Key Business FactorsKey Business Factors

Steven ThorneSteven Thorne

OverviewOverview

• What are Key Business FactorsWhat are Key Business Factors• Understanding Key Business Understanding Key Business

FactorsFactors• George SteinerGeorge Steiner• Japanese ApproachJapanese Approach• Examples in real worldExamples in real world

IntroductionIntroduction

• Key Business Factors ?Key Business Factors ?• Measures or indicators that are Measures or indicators that are

significantly related to the business significantly related to the business success of a particular firm.success of a particular firm.

Understanding Key Understanding Key Business Factors Business Factors

• ““If you don’t know where you’re If you don’t know where you’re going, you probably will not get going, you probably will not get there.” (Yogi Bera)there.” (Yogi Bera)

• Contribute to the overall Contribute to the overall improvement of a firms business improvement of a firms business results.results.

• Each firm is uniqueEach firm is unique

Understanding KBF’sUnderstanding KBF’s

• Factors that all firms must address Factors that all firms must address from the beginning.from the beginning.

• Good Products and Good Service Good Products and Good Service • Marketing Marketing • SatisfactionSatisfaction• Minimization of costsMinimization of costs• Managing of AssetsManaging of Assets• Cash FlowCash Flow• Etc.Etc.

Understanding KBF’sUnderstanding KBF’s

• ExampleExample• A key business Factor for an organization A key business Factor for an organization

may be getting the deliveries out fast and may be getting the deliveries out fast and reliablyreliably

Cross-Functional TeamsCross-Functional Teams

• Teams that enlist people from a Teams that enlist people from a variety of Functional groups within variety of Functional groups within the firmthe firm

(Dr. Thomas Foster)(Dr. Thomas Foster)

ExerciseExercise

• Form Groups of four to six peopleForm Groups of four to six people• Should include a secretary (note-taker)Should include a secretary (note-taker)• Brainstorm some key business factors Brainstorm some key business factors

that would be relative for a financial firm that would be relative for a financial firm or instituteor institute

George Steiner George Steiner

• Study on the Strategic Factors of Study on the Strategic Factors of BusinessBusiness

• Survey to 700 executives, treasures, Survey to 700 executives, treasures, planners, and others of many Financial planners, and others of many Financial InstitutesInstitutes

• Provided a list of FactorsProvided a list of Factors• Asked to rank the importance of each 1-5, Asked to rank the importance of each 1-5,

5 being of most importance5 being of most importance

George SteinerGeorge Steiner

• Factors for Today’s PerformanceFactors for Today’s Performance• Most important factor was to Raise Short-Most important factor was to Raise Short-

term Capitalterm Capital• 22ndnd was to Raise debt at low cost was to Raise debt at low cost• Raise equity at low costRaise equity at low cost• Get High quality Top ManagementGet High quality Top Management

George SteinerGeorge Steiner

• Factors For Future ImportanceFactors For Future Importance• The most important factor for the future The most important factor for the future

was to Get High Quality Management was to Get High Quality Management • Others includedOthers included

- Managerial Drive for ProfitsManagerial Drive for Profits- Train future Domestic ManagersTrain future Domestic Managers- Better Long-range PlanningBetter Long-range Planning

George SteinerGeorge Steiner

• Top 10 factors listed by Chief Top 10 factors listed by Chief Executive OfficersExecutive Officers

• Get High Quality top managementGet High Quality top management• Managerial drive for profitsManagerial drive for profits• Train future domestic managersTrain future domestic managers• Vigor in sales organizationVigor in sales organization• Service to customersService to customers

Georger SteinerGeorger Steiner

Top ten Cont’dTop ten Cont’d• Better employee relationsBetter employee relations• Better overall controlBetter overall control• Better long-range planningBetter long-range planning• Competitive stockholder returnCompetitive stockholder return• Maximize stockholder returnMaximize stockholder return

Japanese ApproachJapanese Approach

• Use three variables to determine Use three variables to determine Key business FactorsKey business Factors

• Business ResultsBusiness Results• Employee’s moraleEmployee’s morale• Corporate FlexibilityCorporate Flexibility

Business ResultsBusiness Results

• Ranking of the top 5 Business Ranking of the top 5 Business factors contributing to Business factors contributing to Business ResultsResults

• Ratio of R&D expenditure to salesRatio of R&D expenditure to sales• Ratio of new equipmentRatio of new equipment• New-product ratioNew-product ratio• Channel of distributionChannel of distribution• Employee MoraleEmployee Morale

Employee MoraleEmployee Morale

• Top 5 Business factors contributing Top 5 Business factors contributing to Employee Moraleto Employee Morale

• Wage LevelsWage Levels• Level of basic researchLevel of basic research• ComputerizationComputerization• Human Resource Development for rank Human Resource Development for rank

and file employeesand file employees• Level of applied researchLevel of applied research

Corporate FlexibilityCorporate Flexibility

• Top 5 business factors positively Top 5 business factors positively contributing to Company flexibilitycontributing to Company flexibility

• Employee MoraleEmployee Morale• Ratio of R&D expenditure to salesRatio of R&D expenditure to sales• Overseas strategiesOverseas strategies• Presidents TypePresidents Type• Business Goals (3 years ago)Business Goals (3 years ago)

Solaris WirelessSolaris Wireless

• Key Business FactorsKey Business Factors

• Retaining Existing CustomersRetaining Existing Customers• Cost Efficient and Rapid Delivery of Cost Efficient and Rapid Delivery of

servicesservices• 24X724X7• Grow With Your BusinessGrow With Your Business

United States ArmyUnited States Army

• Key business factorsKey business factors• Rate of deterioration of our infrastructureRate of deterioration of our infrastructure• Political Support for studies and projectsPolitical Support for studies and projects• Demand for products and services in our Demand for products and services in our

areas of expertiseareas of expertise• Reputation of the District for delivering Reputation of the District for delivering

quality products and services, on time, quality products and services, on time, within budgetwithin budget

U.S. Army KBF’s Cont’dU.S. Army KBF’s Cont’d

• Safety Record on corps projectsSafety Record on corps projects• Funding availability and authoritiesFunding availability and authorities• Environmental consciousness of the public Environmental consciousness of the public

and the Corpsand the Corps

Summary Summary

Key Business Factors are not easily Key Business Factors are not easily defined, they often involve team defined, they often involve team decisions and non bias goals for an decisions and non bias goals for an organization. The overall objective for organization. The overall objective for identifying Key Business Factors is to identifying Key Business Factors is to improve business results. These results improve business results. These results will improve the companies profitability will improve the companies profitability and market share.and market share.

BibliographyBibliography

Shimizu, Ryuei. Shimizu, Ryuei. Success Factors. Success Factors. Tokyo: Tokyo: Chikuro Shobo, 1989.Chikuro Shobo, 1989.

Steiner, George. Steiner, George. Strategic Factors in Strategic Factors in BusinessBusiness. New york: Financial Executives . New york: Financial Executives Research Foundation, 1969.Research Foundation, 1969.

Resnik, Paul. Resnik, Paul. The Small Business BibleThe Small Business Bible. . New York: John Wiley & Sons, 1988.New York: John Wiley & Sons, 1988.

Bibliography cont’dBibliography cont’d

www.mvs.usace.army.mil/stra_plan.pwww.mvs.usace.army.mil/stra_plan.pdfdf

. 15 February 2001.. 15 February 2001.

www.sun.com/solaris/ds/ds-solariswirwww.sun.com/solaris/ds/ds-solariswirelesseless

. 13 February 2001.. 13 February 2001.