001

Table of Contents
 
Title Page
Copyright Page
Dedication
Foreword
Introduction
Acknowledgements
 
CHAPTER 1 - BUSINESS PLANNING
 
TRADITIONAL APPROACH TO STRATEGIC IMPLEMENTATION AND BUSINESS PLANNING
THE PLANNING CYCLE
UNDERSTANDING THE PRODUCT/SERVICE
TYPICAL BUSINESS PLAN CONTENTS
PRODUCING THE BUSINESS PLAN
CHECK ON BUSINESS PLAN FEASIBILITY
FACTORS INFLUENCING COMPETITIVE SUCCESS
 
CHAPTER 2 - CHANGE MANAGEMENT
 
PATTERNS OF STRATEGIC CHANGE
STRATEGIC DRIFT
TWO EXTREMES OF MANAGING CHANGE
THE CHANGE CURVE (OR LOSS TRANSITION CURVE)
MANAGEMENT OF CHANGE WITHIN AN ORGANIZATION
MANAGEMENT OF CHANGE - CHANGES IN SELF-ESTEEM DURING TRANSITION
CHANGE AND SECURITY
CHANGE PYRAMID
VECTORS OF CHANGE MANAGEMENT
SKILLS MANAGERS NEED FOR HANDLING CHANGE
FOUR CHANGE OPTIONS FOR INDIVIDUALS
RESISTANCE TO CHANGE - LESSONS FROM HISTORY
PLANNING ORGANIZATIONAL CHANGE
MANAGING RESISTANCE TO CHANGE
CONSIDERATION OF CHANGE STRATEGIES
SIX APPROACHES TO DEALING WITH RESISTANCE
A BUSINESS TURNAROUND MODEL
CHOICE OF CHANGE STRATEGIES
ERRORS IN COPING WITH CHANGE AND CONFLICT
ASSESSING READINESS TO CHANGE
FOUR TYPES OF CHANGE ʹJOURNEYSʹ
FOUR KEY CHANGE COMPONENTS
THE EVOLUTION AND REVOLUTION CURVE
KEY ACTIVITIES FOR SUCCESSFUL IMPLEMENTATION
FORCE-FIELD ANALYSIS
CATEGORIES OF RESISTANCE BEHAVIOUR
REACTIONS TO CHANGE
 
CHAPTER 3 - CUSTOMER RELATIONSHIP MANAGEMENT
 
A CUSTOMER-FOCUSED ORGANIZATION
CUSTOMER DESIRES
THE POWER OF EXISTING CUSTOMERS
THE SERVICE/PROFIT CHAIN
OBSERVING CUSTOMER BEHAVIOUR
CUSTOMER INTERACTION
LISTENING TO CUSTOMERS
CUSTOMER CARE TRAINING
COMMUNICATIONS WITH STAKEHOLDERS
CUSTOMER BEHAVIOUR
INTEGRATED CUSTOMER RELATIONSHIP MANAGEMENT
PARETO ANALYSIS
 
CHAPTER 4 - DECISION MAKING AND PROBLEM RESOLUTION
 
DECISION MAKING, PROBLEM SOLVING AND CONTINGENCY PLANNING
STEPS IN PROBLEM ANALYSIS AND DECISION MAKING
TRADITIONAL FOUR STEP MODEL TO PROBLEM SOLVING
PROBLEM SOLVING PROCESS FROM INDUSTRIAL MANAGEMENT/WORK STUDY
CAUSE AND EFFECT (FISHBONE) DIAGRAM
RELATIONSHIP BETWEEN INNOVATION AND CREATIVITY
MODELS OF DECISION MAKING: TYPES OF UNCERTAINTY
DECISION-MAKING PRESSURES ON THE MANAGER
DECISION MAKING - BERNHARD-WALSH MODEL
CONTINUOUS IMPROVEMENT METHODS - THE 4M CHECKLIST
DECISION-MAKING STYLES
CONTINUOUS IMPROVEMENT METHODS
CONTINUOUS IMPROVEMENT METHODS
NATURE OF KNOWLEDGE
FINDING AND ANALYSING PROBLEMS IN AN INNOVATIVE SYSTEM
MANAGING INNOVATION
FACTORS THAT UNDERPIN A FIRMʹS ABILITY TO RECOGNIZE THE POTENTIAL OF AN INNOVATION
ROADBLOCKS TO ADOPTING AN INNOVATION
INNOVATION MANAGEMENT MATRIX
CREATIVITY IN STRATEGY
CREATIVE THINKING - ‘MIND MAPPINGʹ
DISCOVERY
INNOVATION
IMPLEMENTING NEW IDEAS
TEORIYA RESHENIYA IZOBREATATELSKIKH ZADATCH - ‘TRIZ’
A LIST OF WAYS TO IMPROVE SOMETHING
THE FIVE PRINCIPLES OF LEAN THINKING
CREATIVITY ASSESSMENT GRID
 
CHAPTER 5 - FINANCIAL MANAGEMENT
 
ACCOUNTING AND FINANCE
SIMPLE ECONOMIC MODELS
CAPITAL INVESTMENT DECISION PROCESS
UNDERSTANDING THE PRODUCT/ SERVICE - STRATEGIC FOCUS MODEL
CONTRACT CASH FLOW PROJECTION - MILESTONE MANAGEMENT
FINANCIAL RATIO ANALYSIS
APPROACHES TO COST REDUCTION
 
CHAPTER 6 - INTERNATIONAL MANAGEMENT
 
THE DEVELOPMENT OF INTERNATIONAL BUSINESS
KEY INFLUENCES ON INITIAL INTERNATIONAL INVOLVEMENT
DIFFERENT WAYS OF BEING GLOBAL
REASONS FOR FOREIGN DIRECT INVESTMENT
INTERNATIONAL ENTRY STRATEGIES
RISK CONSIDERATIONS OF INTERNATIONAL BUSINESS
DEVELOPMENT OF INTERNATIONAL ADVERTISING OBJECTIVES
GLOBAL STRATEGY AND INDUSTRY STRUCTURE
INFLUENCE OF INTERNATIONAL CULTURE ON TASK PERFORMANCE
EXPORT MARKETS - DEMAND AND OPPORTUNITIES
 
CHAPTER 7 - MARKETING MANAGEMENT
 
STEPS TO THE PRODUCTION OF A MARKETING STRATEGY
NATURE OF DEMAND
STAKEHOLDER MAPPING: THE POWER/INTEREST MATRIX
MARKETING INFORMATION SYSTEM
PRODUCT - MARKET GROWTH STRATEGIES
STRATEGY DEVELOPMENT DIRECTIONS
PESTLE
MARKETING COMMUNICATIONS
APPROACHES TO PROMOTION
THE MARKETING STRATEGY
THE ‘MARKETING MIX’
USING THE ‘MARKETING MIX’ TO MATCH CUSTOMER NEEDS
DEVELOPMENT OF THE MARKETING STRATEGY (1)
DEVELOPMENT OF THE MARKETING STRATEGY (2)
PRODUCT LIFE CYCLE
UNDERSTANDING PRICE
COMPETITION
ESTABLISHING A PRODUCT/MARKETING MATRIX
SEGMENTING CUSTOMER MARKETS
PRODUCT PERFORMANCE ANALYSIS
INTERNATIONAL MARKET STRATEGY
MARKET ANALYSIS PROCESS - OVERVIEW
BUSINESS INTELLIGENCE FROM MARKET RESEARCH
 
CHAPTER 8 - ORGANIZATIONAL DEVELOPMENT
 
THE BASIC MANAGEMENT ORGANIZATION
SYSTEMS THEORY
ELEMENTS OF AN ORGANIZATION
TRADITIONAL (AND EXPANDED MODEL OF) IDENTIFIED MANAGEMENT FUNCTIONS
LINKAGE BETWEEN HR AND ORGANIZATIONAL DEVELOPMENT
UNDERSTANDING ORGANIZATIONAL ACTORS
INFLUENCES ON ORGANIZATIONAL CULTURE
ELEMENTS OF CULTURE
KNOWLEDGE MANAGEMENT
THE PERFORMANCE MANAGEMENT PROCESS
HUMAN RESOURCES STRATEGY - ʹCOPSʹ
 
CHAPTER 9 - PEOPLE-FOCUSED PERFORMANCE MANAGEMENT
 
A MODEL OF HUMAN RELATIONS
INDIVIDUAL LEARNING
SELF-MANAGED LEARNING
ACHIEVEMENT OBJECTIVE
ACTION-CENTRED LEADERSHIP
COACHING AND MENTORING
HUMAN RESOURCE PLANNING PROCESS
CORE SKILLS FOR PERFORMANCE MANAGEMENT
EMPOWERMENT
TYPICAL PERFORMANCE MANAGEMENT PROCESS
CONTINUUM OF LEADERSHIP STYLES
THE BASIC MOTIVATIONAL MODEL
UNDERSTANDING CONFLICT - FIVE LAYERS
MODEL OF CONFLICT BEHAVIOUR
THE ALIGNMENT MODEL
MOTIVATION
NEEDS AND EXPECTATIONS OF PEOPLE AT WORK
CULTURE AND PERFORMANCE
MUTUAL OBJECTIVE SETTING AND PERFORMANCE MANAGEMENT
COMMUNICATIONS
MASLOW’S HIERARCHY OF NEEDS - MOTIVATION MODEL
ANOTHER MOTIVATION MODEL - HERZBERG’S TWO-FACTOR THEORY
THEORY X AND THEORY Y - DOUGLAS MCGREGOR
REVIEWING COMMUNICATION EFFECTIVENESS
TYPES OF STAFF
COMPETENCIES
THE JOHARI WINDOW
TEAMWORK AND LEADERSHIP
THE TEAM LIFE CYCLE
STRESS MANAGEMENT
THE LEADERSHIP GRID
GIVING AND RECEIVING FEEDBACK
TRUST
OBJECTIVE SETTING
 
CHAPTER 10 - PROCESS IMPROVEMENT
 
THE RE-ENGINEERING SPECTRUM
BUSINESS PROCESS RE-ENGINEERING STAGES
PROCESS MAPPING
PROCESS IMPROVEMENT
STAGES IN THE RE-ENGINEERING PROCESS
STAGES IN BENCHMARKING
EFQM EXCELLENCE MODEL
 
CHAPTER 11 - PRODUCT MANAGEMENT
 
THE TECHNOLOGICAL LIFE CYCLE
MANAGEMENT OF DESIGN
LEAN THINKING - WASTE
EMBODIMENT AND DESIGN
OPERATING EFFICIENCY: CYCLE OF PRODUCTION
SEVEN WASTES
VALUE ANALYSIS
PRODUCT LIFE CYCLE COMBINED MATRIX
LEAN PRODUCTION
 
CHAPTER 12 - PROJECT MANAGEMENT
 
TRADITIONAL PROJECT MANAGEMENT VARIABLES
PROJECT MANAGEMENT PARAMETERS AND BENEFITS
PRINCIPLES OF PROJECT PLANNING AND MANAGEMENT
PROJECT PLANNING CHARTS
TIME AND COST RELATIONSHIP
PROJECT MANAGEMENT - PROJECT ACCOUNTING TERMINOLOGY
MONITORING AND CONTROL PROCEDURE
THE LIFE CYCLE OF A PROJECT
THE PROJECT AS A CONVERSION PROCESS
PROJECT CASH FLOW PROFILE
NETWORK ANALYSIS
NETWORK NOTATION
NETWORK LOGIC
PROJECT PLANNING NETWORKS
CONTROLLING THE PROGRAMME - CLOSED LOOP FEEDBACK SYSTEM
CONFLICTING FACTORS IN PROJECT RESOURCE SCHEDULING
PRINCE ® AND PROJECT ORGANIZATION
 
CHAPTER 13 - QUALITY MANAGEMENT
 
DEMING CYCLE
KEY ELEMENTS IN THE CONCEPT OF QUALITY
QUALITY AND PROFIT - THE PRICE PERFORMANCE GRAPH
QUALITY AND PROFIT - BALANCING OPERATIONAL AND STRATEGIC EFFECTIVENESS
DEMING’S 14 POINT LIST
CONTINUOUS IMPROVEMENT
PERFORMANCE DETERIORATION
FOUR LEVELS OF QUALITY
THE QUALITY IMPROVEMENT PROCESS MODEL
THE QUALITY IMPROVEMENT PROCESS MODEL, QUADRANT 1 DETAILS: IDENTIFICATION
THE QUALITY IMPROVEMENT PROCESS MODEL, QUADRANT 2 DETAILS: ANALYSIS
THE QUALITY IMPROVEMENT PROCESS MODEL, QUADRANT 3 DETAILS: IMPLEMENTATION
THE QUALITY IMPROVEMENT PROCESS MODEL, QUADRANT 4 DETAILS: EVALUATION
EFQM THE EXCELLENCE MODEL
 
CHAPTER 14 - RISK MANAGEMENT
 
RISK MANAGEMENT - THE TRIPLE DEFINITION
CONSEQUENCES OF FAILING TO MANAGE RISK
RISK MANAGEMENT
RISK MANAGEMENT AS PART OF CONSTRUCTION PRIME CONTRACTING
THE STAGES OF RISK ANALYSIS AND MANAGEMENT
INTEGRATING RISK MANAGEMENT WITH OTHER PROJECT MANAGEMENT FUNCTIONS
RISKS ON CONTRACT CONSIDERATIONS
BALANCING RISK AND CONTROL
BUSINESS CONTINUITY PLANNING
PROBABILITY VERSUS IMPACT
RESPONSE TO RISK
CONSIDERING RISKS FOR CONTRACT SELECTION
 
CHAPTER 15 - STRATEGIC MANAGEMENT
 
INTER-RELATED STRATEGIES
A SUMMARY MODEL OF THE ELEMENTS OF STRATEGIC MANAGEMENT
THE FAMILY OF PLANS
SWOT ANALYSIS
SWOT ANALYSIS - POTENTIAL FEATURES
PORTERʹS ʹDIAMONDʹ THEORY
A MODEL FOR STRATEGIC ANALYSIS
STRATEGIC MANAGEMENT AND ENVIRONMENTAL PRESSURES
UNDERSTANDING THE LEVELS OF STRATEGY
STRATEGY FORMULATION PROCESS
7S FRAMEWORK (SOMETIMES CALLED MCKINSEY 7S MODEL)
IMPLEMENTING STRATEGY - KEY FORCES
IMPLEMENTING STRATEGY - A WORKING MODEL
THE LINK BETWEEN STRATEGY AND PLANNING
A PERSPECTIVE ON BUSINESS STRATEGY AND HR STRATEGY INTERDEPENDENCE
MOTIVES FOR GOING ʹGREEN ʹ
 
CHAPTER 16 - SUPPLY CHAIN MANAGEMENT
 
A SUMMARY MODEL OF THE ELEMENTS OF SUPPLY CHAIN MANAGEMENT
ADVERSARIAL VERSUS PARTNERSHIP APPROACHES
RISKS AND SUPPLY CHAIN MANAGEMENT
ENVIRONMENTAL FRAMEWORK FOR THE SUPPLY CHAIN
FACTORS ON THE DESIGN OF A LOGISTICS SYSTEM
SUPPLIER/BUYER RELATIONSHIP
STOCK ORDERING STRATEGY
VARIATION OF COST WITH ORDER SIZE
TYPES OF STOCK
JUST IN CASE STOCK
SUPPLY CHAIN ANALYSIS
TYPICAL RESULTS OF A SUPPLIER REALIGNMENT PROCESS
SUPPLY AND DEMAND MISALIGNMENT
INPUTS INTO MASTER PRODUCTION SCHEDULE
SUPPLY CHAIN POSITIONING MATRIX
MATERIAL REQUIREMENTS PLANNING
STAGES IN THE BUYER/SUPPLIER RELATIONSHIP LIFE CYCLE
THE PURCHASING CYCLE
MODEL OF COLLABORATIVE WORKING/ PARTNERING COMPONENTS
‘Above ground’ components
MODEL OF PARTNERING IN ACTION
ELEMENTS OF A PURCHASING ORGANIZATION FOR A CAPITAL PROJECT
 
CHAPTER 17 - TIME MANAGEMENT
 
‘TIME STEALERS’
MAKING TIME: IMPORTANCE VERSUS URGENCY
 
CHAPTER 18 - UNDERTAKING RESEARCH
 
TYPICAL RESEARCH PROCESS
SELECTION OF RESEARCH STRATEGIES
SOURCES OF EVIDENCE
SELECTING THE RESEARCH APPROACH
SELECTING THE RESEARCH STRATEGY
METHODOLOGICAL TRIANGULATION
RESEARCH CONSIDERATIONS
 
CHAPTER 19 - WORKING AS A MANAGEMENT CONSULTANT
 
SEVEN C CONSULTING PROCESS
THE ROLE OF THE MANAGEMENT CONSULTANT
VALUE ADDED OF CONSULTANCY TO THE CONSULTANT ORGANIZATION
VALUE ADDED OF CONSULTANCY TO THE CLIENT ORGANIZATION
CONSULTANCY MODELS FOR HELPING ORGANIZATIONS
TYPES OF CONSULTANT
GENERIC CONSULTANCY PURPOSES
CONSULTANTʹS CHECKLIST FOR CONTRACTING
A RANGE OF CONSULTANCY SERVICES
THE CONSULTING PROCESS
TEN TIPS TO ENHANCE ORGANIZATIONAL CONSULTING SUCCESS
MAXIMIZING THE VALUE OF PROFESSIONAL NETWORKING MEETINGS
TWELVE STEPS OF CONSULTING
 
CHAPTER 20 - WORKSHOP FACILITATION
 
THE THREE COMPONENTS OF FACILITATION
THE ROLE OF THE FACILITATOR
THE ROLE OF THE WORKSHOP ATTENDEE
MODES OF FACILITATION INVOLVEMENT
RELATIONSHIP BETWEEN FACILITATOR, GROUP AND THE TASK
FORCE-FIELD ANALYSIS
FACILITATORʹS CHECKLIST
GUIDELINES FOR FACILITATING SMALL GROUPS: 4 TO 12 ATTENDEES
GUIDELINES FOR FACILITATING LARGE GROUPS: MORE THAN 12 ATTENDEES
THE WORKSHOP LIFE CYCLE AND ITS FOUR CONTENT PHASES
 
REFERENCES
INDEX

001

To ‘The B-Gs’ - Carole, Alex and Edward

FOREWORD
This book from Simon Burtonshaw-Gunn will be of great use to management consultancy practitioners at all levels. It covers a wide range of consultancy tools and techniques that are well displayed, well described and well referenced. The reader will find the tools and techniques helpfully divided into 20 recognizable skill sectors within management consultancy fields and specialisms. There is no reference source available currently that concisely lists and briefly describes management consultancy tools and techniques across such a wide range of sectors. The contents are written up by the author with the accuracy and brevity of the unique blend of an experienced practitioner and a seasoned educator. This is also reflected in the author’s unerring choice of safe, reliable, robust and instantly recognizable models, principles and practices. The method of depiction of the content, mainly in diagrammatic form, aids the process of quick reference and ease of understanding. The tools and techniques can be utilized across the whole range of organizational sectors and both the private and public sectors.
The tools described will be useful to the inexperienced management consultant to explain the working of tried and tested interventions and relating them back to solid and trusted reference books. The value of this is for the beginner to have a quick reference source and then, if necessary, undertake further and deeper research into the methodology from the identified source. There are clear benefits in this to contribute towards the professional and personal development of the management consultancy practitioner.
For the more experienced management consultant there is always an advantage in having a ‘quick reference’ source of tools and techniques to remind them of the specifics of a principle or to enable a common understanding to be established in a consultancy team or with a client.
Thus, I can envisage that this book, with the simple idea of being a repository of the ‘bare bones’ of management consultancy tools and techniques, will be of great value to all management consultants (and managers) in the field.
 
Alan Beckley
 
Alan Beckley is a company director of several management consultancy companies that hold ISO 9001 accreditation and IBC Recognized Practice status; he is an operational management consultant. He is also the External Verifier for management consultancy qualifications provided by the Chartered Management Institute (CMI) and an Assessor for the Institute of Business Consulting (IBC) for the Certified Management Consultant (CMC) award. He has been the managing editor of the IBC’s Professional Consultancy web-based quarterly management consultancy magazine for several years.

INTRODUCTION
With a technological background the use of engineer’s tables and formulae has for me been a common occurrence to help both in my student days and as a practising professional. In progressing a career in management it seems that a similar reference book is absent despite a relentlessly growing list of management and business publications. Even a brief scan of the bookshelves will reveal that there is a wide spectrum from specialist publications to generalist ‘Bluff your way in . . .’, ‘Dummies guide to . . .’ and others claiming to provide MBA knowledge from a day’s reading.
In the same way as providing engineers with a formula that relies on a level of prior knowledge and competence, the purpose of this book is not to short-cut any formal learning and understanding of the use of established and practical management tools and techniques but to provide an easy access to various management approaches through a collection of models and occasional brief prompting notes. The intention of this book is to provide a set of tools and models from tried and tested sources which can be used by scholars, practising managers, experienced consultants or newcomers to the profession to use in a practical way.
Just like the typical craftsman’s toolkit rarely are more than a few tools used on a single project; nevertheless, the advantage of a full set of tools at least provides the opportunity to select the correct, efficient and safe tool - even if this is no guarantee of the proficiency of the user! While there will always be specialist tools for an expert - rarely needed by the majority of users - the generalist tools provided in this book cover a range of generic management themes. There is a widely held view that many management consultancy tools feature the use of a two by two matrix - and while this book does seem to support this view, these should be considered to be the equivalent of a set of spanners as each one may have the same appearance but will differ in its application. Where possible I have made reference to the origin of the models and tools in this book to guide the reader to where further information and detailed ‘operating instructions’ may be gained. Full details of the material used are provided in the References section.
So often the various topics of management are interwoven: for example, some of the tools described in strategic management are also of use in marketing, business planning, HRM and international business. In many ways the massive topic of ‘management’ itself can be thought of as a giant jigsaw of many interlocking pieces and as such the tools described in each alphabetically arranged section of this book can often be directly used or adapted for use in other management areas.
Many of the tools shown here are from works published over the last 30 years which coincide with the move to specialization and the jigsaw analogy of the field of management with the development of specialist topic areas. Indeed this trend for greater specialization continues as managers have to understand newer developments such as e-commerce and advances in business to business (B2B) and business to customer (B2C) relationships.

ACKNOWLEDGEMENTS
Following the concept of the ‘engineers’ formula handbook’ described in the Introduction I am not claiming to present anything new but from my own experience have tried to compile a useful book for a number of users. Naturally this would not have been possible without the fine efforts from all those management authors, research publications and course notes, etc. which I have collected over the years. As such I am greatly indebted to all whose work appears in the book, and also to my own teachers and mentors who have aided my own journey through many management topics.
As time progresses and new tools, models and techniques become used there is opportunity for us all in the ‘management community’ to develop this further, indeed if you have any comments on the models so far identified or wish to add more for a future edition then I would be very happy to hear from you. My contact details are: toolbox2008@hotmail.co.uk
I am very grateful to the following publishers, individuals and copyright holders who gave their permission to allow previously published work to be used in this book. Every effort has been made to ascertain copyright and seek permission; however, any omissions will be corrected in any future edition.
• Academy of Management Review
• Christopher Ahoy, Iowa State University, USA
• American Association of Marketing
• American Psychological Association
• Michael Armstrong
• Ashgate Publishing
• Professor Henry Assael, Leonard N. Stern School of Business, New York, USA
• Association of Project Management Group Ltd
• Dr Mike Baxter
• Berrett-Koehler Publishers Inc.
• Blackwell
• Boston Consulting Group Inc.
• Butterworth-Heinemann
• Chartered Management Institute, UK
• Chartered Institute of Management Accountants
• Professor Colin Coulson-Thomas
• Professor Michael Czinkota, McDonough School of Business, Georgetown University, USA
• Department for Work and Pensions, UK
• Edwards-Deming Institute, MIT
• Elsevier
• European Foundation of Quality Management
• Nick Eve, Elements Ltd
• FT Prentice-Hall
• Gower Press
• HarperCollins
• Jean Harris
• Harvard Business Review
• Julie Hay
• Institute for Sport, Parks and Leisure
• Institute of Management Consultants
• Kogan Page
• Liverpool Academic Press
• Dennis Lock
• Professor Simon Majaro
• McGraw-Hill
• New York Productivity Press
• Open University Press
• Oxford University Press
• Palgrave Macmillan
• Pearson Education Inc.
• Pearson Education Limited
• Penguin
• Peter Honey Associates
• Kate Piersanti
• Pitman Publishing
• Praeger
• Prentice-Hall
• Project Management Institute Inc., USA
• Psychological Bulletin
• Kit Sadgrove
• Dr Malik Salameh
• Simon & Schuster Inc., New York
• Dr Stuart Slater
• SPCK Publishing
• Springer Science and Business Media
• Taylor & Francis
• Thompson Learning
• University of Virginia Darden School Foundation
• University of Salford
• John Wiley & Sons
I would also like to record my sincere thanks to those that have supported my efforts in reviewing my draft manuscripts and providing such encouragement. Finally, but not least, my thanks go to Francesca, Jo, Emily, Sam and Natalie and all at John Wiley & Sons for their support and help in bringing this project into reality.

CHAPTER 1
BUSINESS PLANNING
This chapter covers the task of business planning which is applicable to all businesses whether a sole trader or a multinational conglomerate. The production of a business plan is needed to describe the business, its objectives, its strategies, the market it is in and its financial forecasts. It is often used as a tool for measuring the performance of the organization against that intended over a short- or medium-term period, typically three to five years. For many new businesses the business plan may be used as a tool to promote an interest in the business and to secure external funding and as such needs to be undertaken as a serious task. In addition to this, a business plan has several other purposes as it:
• Prompts management to logically examine the business in a structured way and consider what it currently does and what it wishes to do in the future.
• Encourages management to set future business objectives and then monitor progress against the plan.
• Identifies the resources and time needed to implement the business plan.
• Can be used to communicate the key features of the business plan to employees and provide them with an awareness of the business’s direction.
• Provides links to the detailed, short-term functional strategies.
This chapter also shows the basic stages in producing a business plan and the planning cycle which also looks at past performance and what needs to be addressed as new targets and objectives. Indeed the focus on the business plan is likely to be on three areas: setting realistic goals for the business to aim for, demonstrating how its objectives will be met and finally identifying what resources in terms of people, plant and investment will be required by the organization to achieve the plan.
Although there is no set formula for the contents of a business plan, a typical layout is provided in this chapter as a good starting model for those embarking on its production. For those who do so with an external reader in mind - bank, shareholders, etc. - then adopting a common format is likely to convince the lender that the organization at least knows how to portray its business and ambitions in a professional and recognizable way. On completion of the task a checklist on the business plan feasibility is also included, this covers the key questions on the management, marketing and financial aspects of the plan which need to be addressed either directly or indirectly in the plan.
For new businesses the business plan should also describe how the company will operate from its launch until it has established itself in the market. In practice there should be a detailed narrative on the first six months as this is when costs in establishing the business are being incurred - in developing a market, recruiting staff, negotiating with suppliers, etc. - contrasted with no or low income, particularly if part of a supply chain, when customers’ terms of payment are unlikely to be favourable in terms of timescale and hence the subject of cash flow needs to be described. Having invested time, effort and some cost in producing the business plan with its objectives clearly articulated, this should not be limited to senior management or shareholders but should be used in the business and updated as new environmental opportunities and threats arise. This tool will help to keep track of current performance and development plans. The final point to consider is that business planning is not a on/off isolated event; it needs to be used, reviewed and periodically repeated to ensure that the business is achieving its desired level of performance.

TRADITIONAL APPROACH TO STRATEGIC IMPLEMENTATION AND BUSINESS PLANNING

While this model presents the ideal approach, in practical terms this is a much more inter-related process; however, the benefit of the model is to illustrate that determining the Vision and Mission are important steps in strategy formulation and in setting the business plan.
002

THE PLANNING CYCLE

This simple model has links into research and data gathering, analysis and options studies, strategic management in the form of setting objectives and finally in performance management often related to people performance objectives. While this is shown here in a business planning context it also has applications at an individual level as part of career appraisal and personal development and in training needs identification.
003

UNDERSTANDING THE PRODUCT/SERVICE

This is a typical approach which can be used to understand a product or service business with a client organization to demonstrate and promote the planning process.
The questions shown below, together with establishing a view of the future for the organization and identifying barriers or constraints, can be linked to a workshop format to maximize the amount of involvement, creative thinking and agreement to a way forward.
004

TYPICAL BUSINESS PLAN CONTENTS

While there is no set format for a business plan the majority of these follow a typical presentation format; this is mostly because companies looking for investors will want to show that the business is being professionally managed and investors will want to understand the business activities, its future aspirations and the potential that the business wishes to address. Thus a typical layout of a what may be regarded as an extended business plan is shown below:
Executive summary
005
Company description
006
Industry analysis
007
Market analysis
008
Competition
009
Marketing and sales
010
Operations
011
Management and organization
012
Capitalization and structure
013
Development and milestones
014
Risks and contingencies
015
Financial projections
016
Summary and conclusions
Appendices
017

PRODUCING THE BUSINESS PLAN

Producing a business plan must cover four basic stages of business development:
 
The management’s best estimate of future operations is set out in a logical and organized way. This should crystallize ideas and identify any problems and areas for further analysis.
 
To determine when money is required and whether it needs to take the form of loan capital or other forms of funding.
 
This provides the management with guidelines for running the business efficiently.
 
To allow the management to assess and control the company’s progress by comparison with financial projections in the plan.
018

CHECK ON BUSINESS PLAN FEASIBILITY

Having completed the production of a business plan, its success in business depends on three crucial elements:
• The management of the business
• Its approach to marketing
• The money that the business needs and will generate
These three elements are detailed below and testing them against these questions will provide the organization with a level of confidence before it faces any external investor, bank or stakeholder.
Management
• Does the management team have the motivation and skills to deliver the products/services you envisage?
• Does the management team have the skills to look after the administration side of the business, including all of the money matters?
• Has the organization the ability to sell the services to the potential clients identified?
• Are you prepared to modify the business plan in the light of what people want?
• Is the company confident that it is able to manage skills and time to full effect?
• Does it need any new people to make this plan work?
• Does it need ‘different’ people to make the plan work?
• Can the plan work and the business carry on if current key people leave the company for another job, retire, win lottery, etc.?
Marketing
• What is so special about the services that the company intends to provide?
• How do you know that anyone will want to buy them?
• How often will they buy from you?
• How much will you charge for the services and are people/ companies prepared to pay those prices?
• Are you sure that you can provide these services at these prices, make a profit and manage the cash flow?
• Why should anyone buy from the company rather than others in the market?
• Is this the right time to start providing the services that you have in mind?
• Will you be able to develop them as the market develops?
• Have you considered how you will advertise or promote the company’s services and how much will this cost? (See also Money)
• Where will you advertise or promote?
• Do you know who the competitors are and what services/ products they are selling?
• Have you spoken to any potential customers about the company’s services that you provide or intend to provide?
Money
• Will the business make a profit?
• Will you be able to pay each bill as it arrives?
• What financial resources will you need to be successful?
• Are you confident that you can pay back any loans over a reasonable period, and pay the interest?
• Have you researched, listed and costed the expenditure items that you will incur?
• When will income start to flow?
• Which part of the market provides the revenue? Is this secure or high risk?
• What are customers prepared to pay for the company’s services?
• What revenue can we expect from new markets?
• What revenue can we get from repeat business?
• What is the cost of acquiring new business, in bidding, making contacts, marketing, presentations, etc.?

FACTORS INFLUENCING COMPETITIVE SUCCESS

Business performance is determined not just by income from the company’s services and products but also by how it manages its relationship with a number of factors. The model below shows these factors, some of which are outside of the control of the organization. For those tasked or advising on the production of an organization’s business plan, consideration of the model will help to ensure that the major factors have been addressed and planned.
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From Edgar P. Hibbert, International Business - strategy and operations, 1997, Macmillan Business. Reproduced with permission of Palgrave Macmillian.

CHAPTER 2
CHANGE MANAGEMENT
All organizations are destined either to perish through business failure from being left behind by the competition or to accept that undertaking change is a natural part of business life in order to keep in line with customer requirements, the need for improvements or customer or fashion demands. While this chapter provides a number of models around managing change, it is stressed that any change management plan is destined to fail unless supported by a main sponsor, often the senior management of the organization. The organization’s stakeholders have to accept that such change is seen as being appropriate for the specific organization and its customer base will respond positively to the change. There are a number of reasons for change, through either incremental drift of lagging behind others or the need for a more large-scale change initiative through evolution or revolution.
Even on the basis of senior management support, the change process is likely to be time consuming and management will have to consider the type of change strategy best suited to pursue the organization’s new direction. There are a number of factors that should be considered when choosing how to implement the necessary changes as each approach will be appropriate in different circumstances. Indeed, those that are inconsistent with the demands of the situation - the people, the cultural setting and the business environment - will undoubtedly run into problems and fail to support the long-term required changes.
This chapter provides some approaches to planning organizational change and gaining commitment, and also includes a number of models around managing resistance. With few exceptions people’s reaction to change will follow the change curve, itself influenced by issues around security, status and self-esteem. Clearly, implementing change needs to be planned, executed, reported and reviewed.
The process of change implementation needs to be aligned and appropriate to the organization and an example of a three-phase approach is described below.
 
 
Phase 1: Organizational pre-positioning - the first phase focuses on the preparations for change through communications with staff and stakeholders, it concentrates on preparation for the introduction of changes to the organization’s structure and the delivery of general change management awareness training to staff. This important phase is aimed at preparing the organization for change, gaining commitment from those involved and managing the associated risks.
 
Phase 2: Change management plan implementation - this phase concentrates on the implementation of the changes in accordance with the agreed plans and the business objectives. The four key change componments described in this chapter are undertaken by the change management team. During this phase typically any new senior management appointments will be initiated and the new organization structure implemented.
 
Phase 3: Ongoing support and consolidation phase