The McKinsey 7S Framework

How effectively does your business operate? Are some areas of your business pulling in different directions? The ‘McKinsey 7S Framework’ can help you to create an effective business.

In the late 1970s Thomas Peters and Robert Waterman at the Consulting firm McKinsey & Company developed what became known as the ‘McKinsey 7S Framework’.  The model was created to:

  1. Diagnose how organizations operate.
  2. Advise people on what particular elements of their organization they should change.
  3. Advise how any changes made should be aligned with one another.

The McKinsey 7S Framework

The model divides an organisation into seven areas or ‘elements’. There is no hierarchy of the elements because they […]

Porter’s Value Chain

If you want to increase your profits, Porter’s Value Chain can identify where your small business creates value.

In his book ‘Competitive Advantage’, Michael Porter proposed the Value Chain as a way of understanding that competitive advantage is not created by a business but by each of the distinct value adding activities that it performs in designing, producing, marketing, delivering and supporting a product.

The value chain is the sequence of activities that a business performs in order to create and deliver a valuable product.

The model considers each activity as having inputs, transformation processes and outputs. Resources are consumed by each activity as value […]

10 Tips for having difficult conversations

Are you avoiding a difficult conversation? It might be difficult because of the emotions involved or because you don’t feel in control or because you’re at risk of losing something.

Here are 10 tips to help make that difficult conversation a successful conversation.

1. Have a ‘game plan’

It’s a good idea to have a ‘game plan’ or framework for the conversation before you start. Without a plan you are likely to jump feet first into an accusation and force the other person into a defensive reaction. Setting the wrong tone at the beginning means you’ve lost before you’ve started.

The framework should look something […]

10 Reasons Why Small Business Projects Fail

Learn from the mistakes of others and you can save yourself some pain. However, if you have already been involved in business projects then you’ve probably also seen some of these hazards.

1. Objectives not clearly defined at the start

If you don’t know where you’re going, how will you know when you’ve arrived? Objectives need to be SMART – specific, measurable attainable, realistic and time-bound.

2. Overly optimistic planning

It is well recognised that project planners regularly overestimate benefits while underestimating costs and time to completion.

3. Lack of regular project monitoring

Even the best project plan is worthless unless the actual project performance is monitored against […]

Your Small Business Pricing Strategy

When was the last time you reviewed your pricing strategy? You put a lot of effort into making your business successful but get your pricing wrong and you can be missing profit on every sale!

Here are 16 ways that you could be pricing your product or service.

Pricing Strategy Matrix

The pricing strategy matrix shows four pricing strategies based on the relationship between price and perceived quality.

Pricing Strategy Matrix

1. Economy pricing

Costs are kept to a minimum and price is set as low as possible because there is no difference in the products […]

Managing Your Small Business Cash Flow

Cash flow is the life support system of your small business because every purchase your business has to make depends on it. How effective is your small business cash flow management?

Here are 8 keys for managing your cash flow.

Have Good Financial Systems

You need to know how much cash you have, where it has come from and where it has been going.

  • Reconcile your bank accounts regularly.
  • Have a disciplined approach to recording all expenditure.
  • Find out how to get useful reports out of your accounting software.

Have a Realistic Cash Flow Forecast

Develop a cash flow forecast based on historic payments and receipts that […]

Work Life Balance in Your Small Business

How is the work life balance in your small business? Do you own your small business or does your small business own you?

Here are 5 questions to help you judge whether you’re getting the balance right.

Question 1: Are you still in control?

Not being able to influence what happens to you is stressful but sometimes it’s just because you have handed over control.

  • Take responsibility and take control back.
  • Don’t firefight, manage your workload by planning ahead.
  • Use calendars, to-do lists and other work management tools so that you don’t have to take work home in your head.
  • Practice saying ‘no’.
  • Put healthy boundaries in place […]

SMART Goals for Small Business

Are your goals helping or hurting your small business? SMART is an acronym that stands for specific, measurable, attainable, relevant and time-bound. It is a simple but useful checklist that you can use to ensure your goals are fit for purpose.

SpecificSMART Goals

General goals only produce general results.  If you want specific results then make sure your goals are well defined.

Use the following questions to help define your goals.

  • Where?
  • When?
  • Why?
  • What?
  • Who?
  • How?’

Measurable

If your goals are not measurable how will you know if they have been achieved or not. For example, ‘we will improve quality’ is […]

Your Small Business Competitive Advantage

What makes your small business different from your competitors? Why should people buy your product or service instead of another?

Porter’s Generic Strategies

In his book ‘Competitive Advantage: Creating and Sustaining Superior Performance’, Michael Porter identified three strategies for gaining a competitive advantage over your competition. These strategies are ‘Cost Leadership’, ‘Differentiation’ and ‘Focus’.  Porter further split the ‘Focus’ strategy between ‘Cost Focus’ and ‘Differentiation Focus’.

Competitive Advantage - Porter's Generic Strategies

Cost Leadership

The Cost Leadership strategy is being the producer with the lowest costs in a market where competing products are indistinguishable. […]

Managing Risk in your Small Business

What are the largest risks to your small business? Do you have plans in place to reduce those risks?

Risk cannot be eliminated but it can be managed. The following tool is a way to record, prioritise and monitor individual risks so that you can reduce their impact on your business.

Tool for Managing Risk in a Small Business

Step 1: Identify risks

A risk is an uncertain event that if it happened would negatively affect your business.

Brainstorm across every aspect of your business to identify all significant risks. Consider both internal and external risks.

Step […]