Page 19 - 201902 SCA February 2019 Volume 56 Number 1

FEBRUARY
Business ARTICLE 2019

Are you doing the right thing?

By Graham Haines, Principal of Plans to Reality • www.planstoreality.com.au

“Doing the right thing and doing things right” is the basic and unchanging recipe for
succeeding in any business. The order is critical for if you don’t do the right thing,
how well you do it is immaterial.

Today’s reality is that it has never been harder to get External Environment Impact Evaluation Grids
both of these components right and the underlying 10
reason is a six-letter word beginning with “C” –
CHANGE and, just as significantly, the PACE of change. MEDIUM IMPACT HIGH IMPACT
What are the implications of CHANGE on the first
ingredient of our recipe for success – “doing the right 5

thing”. Businesses operate in three environments. LIKELIHOOD OF
HAPPENING
MACRO EXTERNAL ENVIRONMENT – no control LOW IMPACT MEDIUM IMPACT
MICRO EXTERNAL ENVIRONMENT – some influence
1
INTERNAL ENVIRONMENT – full control 1 5 10
IMPACT ON BUSINESS
Not only are the number of factors that could
influence your business increasing but the pace at
Macro – External Environment which they occur is also becoming more rapid. Thus,
The macro-external environment checklist comprises there is an on-going need to assess the impact of
such factors as a) technological, b) economic, these changes on your customers’ needs and hence
c) social/cultural trends, d) political/regulatory, e) your business model. The old pattern of doing a
demographical and f) environmental. Once you have strategic review every five years is gone forever.
identified them, the next question to ask yourself In a previous article in this journal, “Get aligned;
is whether – and how – the factor in question get ahead” I referred to the concept of Total
will impact upon your customers’ needs and, by Organisational Alignment, the first component of
inference, on the future of your business. All factors which is the alignment of your organisation’s strategic
in the macro-external environment share one thing business plan with the external environment in which
in common. You have no control over them so your it operates – “doing the right thing”. This environment
business must adapt to them. changes over time and across geographical
boundaries. Two examples will suffice.
Micro – External Environment Wesfarmers has been hugely successful in
The influence of the micro-external environment is Australia with the Bunnings business model and its
more immediate as it encompasses such factors as executives believed that the model could be applied
a) markets, b) customers, c) competitors, d) suppliers equally successfully to the UK market. Rather than
and e) distribution channels. You have some influence do what Woolworth’s had done with their disastrous
over the micro-environment. You can be selective Masters foray into the Australian home improvement
about the markets and customers that you want to market, Wesfarmers decided against a green field
serve but you may have little influence over growth strategy and opted to purchase for $700 million the
factors and other market dynamics. You may have Homebase chain, No.2 to the market leader B&Q
flexibility in the selection of suppliers and marketing in the UK market. Furthermore, the Wesfarmers’
intermediaries such as agents and distributors. You strategists, recognizing that the positioning of
may be able to influence the actions of your direct Homebase in terms of its customer profile and
competitors and of independent advocates such as product offerings was significantly different to that of
specifiers, consultants and architects. Bunnings, decided to make haste slowly by piloting
Invariably this scanning of the two external the Bunnings formula at a small number of stores to
environments will generate a host of trends and refine their understanding of UK customers’ needs.
influences that vary considerably in their potential The business strategy was then handed over to ex-
impact on your organisation’s future. Thus, a culling pat Bunnings executives to implement.
process is required to identify those that will have the Confronted by an underperforming Homebase
most impact over your business model in coming years. business, the ex-pat management team decided
You will need to run the impact analysis twice, to abandon the hasten slowly approach, sack the
firstly for the macro-external and secondly for the Homebase management team and rid the Homebase
micro-external environments. Take each factor in stores of the concessions such as Laura Ashley and
turn, plot its position on the grid in terms of its Habitat that had been a centerpiece of the Homebase
likelihood of happening and its potential impact business model and which had given its customer
on your business, then multiply the X and Y axes base a female skew. The accelerated re-formatting
together to obtain an impact rating out of 100. continued page 35
Journal of Surface Coatings Australia 17