methodology. However, it is the process of creativity – coming up with the spark of an idea that kick starts the new product development process – that most individuals and businesses believe they require assistance with (perhaps because creativity is seen as a behaviour, whereas innovation is seen as a process). […]

By |April 15th, 2007|Australian Anthill, Cash, Culture, Media, VC|0 Comments