management control archivos - Fenix Asesores y Consultores PyME

Post author By Alvaro Flores
Post date March 7, 2021
Sticky post

How to model our business idea

We usually hear in business meetings that we must prepare the “business plan” for the quarter, semester or year. It is heard as something known and processed, but in practice and with the dynamics of current times, this guideline or north that should guide the work of sales is often forgotten because it is elaborated in a complex way.

The business plan must be simple to review and control and totally transversal not only to the sales people, but to the whole company so that there is an integral culture towards the customer.

What elements should be included in this plan?

The most important is the determination of the real added value that the final customer receives from our services or products, what is/are the critical variable(s) that differentiate me from the competition and make what I offer attractive to the consumer?

This aspect, together with eight additional parameters, makes it very simple and easy to explain to the entire company what makes us so special.

CANVAS

There is a methodology that we always suggest to address this issue called Canvas as a tool for planning, analysis, study and presentation of Business Model. It was developed in 2011 by Alexander Osterwalder and Yves Pigneur in the book Business Model Generation, where they analyze the different types of models and which one is best to use in each case. This philosophy simplifies the business into 4 major areas: customers, supply, infrastructure and economic viability in a box with 9 divisions.

The way to fill these tables is with an open participation of the direct members and sometimes with some indirect ones that bring balance to the answers. Each person responds to what he/she believes is consulted in each table in a personal way on a sheet that is then handed to the person who directs the process and that is added to everyone’s answers. Along with this comes a dialogue of argumentation as to why each answer is thought to have merit.

Team participation enriches the vision and the construction of the Business Plan.

It is precisely this dialogue that is most valuable of all, because there are pictures that are very simple, but others in which totally opposite positions can be determined that end up answering concerns as to why certain strategies have not worked in the past. This is because the arguments that sales people make may be unexpectedly different from anything that is promulgated as a company ideal.

The clearest example of this is in the added value that we think our services or products have, here we usually hear arguments related to higher or lower price, better service, quality, response time, etc. when in practice management has sent signals in another direction.

Model Review Period

By generating these charts from which you can get some very famous ones on the internet about netflix or airbnb for example, variables have appeared that indicate that we should have more than one canvas board because there are services or products that have different characteristics and it could have happened that we have only one message for the whole portfolio. For this reason, and according to the dynamics of market rotation in which we are, it is suggested to perform this vision at least once a year to see if our value to the customer still applies or if it should be improved or adapted in form and substance.

You must first ask yourself who are your customers? It seems simple but clearly it is not, you must segment. You need to be clear about the relationship and the channels you will use with them, what will be the added value to deliver, what activities and resources you will need to deliver this value, what alliances you should count on for this and of course how much it will cost and how you will have the income. All this is a single table or chart in a simple, self-explanatory and measurable way.

You need advice or accompaniment

Online courses for Businessmen, Entrepreneurs and Professionals

In Chile, 80% of the companies are family-owned, a scenario that presents several administrative and management shortcomings, which can be addressed by creating corporate structures that allow the business to be projected over time.

In general terms, a “family-managed company” is one in which at least 50% of the senior executives are from the same family group. INE data indicate that today there are around 750,000 companies in Chile, and of these, according to studies by the Business School of the Universidad de los Andes, around 80% are family businesses.

This is not minor if we take into account that, at market level, it is considered that a company loses value if more than two thirds of the executives are family members -mainly because of the potential for conflict- and that, according to the Association of Family Businesses (AEF), 85% of these companies do not survive to the third generation, with an average duration of 8 years of existence.

ROLE CROSSOVER AND LACK OF MEASUREMENT

“These companies face, first, a growth crisis, and then a management crisis”, this would be generated, among other reasons, by administrative failures of managers and/or owners, invasion of roles or members unsuitable for the positions, lack of protocols, irregular financial and communicational flows.

In this scenario, one of the greatest shortcomings may come from the leader, who, bypassing middle management, intervenes in the areas of competence of other members. “This is harmful, because it avoids the structure of people through which you could transfer decisions, and at the same time, measure their efficiency”, it also happens that the founder is the one who “has the business in his head”, not having created a system to transfer that knowledge, a scenario that can complicate the family succession of the business.

Another present problem is related to people in positions merely because of family connection, instead of knowledge, “who try to make up for what they don’t know, with authority; thus, those who really know see that there is no merit in the processes”, adds the engineer. Unfortunately, in these situations, there is often no intervention, either for emotional reasons or because of a lack of effective measurement of the work to support a removal.

In terms of financial diagnostics, he warns that audits often uncover what he calls “Bowling Pin Syndrome”, a common phenomenon characterized by unclear accounting information and/or erratic cash flows, something that usually goes unnoticed “because the owner feels that the business has been doing well”, but which may be generating large losses.

BUSINESS BLINDAGE or ORGANIZATIONAL MANAGEMENT

At the corporate level, the professionalization of an organization is not merely the academic improvement of its members: it is to make it visible, optimize it and standardize its operation through a clear and assessable corporate structure, thus generating a “shield”,

to consolidate its position in the market as well as to face its ups and downs. Something that can be complex to achieve in a space where things have often been put together on the fly.

This requires a company accompaniment – developed by external advisors – characterized, in the first instance, by the creation of management committees, which will define rules, procedures, roles and authorities, and regularize the provision of information for decision making. “The objectives must be clear, nothing can be left to interpretation,” he says, adding that an alignment of senior management, with commitment and a strategic outlook, is fundamental to the success of this.

“In Chile, it usually happens that when companies go bankrupt, especially medium-sized ones, they do so because of cash flow problems”, stressing that a restructuring of the financial administration may be required, consciously analyzing the suitability of the roles, not only in this area, but at a general level, since “the neural network of the company is sometimes different from the network of authority and you have to be able to identify who is who, to make the most of human capital and see where the elements that give meaning to the process are”.

In this sense, it is vital to measure the performance of each of the parts of the gearbox. “Progressively each member should be advised that they will begin to be evaluated. Methods and goals are established, and the person will have to start performing. If he or she doesn’t, there is an objective argument for moving him or her; in addition, a signal of transparency will be given to the rest of the organization.”

However, it is asserted that success in the process stems from the ability to visualize the value of the process. “There are people whose business is so good, that they won’t make the effort to become more efficient, because they like the familiar. And no matter how much they are told that such a person is a ‘disaster,’ they won’t take him out.”

LONG-LASTING

It should be clear that the experiences of professionalization counseling vary from case to case, and according to the specific needs, although all of them require long-term and, in the first stage, intangible work. Depending on the organization of the company, after approximately 6 to 18 months, the necessary radical changes begin to be identified: who is really useful, who has potential, as well as who and what no longer worked”. However, contrary to what one might think, in the expert’s opinion, these are very simple stages that begin with the loyalty of the information. “When you have the appropriate information, you start with one area, normally administration and finance, which is the one that summarizes everything, then you combine it with the commercial area, with the logistics area, and in the end you make the whole unit work together in a great delivery of regular and stable information. And with that you can make key decisions to give projection to the company”.