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Executive Education
The 24 golden rules to organize a business that works
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Executive Education
A one-day seminar for managers
Experienced managers apply a limited number of rules to run a business unit
These favorite business rules have costs and benefits
This workshop will permit participants to select the right rules to apply in their particular situation
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Executive Education
What’s a business unit
Making and selling things to a market for
a profit
Applicable to • A public or a private
organization• An internal unit or an
external unit
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Executive Education
The four categories of rules
Strategy rules to thrive on competition
Marketing rules for customer satisfaction, for volumes and quality
Operations rules for costs and productivity management, for delegation to human or technical resources
Control rules for financial profit and brand building
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Executive Education
The rules, step-by-stepProtect the profit from the start• Write the local strategic plan
Place the customer first• Write the local marketing plan
Organize the work for a target quality• Describe the projects and the
processes• Make the personnel aware of
their responsibilities
Increase sales• Write the management
plan
Decrease costs• Simplify the unit• Adapt the unit
Control everything• Create the unit’s
scoreboard• Reorganize the internal
accounts of the unit
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Executive Education
The list of rules
•B-rules, rules of thumb, executive automatic intelligence, quick fixes…
A bunch of names
•Business is not that simple
•If you are a genius, forget them and follow your guts
•It’s a starting point, you will outperform them soon
Don’t forget
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Executive Education
Debate for each rule
What are the benefits ?
What are the costs and limitations ?
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Executive Education
Step 1.
THE STRATEGY RULES
To thrive on competition
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Executive Education
Select a clear strategy
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Executive Education
The business rule
Make a clear choice on what’s your competitive advantage
• Operational excellence, low cost• Marketing and customer
orientation• Innovation, high tech, luxury
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Executive Education
Improve your “Sales From New” performance indicator
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Executive Education
The business rule
Set a clear target for sales revenues from
• New customers• New products• New channels• New technology• New suppliers• New partnership, alliances
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Executive Education
Follow a strict process to collect ideas for innovation
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Executive Education
The business rule
A strict process to ask for ideas to
• Suppliers• Customers• Employees• Competitors
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Executive Education
Always compare to the best
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Executive Education
The business rules
Organize internal and external
benchmarking
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Executive Education
Steal a good idea to a competitor
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Executive Education
The business rule
Steal a good idea to a
competitor
Improve the product
Outperform the
competitor
• By investing more cash
• By more marketing
• By more forces in sales
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Executive Education
Step 2.
THE MARKETING RULES
For customer satisfaction, for volumes and for quality
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Executive Education
Sell first, produce after
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Executive Education
The business rule
Demo first, contract second, code line after
• Ask for bigger down payment, for delivery delay
• Build to order• Just-in-time production• Produce only what’s already sold
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Executive Education
Producing with customers’ money ?
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Executive Education
Producing with the money of the customer
Books Building
Transportation: bigger or smaller plane depending
on booking
Events: cancellation for
low booking
Furniture, computers: build
to order
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Executive Education
Frontalize the company, subcontract operations
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Executive Education
The business rule
Turn a technicians business into a marketing business
•Delegate, subcontract operations
•All employees should sell
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Executive Education
Measure constantly the Customer Satisfaction Index
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Executive Education
The business rule
Measure the Customer Satisfaction Index on an on-going basis, per customer segment, on selected product specifications
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Executive Education
Organize internal customership
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Executive Education
Step 3.
THE OPERATIONS RULES
For costs and productivityFor delegation to human or technical
resources
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Executive Education
Give more to the best and less to the worst
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Executive Education
The business rule
Regularly: quarterly
Give more: budget,
responsibilities,..
To the best: employees,
activities
And less: budget,
responsibilities,…
To the worst: employees,
activities
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Executive Education
Each year abandon 5 % of your less profitable suppliers, customers,
employees or activities
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Executive Education
The business rules
Businesses are build case per case and their complexity increases with years. Simplify it
regularly
Analyze the return per customer, employee,..
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Executive Education
Allow no activities outside a project or a process
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Executive Education
The business rule
Projects and processes are customer-oriented
Projects and processes are easy to delegate and control with the
project and the process master document
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Executive Education
Constantly reduce costs per automation, per delocalization and
per subcontracting
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Executive Education
The business rule
For cost leadership on competitors
•Automate•Sub-contract•Delocalize
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Executive Education
Different methods
Abandon the less profitable activities
Decrease suppliers bills by
centralization, negotiation,…
Collecting the employees
suggestions to reduce the costs
Subcontract activities
Turn activities into procedures
Sign partnerships for economy of
scale
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Executive Education
Measure the sales activities
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Executive Education
The business rule
Measure and pay people on sales
activities
Increase the Time Facing Customer
performance indicator
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Executive Education
Variabilize and flexibilize all costs and assets
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Executive Education
The business rule
Match your flexibility with the market
flexibility
• People flexibility• Machine flexibility• Contracts flexibility• Suppliers flexibility
Increase the versatility of your
pricing policy
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Executive Education
Optimize your Resources Occupation Rates
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Executive Education
The business rule
Calculate the capacities
• Maximal• Minimal• Optimal
Of all your resources
• Employees• Machines• Floors
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Executive Education
Organize a flat structure, downsize middle management
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Executive Education
The business rule
Delayer the business to be more reactive
Middle managers are less useful• First line manager are self
managing by clear accountability
• Reporting is automated
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Executive Education
Improve your indicator “Gains From Processing”
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Executive Education
The business rule
Start an activity as a project to check the feasibility to reach a
quality objective
Turn the project into a process to reduce the costs and delays at stable quality level
Streamline the process regularly
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Executive Education
Organize the leadership
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Executive Education
The business rule
People need directions, vision,
… select only a few KPIs
Place your scoreboard in their
sight
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Executive Education
Measure the Employee Satisfaction Index
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Executive Education
The business rule
Satisfied employees are more productive
Measure regularly a critical satisfaction
factors with a selected category of employees.
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Executive Education
Step 4.
THE CONTROL RULES
For financial profit and brand building
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Executive Education
Measure everything
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Executive Education
The business rule
No crime to knowAim for a fully
transparent unit, project…
Modern ERPs provide
information at no additional costs
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Executive Education
Finance all investments with the gains from abandoned activities
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Executive Education
The business rule
Finance all new activities with the gains from
abandoned old activities, for at least
50 %
Avoid stretching your cash. Its easier to engage
a new activity than to stop an old activity
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Executive Education
Improve your indicator Return on Critical Resources
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Executive Education
The business rule
What’s your most critical resource, asset
• Equipment ?• People ?• Brand ?• Technology ?
What’s its
• Return ? • Occupation rate? • Productivity ?
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Executive Education
The business rule
Calculate the return
• Per project• Per process• Per customer segment• Per distribution channel
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Executive Education
Protect your profit from the start, buy low
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Executive Education
The business rule
Make your profit when you buy, when you are strong, not when you
sell, when you are weak
Constantly try to reduce all suppliers bills and COGS : work hours,
energy…
Supply with the cheapest way : rent or
make or buy
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Executive Education
Stop allocating budgets, ask managers for their business plans
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Executive Education
The business rule
Start with zero budgeting
Roll your budgets quarterly
Ask managers if they need more and what return they promise if they get that
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Executive Education
Create smaller responsibility centers
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Executive Education
The business rule
Each team should produce a valuable, merchandisable, tangible product or service, internally or externally
Turn cost centers into profit centers with the internal customership method
Reduce the size of the profit centers
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Executive Education
Conclusions
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Executive Education
Take home point
You can do better with a simple
discipline, applying some rules
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Executive Education
Do not forget
All those rules are common sense and
business proved, but business is not so
simple
Be selective, some rules do not apply to your current situation
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Executive Education
Thanks for your patience with me
See you on LinkedIn