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TIPS FOR BUSINESS EXPANSION

Alan Sutherland, CEO of Kind Consumer

 

Every successful business had a beginning.  Its founders usually looked for ways to gradually expand, attract new customers and increase monthly revenue.  From the outside looking in that type of success often feels as though it requires some form of magic or hidden formula.

So how do you drive success?  There are two which are fundamental to success.  On first glance they may seem obvious, but they are often neglected.

 

Do you have a strong team?

No matter how great your business or idea you will not drive it to its full potential without a strong team behind you.

The process of recruiting and finding the best talent is never easy.  You must over-invest time in the process as it is a fundamental investment and future growth driver.  Two principles I have learned over the years when looking at recruitment are, to surround yourself with people who are better than you and do not be afraid to recruit someone who could make you redundant.

If you can achieve these, the benefits are clear.  Better business results, stronger talent pool, and with capability future fit plus built-in succession planning.

 

Have you created a road map?

Strategy should not be complicated, as it is the set of choices you make to help you deliver your goals.  It is your roadmap.

In thirty plus years of corporate life I have reviewed many.  Countless textbooks have also been written on the subject, but there are some basic principles that I firmly believe work best.  Namely, the vision should be clear, motivating, and understood by all in the organisation.  In addition, it’s important to remember ‘less is more’.  Too often strategy papers can be voluminous and complex.  The best strategy work I have seen is on one piece of paper with clear, simple articulation of the choices you will do and equally what you will not do.  It is very empowering to tell a team what you are not going to do.

 

Alan Sutherland

Have you established a core market?

In any business, the “core” needs to be healthy before you divert any significant level of resource to expansion, there are thousands of examples where enthusiasm to grow has caused companies to fail.

As you evaluate expansion, having an array of ideas and opinions needs to be balanced with a clear brand that consumers feel they relate to.  Whilst adding new products or services is an organic part of company growth it needs to be tempered, so you do not drift too far from your core market.

Therefore, before ploughing resources into new markets, you do need to ensure that new product and services will be of value to existing (or new) customers.  You may need to ask some critical and challenging questions such as, is there a clear need for this?  Is it marketable?  Does it sit within the brand equity?  How much will consumers pay for it?

If you conclude that the demand is there, only then should you move onto executing that new idea because it will require a significant amount of investment of time, resources, and money.  If the market entry cost is potentially high, you should also evaluate a test & learn approach by launching in a limited way and, if early traction is good, then expand.

Once you have revised your existing offering, you need to engage with these new consumers to increase brand recognition.  If your business is not online, add this to your to-do-list because in today’s era, convenience is key.

A website is the shop window to your brand and, done well, can allow you to build up a direct one-on-one relationship with your customers.  If it was already an important criterion before, the impact of Covid-19 will make it indispensable.

With social media and the abundance of mobile technology, it is not difficult nor expensive to drive traffic to your site, so you need to ensure the site is engaging, easy to navigate, informative with a call to action to purchase.  Loyal customers who return to your site are worth their weight in gold!

 

Do you have a healthy working capital?

Finally, a healthy working capital is essential not just for growth but for the day-to-day operations of running a business.  Even as you start to see your business develop, you must keep a scarcity mindset with cash and make sure you have some reserves for when something goes wrong. This has caused thousands of start-ups to fail as they hit unexpected turbulence and had no contingency in place.

In today’s global economy, there is a lot of uncertainty so there has never been a more important time to maximise liquidity to meet short term obligations and avoid going bust.  Not to mention, flexibility is key when a business is looking to expand and without enough working capital a business can lose this flexibility.

Banking

TRANSFORMATION IS NON-NEGOTIABLE FOR BANKS LOOKING TO DELIVER VALUE IN A POST-PANDEMIC WORLD

Andrew Warren, Head of Banking & Financial Services, UK&I, Cognizant

 

In addition to responding to changing customer expectations, higher operating costs, new technology, and an evolving regulatory landscape, financial services organisations now also face the uniquely challenging business environment created by COVID-19. The economic consequences that are unfolding rapidly and unpredictably mean that banks must double-down on both their efficiency and customer experience agendas. In light of this, the need to modernise legacy banking platforms will gain sharper focus as banks emerge into the post COVID-19 landscape, driven by the need to focus on value for customers and agility to change and shift operations quickly.

 If banks are to remain strong and stable and make real progress with their efficiency and experience agendas, transformation is non-negotiable – but it can be risky and have high rates of failure. So how can banks pursue their transformation agenda, while addressing the very real risk that modernisation of legacy banking platforms presents?

 

Communicating value across the business

 Banking transformation may have traditionally been the domain of the IT function, but the impact on current and future value means it should be on the agenda of a much wider set of senior executives. This includes the CIO and COO but should also be as far reaching as the Chief Risk Officer, Chief Financial Officer, Chief Digital Officer, and Chief Experience Officer.

When we talk about value in the context of transformation it can mean multiple things. In monetary terms, transformation can reduce the total cost of a bank’s IT infrastructure, with legacy equipment 55 per cent more costly than cloud data. More importantly however, transformation often results in moving from highly manual orientated processes to more efficient, automated – and therefore accurate – processes. In turn this can lead to more informed and tailored products and services, internal process efficiencies, enhanced cybersecurity, advanced analytics, and reduced risk, especially around fraud and malicious activity. These all add significant value to customers, as well as operational and regulatory imperatives.

Furthermore, viewing transformation through a value lens should tie it to a range of specific financial and accounting metrics that ultimately measure success. That includes both those that reflect the protection and extension of current value, as well as measuring the extent to which transformation will support the capture of future value. Financial services organisations have a huge opportunity to create greater value for customers from innovation in products and services. Changing market dynamics are creating a basis upon which banks and others in the industry can evolve their offerings and organisations.

In much the same way as we have already seen in retail, for example with Amazon and AliBaba, and media platforms, such as Facebook and Netflix, customers are adjusting to a new way of banking that is changing expectations. To keep up, banks need to increasingly provide easy-to-use digital-first services across their products, as well as introduce new tools to help customers manage their money in the 21st century. And there is no doubt that the fall-out from COVID-19 will likely further drive the degree and extent of digital adoption.

Traditionally, financial institutions take many different approaches to transformation, such as developing sleek new customer experiences to compete or developing new platforms and partnering with fintechs. But achieving success for more mature banks is more challenging given the obstacles presented by their legacy platforms. Comprising complex, customised systems, these are expensive to run and very costly to change.

 

The inevitability of change

To truly transform operations and experience, many banks are now having to face up to the reality that they cannot move forward without banking platform transformation. That means they must – in one way or another – replace their historic systems with more modern, cost-effective, and flexible platforms. That is going to be essential to stand up the capabilities required to enable digital products and deliver the truly revolutionary experiences that customers demand.

Recognising this, many banks are now considering their options. Some have already started down the challenging path and hit bumps in the road. A very small number have successfully executed their ambition to create a platform for the future. All banks contemplating transformation should take lessons from both the successes and the mistakes. These will be critical to inform their plans.

 

What are the next steps?

There are a number of essential transformation steps to consider that will help realise value from investment as rapidly as possible, provide an appropriate level of delivery confidence and manage exposure to the operational risk normally associated with such changes. These include:

1. Business strategy must inform every step of transformation – ensure that the approach to platform transformation is tightly aligned to the wider business strategy.

 

2. Design a strategy-aligned roadmap for delivery – a transformation roadmap should clearly set out the logical order in which business outcomes will be delivered. Here again, that needs to align with the value that the organisation is seeking to achieve, with incremental progress determined by business priorities. This involves making appropriate use of modern delivery methods, such as agile, and making sure that everything that is done satisfies and is frequently assessed against the relevant value criteria.

 

3. Assess technology selection against business value – organisations often undertake detailed and exhaustive market, functional and technical assessments when reviewing new products and suppliers. This often means either the technical assessment dominates proceedings and / or new technology platforms are selected without a clear line of sight to the value required. Poor product selection is a risk as a result, as well as a lack of understanding of how products should be deployed to inform the sequence of delivery required by the transformation roadmap.

 

4. Assess your readiness for change – unsurprisingly, given the sheer scale and velocity of change that business leaders must deal with, resistance to change is often a key reason given for the failure of banking transformation projects. However, it is crucial that the ability of the organisation to deliver and adopt the operational, technical, and cultural changes required to support transformation is comprehensively assessed and done early.

The impact of COVID-19 paired with and the demands that financial services organisations face from all directions, make change an inevitable necessity for the most. The approach to delivering a successful banking transformation, underpinned by a modernised platform, will vary dramatically from bank to bank. However, above all, businesses need to ensure that value drives every aspect of change explicitly linking transformation strategy and investment with the realisation of value.

 

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Top 10

THE INDICATION OF A DEEP RECESSION AND HOW TO PLAN

Nick Gold, MD of Speakers Corner

 

All the indicators are that the UK will be heading into a deep and painful recession come the Autumn. How bad, and indeed for how long, are the unknowns, but businesses need to use this time to start to look ahead and plan for the future. But how can a business plan when the future is uncertain? 

Nick Gold will discuss why the planning needs to start now by creating an entrepreneurial culture within the business that liberates employees to come up with new ideas, to test the market, speak to their customers and find new opportunities. He will also explore how this needs to go hand in hand with a creative employee reward and incentive programme.

The Entrepreneurial Mindset seems, over time, to have become confused and assimilated with a ‘start-up culture’.  This might be the case in an actual start-up of course but an entrepreneurial mindset should exist in all businesses, whatever size or heritage.

Even more so, in times of crisis and uncertainty, the entrepreneurial mindset is a necessity for any business to survive and more so, thrive.  It allows both leaders and employees to embrace the unknown, accept the uncertainty we find as being part of the challenge, rather than being a blocker to progress.

The ‘Start-Up’ mode is an aura where the vision or idea is clear but the direction of delivery is uncertain, an agile approach and wrong directions are not only common place but welcome within a business where they are learning the path for the successful growth of their business idea and company

As businesses grow and mature, the processes within the business are refined and developed and the mindset shifts to an environment where the whole picture can be captured, analysed and evaluated at the outset.  This, from a strategy and planning perspective is a much more attractive and robust offering, it gives greater visibility to the outcomes and risks of a project, it ensures the effective monitoring of the project and it means the future is clear.

The business landscape is a fascinating place now where there is no historical precedent as to what the future holds. At whatever stage of the lifecycle of the business, in marketplaces which are at different levels of maturity, business leaders need to embrace this new mindset and allow their employees to to rediscover, or even just discover, their entrepreneurial mindset.

This will require a change in the way businesses operate. Employees will start to feel liberated, spending less time developing the business plan which has a hypotheses, method, outcome and conclusion, and transition to a culture where the path to an idea is embraced as a test bed for possibilities.  It is a place where budgets aren’t clearly allocated in advance but rather the opportunities are continually assessed so resources are refined and directed to areas as ideas open up.

The obvious challenge is that this fluid approach might work for businesses who are not established in a marketplace or defending a position as they have no legacy to protect. It is much harder and more complicated where customers are expecting certain service levels and ways of working.  But with an entrepreneurial mindset, this should be seen as an opportunity to build closer relationships, to test new ideas, to spot problematic trends and develop solutions.

The truth is that an entrepreneurial culture has always been presented as a polarised extreme to established business or process) culture.  This is simply not true. While there is no doubt that a business trying to marry up different cultures to create a hybrid model has a much more challenging task, but the rewards are so much greater.

The starting place has to be the right vision, delivered from the top level of the business and then implemented so every employee not only buys into the vision that has been laid out before them but they actually start owning the vision too.

In the case of the established business with a secure customer base, the customers also own the vision.  Effectively the vision is no longer a top down approach but is actually the values and purpose of the business itself.  This ownership means that employees will be more willing to make decisions and take risks in the areas that they are focussed on as they can see how the choices they make can and will effect trying to attain the vision.

The entrepreneurial mindset means that every employee, regardless of role within the business, feels that they are able to contribute to the vision. It means employees are not restricted by job title or role, they are liberated by the vision. It means skill sets are transferred to exploit opportunities.

Business leaders which understand this will develop an incentive and professional development plan for employees. As time moves on and employees start to see the opportunities for themselves within the business, the entrepreneurial mindset we have talked about now starts to become deeply embedded within both the business and employees.

The single most critical aspect to this, the one change that is required for any business as the landscape looks ever more fraught and even more so uncertain is that the business trusts it employees.

It requires leaders to understand that any IP that it owns, any products that it has developed, any brand loyalty or reputation it has developed and maintained over the years, this is now secondary to empowering its people within it.  The employees are both the custodians of the brand and responsible for delivering the vision.   Above all else, this is the critical aspect for business leaders trying to create an entrepreneurial mindset for the company at a time when forecasting and planning has never been so abstract.

 

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