Business Management Life

In 1993 Mobil rated last on profitability in its industry, with a return on capital employed of 6%. In 1995 and for the following four years it rated first in profitability within its industry, with ROCE up to 16%. Similarly, Cigna Insurance was losing $1 million a day in 1993, but within two years it was in the top quartile of profitability in its industry. In 1998 it was able to sell its Property and Casualty division for $3 billion. Another great success story is that of Saatchi & Saatchi. They increased shareholder value from $500m in 1997 to $2.5b in 2000. These companies are among a number of legendary turnaround success stories quoted by Norton and Kaplan, authors of the Balanced Scorecard.

These companies attribute at least part of their success to having implemented the Balanced Scorecard. Developed in the early 1990s by Norton and Kaplan, this valuation methodology ensures appropriate strategic focus on three value disciplines viz, customer intimacy, operational excellence and innovation & learning, through a defined set of metrics. In the Balanced Scorecard these value disciplines are presented as three perspectives: Customer, Internal, Learning & Growth. A final dimension, the Financial perspective, records the commercial outcome of the value created in the other three perspectives.

At a conceptual level, the Balanced Scorecard methodology is logical, simple and elegant. It asks the following: What skills and innovative capabilities are needed to drive operational excellence to a level that the value proposition for my customer becomes so compelling that the company meets its growth and revenue targets in a sustainable fashion?

Looking at the success stories, and considering the simplicity of the methodology, the notion “the holy grail of business management” comes to mind. However, according to Norton, the ove Read the rest of this post »

Opportunities are situations where you (or the organization) has to respond quickly in a unique situation, not likely to happen again (soon).

For instance. You walk in the street and before you know it you bump into someone who was talking on the phone and didn’t notice you. In the “accident” some papers fall on the ground and you help the other getting them. “I’m sorry I wasn’t paying attention…” On the ground you notice a ticket to the opera and you start a conversation about Romeo and Juliet… The next moment you are having both a cup of coffee in the nearest coffee-shop.

That is one example of an opportunity in the private sphere. In the organizational setting an opportunity is one where because of a similar event a business response may be very profitable. It only requires that you act soon.

For instance, in the business setting, the uncertainty in the stock market may be used as an opportunity to increase interest rates to attract clients’ savings. Many some private investors are often “afraid” to invest during a bear market, and a high interest rate on savings may attract new clients.

Now where is the risk?

Minor risks are that your organization is too late (time-to-market) in launching the new product (including advertisements and such) at a moment where the stock-market is already turning positive.

Another more important risk however is that the opportunity brings also unexpected changes in your business. Perhaps not in the short term, but in the long term.

Now think again about the two people how bumped into each other. When is this a risk, rather than an opportunity. The opportunity is a risk when they both already have a compromise — at home. If you are married or otherwise engaged, opportunities are more of a risk than if you are free and unattached.

The business equivalent is more or l Read the rest of this post »

You need to be prepared for trying situations at your bed & breakfast location. There are going to be times when you have to make a choice as to how to effectively handle a situation. You may not have time to carefully consider all of your options so make sure you have thought about this process in advance. Most of the customers that come to your bed & breakfast are going to be a pleasure to see but not all of them.

While this won’t be a daily occurrence it is something you are going to need to be prepared for. You will likely have other guests there too and they will expect you to handle things professionally as well as quickly. You definitely don’t want them to be the one to pack their bags and leave. More than likely they won’t be coming back and they would like their money refunded as well.

Most business owners understand that they need to do all they can to accommodate the wishes of their guests. Yet that doesn’t mean that you allow them to engage in reckless behaviors that affect everyone else. Try to give people the benefit of the doubt but should you feel uneasy about a situation then trust yourself to know enough about people to be on alert.

Do your very best to resolve any conflicts among guests amicably. Generally this type of scenario is going to occur between people that came to your business together rather than separate parties. Should there be any threats made or domestic abuse you definitely need to contact law enforcement immediately to handle the situation from there.

Noise tends to be a problem from time to time at a bed & breakfast. Out of respect for other guests they need to be quiet at night. You may need to provide a couple of warnings but beyond that they are being disruptive. If they continue to engage in the disruptive behavior rather than respecting others you may need to ask them to leave.

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