Archive for February, 2011

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Analysis Of Drivers

February 27th, 2011

Analysis Of Drivers photoIn the planning conference you examined six key business drivers and initially selected a single business driver as your focus. The single focus creates alignment. Now you must account for the remaining five drivers. You need to ask specific questions of your operations to make sure none of the other five have been neglected. Ask these questions for each driver:

Players

  1. Am I taking care of my employees? Does my plan facilitate the employee component of our business, or is it a punitive document?
  2. Am I solving my customers’ problems? Have I looked at what is at the center of my operational focus—customers or things?

Plans

  1. Are we operating in a planned way, or are we living from day to day? Is the span of time for our plan long enough, or have we been too limiting in time?
  2. Are we disciplined about how we do business? Do we have accountability measures in place to make sure the plan is followed? Do the rewards and compensations match the desired results of the plan?

Processes

  1. Are we operationally efficient? Do we have a plan for controlling overhead?
  2. Do we pay attention to our business process? Are we upgrading our ways of doing business or just continuing to do business the same old way?
  3. What is our level of heat loss? Do we know how much money is draining out the bottom through inefficient processes? What is our plan to fix the loss?

Products, Goods, and Services

  1. Are we single-product focused with no alternatives? What would be the implications of additional products? Have we let go of obsolete but emotional lines of goods?
  2. Where do we make our money? Is our attention and focus in the right place?

Properties

  1. Are we using our intellectual capital database as well as we should? Is teamwork required of our people?
  2. Are we protecting and preserving our capital assets? Are we willing to invest money to make money with our facilities and equipment?

Payoffs

  1. Why should our customers buy from us? Have we made the connection to our customers worth their effort?
  2. Why should people work for us? Are we realistic about what it costs to court and retain labor? Are we willing to be top-of-the-line, or do we choose to be second string in matters such as benefits? Can we afford it?

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Term Of Business Forecasting

February 25th, 2011

Term Of Business Forecasting photoBusiness forecasting is not a pure science. It is more likely to be a matter of common sense, patience, research, and educated guessing than statistical analysis or higher mathematics. Consider the weather forecast: it’s one of the best forecasts available anywhere. Meteorologists study wind patterns, satellite pictures, air pressure, and years of past trends. Each forecast is based on careful analysis of what’s going on, why it’s going on, and why it might lead to something else tomorrow. If a storm is over the ocean and is headed toward the coast, then the probability of rain or sunshine is a professional guess, based on a wealth of knowledge, some good judgment, and common sense. Computers, satellites, and other tools increase the store of knowledge, but they can’t do it all alone.

The same general idea applies to many other good forecasts. Market researchers, stock brokers, and even political analysts base their guesses on huge volumes of carefully analyzed information. They might use computerized econometric or simulation models or complicated trends analysis. But even the most sophisticated computerized forecasting models do little more than pull equations out of the past and spread them into the future. This is a good way of considering alternatives and a valuable check on the thinking process. But there is still no substitute for consideration of trends and alternatives: the famous “what if” we hear so much about.

There are no magic forecasting methods that always work, let alone a computer program that will forecast by itself. The heart of forecasting is good guessing and the best guess is an educated guess. So use common sense, judgment and as much information as possible. Look at as many angles as you can and consider past trends, new developments, anticipated cycles, and anything else that gives you a hint of what is to come.

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