Keynote intelligence, innovation & best practice
-
Upload
ibm-new-zealand -
Category
Education
-
view
853 -
download
0
description
Transcript of Keynote intelligence, innovation & best practice
WHERE KNOWLEDGE IS POWER
Phil Ruthven, Chairman
Intelligence, Innovation & Best PracticeHow organisations are driving growth and profitability
Intelligence, Innovation & Best PracticeHow organisations are driving growth and profitability
Topics
1. A New Age Business
2. The Intelligent Organisation
3. Innovation & Productivity
4. Keys To Success
5. Snapshots Of A Changing World
1. A New Age Business
Expectations of a New Age business
1. Profitability and growth A return on shareholder funds after tax of 4 times the bond rate Growth better than the industry average ( + international?)
2. Uniqueness in: Product, IP and operations Organisational culture
3. World best practice in: Value for money for customers Respect for the society in which it operates Relations with other stakeholders Treatment of the natural environment
Worst 5024th 5023rd 5022nd 5021st 5020th 5019th 5018th 5017th 5016th 5015th 5014th 5013th 5012th 5011th 50
Average10th 509th 508th 507th 506th 505th 504th 503rd 502nd 50
Best 50
-50 -40 -30 -20 -10 0 10 20 30 40 50 60
-2.50.21.02.1
3.24.2
5.66.77.99.09.911.1
12.512.613.8
15.617.7
19.721.8
24.728.6
35.248.9
158.0
Percent
Australasian Profitability by Cohorts Return on Shareholder Funds (after tax), Top 1250 businesses 5 years to F2009
Source: IBISWorld 19/11/09
23% > World Best Practice (ROSF 22.2%)
42% > Average (ROSF 12.6%)
68% > Bond Rate (5.4%)
11% Losses
-128.0-10.5
Health & CommunityGovt. Adm. & Defence
EducationUtilities
AgriculturePersonal & Other
ConstructionManufacturing
RetailingAverage
Finance & InsProp & Bus Services
TransportWholesaling
Cult & Recn ServHospitality
MiningCommunications
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36
1.84.3
7.8
8.9
12.0
12.5
12.5
13.1
13.3
13.7
15.2
15.3
17.3
18.9
19.1
19.6
33.7
Percent
Profitability By Major Industries
Return on Shareholder Funds (after tax), Top 1250 businesses 5 years to F2009
Source: IBISWorld 22/12/09
6.4
0.4
Intellectual Property
Intellectual property can best be described as a “cocktail” of:
• skills, special competencies, unique systems; • patents, trademarks & brands; • organisational culture, customer relation
protocols; • vision, plans and documented achievable
strategies.
It is the "holy grail" of a enterprise, its core and its most valuable balance sheet asset, whether recorded as such in dollar terms or not.
Unique Organisational Culture
A unique culture is about attracting and keeping good people to your business, and helping develop ordinary people into extraordinary people.
This is built on a base of world best practice principles of human resources management. But a unique culture goes well beyond the basics: it needs to have special elements of both a tangible and intangible nature.
No matter how often we say it, employees are not a firm’s most valuable asset, since slavery has been outlawed for some considerable time! But in the emerging “sellers market” we need them to stay.
2.The Intelligent Organisation
Our
© IBISWorld
The Total Environment For Business
A Firm
How much do we need to know about . . .
The Influential Environments (4) 1. The world environment, growth, regions, nations, demography etc. ? 2. National resources,developed (infrastructure, IC&T), natural (resources, ecology) ? 3. Our community, its changing demography, lifestyles and spending ? 4. The economic environment, the “business weather” conditions ?
The Operating Environments (6) 5. The government environment, laws, taxes, policies, incentives ? 6. The finance market, equity, debt, exchange/interest rates, treasury ? 7. The services market, to outsource none-core activities and functions ? 8. The labour market, for executives, employees and customers ? 9. The purchases market, raw materials, semi-/finished goods, prices ? 10. Its market, local and global ?
The Immediate Environment Our own industry, WBP, size, growth & disposition, competitors? Our Own Business
Its IP, financials, sales, operations, TQC, productivity, R&D, HR etc. ?
In the Industrial Age businesses generally planned and operated on an inside-out basis.
The external business environments were largely opaque to an enterprise which tended to be fortress style; and enterprises were opaque to outsiders who saw enterprises as secretive.
In the New Age businesses must now forecast, plan and operate on an outside-in basis.
The business environments are becoming transparent to enterprises, and in turn the enterprises
are becoming more transparent to outsiders.
Business Intelligence Expenditure on data and information, F2010(E)
InternallySourced
64.5%
35.5%ExternallySourced
Finance & Accounts
R&D,
Innovation
Operational
analyses etc.
Sales analysisPersonnel
IBISWorld 17/11/09
Nearly two thirds of all business data, information and intelligence in Australia in F2010 will be internally generated.
How much value-adding do we do with this, to help with planning, efficiency, revenue growth, CRM and profitability?
ICT CEO
& Board
Internally Generated Information?
© IBISWorld
IC&T
CIO?
Over one third of all spending on data, information and intelligence by enterprises in F2010 will be outsourced.
This proportion has been steadily increasing from less than 10% half a century ago to an estimated 35.5% this year.
We are spending more on information and also outsourcing more of it.
Type Of Outsourced Business Information Australia F2010 (F)
IBISWorld 18/11/09
Other1
Associations 6.7%
Mgt. Consulting
News/Books/Mags.
1.2%
Legal Services
AccountingServices
Env. Serv. 7.7%
26.2%
Conferences/Meetings2
Data/Inform. 6.5%
20.3%
Online Info 2.0%ISPs 1.7%Data Process 1.5%Mkt. Research 1.3%
Cons. Eng. + Architects
10.6%
Exploratory
9.7%
5.8% 2.2%
Note: 1 Public Relations Credit Agencies 0.9%
Other 0.7%
` 2 Includes accommodation, travel, registration
fees, speakers etc
ScientificResearch
3.1%
Purpose Of Outsourced Information About What? F2010 (F)
IBISWorld 17/11/09
Government 1.0%World 0.8%Services 0.5%Resources 0.5%
Own Industry 9.8%
Comm
unity 1.5%
Market 4.0%
Economy 2.5% Finance 3.0%
71.6% About Our Own Company1
Purchases 2.9%
Labour 2.0%
Exploratory
From Accounting firms, Legal firms, Management Consultants,
Consulting Engineers etc
Spending on information about the external environment ($19.5billion) is 28% of all outsourced spending and 10% of all spending
Of all the business spending on data, information and intelligence - $195 billion - only 10% is spent on issues in the external environment.
But this spending is growing nearly 2% pa faster than the economy in response to the need to plan on an outside-in basis, displacing the old inside-out approach of the secretive Industrial Age?
The Imperative of Going Up The
Information Chain
The Knowledge Pyramid
By ValueBy Volume
Hearsay, Rumour, Scuttlebut
Data
Information
Expert Opinion
Intelligence
Vision
Hearsay
Data
Information
Intelligence
Expert Opinion
Wisdom
Vision & Strategy
Unique IP
Expert Opinion
Wisdom
Unique IP
Vision
Decreasing Value
Increasing Value
Source: IBISWorld 18/11/09
But interesting!
3.The Innovation & Productivity
Imperative
Equatorial GuineaBahreinBelgiumSweden
AustraliaCanada
UAEAustria
NetherlandsSwitzerland
IcelandHong Kong
IrelandUSA
SingaporeBrunei Kuwait
NorwayLuxembourg
QATAR
0 10 20 30 40 50 60 70 80 90 100 110 120
37.2
37.3
37.4
38.1
39.9
39.1
39.9
40.2
40.4
41.8
41.8
43.7
45.3
46.9
51.5
53.1
57.4
59.3
81.0
110.7
Standard of Living 200820 Highest Nations GDP/capita, ppp basis
CIA FactBook/IBISWorld 20/10/09$US ‘000 (ppp)
IndiaIndonesia
ChinaBrazilWorld
TurkeyIran
MexicoRussia
S KoreaNZ
TaiwanItaly
FranceJapanSpain
GermanyUK
FinlandDenmark
0 10 20 30 40 50 60 70 80 90 100 110 120
2.93.9
6.0
10.210.411.9
12.814.9
16.127.628.0
31.1
31.3
33.234.034.735.436.536.937.1
Standard of Living 200821-40 Highest Nations GDP/capita, ppp basis
CIA FactBook/IBISWorld 20/10/09$US ‘000 (ppp)
Business Research & Development(% of GDP)
Source: DIISR
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2.2
2.4
2.6
Australia
Year, ended June
BE
RD
% o
f G
DP
OECD
World Best Practice: nations > 2.5% of GDP (eg. Sweden, Japan, Finland, S. Korea, USA)
Australia 14th in 2008 among 30 OECD member.
NZ (0.5%)
Productivity Growth (Growth in GDP/ hour worked, % pa)
Source: DIISR
19
80
19
82
19
84
19
86
19
88
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
-2
-1
0
1
2
3
4
5
6
7
Australia
Year, ended June (Australia), March (NZ)
Gro
wth
in G
DP
/ho
ur
wo
rked
(%
)
New Zealand
4.Keys To Success
What the Best Enterprises Are Doing
1. They stick to one business at a time and do not diversify
2. They aim to dominate some segment (s) of their market
3. They are forever innovative, valuing the business’ IP.
4. They outsource non-core activities to enable growth.
5. They don’t own “hard” assets.
6. They have good and professional financial management. 7. They plan from the outside-in not the inside-out
8. They anticipate any new industry lifecycle changes.
9. They follow world best practice for their own type of business.
10. They develop strategic alliances.11. They develop unique organisational cultures.12. They value leadership first and management second.
Positioning
Secure a safe industry position in your chosen industry to be master-of one’s-own-destiny by dominating something.
Domination can be of:
the whole industry class (being a major); or one category in the industry (a niche player);
or one product group1 (an ultra-niche player); or one product ( a boutique operator).
Note: 1 Or a customer segment; and occasionally a geographic area
Industry Share Strategy(positioning for a winnable war)
Source: IBISWorld
Major Player
25-75%
5% 1-5 %
No-man’s-land (un-winnable position)
Caught between nichers (“knee-cappers”) and ultra-niche players (“ankle-biters”)
Exotic/boutique operator (0.1%)
No-man’s-land
5-25%
Ultra-niche specialist (1%)
Niche Player
No-man’s-land (un-winnable position)
Caught between majors (“sledgehammers”) and niche players (“knee-cappers”)
Outsourcing And A Virtual Corporation
In the Industrial Age, corporations set out to be self-sufficient - apart from obvious sub-contracting - creating complex and multi-layered/multi-functional structures.
In the New Age, all non-core/non-strategic activities are outsourced1 to specialists in the interest of reduced complexity and to develop focus, lightness, flexibility and faster growth of the business: a virtual corporation. In 2005, over $450 billion of non-core activities are now outsourced by businesses (20% of revenue)
1 Outsourcing is not to be confused with subcontracting
Business Outsourcing in the New Age Trucking
Road transport industry.
Cleaning Office, factory, hotel etc. Laundry, work clothes.
Canteens, Dining Rooms Caterers.
Maintenance Painting . Engineering. Carpentry.
Security Security systems. Surveillance services.
Personnel Recruitment. Out placement. Training.
Reception Serviced offices.
Accounting Payroll, Share Registers Full contract accounting. Superannuation administration.
Computing Software development. Computer services (IT
outsourcing)
Property Property trusts, Property management
Marketing Advertising, media buying Call Centres
Distribution Warehousing & Delivery
Information & Planning Database services
Strategic and Other Consulting
Franchising Operations.
The New Age Virtual Corporation
No Longer
Required
No Longer
Required
New StructureVirtual Corporation
Functions provided back to company by firms in new (specialised) industries (e.g IT, personnel, legal, accounting, information, transport, cleaning etc.)
Traditional Structure
Board, CEO and Top Management
Multi-layered Corporation
Mostly outsourced
Mostly outsourced and /or franchised
Mostly outsourced
MiddleManagement
Supervisors
& Employees
Implementers
Coordinators& Operatives
Head Office functions
Leader, Senate andTop Management
Leadership
Leadership sits above management. It demands special attributes such as loneliness in ultimate decision making (after full consultation), often with no voting. And, sometimes, no consensus.
It is non-gender specific.
Leadership involves more external focus than internal: the opposite of management.
Apart from listening to experts and confidantes, it involves communicating directly with major customers at least once a year.
What can happen with great leadership, and following the Keys To Success (or most of them)
The Leighton Group was mid-sized not that long ago
Leighton Holdings Revenue & Profitability1
Revenue excludes JV & associates share 1962 to F2009
IBISWorld 30/03/10
19
60
19
63
19
66
19
69
19
72
19
75
19
78
19
81
19
84
19
87
19
90
19
93
19
96
19
99
20
02
20
05
20
08
20
11
20
14
20
17
20
20
0
5
10
15
20
25
30
35
40
45
50
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Rev
enu
e (A
$ bi
llio
n)R
OS
F %
Notes: 1 Net profit after tax on S/F
2 Zero data are actually losses for those 3 years
TrendTren
d
ROSF
Revenue
Successful Mid-sized Businesses5-year average ROSF (after tax) basis, % to F2009
Freightways 31.9%
Hollenstein 29.9%
Tower 29.3%
Renaissance Corp 28.3%
Fisher & Paykel 27.2%
Skycity 27.1%
Mainfreight 25.1%
Telecom NZ 24.5%
NZ Refining Co 23.3%
Steel & Tube Hold. 20.8%
Cavalier Corp 20.6%
5.Snapshots Of A Changing World
World GDP GrowthReal growth (PPP), 1950-2011(F)
-11-10
-9-8-7-6-5-4-3-2-10123456789
101112
1940
1945
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
Per
cen
t
Past 25 years 3.5% p.a
1950-1969 growthin US$ market terms
Purchasing Power Parity (PPP) terms
IMF/Economist//IBISWorld: 30/03/10
2008 3.2% 2009 -2.5% 2010 2.5% (F)2011 2.9% (F)
World’s 30 Largest Economies 2010 (F)
World’s 228 nations US$ 72.1 trillion
Mexico 2.1%Spain 1.9%Korea S 1.9%Canada 1.9%Indonesia 1.4%Turkey 1.3%Australia 1.2% 17thIran 1.2%Taiwan 1.0%Netherlands 0.9%
France
Ger
man
y
4.0%
11th – 20th Nations 14.8%
Britain
13.3% ChinaItaly
Brazil
Russia
20.5% USA
Purchasing Power Parity (PPP) terms
Japan
Rest of World(198 nations)
15.5%
India
5.3%3.1%3.1%
3.0%2.
9%2.5%
6.0%
21st – 30 th Nations 7.2%
CIA/IBISWorld 08/02/10
Poland 1.0%S. Arabia 0.8%Argentina 0.8%Thailand 0.8%S. Africa 0.7%Egypt 0.6%Pakistan 0.6% Colombia 0.6%Malaysia 0.6%Belgium 0.5%
1.3
-8.0-6.9
-6.0-5.3
-4.9-4.8-4.7
-4.0-3.6-3.6
-2.5-2.5-2.5-2.2
-0.30.5
2.64.6
6.58.0
-8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9
RussiaMexicoTurkeyJapan
GermanyItalyUK
NetherlanSpain
TaiwanWorld
USACanadaFrance
BrazilS Korea
AustraliaIran
IndonesiaIndia
China/HK
Economic Growth: 2009 (F)20 Largest Economies (ppp ranking)
The Economist/IBISWorld 11/04/10
World Growth2008, -2.5%
0.71.1
1.31.51.6
1.92.3
2.5
3.03.13.1
3.53.6
4.34.95.0
5.3
5.67.7
9.5
-0.3
-2 -1 0 1 2 3 4 5 6 7 8 9 10
SpainItaly
NetherlandsUK
FranceGermany
JapanIran
WorldCanada
USAAustralia
RussiaTurkeyMexicoTaiwan
BrazilS Korea
IndonesiaIndia
China/HK
Economic Growth: 2010(F)20 Largest Economies (ppp ranking)
The Economist/IBISWorld 11/04/10
World Growth2010 (f), 2.5%
Economic Growth: ChinaReal growth 1950-2011 (F)
-28-24-20-16-12
-8-4048
12162024
1950
1954
1958
1962
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
2014
2018
Per
cen
t
SSBC/IBISWorld: 24/03/10
8.2% average
-4
-3
-2
-1
0
1
2
3
4
5
6
7
8
9
10
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
Economic Growth: New ZealandAnnual real GDP growth (%) progressed in quarters to March 2010
Source: IBISWorld/NZ Stats. 08/04/10Source: IBISWorld/NZ Stats. 08/04/10
Long Business Cycle, average 8 years
New Zealand’s Industry Mix Shares of GDP in real terms Year to June 2008
ABS 5206-26 /IBISWorld 06/11/08
Agriculture 5.8%
Utilities 1.7%
4.8% Transpt.
14.1% Manufacturing
GDP $NZ 179.2 billion (current prices)
Finance & Ins.
7.8% W’Saling
Mining1.2%
Govt. Adm. 4.6%
O’Ship Dwells. 5.8%
6.1% Retailing
4.6% Construction
6.1% 6.8%
Communicns.
14.1% Prop. & Bus.
Services
Educn. 3.8%
Health 5.0-%
Cult & Rec.Serv.
Person. Serv.1.1%
Hospitality (1.6%)
Other 3.4%
2.0%
To download this presentation go to: www.ibisworld.com.au
Enter details here to
download presentationr u t h v e n
i b m