The Business Cycle Predicting Your Future Virginia Engineers Conference September 17, 2009.
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Transcript of The Business Cycle Predicting Your Future Virginia Engineers Conference September 17, 2009.
The Business Cycle Predicting Your Future
Virginia Engineers ConferenceSeptember 17, 2009
Copyright Materials
This presentation is protected by US and International Copyright laws. Reproduction,
distribution, display and use of the presentation without written permission of
the speaker is prohibited.
Learning Objectives1. Participants will learn and apply the “Power
of R” – developing specific offerings for every phase of the business cycle
2. Participants will learn how to leverage the business cycle for their competitive advantage
3. Participants will learn about the five components that comprise every organization
How do you predict your future?
Prediction Alternatives ?
Strategic planning has become an
administrative “rite” for many businesses
Prediction Alternatives ?
Adding 5%-10% to last year’s budget numbers
is another way to predict your future
Prediction Alternatives ?
Some businesses just “do it on the fly”
The Natural Business Cycle
RewardReinvest
Review
The Business Cycle Release
Research
Research Phase
Develop new offerings based on omissions or opportunities in
the marketplace
Research Phase
Characteristics of this phase include environmental, industry
and competitive analyses.
Research Phase
The definition of innovation is when your competitor becomes your customer
Referred to as the “market bet”
Release Phase
Substantial capital spent on advertising, websites, social networking and
“beta” customer trials
Release Phase
Firms that “re-start” their businesses every 2 years are caught in a non-viable offerings loop
Release Phase
Favorable phase for owners as customers and revenues are increasing exponentially
Reward Phase
Monies expended during the Release phase are recovered and cost of
sales drops dramatically
Reward Phase
The end of this phase is marked with shrinking profit margins, higher levels of re-work and increased customer scrutiny
Reward Phase
Free cash flow is reinvested into expansion activities
Reinvest Phase
Horizontal and Vertical acquisitions are common
during this phase
Reinvest Phase
Only have 12 months to complete reinvestment activities –
otherwise begin to short-change internal project initiatives
Reinvest Phase
What worked?
Research Phase
Exploit Your Competitor’s Cycle
Realize that your competitor is on a unique cycle that can be
exploited for your benefit
Exploit Your Competitor’s Cycle
During the Release period, it may be in your best interest to push counter-messages to market
Exploit Your Competitor’s Cycle
Even during the Reward phase, there is an opportunity to “beat” your competitor
Exploit Your Competitor’s Cycle
And, when you phase “mirrors” your competitor’s try the
“follow me” approach
Leverage Your Customer’s Cycle
And, no surprise, your customer has their own
business cycle!
Leverage Your Customer’s Cycle
This is where AIM comes into play
Leverage Your Customer’s Cycle
Assessments are quantitative studies that calculate the impact of certain actions or inactions
Leverage Your Customer’s Cycle
Implementation services are the core activities that your firm sells
Leverage Your Customer’s Cycle
Maintenance offerings provide long-term service care of implemented
solutions
Leverage Your Customer’s Cycle
For most of the phases, your customers have
some “monies” to invest in analysis and maintenance activities
Leverage Your Customer’s Cycle
The goal is to effectively time the Reward and Reinvest phases – as these are periods where customers have significant dollars to spend
Maximizing Your Future
The Corporate Component Model
EnvironmentStrategy
Operations
TechnologyOrganization
Those aspects that are not controllable by you but necessary
to operate your business
Environment
The objectives of your business inline with environmental and business cycle realities
Strategy
Create an optimal model to achieve your strategy - devoid of people and
technology
Operational Model
Automate the operational model with technology
Technology
Now, add the people back into the model – bringing the operation to life!
Organization
There has to be a desire to change
Change Management
1. Every business has a natural business cycle that predicts future operational characteristics;
2. This cycle can be exploited to “beat” competitors and leveraged to maximize customer value;
3. Once the cycle is predicted, use the corporate component model to build your business to achieve desired results
Key Points
