Posts

Why is Strategic Focus a Bigger Challenge in the Design Consultancy Industry & What is Needed to Deal with the Challenge?

Why is Strategic Focus a Bigger Challenge in the Design Consultancy Industry & What is Needed to Deal with the Challenge?

In my earlier blog posted on 22/10/2014, I looked at the viability of the design consultancy industry and asked why the strategic focus was a bigger challenge to achieve then in other industries. I drew a straight line, a direct correlation between the strategic focus and achieving/sustaining the intent hence industry viability.

In this blog I will attempt to answer some of these industry challenges (and solutions) that are resulting in this gap, the gap in distance and journey time between where we are today and the strategic intent.

Let’s consider distance first.

When I talk about distance I am literally referring to how far away the industry is from achieving its full potential.

The strategic intent set by a business defines where the business wants to be in five to ten years from today.

The strategic focus is the tool needed to achieve the full potential that will lead to this intent. This full potential must be capable of dealing with the most challenging of intents. The strategic intents themselves must not be unrealistic but dictated to a certain extent by the full capability potential of the business, and I stress full and not current potential. A word of caution here, the full potential is not static state but dynamic.

The benefits associated with a business that strategically focuses on achieving its full potential is a combination of organic and non-organic growth, sustainability and viability.

So to answer the question on why the strategic focus is more of a challenge in the design consulting industry, I would say it basically boils down to:

  1. Organizational/business design
  2. Culture & excessive resistance to change
  3. Tactical non holistic views of the business strategic intent
  4. Greater emphasis on engineering/design works at the expense of focusing on the road map leading to the strategic intent

What is needed to close this gap in distance?

The industry needs in my view to look at implementing four key areas:

  1. A viable systems/business model
  2. Encourage and not destroy both entrepreneurship and intrepreneurship at all levels of the business. If you are wondering about the difference the former is external related and the latter is internal.
  3. A culture that competes for the future by continuously challenging the assumptions and is prepared to forget the past.
  4. Performance related incentives to create a win -win situation for all business and staff alike.

The journey time for closing this gap will ultimately depend on the level of commitment from the very top of the organization. The extent of commitment from the top, CEO, COO level etc will mean the difference between a relatively short journey time and a very long one. The focus in hand must be to narrow the journey time as leaving it for too long may lead to the business demise.

In my next post I will discuss the viable systems/business model, meanwhile I would be happy to answer/debate any questions any of you may have on my initial two blogs.

Author of Blog: Majed Bushnaq

Food for Thought- Incentivizing to Maximize Profitability

Food for Thought- Incentivizing to Maximize Profitability

In a project environment it is the project team, lead by the project director who are ultimately responsible for delivering the agreed contractual scope first time every time at least cost (budgeted cost).

Least/budgeted cost is the optimal delivery cost with no inbuilt contingencies whatsoever. It is the minimum known effort (measured in hours) required to deliver the scope.

In simple terms, a project/delivery team that manages to deliver the scope at the budgeted (least) cost, is a team that maximizes profits to the business they are working for.

Maximizing profits therefore requires each individual on the project striving towards achieving their own individual budgets making up this “least cost”.

The Business should not only focus on requiring that each project delivers at their agreed least/budgeted costs, but also encourage by incentivizing each project team member, the “grass root level” to adhere to their allocated budgets.

Objective performance measurement techniques are vital for incentivizing to maximize profitability.

Earned value management applied at both a project and individual resource/staff level will provide the tool and means to steer the project/all involved in meeting their target budgets and in maximizing the project’s profits.

A pre-defined/approved maximum bonus can be paid to a project that successfully delivers its contractual scope within its budgeted cost.

Similarly each project team member’s bonus can be related to their performance (measured in cost variance at completion of the project) and proportional to the overall work effort involved (measured in the team member’s budgeted cost as a ratio of the overall project budgeted cost)

Incentivizing to maximize profitability as described above would in my opinion not only create momentum at the senior project management level but also the vitally important “grass root level”. It will encourage more team “belonging”, innovation/entrepreneurship, efficiency/effectiveness and result oriented teams.

Can this be the way for the future?

The creation of a feeling of belonging, partnership at every level of the business and incentivizing to maximize business profitability.

What do you think?

© 2015, Majed Bushnaq