Entrepreneurs need to make decisions, create strategies, plan projects and constantly face risks in order to manage day-to-day business challenges. In a global business environment, alertness and the right pace is the key to success. Critical thinking is the most important skill needed by entrepreneurs that can help them move ahead consistently and diligently.
The fundamental aspect of critical thinking is a clear and rational thinking process involving critique. The National Council for Excellence in Critical Thinking defines critical thinking as the “intellectually disciplined process of actively and skillfully conceptualizing, applying, analyzing, synthesizing, and/or evaluating information gathered from, or generated by, observation, experience, reflection, reasoning, or communication, as a guide to belief and action.”
When you think through a business problem, your thought process is naturally motivated by biases, such as your point of view and your assumptions about the situation. Such ideas and biases affect your reasoning. If you let your biases drive your thought process and overlook blind spots in your logical thinking, you’ll unintentionally make decisions filled with flaws.
So what is the right method?
Here is a step-by-step process that can help you get better in critical thinking:
1. Knowledge or insight: The first step is to ask the right questions that can help deep understanding about the problem. The questions in this stage should be open-ended to allow the chance to discuss and explore main reasons. At this stage, two main questions need to be addressed: What is the problem? And why do we need to solve it?
2. Understanding: At this step you understand the material read, heard or seen. In understanding, you make the new knowledge that you have acquired your own by relating it to what you already know. The better you are involved with the information, the better you will understand it. The best way to know if you have understood and comprehended something is by defining what you have read or heard into your own words.
3. Application: This is the step where you build a linkage between the information, your understanding and resources available. An example would be to use Mind maps to analyze the situation, build a relation between it and the core problem, and determine the best way to move forward and take action.
4. Analysis: This is the stage when you deep dive into the problem and divide it into smaller sections or workable actions, so that you have a clear understanding of how ideas are ordered, related, or connected to other ideas and steps.
5. Synthesis: At this stage you put it all together. A decision should be formed about how to solve the problem and the initial routes to follow to take this decision into action. Synthesis involves the ability to put together the parts you analyzed with other information to create a solution.
6. Get going and take action: The result of critical thinking should be transferred into clearly defined actionable steps. If the decision involves a specific project or team, a plan of action could be implemented to ensure that the solution is adopted and executed as planned.
Last but not the least; it is highly recommended that you consider implications of your options and decisions. Every choice and action has consequences, and you can improve your decision-making by anticipating what those might be. In order to do that, try to look at the problem from all different viewpoints and angles and repeat the above steps if needed.
Business plans are the most important starting points for any new venture or start-up. This document acts as a formal statement that defines your business goals and the plan to reach those goals. Ideally, it should also contain background information about the team that is attempting to reach those goals. A well written business plan also acts as a document that can persuade others, including banks, to invest in what you’re creating and trying to achieve.
Though there are many different types of business and ventures coming up these days, but the basic categories of information and questions that need to be covered by a business plan are fairly standard.
Here are the 5 key elements of an ideal business plan:
1. Executive Summary: This is one of the most important and critical elements of a business plan and is generally presented in the beginning of the document. An ideal executive summary should not be more than two pages in length and should provide an overview of your business concept, key objectives of your business, management team, your product or service offering, target market(s), competitive advantages, marketing strategy, and a brief summary of your financial projections.
2. Product and service: This is the next most important section of you business plan document. This is the section where you define, in detail, your unique product of service. It is always better emphasize on the benefits (not the features) of your product of service. Make sure to establish your unique selling proposition. This means you have to show not only how your product or service is different but also why it is better.
3. Market Analysis: In this section you should illustrate your knowledge about the particular industry your business is in. A through market analysis forces an entrepreneur to become familiar with all aspects of the market so that the target market can be defined and the company offering can be positioned strategically. Always keep in mind to defining the market in terms of size, structure, growth prospects, trends and sales potential.
4. Operations and Management: This is the section where you define the people behind your business i.e. who would be running the operations engine. This sections should give a detailed description of your team players and highlight their qualifications. This sections should also highlight the logistics of the organization such as the various responsibilities of the management team, the tasks assigned to each division within the company and how they plan to work together.
5. Financial Plan: Last but not the least, a well researched financial plan is the key to any business success. This is a section which needs the maximum amount of research and data. Typically, one has to show three to five years’ worth of projected financial statements, including income statements, pro-forma balance sheets, and monthly cash flow and annual cash flow statements. Another important element to include in this section is assumptions you used in forecasting your revenues and expenses data.
Well, apart from the above there are other sections that you could add to elaborate and give your plan a more detailed dimension. You could include things like competitive advantage, design and development plan etc. The ultimate objective should be to present your plan in the most detailed and descriptive format. Another thing to remember is that any good business plan is never meant to be written once. A knowledgeable entrepreneur understands that an business plan evolves as their business evolves and as their environment changes so its always better to re-visit your plan on a quarterly or monthly bases.
Why should business goals change ?
There are changes that keep happening in all major fronts, and the key factors which FORCE change are:
1. Customer needs keep changing – technological and trends changes.
2. The speed at which these changes happen – This forces us to compete with innovative products which grab the market shares. Hence the budget for R&D has to increase.
3. Channel partners who take the product to the end users influence the sales, and makes us rethink our strategic approach to marketing , CRM, and distribution.
4. Non- availability of skilled manpower and attrition, force the organizations to have a proactive approach to HRM through appropriate performance management systems.
5. Increasing cost of raw material, labor, logistics, operational cost etc, force the organizations to work more effectively towards operational excellence.
The most effected are small or medium sized business. Hence, it is essential to have goals to succeed. With such transitions that a business encounters, a goal becomes very important in the success and growth of any business.
Most small companies plan to accommodate such changes as they know that these changes are rapid and plan to face challenges like market dynamics, expenditures towards R&D, distribution logistics, production etc., but fail in planning towards the Human Resource (HR) initiatives.
The major backlog in HR planning is the absence of the right knowledge, resources, skilled manpower for execution, and a well translated goal for every department which is linked to the vision and goals of the company.
There are several companies with goals like “We will double our sales volume in 3 years !” or “We will reach a turnover of XX millions in 2 years” etc. These companies force themselves to achieve what they had promised for themselves, which eventually damages the culture, as they were too busy developing strategies to achieve their goals. Instead, if organizations build goals relevant to the changes happening and grow a work culture to suit the same, they would see better long-term success.
Some key solutions:
• Culture in an organization is more important than a strategy – Hence develop a culture required for growth – for example when innovation is the key strength for growth, LEARNING should be prime culture of employees in R&D and production.
• Plan your human resources – If you have excess manpower, train them with new skills in their free time.
• Competition is not about doing all that your competitor does or challenges, but being vigilant that your profits are not destroyed by wrong investments in in turbulent times – hence plan to be in the market with your own USP.
Being focused on the following fronts helps the business succeed in the long-run:
1. Orientation towards the customer needs
2. Orientation towards a work culture that supports Product innovation, Market dynamics and Technical changes.
3. Orientation towards operational excellence that leads to better profits internally.
An organization with a clear goal and with an orientation for transitions accompanied by a proper mission is sure to have a journey of success.
Authored by: Nalina.R – BE, MBA – She is an HR consultant from Coimbatore, India with 16 years of experience in Recruitment, Training, Performance management systems and OD interventions.
A professional online presence has become the most important elements of any business. Smart devices and location-based applications have brought customers closer to their local businesses. Over 15 million Canadians use their smart device to access information on local businesses every day. So it is crucial that local businesses take advantage of this opportunity of instant and effective online visibility via local search engines and local citation sites.
Here are the top five online business directories where you could instantly list your business for quick visibility and a long term online presence.
Yellow Pages Canada:
YelloPages Canada is among the top 10 websites viewed in Canada. The websites has quiet a substantial amount of user traffic both online and on mobile devices. It also supplies its data to partner sites such as Canada411.ca thus enhancing an business or brand’s exposure in a local niche.
Though not a business directory, Kijiji is a free classified ads site for Canadian local businesses. Posting your ad on this site is free. Kijiji has a huge amount of user traffic and also has an awesome social media presence, thus proving its popularity among Canadians.
HotFrog Canada is an international brand operating in around 38 countries across the globe. The site has around 15 million page views every month and over 670,000 unique site visitors. You can add your business description and even create coupons that will be visible to the web traffic specific to this site.
Profile Canada is one of the most visited local search sites in Canada, connecting customers to local businesses every month. The user traffic on the site is considerably high compared to other online local search websites. It also offers a set of tools to promote your business online called the BOB (Better Online Business).
This directory has information of more than 20,000 business registered in Canada. CanadaOne was Launched in 1998, and has since become one of the most popular directories for local businesses. The website also publishes articles, which in-turn attracts more user traffic.
In the year 1989, Scott Adams, an MBA from the University of California, Berkeley, introduced “Dilbert” an American comic strip. The comic strip has become the most popular management and office humor character in history of corporate culture. The series came to international prominence through the downsizing period in 1990s. A former worker in various roles at big businesses, Scott Adams became a full-time cartoonist in 1995. Dilbert is known for its ironic office humor about a white-collar, micromanaged office featuring the engineer Dilbert as the main character.
Dilbert portrays corporate culture as a confused world of bureaucracy and how office politics that stands in the way of productivity, where employees’ efficiency and efforts are not rewarded, and busy work is praised. Most of the humor emerges as the reader sees the characters making ridiculous decisions that are natural reactions to mismanagement.
The popularity of the comic strip within the corporate sector has led to the Dilbert character being used in many business magazines and publications. Also, several newspapers run the comic in their business section rather than in the regular comics section.
In 1997, while working as a management consultant to Logitech executives, Scott acted in a way he depicted management consultants in the comic strip i.e. with an arrogant manner and with bizarre suggestions, such as comparing mission statements to broccoli soup. He went to the extent to convince the executives to replace their existing mission statement for their New Ventures Group, “to provide Logitech with profitable growth and related new business areas,” with “to scout profitable growth opportunities in relationships, both internally and externally, in emerging, mission-inclusive markets, and explore new paradigms and then filter and communicate and evangelize the findings.
Scott Adams recently announced that United Media would be introducing an interactive feature on Dilbert.com, allowing fans to write comments and, in the near future, interact with Adams about the content of the strips.
In the past few years, great emphasis has been given to the concept of Corporate Social Responsibility, precisely defined in terms of the responsiveness of businesses to stakeholders’ legal, ethical, social, economical and environmental expectations. Over the last decade, there have been number of companies worldwide that have started promoting their business through Corporate Social Responsibility strategies because the customers and the investors expect them to act sustainable as well as responsible.
The concept of Corporate Social responsibility is now becoming a self-regulation integrated into an organizations’ business model. Its regulations generally function as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. On a broader level, “corporate social responsibility” or CSR is a mechanism though which an organization can embrace responsibility for its actions and propel a positive impact through its business activities on the consumers, employees, stakeholders, communities, environment and all other members of the public sphere.
ISO 26000 is the recognized international standard for CSR. The standard emphasizes the relationship of a business to the society and environment in which they operate which is a critical factor in their ability to continue to operate effectively. The ISO 26000 standard is becoming popular these days as it helps businesses and organizations translate principles into effective actions and shares best practices relating to social responsibility, globally and is meant for all types of organizations regardless of their industry, activity, size or location.
Social responsibility and sustainability have become important marketing strategies for businesses. Corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. Generally, CSR is related to crisis i.e. whenever a company falls into a social or economical crisis they look towards the concept of corporate social responsibility. It is important that organizations understand the significance of the concept of CRS and integrate it into their business models.
Aligning a business towards a sustainability approach is always helpful in the long run. CSR is an evolving theory and with the coming of the global digital age, the theory is gaining rapid significance among business of all sizes.
MBO – more popularly known as Management By Objective, is a term that was first coined by Peter Drucker in 1954 in his book The Practice of Management. The essence of MBO is to define clear objectives within an enterprise, that helps management and employees work towards a common goal. The process involves setting short term and long term goals, choosing a corrective course of action and making strategic decision.
In any organization, typically all employees should be involved with the goal setting process and should choose the appropriate course of action to be followed. That way they are more likely to fulfill their responsibilities and in-turn achieve organizational goals.
The first step in implementing MBO is to establish long-range company goals in such areas as production, marketing, services, sales, R&D, human resources, finance, information systems etc. A business owner should begin by defining the company’s current business status and looking for emerging market trends that may require adaptation. This is kind of long term planning provides a framework for forecasting the organization’s future staffing levels, marketing approaches, financing needs, product development focus, and facility and equipment usage.
Typically, companies should plan yearly and then break down these long term plans into department wise objectives and eventually as achievable goals for employees. A point to note here is to make sure employees from all departments clearly understand and support the overall goal of the organization. As a manager or business owner, it is important to be involved in such goal setting activities, from the very beginning, as this will increase their commitment to achieving the goals, allow them to communicate the goals clearly to subordinates, and help them to create and align their own goals to support the company goals.
Overall, establishing an MBO system in any organization may be difficult, but it is usually worth it. It is always advisable to introduce MBO slowly into an organization, and all employees should be given the opportunity to set short terms goals to start.
The most difficult aspect of implementing MBO may be simply getting people to think in terms of results rather than activities. Therefore, a formal training program for business owners is always a necessary tool that helps them understand the importance of MBO. Hiring an outside consultant to explain the process of setting an MBO program within an organization is always a good start.
MBO is not a definite theory, but more of a collective goal setting activity. It helps business owners actually analyze their actual goals by looking at the bigger picture.