by Elizabeth Hines | Jul 15, 2015 | Blog, Leadership, Strategy, Supply Chain
The sharing of tangible and intangible assets will increasingly become a fundamental feature of successful businesses.
Few developments of late are as intriguing as the rise and disruptive impact of the collaborative economy. In a very short time, services that we may have thought of as permanent fixtures of our business and personal lives have been rendered obsolete by the sudden sharing of tangible and intangible assets in the peer-to-peer, business to consumer (B2C), and business to business (B2B) spheres.
B&B and hostels, car rental, and DVD rental are giving way to peer-to-peer accommodations, car sharing, and music and video streaming. The Marriott Hotel chain used the online platform LiquidSpace to convert empty conference rooms into rentable work spaces for guests as well as outside visitors. Walgreens teamed up with TaskRabbit, an online marketplace for outsourcing errands, to deliver products during flu season. The list is endless.
Rachel Botsman, an innovation strategist who has spent the past four years studying 500 collaborative economy startups worldwide, concludes in Harvard Business Review:
The real power of the collaborative economy is that it can serve as a zoom lens, offering a transformative perspective on the social, environmental, and economic value that can be created from any of a number of assets in ways and on a scale that did not exist before. In that transformation lie threats—and great opportunities.
While consumer sharing may have received the most media attention, Robert Vaughan, an economist at PwC Strategy & Inc., argues the open sharing of resources among businesses may present an even larger opportunity. Although, on the surface, it seems like an unlikely marriage – businesses do compete, after all – a growing number of successful collaborations prove Vaughan is right.
He writes:
In just a few years of activity, it has become clear that the unfettered exchange of otherwise unused major assets, including physical space and industrial equipment, allows a sharing company to operate more efficiently than its non-sharing rivals. Companies that go further still, wholeheartedly embracing the sharing of less tangible assets, may benefit from a different sort of change, one involving their culture, that builds new types of connections with, and sensitivity to, the world outside.
One example of an interesting collaboration involves General Electric and Quirky, an online inventor community. GE and other market giants such as IBM and Samsung file thousands of patents every year, most of which never move beyond the drawing board. The collaboration gives Quirky open access to GE’s patents, allowing for products that normally would not have been put to productive use – such as a smartphone controlled window air conditioner – to be brought to market.
Sometimes a direct collaboration may not even be necessary. A company may choose to place an undeveloped product on an online technology exchange, thereby opening itself to the possibility of building a connection to another company with complimentary expertise.
In many respects, enterprise sharing is still in its infancy and is likely to evolve just like Airbnb, whose concept seemed “fringe” when it launched in 2008 (it was initially marketed as a service for people to stay the night on their air beds in strangers’ homes). Now the company has amassed more than 650,000 rooms in 192 countries and threatens to disrupt not only the hotel industry but the entire hospitality sector.
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.
Whether it is a wholesale food distributor seeking guidance on how to define and execute corporate strategy; a telematics firm needing high quality content on a consistent basis; a real estate firm looking for a marketing partner; or a supply chain firm in need of interim management, our clients rely on Fronetics to help them navigate through critical junctures, meet their toughest challenges, and take advantage of opportunities. We deliver high-impact results.
We advise and work with companies on their most critical issues and opportunities: strategy, marketing, organization, talent acquisition, performance management, and M&A support.
We have deep expertise and a proven track record in a broad range of industries including: supply chain, real estate, software, and logistics.
by Fronetics | Jul 1, 2015 | Blog, Leadership, Strategy
How to increase prices and retain customers
Companies raise prices all the time. There are various reasons, explanations, and results. Sometimes companies disclose the changes, but sometimes customers and clients never even catch wind of a change. Let’s have a look at the causes, the perception, and the actions to take.
Why?
Usually there’s an impetus for a company to raise prices. Perhaps there’s a business model already in place to raise future prices, but often a price increase is tied to another event. Here are some typical reasons:
Spike in raw material prices used in manufacturing products
Is there dearth of raw materials used to make the products your company is producing? Perhaps there’s a lack of access to the materials due to stalled transportation from inclement weather, natural disaster, drought, etc. Perhaps resources are dwindling or other roadblocks in the supply chain are driving up prices.
Services or products have become incredibly popular (value-based pricing)
Perhaps you realize that your services or products weren’t appropriately priced early on, and you’re realizing your product’s value in the market. You may also need to reduce demand for some time by increasing prices.
Unexpected change in business or a new tact
Perhaps you’ve lost business recently or your business strategy has changed and you need to cover costs by increasing prices. These changes can come with the opening of a new branch or factory, or the launch of new services or products.
Inflation and market trends
It would be nice to keep prices where they started 5, 10, or 20 years ago, but most businesses aren’t sustainable that way. As all prices of other goods and services rise, so too must yours.
Perception
As detailed in an article about the power or perception, behavioral economist Richard Thaler ran an experiment in which some study members were asked how much money they would give a friend to go buy beer at a “run-down grocery store”. Some study members were asked to get the alcohol at a “fancy hotel”. According to the article, “the fancy resort’s median price was 71% higher than the run-down store’s price.”
This might suggest that considering the perception of your product or services could be key to your next price adjustment. Considering what your current branding is, who your competitors are, and where you want to see your company could help shift your own perception of your company, and that of others. Aligning the two could be critical to successfully stewarding a price shift.
How?
It’s important thoroughly think through a price adjustment. Considering your own worth is important, but understanding that some clients and customers won’t be convinced can be a hard pill to swallow. To make the change more palatable, or even attractive, you should consider these options:
Consider the tactic (good-value pricing, value-added pricing)
Are you planning on going to offer any promotions or price discounts in the future? Are you going to attach value-added features and services to support the higher prices? Are you considering doing bundles packages? It’s important to answer theses questions so that you can communicate to clients and customers.
Consider timing
Have you recently increased prices? Does it feel too soon to do it again? You could risk loyalty from consumers and clients if price increases come back to back. However some believe that small increases frequently are better than large increases infrequently.
Are you implementing new, improved services or bundling new packages? An announcement tied to value increase or product change can be more comfortable for consumers and clients.
Make a solid announcement
Most people feel it is best to announce an increase, especially to current customers and channel partners, rather than try to hide the increase. People don’t want to feel fooled or ignored. They want transparency.
Understand that wording is critical
Being direct and confident in expressing the increase is the best tact. Remember that if you value your product and services, your customers and clients are more likely to as well.
Although you’re briefly sharing the reason for the increase, don’t feel the need to disclose sensitive financial information.
Lastly, provide clear timing on the changes and be sure that changes don’t violate any pre-existing agreements.
Although some customers and clients may bristle at an increase of prices, if you’ve been playing fairly and providing solid products and services, many loyal customers will come along for the ride. If you value yourself, and others value you, you can survive a price increase. You may even thrive from one.
Fronetics Strategic Advisors is a leading management consulting firm. Our firm works with companies to identify and execute strategies for growth and value creation.
Whether it is a wholesale food distributor seeking guidance on how to define and execute corporate strategy; a telematics firm needing high quality content on a consistent basis; a real estate firm looking for a marketing partner; or a supply chain firm in need of interim management, our clients rely on Fronetics to help them navigate through critical junctures, meet their toughest challenges, and take advantage of opportunities. We deliver high-impact results.
We advise and work with companies on their most critical issues and opportunities: strategy, marketing, organization, talent acquisition, performance management, and M&A support.
We have deep expertise and a proven track record in a broad range of industries including: supply chain, real estate, software, and logistics.
by Jennifer Hart Yim | May 20, 2015 | Blog, Manufacturing & Distribution, Strategy, Supply Chain, Warehousing & Materials Handling
This article is part of a series of articles written by MBA students and graduates from the University of New Hampshire Peter T. Paul College of Business and Economics.
David Chadwick is an MBA student at the University of New Hampshire with a background in retail store management and electrical engineering.
If technology continues to advance, humans may be obsolete in the supply chain as a result of both automation and RFID utilization. Both technologies have been introduced into the supply chain over the past decade, resulting in a major shift in performance and costs. While automation is a process which can navigate product throughout facilities, RFID can improve efficiency dramatically as well as being the major driver for the elimination of human involvement in the supply chain.
RFID (Radio Frequency Identification) is a form of extremely low-power data communication between a RFID scanner and an RFID tag. The tags are placed on any number of items, ranging from individual parts to shipping labels. The RFID tag itself consists of a microchip and antennae, usually without a battery to power it. The tags can be printed using special printers, which wirelessly load the identifying information to the tags. The information on the tags can be used for a wide variety of tasks. When an item goes through the RFID scanners, information is read from the tag, which could include any amount of information, such as:
- Order ID number
- Product bin location
- Order status
- Serial numbers for individual product components
- Location logs
The information is not limited to just holding ID and serial numbers. Since the information can be updated and transferred through any RFID receiver when in range, it can be joined with other software to update databases, send information online, and more. The amount of information that RFID can provide can be matched with order management systems to track shipment and stock locations automatically as the products move through warehouses and trucks. Powerful receivers can also track the exact location of products within a warehouse in real time, instead of relying on time and location logs to determine the location. This has been a major benefit to UPS, who’ve had RFID tracking chips in their warehouses for over ten years.
The largest problem facing supply chain management today is the potential for the occurrence of devastating errors. These errors could lead to trucks leaving product behind, not stocking to capacity, losing product, or delivering to the wrong locations. There are numerous reasons for such errors to occur, but the most common factor in their inception is human error. Much of the errors faced result from manual inspection and control over product flow in warehouses by humans. Many systems still operate using written data tables and checklists, which can be written incorrectly. Despite major advancements in technology over the past decade, the digital world is being sourced by analog supply chains. This is an aspect which RFID control can create beneficial change.
RFID can lead to completely autonomous warehouses and distribution centers. This can be seen in current warehouses with high levels of automation, where picking machines transport bins of product to a central sorting area to be boxed, before returning to their location. Zebra uses this technique to ensure product location accuracy as a means of reducing lost merchandise. Zebra places a great deal of importance on product visibility and transparency as well as accuracy in locations. Implementation of RFID into this system can ensure that both the correct product and the correct quantities of product are collected at both points, thereby eliminating errors seen in traditional analog supply networks. Coupled with the potential for self-driving trucks and the ever expanding internet of things in the cloud, product information can be tracked at all stages of shipment and storage, increasing accuracy, efficiency, and accountability. Where warehouses and receiving departments had to endure a certain amount of shrinkage of products in the past, a fully utilized RFID-enabled supply network can determine exactly where product is at all times, ensuring that theft is discovered immediately and enforced.
While the reduction of human interaction in the supply chain and warehouses in general can be eliminated with enough technology, it is uncertain to what degree this technology will be implemented in all aspects of supply chain management. While there are huge benefits to operating in such a system, the major negatives include high initial costs and restructuring costs associated with implementing this network into existing, analog networks. Humanity may not be completely removed from the supply chain in the future, but this technology, as well as more advanced techniques for automation, will increase the efficiency and reduce the costs required to operate these newer supply chains dramatically while significantly reducing errors and inefficiencies.
by Fronetics | Apr 21, 2015 | Blog, Leadership, Strategy
The inability to delegate effectively is a principal reason why executives fail. According to London Business School Professor John Hunt, only 30% of managers think that they are able to delegate well. Among these individuals only one-third are considered to be good delegators by their subordinates.
For many managers there is a fear of delegation – a fear of letting go and a fear of losing control. Others confuse delegation for giving away or passing off work, and therefore steer clear. On the other side are those individuals who delegate too easily; managers who delegate everything, but do so ineffectively setting everyone up for failure.
There are still others who have no idea when to delegate and/or how to approach the act of delegation.
Here are 10 steps to successful and effective delegation:
Know when to delegate. Use the 70% rule. Simply put, if the person is able to perform the task at least 70% as well as you are able to, you should delegate the task.
Also consider delegating tasks that you are not good at, tasks you don’t like, tasks that you would like others to learn, or tasks that others should learn.
Choose the right person. When delegating it is important that you choose the right person to whom to delegate. Don’t make the mistake of delegating to the person who has the most time available. Instead, delegate to the individual who has the skills and abilities to deliver.
Trust. Don’t second guess, don’t micro-manage, don’t become a backseat driver. Once you have delegated a task you need to trust that the individual will not only accomplish the task but also that they will do a good job.
Provide clear instructions. It is critical that you provide clear instructions on the task including your expectations, a timeline including the date due, and other details that are needed so that the individual has the information needed to succeed.
Provide the right tools. Make sure you provide the individual with the right tools to accomplish the task.
Delegate in responsibility and authority. Don’t just delegate the task, make sure that you delegate the responsibility and authority as well.
Answer questions. Do not delegate a task and then end all communication. Instead, make sure that you are available to answer questions or to clarify things as necessary.
Recognize that there is more than one way to accomplish a task. Don’t assume that how you would accomplish the task is the only way and/or is the right way. Once you delegate the task you need to support the individual and their approach to accomplishing the task.
Provide recognition. It is important to recognize the work accomplished. Provide public and written recognition.
Say thank you. Don’t forget to say thank you. Saying thank you is very powerful; however, it is often forgotten.
Delegating effectively is critical for business and for your sanity. Let it go.
by Fronetics | Apr 15, 2015 | Blog, Leadership, Strategy, Talent
You might be surprised to find currently untapped financial gains just by putting employee happiness at the top of your priority list.
The way we work has fundamentally changed. There’s no doubt it is still evolving, but what we know about the way we work is that it can no longer be summed up by the decades-old “going to work” experience. Company-owned buildings, offices, and cubicles are no longer required to accommodate employees and the growing trend of companies offering flexible scheduling and remote work options for employees has substantial implications. There’s good news in that these new employment structures are impacting employee satisfaction and productivity in ways that employees and employers alike can celebrate.
Of the most significant factors affecting employee satisfaction is the employee-manager relationship. Communication is essential for relationships to flourish – especially employee-manager relationships. A recent Gallup poll found that employee engagement was highest among those with daily communication with their managers. By leveraging digital communication tools, employees who work remotely are able to have just as much, if not more, interaction with supervisors. Consistent, regular access to management creates a culture of connectedness and accountability – a culture where employee satisfaction is high. Not only does this allow for nimble adaptations in project approach or client strategy, but the immediate feedback loop positively affects employee engagement and motivation. The emergence of this unique employee-manager structure has allowed for managers to effectively monitor work and provide meaningful feedback, but to avoid micromanagement.
The most effective managers have been shown to be the ones who have respect for their employees as individuals. These managers actively work to help their employees find an ideal work-life balance. Recognizing and responding accordingly to situations where employees are disengaged, either physically or emotionally, from their work responsibilities is at the heart of building a relationship of trust and conviction.
Even though remote work arrangements seem to run counterintuitive to expanding the capacity of workplace productivity, giving employees the flexibility to fit work around their life actually improves worker productivity. The effects of building a company culture where employee satisfaction is valued translates into increased efficiency. That is, a happy and well-managed staff is likely to stay engaged, motivated, and committed to company objectives.
The flexibility that working remotely provides makes it easier for workers to strike their ideal work-life balance. A significant finding emerged from a 2000 study in which researchers found that on average workers reached peak productivity in their 30s and 40s. Most often concurrently, these same workers are tasked in their home lives with parenting responsibilities and the care of aging parents. Giving employees options to maintain flexible work schedules allows employees to give equal attention to both home and work life, enabling maximum productivity. What’s more, by eliminating commute time and spending less time in meetings, people who work from home actually spend more time working. Some find managing work responsibilities from a quieter environment, as opposed to a noisy office, more conducive to productivity.
Presented with all the benefits flexible scheduling and remote work options have to offer, some companies might find it tempting to quickly implement a flexible work program in order to start realizing benefits. But consider that this new work structuring also brings with it a new set of issues for managers to navigate. Supervising employees who aren’t location-specific and monitoring performance without personally interfacing require companies to put thoughtful initial focus on building a solid communication structure and setting manageable expectations for employees. Clear articulation of these expectations and structures is required for success.
While this type of work structuring might not be a good match for every employee or every workplace, the opportunity exists for employers to positively affect worker happiness while simultaneously increasing productivity. If your company is interested in exploring the benefits of offering flexible scheduling and remote workplaces, consider a trial period or experimental program. You might be surprised to find currently untapped financial gains just by putting employee happiness at the top of your priority list.
