.cobusiness-survival-toolkit.co.uk/dl.php?url=/tools/bst...use this tool alongside a SWOT, PESTLE...
Transcript of .cobusiness-survival-toolkit.co.uk/dl.php?url=/tools/bst...use this tool alongside a SWOT, PESTLE...
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Stage 3 - What you need to do
to get there
Strategy & Planning tools
How Resilient is your Business? Strategic Group Mapping Strategic Options
Business Planning
Business Plan Readiness Assessment Plan Cruncher
Business case development
Developing a Robust Business Case
Fundraising
Fundraising Readiness Funding Models
Change Management
Agreement/Certainty model Change Quadrants
Investment Readiness
Are you investment ready?
Partnership/collaboration
Levels of Joint Working Compete, Collaborate, Compliment Strategic Alliances
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Marketing and Communications
Portfolio Analysis - where do you make your money? Areas of Business Growth - Ansoff's Matrix Social Media Checklist CRM Maturity Checklist
Creative Problem Solving
Gordon/Little Technique Problem Reversal Attribute Listing Association Problem Solving Pattern Language Assumption Reversal
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How resilient is your business?
“Resilience is the organisational capability to anticipate key events from emerging
trends, constantly adapt to change, and rapidly bounce back from disaster.” Javier
Marcos
The big idea
Increasingly we are faced with a wide variety of changes on many fronts: from the
economy to familiar infrastructures, financial services, entertainment and media.
Rapid changes in science and technology mean we are embracing new ways of
engaging and linking up and we are adapting the way we consume. Often we are so
challenged in finding the time to keep up with our changing environment that it is
difficult to ensure that our business practices can withstand the pressures and be
resilient to change.
Purpose
The purpose of this tool is to encourage you to think about how resilient your
business is: how your business capitalises on emerging trends, adapts to change and
could withstand any sudden shocks or crises. It provides a framework for you to
consider some core elements of your business so you can consider the future, rapidly
adapt to change and bounce back from any nasty surprises.
The tool
The tool consists of a checklist of questions with a focus on the characteristics of a
resilient business (adapted from Marcos, 2008). Read and reflect on each of the
questions in the seven areas, in Table 1, making notes of the areas that you could
improve on. Now consider:
• Which of the areas can you address immediately to make your business more resilient?
• What do you need to address in the next three months?
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• What do you need to address in six months?
Take the next step
How able are you to maintain these practices and ensure that your business is not
becoming static? What mechanisms can you use to ensure that you reflect on these
key areas regularly? Have you considered any of these issues before? Can you think
of a business that you would describe as resilient?
Top tips
• It may help you to undertake this with a colleague or friend • Write down as many answers as possible under each question and make a note
of where you could improve • Once you’ve attempted this activity, you may wish to revisit it pushing the
boundaries of your first answers
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Environment
scanning
What are the long-term trends that may impact on your
business? (See the PESTLE tool under the ‘Where are you now’
stage)
What industry and business publications and websites do you
regularly read?
What newsletters and email alerts do you regularly subscribe
to?
How often do you scan the horizon for new opportunities and
consider how you could respond to them?
Staying
linked in
What professional and membership bodies are you part of?
What are your formal and informal networks?
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What range of sources do you get your information from?
How frequently do you stay in touch?
What do you offer the networks that you have?
How could you add value to your networks?
Systems and
processes
Do you have joined-up decentralised systems?
Do you have effective processes for capturing, sharing and
using information?
Scenario
planning
Who are your stakeholders and what are the future driving
forces for change?
What are the key uncertainties and potential areas of impact on
your business?
What would be the impact of these changes to your business if
they happened?
How do you take account of these likely scenarios and impacts
in your business planning and decision-making processes?
How can you anticipate and exploit emerging opportunities in
your strategic planning process?
Exploiting
resources
What resources, knowledge or skills do you have to exploit?
What is your strategy for building on your resources, knowledge
and skills?
What resources could you make more of?
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Which of your resources are difficult to replicate?
What new ideas are you developing and testing?
What range of different income streams do you have?
Reinforce
connections
How can you reinforce the connections you have either by
joining up on projects or on working groups?
How can you build a shared sense of mission?
How can you work together to identify and share crucial tasks?
How can you be more interactive in your planning processes?
Responding
to customers
How do you collect information from your customers?
How responsive are you to changes in your customers’ needs?
How can you ensure that you build trust and respect from your
customers?
References
Marcos, J. (2008). Organisational Resilience: the Key to Anticipation, Adaptation and
Recovery: Cranfield School of Management.
Royce S. (2010) Business Models in the Visual Arts Arts Council and Turning Point
London
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Strategic group mapping
“We could learn a lot from crayons: some are sharp, some are pretty, some are dull,
while others are bright, some have weird names, but we have to learn to live in the
same box." Anonymous
The big idea
Strategic group mapping is a mechanism for considering your position in your sector,
field or market. Hunt coined the term ‘strategic group’ in 1972 when he noticed sub-
groups of businesses with similar characteristics in the same market. Michael Porter
then expanded the concept in the 1980s. There are a number of benefits to strategic
group mapping:
• It can help you identify who your direct and indirect competitors (or possible partners) are
• It can illustrate how easy it might be to move from one strategic group to another • It may help identify future opportunities or strategic problems • It ensures you take your customers’ or beneficiaries’ views into account when
developing or assessing your strategy
Purpose
The purpose of strategic group mapping is to ensure you take the needs or wants of
your customers/beneficiaries into account. It encourages you to ask different
questions about your future strategy, relationships with other businesses in your
sector and your understanding of the people who ultimately benefit from your
products or services.
The tool
To use the strategic mapping approach, you need to follow a number of steps:
1. List the top five other players working in your field or sector
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2. Complete the following table (adapted from Bruce et al., 2008)
Player 1 Player 2 Player 3 Player 4 Player 5
What services do they provide?
What products do they offer?
Which beneficiary or customer group do they work with?
What is their impact?
What might be their plans for the future?
How might you create greater impact by reconsidering your relationship with them?
3. Now think about the beneficiaries or customers for your services/products. What do you think are the two most important aspects of what you do from their perspective? It could be a personalised service, easy access, low cost and so on
4. Now using the two customer wants/needs you have determined above, draw a 2x2 matrix. Plot your business and the five other players you have considered above onto the matrix. For example a games designer might create the following map:
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High
Quality of graphics
Low Interactivity High
5. Once you have mapped the various players in your field as well as your own position, consider the following: • Where are the gaps in provision? • Why are the gaps there? • Who should be filling them?
P2
P1
P3
P4
Your business
P5
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• What potential is there for developing new services or products? • How might you work with the other players to meet customer needs or wants? • Where are the overlaps in provision? • What are your options? • What further research do you need to do? • What factors will affect your response to beneficiary needs or wants?
6. Develop a competitive or collaborative strategy to ensure you are meeting beneficiary needs and building a strong position within your strategic group
Take the next step
When you did your analysis of the other players, how much did you already know
about them? How much of this was based on assumption and how much did you
have hard evidence for? Were there any surprises?
Top tips
• To get an in-depth overview of your competitive and/or collaborative environment, use this tool alongside a SWOT, PESTLE and Five Forces analysis (these tools are also included in the toolkit)
• Think about how you might stay up to date with other key players in your sector or market
• Once you have mapped the other players, draw arrows from each player to show the direction you think they are moving in
References
Bruce, I., Coperman, C., Forrest, A., Lesirge, R., Palmer, P., & Patel, A. (2008). Tools for Tomorrow: A Practical Guide to Strategic Planning for Voluntary Organisations. London: Cass Business School/NCVO.
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Strategic options
’Cheshire Puss ... Would you tell me, please, which way I ought to go from here?’
‘That depends a good deal on where you want to get to,’ said the Cat. ‘I don't much
care where –’ said Alice. ‘Then it doesn't matter which way you go,’ said the Cat. ‘–so
long as I get SOMEWHERE,’ Alice added as an explanation. ‘Oh, you're sure to do
that,’ said the Cat, ‘if you only walk long enough.’ (Carroll, 1865: 89)
The big idea
For a business to succeed, it is vital that the right strategic choices are made. A
strategy is about giving the business a clear direction and purpose. It has been
proposed by Henry Mintzberg that strategy can take different forms. It can be a:
• Plan: some sort of planned course of action • Ploy: it outlines a manoeuvre to outwit a competitor • Pattern: it is about putting the plan into action and recognising the behaviours
that result. Be aware that not all outcomes are intended, or ‘planned’, and that there is an emergent aspect to strategy
• Position: it locates a business in a particular environment at a specific point in time. It is externally focused
• Perspective: it is about the viewpoint of those running the business. It is internally derived and shows the personality of the business
On this basis, a good strategy gives a clear sense of direction but is flexible. It
recognises the position of the business within its external environment. It moves
people to action and reflects the intentions and viewpoints of its creators.
Purpose
This tool is designed to help you explore all the strategic options available to your
business. It encourages you to make a rigorous assessment of where your business
is now and what options might be available in the short, medium and longer term. It
offers a spectrum of options from reduction to growth and asks you to consider what
is feasible in terms of future direction. It deliberately includes some tough options,
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like closure, to ensure you consider the full range of possibilities. This may not be an
exhaustive list of options for your circumstances: do feel free to add others.
The tool
This tool includes two stages of strategic planning. Firstly, it is a framework for
reviewing different strategic options. Secondly, the ‘options grid’ offers criteria for
analysing the relative benefits of the different options that you might be considering.
Table 1 Strategic options (adapted from Bruce et al., 2008; Courtney, 2002)
Reduction Improve/exploit current Growth
Retrench
Reduce or close programmes, services or product lines
Status quo
Continue programmes/
services/activities as they are
Piggybacking
Develop fee-earning activities to cross-subsidise other activity
Expand boundary
Extend users/customer groups, amount of service or geographical spread
Quantitative expansion
Increase the number of users/customers or extent of services/products
Reduce costs
Reduce costs of production, programmes, administration or other activities
Improve quality
Improve the quality of programmes/ services or products
New related strategy
Switch activities/products to a related group of customers or area
Experiment
Pilot new services or existing activities to new audiences/
customers
Unrelated expansion
Expand to add activities to unrelated areas, customers or audiences
Winding up
Your work is complete so agree a dignified exit
Outsource/ sub-contract
Find other providers who can take over some of your activities at a lower cost
Joint working/ collaborating
Develop a closer partnership with another business
Switch strategy
A radical change to switch services/ activities/
customers completely
Acquisition/merger
Take over other businesses or join with another organisation of similar or larger scale
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Use the criteria in Table 2 to complete the grid for the strategic options you have
selected.
Table 2 Options analysis grid
Option
Criteria
Option 1 Option 2 Option 3 Option 4 Option 5
Strategic attractiveness
Cultural fit
Financial attractiveness
Implementation difficulty
Uncertainty and risk
Acceptability to stakeholders
Level of support for the option
Breakeven point
Take the next step
Think about another business. It might be a competitor or a partner. See if you can determine which of the above strategies they are following. What are the clues that lead you to your conclusions? What might you learn from them?
Top tips
• “There are three types of businesses: those that make things happen; those that watch things happen; and those that wonder what happened!” (Anonymous)
• Consider which option would be your worst nightmare and what you would do about it. If you can confront your fears, it may give you some new alternatives
• Consider where the drivers for your strategy are coming from as they will have an impact on how you respond
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References
Bruce, I., Coperman, C., Forrest, A., Lesirge, R., Palmer, P., & Patel, A. (2008). Tools
for Tomorrow: A Practical Guide to Strategic Planning for Voluntary Organisations.
London: Cass Business School/NCVO.
Carroll, L. (1865). Alice's Adventures in Wonderland (1994 ed.). London: Penguin
Books.
Courtney, R. (2002). Strategic Management for Voluntary Non-Profit Organisations. London: Routledge.
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Business plan readiness assessment
“Planning is an unnatural process; it is much more fun to do something. The nicest
thing about not planning is that failure comes as a complete surprise, rather than
being preceded by a period of worry and depression.” Sir John Harvey-Jones
The big idea
Such is the effort that often goes into the preparation of a business plan that, once it
is produced, the last and most crucial stage is neglected. It is at this point that you
are well advised to do a thorough critique, reading it as far as possible, with the eyes
of an outsider. It is an opportunity to assess its strengths and weaknesses and
determine if there are any gaps you need to address. This evaluation phase should
consider four elements:
• The written business plan itself: timelines and targets should be carefully reviewed and all the fundamental questions must be answered
• The manner of presentation: is it clear and concise, with a logical progression?
• Realistic approach: does it present a realistic perspective on how the business will evolve? That is not to say that it can’t be ambitious but there should be a clear argument behind your proposals
• The viability of the business: does the business plan present a business strategy with a strong and sustainable model at its core? Does the business have the management capability and financial competence to deliver its strategy?
Purpose
The purpose of this tool is to provide you with a checklist against which you can self-
assess your current plan. It could also be used as guidance criteria for revising your
current plan or for writing a new plan.
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The tool
A business plan normally consists of a number of core sections. Use the following
questions to assess the readiness of your plan. You can use the criteria as you write
each section to ensure you have completed it as comprehensively as possible or you
can assess the plan as a whole once it is all written. You may need to adapt the
sections to make it appropriate to your business.
Answer the questions for each element and then use the rating scale at the end to
assess each section.
1. Executive summary
Key elements Yes No Is the answer complete?
Have you provided succinct highlights of the plan?
Does the executive summary stand alone? (If someone reads nothing else, does it make sense?)
Have you kept it to no more than two pages?
2. Background/context
Key elements Have you covered this in the plan?
Is the answer clear?
Is the answer complete?
How has your business developed over time?
What have been your key successes to date?
What issues might you want to address going forward?
3. Vision, mission, values
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Key elements Have you covered this in the plan?
Is the answer clear?
Is the answer complete?
What type of business are you in?
What is your purpose or long-term vision?
What do you do, who for and where?
What are the underlying beliefs or values that drive your business?
How are you distinctive?
4. Delivery aims and objectives
Key elements Have you covered this in the plan?
Is the answer clear?
Is the answer complete?
What are the key areas of your business activity?
What are your artistic activities and how will they be developed?
What are your education or outreach activities and how will they be developed?
What products do you offer and how will they be developed?
What services do you offer and how will they be developed?
What do you offer that is distinctive?
What targets have been set for each area of your activity?
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5. Marketing
Key elements Have you covered this in the plan?
Is the answer clear?
Is the answer complete?
Who will be your customers/beneficiaries?
How big is your market, segment, sector or the field you work in?
Who are your competitors – direct and indirect?
How successful are they?
Do you have a pricing strategy?
Do you have clear routes to market?
What is your marketing strategy?
What is your audience development strategy (where appropriate)?
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6. Organisational capacity and capability
Key elements Have you covered this in the plan?
Is the answer clear?
Is the answer complete?
Who manages the business?
How do you develop people involved with your business?
What are your core issues and challenges in running the business?
What skills and experience do you need going forward?
How is your business governed?
How will you develop your structure and processes going forward?
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7. Finance and resources management
Key elements Have you covered this in the plan?
Is the answer clear?
Is the answer complete?
What is your financial model?
What is your expected monthly cashflow for the first year?
What is your break-even point?
How do you see your income and expenditure working over the next three years?
How do your various activities contribute financially to the business?
What are your total financial needs?
What are your funding sources?
What assets does your business own?
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8. Monitoring and evaluation
Key elements Have you covered this in the plan?
Is the answer clear?
Is the answer complete?
How do you monitor your progress?
How do you know if you have achieved your targets?
What changes do you want your business to make?
How does monitoring inform your decision making?
9. Risk assessment
Key elements Have you covered this in the plan?
Is the answer clear?
Is the answer complete?
What potential problems have you identified?
Have you calculated the risks?
How will you mitigate those risks?
What alternative courses of action exist?
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10. Appendices
Key elements Have you covered this in the plan?
Is the answer clear?
Is the answer complete?
Have you included any additional documents, agreements or visuals to support the plan?
Do you have formal evidence or external advice to support your plan?
Are there any other relevant supporting documents?
Now rate each section based on the answers you have given above:
Section 1 2 3 4
Executive summary
Background and context
Vision, mission and values
Delivery aim and objectives
Marketing
Organisational capacity and capability
Finance and resources management
Monitoring and evaluation
Risk assessment
Appendices
Total points
4 = very good, 3 = good, 2 = fair, 1 = poor
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Scoring:
• 40 points: outstanding. Looks like a great plan! • 24-39 points: looking good. The plan is well on its way • 13-23 points: some areas may be covered in detail but others need developing • Below 12 points: the plan needs a lot more research and development
Take the next step
A number of business plans are publicly available on the internet. Find one that
interests you. Use the criteria to review and critique it. Looking at your critique, how
would you improve it? Who do you think the audience is for the plan?
Top tips
• Remember that your business plan should be a living document. You are its first audience
• Consider who else has an interest in your business and the criteria they might use to evaluate your plan
• Leave yourself time during the plan-writing process to review it and use the assessment criteria
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The plan cruncher
“Creativity involves breaking out of established patterns in order to look at things in a
different way.” Edward de Bono
“We do not know how long this crisis will last and how deep it will become. But when
it is over, those who have invested in creativity and innovation will find themselves
well ahead of the pack.” Jan Figel, EU Commissioner for Education, Training, Culture
and Multilingualism.
The big idea
Plan Cruncher was created by Lunatech Ventures, an IT investment company looking
for young and talented entrepreneurs who want to build remarkable companies.
Lunatech Ventures are seed investors who focus on internet and interactive media
technologies. The big idea is that you should be able to succinctly describe any
venture you are planning and, using the visual icons, you can quickly establish an
overview of your plan:
Example – you are working on something that is going to be great
A revolutionary new idea that you are building yourself… You have a team that can
build it… You have a prototype you can demo… You are gathering users… and need
an investment to develop the product to the point where you charge them for the
service.
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Example – a lot of hot air and a totally unrealistic valuation
The idea is all you have, so you want us to sign a non-disclosure agreement … You
do not know how you are going make money … You want to use someone else’s
money to build it … So basically you have nothing, but have somehow come up with
a valuation where 10% is the funding you need.
Purpose
Plan Cruncher icons are based around some of the key questions you should be
asking yourself about your business:
• Are you ambitious? Can you build a new (or grow an existing) business? • Do you have the skills to build the product or service? • Do you have a track record and can you demonstrate your new idea? • Have you worked out how to fund the product and/or service? • How much investment capital do you need? • Do you have a financial forecast? • How long will it take to reach profitability or gain the necessary income?
If your plan’s executive summary is good, it can answer these questions in less than
30 seconds.
The tool
There are two approaches you can take to using this tool. You can either use the
downloadable icons or you can go online and use the interactive Plan Cruncher site
to upload your information. The Plan Cruncher site is more focused on for-profit
businesses and attracting investment so it may not suit all creative and cultural
businesses.
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If you are using the icons1 feel free to add new ones that are more appropriate to your
context.
Think about the status of your idea, the people who will make it happen, the funding
you already have available, the funding you will need, will you go it alone or do you
need other investors/funders and so on.
See below for an example of a ‘crunched’ plan for sliced bread 2.0!
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Take the next step
Think of an idea you may have been pondering for some time, however improbable it
may seem. Lay the icons out on a table and, using your idea, see how many of the
questions you can answer. How does it feel to imagine someone else investing in
your idea? Who might that be?
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Top tips
• Use the icons quickly to answer the key questions • Take notes as you go to capture moments of insight or further research you need
to do • If you develop the icons, it might be a good way to involve artists, designers or
other practitioners in your planning
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Developing a robust business case
“No business case will sell social software to a firm that doesn’t already value
collaboration in its culture …//... If the ROI is needed to convince an organisation that
collaboration is a good thing – then ROI is the least of your problems …” Larry Hawes,
Gilbane Group
The big idea
A business case is a means of providing evidence that a project is a good investment
for your business and/or an external investor. It differs from a business plan in that it
focuses on a specific project or programme rather than the whole business. It is
effectively an investment tool that sells a particular idea or concept.
Purpose
The reason for preparing a business case is to identify a future opportunity that is
supported by robust analysis of the benefits, risks and costs involved. It should
achieve four purposes:
• Helping you to think through the project in a systematic manner • Explaining to stakeholders, internally and externally (as appropriate), why the
project should proceed • Helping potential investors (both public and/or private) understand the economic
value of the project • Providing a clear framework for delivering the project to ensure it is completed on
time and on budget
A good business case covers:
• The purpose of the project, the opportunity it addresses and its benefits • The strategic fit with your business • Risks • Affordability • Value for money
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The tool
Building an effective business case that sells your idea requires you to follow a
number of steps:
1. Outline the problem or opportunity it addresses 2. Describe your solution 3. Define your approach 4. Estimate costs and benefits 5. Assess the risks 6. Sign off the case through whatever approval system you use 7. Present the case
You can use the following template to help you build your case:
Background: context, environmental factors, trends, forecasts, benchmarks
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The opportunity: why this project, why now, why are you best placed to deliver
it? Describe the scale, scope, aims and objectives. Clearly demonstrate the
need and what will be achieved
The proposed solution: what is the solution and how will it be achieved? Why is
this the solution and how are you best placed to deliver it?
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How you will implement the project: describe the process or steps you will take
to deliver the project. This may include details of delivery structure, partners
and monitoring
Estimated costs: this should include one-off and ongoing costs. Cashflow
requirements and any legacy commitments that the project creates
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Estimated benefits: this should include financial as well as other measures.
Include one-off and likely future benefits. Demonstrate how the benefits will be
tracked and measured
Risks: illustrate the key risks and how you intend to mitigate them. You should
include risks that might affect time, cost, cashflow, quality and levels of benefit
achieved. This section should also cover impact, probability and containment of
the risks
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Milestone plan: this provides the breakdown of how the project will be
implemented. To start with, there will probably be a small number of high-level
milestones which you can then add to as the project is implemented. You
should clearly identify who is responsible for what if you are working with a
team
Appendices: in some cases you may include appendices, depending on who
you are seeking funding from. These may include evidence underlying some of
your conclusions and claims, financial statements, business documents
(constitutional, policies etc) and so on
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Take the next step
Consider a recent project proposal you have made. Does it include the elements
listed above? How might you have improved your case? What additional research
could you have done to build your argument?
Top tips
• Presenting and communicating the business case happens throughout the life of the project. It is not a one-off event at the beginning
• You are trying to present a clear and compelling case for your project that can be easily understood by everyone – keep your language clear and simple
• Clearly identify all your assumptions • Be honest and realistic about the likely outcomes • The business case should be treated as a live project document, not a one-off
funding application
References
This guidance was adapted in part from the Arts Council’s Grants for the Arts, OD
Thrive! toolkit, which was prepared by The Change Works
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Fundraising readiness check
“Donors don't give to institutions. They invest in ideas and people in whom they
believe.” G.T. Smith
The big idea
Key to any successful fundraising campaign, whether for a large project or capital
development, is preparedness. Much of the work should happen in advance so that
by the point that it becomes a ‘public’ campaign all of the groundwork is done and a
large proportion of the funds is already raised.
Purpose
This tool provides a checklist to enable you to assess your business’ readiness to
undertake a fundraising campaign.
The tool
Consider the following indicators and rate your business against them from 1 to 10
(where one is low) in each case:
Indicator Rate 1 - 10
A clear business mission
A strategic plan that outlines what you intend to achieve as a business
A comprehensive fundraising case, which includes the problem or opportunity you are addressing, how you are addressing it and why your organisation is best placed to deliver it
A clear action plan for running the campaign, including timelines and milestones
Identified and willing major donors who can give substantial lead gifts
Well-informed key participants (including volunteers) who can represent the case and organisation
The involvement and commitment of the whole business to actively fundraise and to
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Indicator Rate 1 - 10
integrate fundraising into all activities
Commitments of time and support from all relevant participants
Additional external expertise where appropriate
A fundraising budget
Adequate working capital to conduct necessary research or development activities
Management information systems capable of managing the fundraising data and monitoring the campaign, such as donor lists, activities etc
Total score Implications
80+ The campaign is well positioned and you are ready to go ahead
60-79 There is still some preparation to do but you are on the way to being ready
Less than 60 The campaign is not ready and you need to strengthen your planning further
Take the next step
Think about your role in the fundraising process. Is it something you are comfortable
with? What impact do you think the current economic environment will have on your
fundraising campaign? How might you mitigate some of that impact?
Top tips
• Never ask a stranger for money. People give to people because of people • Use different cultivation approaches to help people get to know you and allow you
to get to know them • Think of the wants and needs of the donor. They will be interested in the benefits
you are providing, not the fact you need funding • Ask for support for what you need. Don’t be side tracked by sources of funds that
will take you in another direction • Aim for something you know you can achieve and don’t overreach yourself
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Funding models
“When a non-profit finds a way to create value for a beneficiary ... it has not identified
its economic engine. That is a separate step.” Landes Foster et al. (2009)
The big idea
The idea of this approach is to look specifically at your funding model. Often creative
and cultural leaders are very adept at creating their programmes but are fuzzier about
the nature of their funding model. This sometimes leaves stakeholders unsure about
the impact of their support. Unlike commercial models, a non-profit organisation has
to be mindful of both its beneficiaries and its funders. This tool illustrates ten funding
models which highlight the source of funds, the types of decision makers involved
and their motivations.
Purpose
This tool should enable you to identify the funding model/s your business operates.
You can then consider the strengths and weaknesses of each approach. During
these turbulent economic times, it is important to be able to identify your model and
be disciplined about the way you raise your money. This should ensure that you are
not blown off course by chasing any available funds.
The tool
Consider the characteristics of the ten funding models (Table 1) that Landes Foster et
al. have identified. Decide where your organisation might be positioned.
Now review the following questions that relate to each model:
1. The heartfelt connector: a. Have a large cross-section of people already demonstrated that they will
fund your type of cause/s? b. Can you communicate a compelling case for your business?
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c. Is there an existing channel for attracting and involving large numbers of volunteers?
d. Do you have, or can you develop, the necessary outreach required? 2. The beneficiary builder:
a. Does your mission support the creation of both individual and social benefit?
b. Does your organisation build a very loyal beneficiary base? c. Are you able to reach out to your beneficiaries and maintain long-term
relationships? d. Are those relationships scalable?
3. The member motivator: a. Are you able to provide individual benefit at the same time as collective
benefit? b. Do you have the ability to engage and manage your members in
fundraising activities? c. Can you commit to maintaining your core membership even if that limits
your fundraising or programming, meaning your main focus is your members?
4. The big bettor: a. Can you solve a major problem in an identifiable timeframe? b. Can you clearly articulate how you will use a small number of large-scale
donations to achieve your goals? c. Are any high net worth individuals or trusts and foundations already
interested in your approach or issue? 5. The public provider:
a. Is your organisation a good match for one or more pre-existing public funding programmes?
b. Can you demonstrate how your organisation will do a better job than your competitors?
c. Do you have the time to enter into contractual relationships as well as securing contracts on a rolling basis?
6. The policy innovator: a. Do you provide an innovative approach? b. Is your approach compelling enough to attract funders who tend to
gravitate towards traditional solutions? c. Can you provide evidence that your approach works?
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d. Are you willing to cultivate strong relationships with public decision makers who will advocate change?
e. Are there sufficient pressures on public funders at this point in time to overturn the status quo?
7. The beneficiary broker: a. Can you demonstrate to public funders your unique ability to connect
beneficiaries with benefits, such as successful placement rates or customer satisfaction feedback?
b. Can you develop supplemental services that add value to the benefit? c. Can you manage the regulations and requirements needed to be a provider
of these benefits? d. Can you find ways to raise additional money to the fees received from the
benefits programme? 8. The resource recycler:
a. Are the products you distribute likely to be donated on an ongoing basis? b. Can you develop the expertise to stay abreast of trends in the industries
that donate products? c. Can you prepare for fluctuations in donations? d. Do you have a strategy for attracting funding needed to run the operations
and overheads? 9. The market maker:
a. Is there a group of funders with an interest in supporting your work? b. Are there legal or ethical reasons why this service or product is better
delivered by your organisation? c. Do you have a trusted programme and brand?
10. The local nationaliser: a. Does your cause address an issue that local leaders see as important? b. Is this issue compelling in communities across the country? c. Does expanding your work into other communities fulfil your mission? d. Can you replicate your model elsewhere? e. Are you committed to attracting and developing strong leaders to run local
branches of your organisation?
Having thought about these questions, can you identify a new funding model that you
might pursue? What are its implications for your business? Who else might move into
your area?
4
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Take the next step
Think about some of your competitors or partners. Which model do you think they
are operating? How might you find the necessary information to check your
conclusions? Having identified your core model or models, what might be your
second and third options?
Top tips
• In reviewing your funding model, consider how well it reflects your mission • Involve stakeholders by asking for their perceptions of which model you are
operating • In the light of the current financial challenges, consider how viable your model is
over the next three years • If you are planning a switch in model, be really clear about the implications and
the time it takes to establish credibility in new sectors
Table 1 Funding models (Landes Foster et al., 2009)
Model Characteristics Tactical tools
The heartfelt connector
Funding source: individual
Funding decision maker: multitude of individuals
Funding motivation: altruism
The mission has broad appeal
The benefits often touch the lives of the funder’s family and friends
Funders are connected to the cause through volunteering or other means
Special events
Direct mail
Corporate sponsorship
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Model Characteristics Tactical tools
The beneficiary builder
Funding source: individual
Funding decision maker: multitude of individuals
Funding motivation: self-interest followed by altruism
The mission initially attracts people pursuing individual benefits
Mission creates a strong individual connection through the delivery of the benefit
Benefits created are viewed as having important social benefit
Fees
Major gifts
The member motivator
Funding source: individual
Funding decision maker: multitude of individuals
Funding motivation: collective interest
Most of the benefits have a group orientation
Uses richest mix of tactical tools to raise money
Membership
Fees
Special events
Major gifts
Direct mail
The big bettor
Funding source: individual or foundation
Funding decision maker: few individuals
Funding motivation: altruism
Builds majority of support from a small number of individuals or family foundations
Mission may be fulfilled within a limited time period (that is, finding a cure)
Major gifts
The public provider
Funding source: public sector
Funding decision maker: Administrators
Funding motivation: collective interest
Provides services that are perceived as state responsibility
Clear definitions exist of the services and products that the non-profit must provide
Public sector contracts
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Model Characteristics Tactical tools
The policy innovator
Funding source: public sector bodies
Funding decision maker: policy makers
Funding motivation: collective interest
Secures public funding for a significant new approach to a problem or to address a problem not currently seen as state responsibility
Requires a high-level public sector champion
Generally succeeds when there is pressure on Government as a result of financial or media crisis
Legislative appropriation or ring-fencing
Executive ring-fencing
Government/public sector pilot project
The beneficiary broker
Funding source: public sector bodies
Funding decision maker: multitude of individuals
Funding motivation: self-interest
Individual beneficiaries decide how to spend Government funds
Must navigate and influence public decision makers for eligibility, compliance and reimbursement
Requires individual-based marketing capabilities
Government/public sector reimbursement
The resource recycler
Funding source: individual
Funding decision maker: multitude of individuals
Funding motivation: altruism
Non-profit uses goods created by the private sector where there are inefficiencies that create surpluses or where the marginal costs to produce are low
In-kind giving
The market maker
Funding source: mixed
Funding decision maker: mass of individuals or a few individuals
Funding motivation: altruism or self-interest
A funder with some degree of self-interest and the ability to pay exists
Often one of the parties involved is motivated by altruism (for example, blood donors)
Fees
Major gifts
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Model Characteristics Tactical tools
The local nationaliser
Funding source: mixed
Funding decision maker: few individuals
Funding motivation: altruism
The issue is one of a few or the top priority for a locality
The issue is common enough to exist in various locations
The level of funding available in a single geographic locality is usually limited
Major gifts
Special events
References
Landes Foster, W., Kim, P., & Christiansen, B. (2009). Ten Nonprofit Funding Models. Stanford Social Innovation Review, Spring 2009.
.co.uk
The agreement/certainty matrix
“In other words, given that we do not know with any certainty what it happening, we
certainly know about what we are doing to enable us to live in uncertainty.” (Stacey,
2010: 2)
The big idea
The idea was originated by Ralph Stacey as a result of his ongoing concern with
complexity and how organisations change over time. The model, sometimes referred
to as the Stacey Matrix, considers organisational management from the perspectives
of levels of agreement and levels of certainty.
Certainty is driven by the quality of available information that supports management
and decision making. Agreement recognises that enterprises are socially-based and
dependent on negotiation for their activities.
Purpose
The matrix encourages you to reflect on the relative levels of certainty and agreement
in your enterprise, activities or in a particular project. Using the matrix can support:
• Decision making • Stakeholder management • Communicating why particular approaches are being used • Encouraging creativity and considering different perspectives
The tool
The approach involves plotting your projects, decisions or activities on the
certainty/agreement axes (Figure 1). Depending on where the projects or activities are
placed, a different response is needed in terms of management and decision making.
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To assess your business’ levels of complexity and agreement, work through the
following steps:
1. Map your projects, activities or ideas onto the matrix (Figure 1)
2. Consider the following questions in relation to each of the management/decision-making dimensions.
Telling
a. How do you know things are this certain? b. How do you know what you know? c. Have you considered all the necessary variables? d. What have you done to ensure that everyone shares a common
perspective? e. Are you sure there is a common perspective? f. What have you done to ensure that you are not blinded by your own vision? g. What approaches have you used to assess different perspectives?
Selling
a. Are you ready to change the people involved if they don’t all agree? Would this even be feasible?
b. How good are you at managing disagreement? c. How will you go about selling the project or approach? d. How good are your powers of persuasion? e. Have you got the time and resources to invest in selling the idea?
Consulting
a. How will your field or sector evolve? b. How can you best respond? c. How are you forming your judgements about the future? d. Which political decisions will influence your future? e. What other environmental factors might be an issue? f. Are you open to the levels of research needed?
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Far from
certainty
4. Co-creating methods
and approaches –
Complex decision making
Close to
certainty
Clo
se t
o
agre
emen
t F
ar f
rom
ag
reem
ent 5. Chaos and
anarchy or
avoidance
Edge of
chaos
3. Consulting –
judgemental
decision making
1. Telling –
rational decision
making
2. Selling –
political
decision
making
Co-creating
a. How well are you connected with your stakeholders? b. How comfortable are you with change being the norm? c. How open and flexible is your business model? d. What opportunities do you provide for co-creation? e. Are your management practices as creative and innovative as your work? f. Are you confident to work intuitively?
Chaos
a. Are you ready for the collapse of what you have created? b. Are you avoiding the very real challenges your business is facing? c. Are you ready to let go of any form of certainty?
Figure 1 Stacey's agreement and certainty matrix
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3. Having mapped your work onto the matrix, are there any particular patterns? Have they clustered in particular zones?
4. Having considered the previous questions, think about any actions you might take with regard to your activities or business
Take the next step
Think about a project you have recently completed. Looking back, did you have a
strong sense of certainty about what was needed? What management approaches
did you use? What might you do differently next time, thinking about the levels of
uncertainty and agreement?
Top tips
• Don’t be put off by uncertainty; try and find different ways of working with it • Be aware of when you are managing from a rational, decision-making perspective • There are a range of additional techniques to support each level of decision
making. Experiment with different approaches – participatory risk analysis, real time strategic change, future search and so on
References
Stacey, R. (2010). Complexity and Organizational Reality: The Need to Rethink Management after the Collapse of Investment Capitalism. Abingdon, Oxon: Routledge.
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Change quadrants
“It is not the strongest of the species that survive, nor the most intelligent, but the
ones most responsive to change.” Clarence Darrow
The big idea
The change quadrants model (ten Have et al., 2003) is a framework for helping you to
take account of the culture of your business during a change process. The idea
behind the model is that your approach to a particular change or initiative will depend
on the nature of your organisation, whether it is warm or cold and whether the
change is warm or cold.
A cold organisation is one that has a command and control approach, systems,
procedures and structures which drive the direction of the organisation to ensure it
achieves its goals. A warm organisation operates on the basis of shared values; it is
reliant on a shared commitment to the direction of the business.
A cold change is based on a clearly identifiable situation or crisis such as a drop in
revenue, downturn in customers or audiences, or near insolvency. A warm change,
however, is generally internally driven by personal and professional ambitions and
aspirations.
Purpose
Thinking about change in terms of organisational culture encourages you to take
account of the kind of business you are running. In doing so you can look at the
types of change initiative that are most likely to be effective. You can also use it as a
mechanism following a change project to understand what worked and why or,
conversely, why you encountered some of the challenges you did.
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Based on your assessment of the temperature of your organisation and the change,
there are four possible strategies:
• Intervene: change systems to respond to a clear, identifiable problem or issue • Transform: change direction of commitment in response to an identifiable issue • Innovate: change focus of commitment in response to a possible opportunity • Implement: change systems and procedures in response to a possible
opportunity
The tool
To consider your business in relation to the change quadrants, complete the
following steps:
1. Consider the following scales and mark on the line where you would place your organisation and the change you are considering
Cold
!"#$%
&'()%
&'()
%
Intervene
Transform
Implement
Innovate
Type of organisation
*+,-%".%/0'12-%
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Change
Externally driven Internal
momentum
Urgent
Time to consider
Responds to an
opportunity/issue
Recurring, i.e.
seasonal
Reactive
Proactive
Organisation
Focused on
goals and targets
Guided by
norms and
values
People do as
they are told
People act
independently
Senior people
expected to take
responsibility
Everyone takes
responsibility
Resistance is
mainly based on
barriers
Energy directed
into resistance
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Focused on
processes
and/or structures
Adapts as
required
2. If your scores are mainly to the right, you are considering a warm change and a warm organisational culture. If your scores are mainly to the left, it will be a cold change and a cold culture
3. If your scores are on different sides for change and organisation, you are thinking about a change that may not sit comfortably with the way your organisation works. It might be worth rethinking your change strategy
4. In the light of the above, consider which form of change strategy you are adopting and how it will be implemented
Take the next step
Think about a change initiative you have experienced. Would you say it was a warm
or cold change? How well did it work for the business? What did it feel like for you?
Looking back what would you do differently?
Top tips
• A cold change is easier to plan and communicate than a warm one • Many organisations believe they are warmer than they actually are. Be honest in
your assessment of how your business works • You might want to consider the possibility of warming up or cooling down,
depending on the nature of the change • The warm and cold metaphors are not value judgements: they are a mechanism
for thinking about change in relation to your organisation. They both have a value and will depend in part on the wider context in which you are operating, for example you can imagine that a regional theatre will have a different culture to an accountancy practice
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References
ten Have, S., ten Have, W., Stevens, F., & van der Elst, M. (2003). Key Management
Models. London: Prentice Hall.
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Are you investment ready?
“Understanding how to be a good investor makes you a better business manager and
vice versa.” Charlie Munger
“Many of the biggest and most far-reaching investments we make in our lives are
investments that have little or nothing to do with money.” Daniel Quinn
The big idea
Investment readiness means that you are in a strong position to present your
business to different investors and meet their requirements. You may have a
particular project to put forward or you may feel that your business is ready for rapid
growth. On this basis you might consider approaching different sources of funding,
such as:
• Business angels • Venture capitalists • Banks • Other funders such as high net worth individuals
Purpose
Seeking external support to allow your business to grow involves both ensuring you
have a credible case to present and making a series of personal decisions to make
sure you are comfortable with the direction you are taking the business in. The
purpose of this tool is to help you think about some of the issues that might arise
during this process so you are more likely to meet the needs of the investors and to
succeed.
You are unlikely to be investment ready if:
• You are unwilling to give up a stake in the business • You have an inadequate business plan
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• You are not looking for fast growth. Can you provide a growth level of eight to ten times within five years?
• You do not have a proven need for your product or services • You lack knowledge of your market • You lack knowledge of the investment process • You are unable to pitch your business effectively or credibly
The tool
This tool consists of a questionnaire that takes you through some of the key
questions you need to consider to work towards investment readiness. To use the
tool take the following steps:
1. Complete the following questionnaire 2. Ensure you have evidence to support your answers 3. Record any issues or further questions that arise as you complete the
questionnaire 4. If you decide not to proceed with seeking external funding, consider what that
means for the future of your business. Is this a final decision or will you revisit it at a later date?
5. If you decide to proceed, consider: a. Any actions you need to take to improve your investment readiness b. Are you looking for national or international growth? c. What further advice you might seek to prepare your case d. Whether you need training in this area
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Yes No
The market
Are you operating in a high growth industry/sector?
Do you have a first-to-market advantage?
Do you have innovative products or services?
Do you have a unique selling proposition?
Is there a global market for your products or services?
Is there clear evidence of a market need for your products or services?
Have you undertaken any formal market research?
Do you have both primary and secondary sources of information about the market?
Are you able to list all your potential domestic and/or international market segments?
Do you have a clear indication of the market size?
Have you completed a competitor analysis?
Your business
Do you have a comprehensive business plan?
Have you identified your strengths and weaknesses? And how you intend to deal with them?
Do you own your intellectual property? Have you protected your intellectual property and can you show a strategy for protecting future developments?
Is the legal structure of your company clear and appropriate?
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Yes No
Is the company compliant with current legislation and regulatory requirements?
Are you able to supply a copy of your company registration documents?
Is there a shareholder’s agreement?
Are you facing any litigation – current, pending or potential?
Does the business have appropriate insurance coverage?
Your finances
Have you identified the level of funding required?
Have you identified the type of funding required? (business angel or venture capital etc)
Are you able to supply audited accounts?
Are you able to supply projected operational and financial statements?
Are you able to supply projected earnings and cashflow forecasts?
Are you able to provide details of types of shares and share distributions to potential investors?
Are the business’ accounting policies in accordance with accounting standards?
Are your personal and business affairs clearly separated in the operation of the business?
Are the director’s credit cards or holidays funded by the business?
Your people
Do you have an effective management team (where one exists)?
Do the people involved in your business have a diverse range of skills?
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Yes No
Where you are working on your own or with a small team, do you have access to a wider range of advisers and skills?
Are the shareholders realistic about the business’ market value?
Are current employee contracts in place for all staff (where appropriate)?
Does the business have a properly constituted board that meets at regular intervals?
Your business case
Are you able to clearly demonstrate the opportunity you are intending to address?
Have you clearly identified the level of benefits arising from the opportunity?
Have you undertaken a risk analysis?
Do you have realistic cost projections?
About you
Do you understand the investment process – timescales, due diligence, legal requirements, key documents, handling investor requirements etc?
Are you ready to accept equity?
Can you clearly identify the characteristics of your ideal investor?
Have you perfected your pitches/presentations to investors?
Are you ready to undergo the due diligence process?
Are you ready to work with new stakeholders?
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Take the next step
How does it feel to think about your business growing in this way? Do you know of
other people who have followed a similar path, consider approaching them to learn
more about their experiences. Which aspect of this process concerns you most?
Which aspect excites you the most?
Top tips
• Practise, practise, practise – work through your pitch and presentation • Get support. There is a range of small business advisers, like Social Innovator,
UnLtd Advantage and Business Link to name a few, who can help you prepare your case
• Be realistic about your business model • Be honest about whether this form of funding is really for you
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Levels of joint working “Some of the brightest ideas for social change grow in the spaces between
organizations and sectors. Yet few organizations have systems to make collaboration
happen.” Satish Nambisan (2009)
The big idea
Inter-organisational working, collaboration, partnership … Call it what you will, the
drivers for businesses coming together to deliver activities are growing. However, in
building a joint working initiative the participants do not always consider the nature of
the group they are building. This is important in shaping the success factors and
outcomes that the group may be striving for. It can help avoid disappointment and
frustration around what is achieved.
Joint working is usually good for: • Addressing complex problems • Improving efficiencies and gaining economies of scale • Leveraging new resources • Providing a larger and more diverse skills base • Accessing specialist expertise, which can support capacity and capability building • Improving outcomes through working towards common or related goals
Purpose
The purpose of this tool is to help you plan the nature of your joint working group
from the outset, to determine your purpose, processes and structure according to the
joint working model that is right for you. It should also help you manage the
expectations of the group.
The tool
This tool is based on a framework (Figure 1) that outlines various levels of joint
interaction. This can be used to determine the most appropriate level of collective
working for your business and/or project. You will need to undertake the following:
1. Define the issue you are hoping to address
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2. Undertake a review of the key issues you need to consider 3. Review the joint working framework levels (Figure 1) 4. Determine the level that you feel fits your purpose, context, partners and
beneficiaries 5. Set goals and benchmarks 6. Identify partner roles 7. Decide how to approach the issue or opportunity 8. Establish timelines 9. Determine the resources needed – not just what is already in place 10. Decide what type of evaluation is needed 11. Agree direction with prospective partners 12. Agree relevant documents with partners 13. Establish an action plan
Take the next step
Consider other joint working projects you have been a part of. Using the levels
framework, how would you characterise that collective approach? Is that what was
agreed at the outset or did it evolve over time? How might you have organised it
differently?
Top tips
• Often joint working projects start out with the aim of leaping straight to ‘collaboration’. Be clear about the context, purpose and histories of the group to determine he right level to work at
• There is nothing to stop a joint working group moving from one level to another if that is appropriate
• There is sometimes a tendency for joint working groups to focus on tasks. Pay attention to process and structure as much as tasks and purpose
References
Hogue, T. (1994). Community Based Collaboration: Community Wellness Multiplied. Retrieved June 2008, 2008, from http://crs.uvm.edu/nnco/collab/framework.html
Nambisan, S. (2009). Platforms for Collaboration. Stanford Social Innovation Review, 43-49.
.co.uk F
igu
re 1 Join
t wo
rking
framew
ork (H
og
ue, 1994)
Level o
f join
t w
orkin
g
Pu
rpo
se S
tructu
re P
rocess
Netw
orkin
g
Dialogue
Sharing und
erstanding
Information d
istribution
A b
ase of supp
ort
Non-hierarchical
Loose/flexible links
Roles loosely d
efined
Com
munication is the p
rimary link b
etween m
emb
ers
Low-key lead
ership
Minim
al decision m
aking
Informal com
munication
Little conflict or resistance
Co
-op
eration
or
alliance
Match need
s and p
rovide co
-ordination
Limit d
uplication of services
Ensure tasks are d
one
Central b
ody of p
eople w
ho act as a comm
unication hub
Sem
i-formal links
Roles som
ewhat d
efined
Links are advisory
Little or no new resources
Facilitative leaders
Com
plex d
ecision making
S
ome conflict
Formal com
munication w
ithin the central group
Co
-ord
inatio
n
or p
artnersh
ip
Work to a com
mon goal
Share resources to ad
dress com
mon
issues M
erge resource base to create som
ething new
Central b
ody of p
eople w
ho are decision m
akers R
oles defined
Links form
alised
Group
develop
s new resources and
joint bud
get
Autonom
ous leadership
but focus is on the
comm
on issue G
roup d
ecision making in central and
sub-
groups
Com
munication is freq
uent and clear
Co
alition
S
hare ideas and
be w
illing to pull resources
from existing system
s D
evelop com
mitm
ent for a minim
um of
three years
All m
emb
ers involved in d
ecision making
Roles and
time d
efined
Links are formal w
ith a written agreem
ent G
roup d
evelops new
resources and a joint b
udget
Shared
leadership
D
ecision making is form
al, involving all mem
bers
Com
munication is regular and
prioritised
Co
llabo
ration
A
ccomp
lish a shared vision and
imp
act b
enchmarks
Build
interdep
endent system
to add
ress issues and
opp
ortunities
Consensus used
in shared d
ecision making
R
oles, time and
evaluation formalised
Links are form
al with w
ritten agreements and
work
schedules
Leadership
is high, trust levels high, prod
uctivity high Id
eas and d
ecisions are equally shared
H
ighly develop
ed com
munication system
s
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Compete, collaborate, complement
“A merchant who approaches business with the idea of serving the public well has
nothing to fear from the competition.” James Cash Penney
The big idea
Once you have undertaken an environmental analysis (see the PESTLE tool under the
‘Where are you now’ stage) and considered who else is operating in your area or
market, you need to assess the relationship between your respective businesses. If
you have a sound awareness of your own business and know the strengths and
weaknesses of the other players in your field, you can determine the kind of
relationship you want to have with them. This is particularly crucial at a time when
funders or investors are likely to be looking for efficiencies and new business models.
Purpose
Consider the other businesses in your field and think about the different relationships
you could have with them (you can use other tools such as ‘Strategic group mapping’
in this stage to help identify who they are). There are a number of options you could
pursue depending on your respective missions, customer bases and business
models. These range from direct competition to collaboration or co-operation.
The tool
To consider your options in relation to others in your market or field take the following
steps:
1. Determine who you would define as the other key players operating in your market or field
2. Record how much you know about each of the other players. What are their:
a. Objectives: what drives their business? This may be their mission, financial success, market share etc
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b. Assumptions: beliefs they hold about themselves, their past behaviour and experiences, industry trends, assumptions they may make about you etc
c. Strategy: what the player says (annual reports etc) and what it does (cashflows, recruitment, research and development, public relations etc)
d. Resources and capabilities: SWOT, capacity to increase capabilities, ability to react to change, financial analysis
3. In the light of what you have found above, think about your relationship with each of the players. Will your response be to compete, collaborate or complement?
4. Complete the options analysis template (Table 1) with regard to your approaches
5. Prepare an action plan
6. Look at some other tools that could help you determine the appropriate strategy
There is another possible option, which is to do nothing, but this is a high-risk
strategy particularly in such a changing environment. Even if that is your short-term
decision, you need to keep a close eye on what is happening in your wider
environment.
Take the next step
Think of an organisation that you have regular dealings with (it need not be in your
sector, it could be where you do your shopping). What do you think are their
objectives, strategies and resources? If you were a business operating in their field,
how would you respond?
Top tips
• When considering co-operation and collaboration, be clear about what you want and what’s in it for you
• Constantly re-assess any form of joint working and have a clear exit strategy • If you are going to invest resources in the relationship, carry out a cost-benefit
analysis and ensure there is a clear business case • Remember that relationships are between people and as such you need to be
comfortable that your businesses are compatible if you want to work together
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• Competition has tended to be a dirty word, particularly in the non-profit creative and cultural industries. Nonetheless, in a time of high potential demand and diminishing public resources, it will become an increasingly important aspect of your environment
References
Bruce, I., Coperman, C., Forrest, A., Lesirge, R., Palmer, P., & Patel, A. (2008). Tools
for Tomorrow: A Practical Guide to Strategic Planning for Voluntary Organisations.
London: Cass Business School/NCVO.
Table 1: Options analysis template
Relationship Approach Which players would you include?
What you know about them
Your strategy for managing/working with the other players
Compete Take action to succeed at the expense of other players
For example improve quality, distinctiveness or compete on cost ...
Collaborate Establish formal relationships for mutual benefit
For example legal agreement, shared resources, joint venture etc ...
Co-operate/ complement
Establish informal relationships to mutual benefit
For example share information, resources, expertise etc ...
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Strategic alliances – mergers and acquisitions “This really is a merger of equals. I wouldn't have come back to work for anything less
than this fantastic opportunity. This lets me combine my two great loves – technology
and biscuits.” Lou Gerstner
“Mergers are difficult enough when they are strategic and well-evaluated. They are all
the harder when they are reactive and involve at least one distressed entity.” Cortez
The big idea
Mergers and acquisitions (M&A) have always been an option for all kinds of business
from commercial to non-profit. But the current economic downturn has put them
centre stage. M&As are sometimes seen as a rescue option for those needing to
shore up their finances but they can also be seen positively as a chance to
strengthen effectiveness and impact. The key question for any organisation looking at
an M&A option is not whether it should be pursued but “How best do we fulfil our
business’ mission and is M&A a better option than other alternatives?” (Cortez 2009)
Purpose
When two or more businesses are thinking of coming together as a merger or
acquisition, there is a wide range of issues that need to be considered and they are
likely to be viewed from very different perspectives. Different company forms may
have different legal requirements in relation to such a process and this tool is no
substitute for formal legal advice. There are various forms that the merged entity
could take:
• A holding company is established and the existing businesses continue as subsidiaries
• A new company is created and the activities, assets and liabilities are transferred to the new business
• One of the existing enterprises transfers its activities, assets and liabilities to the other
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• One of the existing businesses becomes a subsidiary of the other
Each approach has different costs and benefits and it will depend where you are in
the M&A as to how you perceive them.
The tool
This tool covers two aspects of the pre-M&A consideration, based on the following
two questions:
• What are the key drivers of this M&A? • How might you evaluate the attractiveness of an M&A partner?
Consider the following drivers and select the ones that you think apply to you:
Environmental forces Programme/activity forces
Managerial forces Financial forces
Rapid growth of your sector
Increasing competition for resources
Increasing competition between businesses in your field
Real or perceived threat of being the target of an M&A
Pressures from partners or other stakeholders
Increasing need for advocacy around a particular cause
A desire to:
Diversify or expand product/service mix
Create a stronger market niche
Improve quality
Improve reputation or brand
Assure survival of an important service
Strengthening the leadership of the organisation
Using resources more effectively
Obtaining intellectual capital
Providing better opportunities for specialisation
Obtaining state-of-the-art technologies
Establishing or strengthening strategic position
Energising the governing body
Overcoming scandal
Increasing visibility
A desire to:
Increase, stabilise or diversify funding streams
Gain access to capital
Improve the bottom line
Reduce costs and/or achieve economies of scale
Maximise resources
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If a large number of the drivers apply to your current situation, you may want to
consider pursuing an M&A. If you have a potential partner or partners in mind,
consider the following checklist:
• Do you have a history of working together? • Are your missions and values compatible? • Do you share a consistent vision of future direction to be achieved through the
M&A? • How receptive is either of you to giving up a degree of autonomy? What if one of
you were the one being acquired? • What are the strengths and weaknesses of your respective activities? • Are there significant differences in scale between you? • How complementary are your organisational cultures? • How compatible are the members of your governing bodies? • What are the implications for the management and leadership of your business? • Are there complexities around integrating staff (TUPE, pensions liabilities etc)? • Is there genuine potential for operational efficiencies? • What is their financial status? • What is the likelihood of long-term viability? • Are the funders supportive of the M&A? • What are stakeholders’/beneficiaries’ perceptions of the merger? • Are there any special issues to consider?
Take the next step
Look on the internet or in the press for recent M&A stories. What sort of picture do
they paint. Look up case studies and consider the lessons they may have to offer.
Imagine that the M&A has happened and you are five years down the line. What do
you think the business will be like?
Top tips
• The more work you can do at this stage the more likely you are to make an informed decision
• Ensure you obtain as much data as possible. Don’t rely on assumptions or verbal assurances
• Seek specialist advice early if you are considering proceeding
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• Communicate, communicate, communicate. This can be a tricky process and anxieties build quickly
• There are some very good publicly available resources in this area. Make use of them – National Council for Voluntary Organisations (NCVO), Sayer Vincent etc
References
Cortez, A., Foster, W., & Smith MIlway, K. (2009). Nonprofit Mergers and Acquisitions:
More Than a Tool for Tough Times. Retrieved 12/2/11, from
http://www.bridgespan.org/Nonprofit-M-and-A.aspx
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Portfolio analysis – where do you make your money?
“in the non-profit sector financial information and information about mission impact
are seldom discussed in an integrated way.” (Bell et al., 2010: 3)
The big idea
This tool offers two approaches to portfolio analysis. Portfolio analysis means looking
at your mix of programming and/or products and/or services and the money they
make for you or not!
The first approach was created by the Boston Consulting Group (often known as the
BCG or Boston Matrix). It suggests that, to ensure long-term success, a business
needs high growth products or services that have potential but are in need of
investment as well as established products or services that generate income. The
portfolio is divided into four categories: stars, cash cows, question marks (or problem
child) and dogs, depending on market share and contribution. The tool assumes that
long-term income generation is the main driver and relationships with existing
customers are secondary.
An alternative approach is based on the Matrix Map (Bell et al., 2010), which looks at
the portfolio from the basis of contribution to mission and financial impact. This is for
creative and cultural organisations that do not work in immediately identifiable or
homogeneous markets and for whom mission delivery is paramount.
Purpose
This tool helps you look at your portfolio of activities – programming, products,
services and so on – to determine the relative contribution each activity makes. The
purpose of the analysis is to determine where best to invest resources in future.
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The tool
In determining your portfolio mix, you need to take the following steps:
1. For each product or service in your portfolio, determine expected relative market growth
2. Determine the relative size of the various markets that are relevant to your product and services
3. Plot your products and services on the matrix 4. Determine your actions in relation to the overall portfolio:
a. Cash cow – invest significant resources and defend at all costs b. Stars – invest as heavily as possible c. Problem child – if your market share is low, you are most likely looking to
exit d. Dogs – exit or reduce costs or raise income to ensure they are less of a
drain on resources
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rke
t g
row
th r
ate
Relative market share
Question mark /
problem child
Minor player in a high
growth market
Stars
Market leader in new
high growth markets
Dog
Minor player in a static
market
Cash cow
Market leader in a large
but fairly static market
?
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An alternative view
Not all creative and cultural organisations can easily determine the nature and scale
of their respective ‘markets’. Or the areas in which they operate may be mediated by
a third party, such as a funder, which manages the market in a particular direction.
You can still look at your portfolio of activities but this time in terms of their relative
cost and the contribution they make to your mission.
This approach is based on recognising the ‘dual bottom’ line that many creative and
cultural organisations have to operate, namely being mission driven and having to
generate a financial return.
For this approach, you need to take similar steps to the Boston Matrix but with a
focus on mission and financial return instead of market share/growth:
1. Consider each area of activity and rate it from 1 to 4 in terms of impact (not much impact, some, very strong, exceptional). You can also develop a more robust evaluation scheme based on the following criteria:
a. Alignment with core mission
Mis
sio
n Im
pac
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Profitability
££
£
££
Heart
High mission impactLow profitabilityKeep but contain costs
Star
High mission impactHigh profitabilityInvest and grow
STOP
Stop
Low mission impactLow profitabilityClose or give away
Money Tree
Low mission impactHigh profitabilityWater, harvest and increase impact
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b. Excellence in delivery
c. Scale or volume
d. Depth
e. Filling an important gap
f. Community building
g. Leverage
2. Now consider each area in terms of the financial contribution it makes. To do this you will need to calculate direct costs plus appropriate administrative costs and deduct that figure from income generated by that activity
3. Now map the activity portfolio onto the matrix
4. Determine your actions in relation to the portfolio:
a. Money tree – invest some resources and monitor (money trees can move into the stop area but the belief remains that it is a money tree if it has not been monitored)
b. Stars – invest as heavily as possible
c. Heart – monitor carefully and consider other funding possibilities
d. Stop – this area is not contributing and you should seriously consider why it is part of the portfolio
Take the next step
Identify one or two of your recent ‘pet’ projects. Where would they be positioned on
either matrix (whichever is relevant)? What does that tell you about how you decide
which projects to do? Will you make different decisions in future? Is your map as you
expected? Have you honestly analysed where activities are positioned?
Top tips
• Use in combination with other assessment tools to determine if your business is spreading itself too thinly
• The Boston Matrix assumes markets can be clearly defined, which is not necessarily the case for many creative and cultural organisations. It provides a useful starting point for portfolio analysis but should not be the only tool you use
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• Either matrix is a useful tool to use before you decide to introduce new products or services
References
Bell, J., Masaoka, J., & Zimmerman, S. (2010). Nonprofit Sustainability: Making
Strategic Decisions for Sustainability. San Francisco: Jossey Bass.
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Business growth options – Ansoff’s Matrix
“The mass market has split into ever-multiplying, ever-changing sets of micro markets
that demand a continually expanding range of options.” Alvin Toffler, 1928
The big idea
Ansoff’s Matrix is a well-established marketing tool that was first published in 1957. It
is sometimes known as the Product/Market Expansion Grid and is used as a tool to
consider areas of business growth. It assesses four strategies for growth: market
penetration, market development, diversification and product development.
Purpose
The purpose of the tool is to help you identify the full range of options available for
developing your business activities with a focus on customers and markets.
New
m
arke
ts Market development
(Expanding through existing products and/or services into new markets)
Diversification
(Expanding through new products into new markets)
Exi
stin
g m
arke
ts Market penetration
(Expanding through existing products and/or services into existing markets
Product development
(Expanding through new products and/or services into existing markets)
Existing products and/or services New products and/or services
The matrix helps you assess each option in terms of its opportunities, benefits, costs
and risks.
• Penetration is the lowest risk option because you are selling more of what you know in a market you know
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• Market development is more risky because you are moving into new market areas • Product/service development adds more risk still because you are trying to offer
something different to your existing markets • Diversification is the riskiest strategy of all because you are moving into
something new on two fronts
The tool
To consider your product/services and market options, you need to:
1. Identify all your current offerings 2. Identify your current markets and list their characteristics 3. List your future options for expansion 4. Against each option assess the opportunities, costs, benefits and risks 5. Determine your future growth strategy including an appropriate timeline. The
following table shows some of the actions you might take
Market development Diversification
Target different geographical areas
Target different interest groups
Use different sales channels
Target different lifestyle groups
Recruit different expertise
Create a separate trading company (if currently non-profit)
Merge, acquire or work with a new partner
Market penetration Product development
Advertise/promote to existing customers to encourage them to purchase more
Introduce a loyalty scheme
Launch price or other promotions
Work with a partner
Produce variants on existing products and/or services
Repackage existing offers
Develop related products and/or services, for example a jeweller might offer a cleaning or polishing service
Shorten the time it takes to get to market or improve customer service
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Take the next step
Look at your business achievements over the last 12 months. Do you have a
preference for development in a particular area (many creative and cultural
enterprises have a tendency to focus on innovation)? If you could take a really
innovative move and there were no risks, what would you do?
Top tips
• Consider expanding the matrix to include nine boxes, which allows for some mid-ground between the new and existing markets/products and/or services
• Don’t be too put off by risk. It should be managed not avoided • Use the matrix to supplement other forms of analysis such as a SWOT or strategic
options matrix
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Getting social – a social media checklist
“Social computing is not a fad. Nor is it something that will pass you or your company
by. Gradually, social computing will impact almost every role, at every kind of
company, in all parts of the world.” !"##$%&$#'($%$)#*+,'-"*.)/'0"123&.45'
6the Internet is now playing a much broader role in arts engagement … A significant
minority use it not only to consume and share artistic content, but also to create it;
and over half use social networking sites regularly. These latest findings from a major
survey of 2,000 adult Internet users appear to ‘confirm that engaging with the arts
through digital media is now a mainstream activity’.” Arts Professional magazine, 2010
The big idea
Social media has increasingly become part of the marketing and programming
toolkits of many creative and cultural businesses. It is not necessarily a given that it is
right for your business but it may be something that you want to give serious
consideration. Social media consists of a number of online media which share some
or all of the following (Mayfield, 2008):
• Participation: social media encourages contributions and feedback from everyone who is interested. It blurs the line between media and audience
• Openness: most social media services are open to feedback and participation. They encourage voting, comments and the sharing of information. There are rarely any barriers to accessing and making use of content – password-protected content is frowned on
• Conversation: whereas traditional media is about ‘broadcast’ (content transmitted or distributed to an audience) social media is better seen as a two-way conversation
• Community: social media allows communities to form quickly and communicate effectively. Communities share common interests, such as a love of photography, a political issue or a favourite TV show
• Connectedness: most kinds of social media thrive on their connectedness, making use of links to other sites, resources and people
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There are currently a number of key types of social media, but these are developing
all the time:
• Social networks: these sites allow people to build personal web pages and then connect with friends to share content and communication. The biggest social networks are MySpace, Facebook and Bebo
• Blogs: perhaps the best-known form of social media, blogs are online journals, with entries appearing with the most recent first
• Wikis: these websites allow people to add content to or edit the information on them, acting as a communal document or database. The best-known wiki is Wikipedia, the online encyclopaedia which has over two million English language articles
• Podcasts: audio and video files that are available by subscription, through services like Apple iTunes
• Forums: areas for online discussion, often around specific topics and interests. Forums came about before the term ‘social media’ appeared, and are a powerful and popular element of online communities
• Content communities: communities that organise and share particular kinds of content. The most popular content communities tend to form around photos (Flickr), bookmarked links (del.icio.us) and videos (YouTube)
• Microblogging: social networking combined with bite-sized blogging, where small amounts of content (‘updates’) are distributed online and through the mobile phone network. Twitter is the clear leader in this field
Purpose
The purpose of this tool is to help you review your position regarding social media
and whether it is the right approach for you. It encourages you to consider what you
want to achieve, whether it is right for your customers or audiences and how you
might go about a social media campaign. Like any project, you need to consider the
business case for adopting social media and whether it is right to dedicate scarce
resources to this approach.
The tool
This tool comprises ten key questions with a number of prompts (adapted from
Mayfield, 2008 and Carton, 2009) to help you make decisions about your social
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media strategy. Work through the following questions to determine the approach that
is right for you.
Key questions Prompts
What is your goal – what are you trying to achieve?
Do you want to:
Extend your artistic practice?
Generate income?
Build brand awareness?
Improve customer care?
Increase engagement?
Build strong relationships?
Why use social media? Is it appropriate for your customer base/audiences/partners?
Is there an audience or community willing to be engaged?
Will it allow you to connect with hard-to-reach audiences or customers?
Do you understand the people you are trying to reach?
Is social media the best method?
Will it deliver an appropriate return on your investment?
Are you prepared to relinquish control?
Are you ready to be genuinely open in your approach?
Are you prepared for any impact this might have on your brand or reputation?
Does everyone connected with your business feel the same about being social?
Are you ready for your audiences/customers to express their views and play a more active role?
What kinds of social media are right for you?
Are you clear about what you want to do and where you will place it?
Do you understand the characteristics of the different social media forms?
How well do those characteristics fit with what you are trying to achieve?
Will you be using blogs, virtual worlds, networking sites, real-time
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Key questions Prompts
updates etc.?
What sorts of content can you commit to?
How will you encourage participation and grow your community?
How will you drive people towards your social media presence?
Do you have a sense of how quickly you will gain a community?
Do you have the resources to build a community?
Who will maintain your social media presence?
Do you have something to say?
Who will say it for you on a regular basis?
Are you ready to commit time and energy to your social media?
Do you have the resources to maintain your profile or will it be a short campaign?
Are you clear whether this is a one-off (perhaps for an event or conference) or ongoing approach?
Are you prepared to commit resources over the longer term if it is an ongoing approach?
Do you have the technology needed to ensure your presence is consistent and reliable?
How will your social media strategy integrate with the rest of your marketing?
What are you trying to do through your other marketing and communication channels?
How does social media fit with your other activities?
How will you ensure all your channels support each other?
How will you measure success? What will failure look like?
What measurements will you use to monitor and evaluate your social media presence – views, followers, comments etc.?
What are your targets?
What actions will you take if you do not meet your targets?
What will you do less of if you are committing resources to social media?
As you are likely to have limited resources, what will you stop doing to engage with social media?
How will you be sure that it is delivering your goals more effectively than other approaches?
How will your other goals be affected by dedicating resources to social media?
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Take the next step
Are you a member of Facebook, do you ‘tweet’, are you a member of any other
groups? How often do you get involved? Do you just watch the community or do you
actively participate? If you are actively involved, what do you contribute and how
much commitment does it take? If you just watch, think about why that is.
Top tips
• Establish your goals clearly up front • Consider involving specialist advice to help you get things started • Consider how you will deal with issues of abuse and set up a community protocol • Look at other successful social media projects in your field or market sector. Try
and analyse what has made their campaign or approach work
References
Mayfield, A (2008) What is Social Media? An e-book from i-Crossing [accessed:
21/2/11]
Carton, S (2009) A Social Media Strategy Checklist, online article [accessed: 21/2/11)
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Customer relationship management – a maturity checklist
“If Franz Kafka were alive today he'd be writing about customer service.” Jonathan
Alter
The big idea
How well do you treat your customers? Do you have a strategy for customer loyalty?
In their research in 2001, Gartners found that less than 10% of the businesses they
reviewed had a single, integrated view of their customers. Not having this customer-
centric approach can be costly in terms of customer loyalty and profitability,
particularly as customer expectations grow.
Purpose
The purpose of the customer relationship management (CRM) maturity checklist is to
enable you to consider where your business is located in terms of having a customer-
centric strategy. It is primarily aimed at SME to larger organisations. If you are a
micro-business or sole trader, you can adapt the various headings to make them
more appropriate to your circumstances. CRM is crucial whatever scale and
whatever sector you operate in. The maturity model looks at three interrelated areas:
• Process – marketing, sales and support • People – who is involved and how they are organised • Technology – infrastructure and applications
The tool
The steps involved with using this tool are based on the CRM maturity template
(Table 1):
1. Assess your current strategy. How ready are you for fully integrated CRM?
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2. Assess your CRM profile by filling in the template. Place a tick in each box on the scale depending on where you place your business from fully product/service-focused to fully customer-focused
3. Analyse your response and determine which areas need immediate attention. Which are a medium-term priority and which are working well (from which you can build)
4. Create a CRM strategy based on the above prioritisation
Take the next step
Remember the last time you had to complain as a customer. How well were you dealt
with? Do you think the business concerned had an integrated approach to CRM?
What might they have done differently to improve your experience? Have you bought
anything from them since?
Top tips
• Think about involving some of your key customers in assessing your CRM approach
• Feel free to adapt the template to add other areas that are important to you • Find exemplars of customer-centric practice and try to analyse why they are so
good at what they do
References
Shostak, B, (2002) Bridging the Gap – A Maturity Model for CRM, Presentation to the
Ottawa SPIN, CGI Group
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Gordon/Little technique “One of the biggest blocks to creativity is being too close to the problem you are
trying to solve. This can make it impossible to see the woods for the trees, and tends
to generate only trite and obvious ideas.” (Jay, 2000: 96)
The big idea
The idea behind this problem-solving technique is to encourage you to step as far
away from a particular problem as possible. Developed by William Gordon (of Arthur
D Little Consulting) in the 1960s, it involves a process of progressively more detailed
revelation, to avoid defining the problem too soon and limiting possible solutions. He
built this approach in response to a problem he witnessed with classical
brainstorming whereby people begin the process by giving what they regard as ideal
or obvious solutions and then their creativity trails away.
Purpose
The purpose of the technique is to bring you out of the immediate detail of a
particular problem. For example, instead of asking, “How to we get our audiences to
spend another £2 each per visit,” you might ask:
• “How do we make our audiences happy?” • After exploring this question in a little more detail you might ask, “How can we
provide good customer service?” • Once answers to that question have finished you would get more specific still,
“What do our audiences want from our programme/activities?” • Finishing with your original question, “How to we get our audiences to spend
another £2 each per visit?”
It is mainly a tool for group discussion to ensure you get as wide a range of
perspectives as possible, but you could try using it on your own with post-its and
large sheets of paper for doodling your answers. (You would have to suspend your
knowledge of the final question though!)
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The tool
Set up a group and, giving yourselves enough time to work through the various layers
of the problem, probably two to three hours, work through the following steps:
1. Explain to everyone involved what is going to happen – that there will be a series of increasingly detailed questions asked and you want them to brainstorm answers. It is worth being clear that you have a final detailed question in mind but that will not be the starting point, in other words it won’t be revealed until later
2. The problem is then presented at its highest possible level 3. Generate ideas in relation to the problem as it is currently stated 4. Repeat steps 2 and 3, moving on to the next cycle when the ideas slow down.
Each time you go through the cycle, the question should become slightly more detailed
5. Reveal the original problem and review the range of possible solutions that have been generated through the various discussions
Take the next step
Think of a current problem you have been wrestling with and try and write down at
least four related versions of the statement that are increasingly broad. Now write
down some answers starting with the most abstract statement first. What do you
notice by the time you get back to your original problem statement?
Top tips
• Ensure you give the participants some background to the approach before you begin, to avoid them feeling like they are being manipulated
• Start from the highest level of abstraction you can. Make sure you leave enough space to work from the outside of the problem in
• You may want to use a facilitator for the process to ensure you can contribute to and be able to pull yourself back from the original problem statement
• If you are working with a group, they need to be open, flexible and tolerant of ambiguity
• You can use the technique to redefine problems as well as solve them
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References
Jay, R. (2000). The Ultimate Book of Business Creativity. Oxford, UK: Capstone Publishing Ltd.
1
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Problem reversal
“We can't solve problems by using the same kind of thinking we used when we
created them.” Albert Einstein
“Creativity suffuses business. It‘s the entrepreneurial spark that finds a solution to a
problem, meets a need or fills a gap in the lives of people.” Creative & Cultural
Skills/Counterpoint, 2009, After the Crunch
The big idea
Problem reversal focuses on solving an identified problem by turning it on its head
and encouraging you to think about it differently. One well-known example of a
practical problem reversal is the police ‘sting’ operation. In a ‘sting’, known criminals
are selected and told they have won a prize, and are then personally invited to an
event to collect their ‘prize’. Once the unsuspecting guests arrive, they are duly
arrested. Instead of defining the problem in terms of how to go and catch offenders,
the police asked how might they get the offenders to come to them.
Purpose
In many cases, the problem definition is what limits our ability to generate new ideas.
The meaning of the words or their order can put blocks on our thinking. Taking a
problem and reframing it in terms of its opposite can change the direction of your
thought and generate new solutions. It can throw people slightly off balance and into
the unexpected, getting the creative juices flowing.
In his Key to Dreams, Magritte causes us to ask new questions: some of the labels
and their associations we recognise but others are disconcerting. He has caused us
to consider again what we are looking at and what it means.
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The tool
The following are the basic steps for using the reversal technique:
1. State the problem as originally defined 2. Reverse the direction of the problem in any way possible. The nature of the
reversal is not as important as rearranging the information about the problem 3. State the new problem and explore its implications 4. Continue reversing the problem until an agreed solution is found
To give an example, your problem might be how to improve customer satisfaction.
The reversed problem would be how to really put customers off.
Ideas on how to upset customers could be:
• Open at inconvenient times • Don’t provide any information on your products or services
Key to Dreams, Rene Magritte (1935)
In his Key to Dreams, Magritte causes us
to ask new questions: some of the labels
and their associations we recognise but
others are disconcerting. He has caused
us to consider again what we are looking
at and what it means.
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• Don’t answer the telephones • Employ rude and disinterested staff
Now you can reverse some of the answers and see what they offer you in terms of
possible solutions. You might decide to introduce new working times to make
yourself more convenient than your competitors.
Take the next step
Think of a recent problem you have solved. Try the reversal technique on it now.
Does it support your solution or does it suggest some new ideas?
Top tips
• Try the most outrageous reversal you can think of • Open up your thinking as much as you can and try not to censor yourself or
others • If the first reversal does not produce a practical solution, try a different slant
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Attribute listing
“Each time we take a step we do it by changing an attribute or a quality of something
else, or else by applying the same quality to some other thing. The pattern of great
pieces of creation may involve hundreds of successive changes. The creative step is
the same, but it is repeated many times with many variations.” (Crawford, 1964: 96)
“A camel makes an elephant feel like a jet plane.” Jackie Kennedy
The big idea
Attribute listing was pioneered in 1931 by Robert Platt Crawford in his course on
creative thinking. The technique takes an attribute or idea from one thing and applies
it to another. The task of creating the ideas is more than just the process of
combining things; an essential element of the process is the Attribute Listing Matrix
(ALM) where the features, attributes and ideas are listed.
The Bahco Ergo Screwdriver was developed through a focus on the attributes of its
handle both in terms of safety (preventing repetitive strain injury) and that at some
point most people want to use a screwdriver with both hands, which meant the
handle had to be redesigned.
Purpose
Attribute listing is a means of getting you to focus on as many attributes of a product
or problem as possible. In breaking down the elements of a problem or object, you
can look at each in turn and generate new ideas. The technique is particularly useful
for considering complex products or processes in that it allows you to consider each
feature or stage and look at the associated attributes in detail. You can also specify
the criteria by which you want to examine an attribute, for example it could be quality,
cost or speed of production. You can also look at the attributes from a range of
perspectives:
• Physical attributes: shape, form, colour, texture • Social attributes: responsibilities, taboos, roles, power
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• Process attributes: selling, marketing, production • Psychological attributes: needs, motivation, emotions • Price attributes: cost to the customer, manufacturer, supplier
The tool
Attribute listing involves four steps:
1. Select a problem, product, or process 2. Break it into key attributes or stages or parts 3. Look at each attribute in turn and identify ways for improving it 4. Design or create a solution by manipulating and recombining the variables
(structured synthesis)
Here is a simple ALM example for improving a torch:
Feature Attribute Ideas
Casing Metal Plastic, recycled plastic, rubber, recycled tyres,
carbon fibre, glass fibre
Switch On/off On/off/low/high
Battery Finite power Rechargeable, wind-up
Bulb Glass Plastic, neon, no bulb
Weight Heavy Light
As the torch has a range of features, these have been broken down to look at the
attributes of each. You could break each feature down further. For example, with
regard to the metal casing, it might also be hard, cold, slippery, round etc.
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Take the next step
Think about a product you have used at some point today and create an attribute list
for it. Now analyse those attributes and see what ideas emerge. How would you
redesign or improve the product?
Top tips
• You can use free association in conjunction with attribute listing. Once you have a list of attributes, freely associate five to ten words alongside each to build your ideas
• Try working with a group of people to bring in different perspectives on the attributes
• Try not to get focused on one or two attributes too early. Create a full list first before you move into generating ideas
• Combine it with other creative techniques like mind mapping, analogies and metaphors or sensory images
References
Crawford, R., P. (1964). The Techniques of Creative Thinking: How to Use your Idea to Achieve Success. Virginia, USA: Fraser Publishing Co.
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Association problem solving
“If free association can lead to interpretation, interpretation makes for more free
associations.” Deborah Britzman
The big idea
Free association is perhaps most commonly known as the therapeutic technique
developed by Sigmund Freud but it is also used as a creative problem-solving
method. It won’t give you a specific answer to your problem but it will help you
explore different approaches to it. Association can help spark ideas to lead you to a
solution.
Your mind will make connections between words by using one of three principles:
• Contiguity: this is based on an object or idea being near to the one mentioned, so for example zoo might lead to lion
• Similarity: which is based on an association that is very like the word stated, for example leek leads to onion
• Contrast: where the first word stated prompts a response that is distant or opposite from it, for example hard leads to soft
Campbell’s Soups used word association as part of their product development
process. They started with the word handle, which generated utensil and then fork.
Someone then joked about eating soup with a fork. They then reflected on the fact
that you could only eat soup with a fork if it had large lumps of meat or vegetable in
it. And so emerged Campbell’s Chunky Soups.
Purpose
In allowing your mind to associate freely with the words, you can generate new ideas;
the technique helps create the spark rather than the solution. You are aiming to
create a list of words, which might help you to look at the problem or issue
differently.
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The tool!
Structured free association attempts to increase the relevance of ideas to the
problem you are exploring. Here are the steps involved:
1. Write down a symbol (number, word, object etc) that is related to the problem or issue you are trying to address or some aspect of it
2. Write down whatever is suggested by the first step, ignoring all concerns for its relevance. Don’t censor your responses to the problem. Develop at least 20 associations
3. Review the list of associations and select those that seem to have special implications for the problem
4. Using the above selected associations, develop ideas that seem capable of solving the problem
5. If none of the ideas seem useful, go back to step 1 and repeat the process, using a new symbol
This approach can be used either individually or in groups. Another group approach
to using this problem-solving technique is to write on coloured cards. The problem
statement is written up and discussed within the group to make sure it is clear. Each
group member then silently and independently writes ideas on each of the coloured
cards and, when they are done with, each then passes it on to the person next to
them.
After 20 to 30 minutes the facilitator draws the process to an end. The cards are then
categorised through group discussion. Once the categories are agreed, write them
up on post-its and place them around the room as headings for different columns.
Each column/colour then represents a category of ideas.
Take the next step
Think about where you would like your business to go next. Associate freely for at
least ten minutes and create a list of words. What possibilities do the associations
suggest to you?
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Top tips
• Keep a notebook with you so you can use free association whenever the need arises
• Practise making free association lists • Notice when you are trying to make meaning or relevance during free association.
Try and clear your mind and just let the associations flow
References
Britzman, D (2003). Five Excursions into Free Association, or Just Take the A Train.
Journal of the Canadian Association for Curriculum Studies 1(1): pp. 25-37
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Pattern language
“As the artist picks his [her] way along, rejecting and accepting as he [she] goes,
certain patterns of enquiry emerge.” Bridget Riley
“Connectivity and constant advances in information and communication technologies,
led to new business models which are changing the overall pattern of cultural
consumption ...” Creative & Cultural Skills/Counterpoint, 2009, After the Crunch: 25
The big idea
Pattern language was originated by Alexander, Ishikawa and Silverstein, three
architects who wanted to look at how to generate new building design ideas. The
basis of the approach is straightforward: instead of expressing the elements of a
problem in writing or verbally, you use symbols and patterns to spark new ideas. The
act of drawing is used as a means for letting go of your assumptions and opening up
your more intuitive responses.
Purpose
The purpose of the technique is to free you from the constraints of verbal or written
language by taking a problem or issue and mapping it visually using a series of
abstract symbols. It forces your mind to look at problems in a whole new way. Once
you have produced a series of symbols, you can start to look for any visual patterns
that emerge and what they suggest to you about the problem.
The tool
The technique involves a number of steps:
1. Identify the problem or topic you want to address 2. List all the attributes you can think of for your problem or topic 3. Now draw a symbol of each attribute on a series of index cards or post-its. Just
draw whatever comes to mind and feels appropriate to you
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4. Spread out all the cards with the symbols face up. Move them around, mix and match, pair some up, focus on one or two in particular. Just allow yourself to play with them intuitively. Don’t try and force anything, just move them around. If your ideas dry up, try adding new symbols or combining other techniques like free association
5. Record your ideas and decide on any actions you want to take
Take the next step
Think about a problem that has been irritating you for a while. Use pattern language
to map out the elements of the problem. What new observations emerge? In what
way were you able to look at the problem differently?
Top tips
• Don’t be put off by having to draw. It really doesn’t matter whether you can draw or not
• Don’t worry if the symbols don’t make sense to anyone else. The technique is for your benefit, not theirs!
• Don’t spend too much time thinking about the symbols. Try and draw them quickly and intuitively
• Be as open to inspiration as you can be. Don’t worry about where the ideas come from as long as they come
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Assumption reversal
“We simply assume that the way we see things is the way they really are or the way
they should be. And our attitudes and behaviours grow out of these assumptions.”
Stephen Covey
The big idea
Assumption reversal was developed by Stephen Grossman, a creativity consultant
who wanted to find a way to overcome the paradoxes that are often inherent in many
problems. So, for example, as many cultural organisations are experiencing at the
moment, you may be required to cut budgets at the same time as delivering more
programming. The apparent contradiction of delivering more with less can serve as a
significant block to problem solving and decision making.
The reversal technique encourages you to alter an aspect of the problem or your
assumptions about it. By turning your assumptions on their head and creating a
mirror image view, you can generate new ways of approaching problems and issues.
Your original assumptions are not necessarily wrong but in reversing them you can
generate new approaches. There is also the possibility that you may be harbouring
false assumptions. If so, this technique will also help you to discover that this is the
case and avoid the limitations that this can cause.
Purpose
The purpose of this technique is to deliberately question your underlying assumptions
about a problem to help spark new ideas for addressing it. The assumption reversal
approach helps you escape from your usual ways of addressing issues. The
technique is most commonly used for problem solving and decision making,
overcoming obstacles or barriers and dealing with general problems. Grossman uses
the example of the problem of improving restaurants.
Basic assumptions: restaurants serve food, are located outside the home, people
pay for the food and the food is prepared by the restaurant
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Reversals: restaurants give food away, they don’t serve people and they don’t
prepare food
Possible solutions: people cook their own food, serving pets and not people,
restaurant is run by a local co-operative etc
The tool
Using assumption reversal involves a number of steps:
1. State your problem clearly and simply. Describe the problem in detail and if
you are working with a group answer any immediate questions
2. List your assumptions and the issues related to the problem you are
addressing
3. Reverse your assumptions and the direction of the problem statement. It does
not have to be an absolute reversal; it could be any change in the original
problem or issue. Record the opposite statement for all of the assumptions
you have generated
4. For example, your original problem statement might be: ‘How do we improve
communication within the team?’ The reverse would be: ‘How do we make
communication worse within the team?’ Then list a whole range of ideas as to
how you could make communication worse
5. Use each reversal as a starting point for new ideas. Once the ideas have been
generated, agree the actions you will take
Take the next step
Think about how you manage your time. What assumptions do you hold about how
you should work and what it means to be productive. Use the assumption reversal
technique to see if there are some creative solutions to dealing with your workload.
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Top tips
• Prepare the problem definition and statement before you start using the technique • It is not a technique for finding one correct answer. It helps you look differently at
existing information • Assumptions can be very fundamental and taken for granted so don’t be
surprised if it takes a while to change them • Don’t stop at the reversal of the problem. Use this to stimulate new ideas