6 Fundamentals Every Modern Entrepreneur Needs to Succeed

The road to being a true-blue entrepreneur is paved with spectacular stories of crash-and-burn. It requires a certain type of stamina that few possess and an insatiable desire to do better than the day before. Such a demanding lifestyle has no boundaries in place, except for those self-imposed. This alone can prove deadly for the half-serious startup hopeful.

Mastering the daily hustle is something that will either make or break any hopes for success. If you’re not serious about upgrading your skill set, than prepare to be beaten by those who make it their mission.

Succeeding today calls for a jack-of-all-trades-like approach. Here are the qualities that future success stories in business need to possess:

1. A scholarly research ability. People don’t simply buy things anymore. There’s a winning mix of brand interactions, advertisements and recommendations that go into every significant purchase we make.

Getting this recipe to truly click involves not only knowing the history of your industry and competitors, but also knowing where and when to go for the latest updates and insights. Don’t pick up a copy of The New York Times, read through, and call it a day. Find those bloggers and influencers leading the way, peruse every trade publication for your industry and learn where to go for real answers.

Having an edge in the form of information is what will help you win those customers who are still on the fence.

2. A strong social media presence. If your LinkedIn profile looks like a phone book listing, we have a serious problem. If your indecent Facebook photos show up in an online search for your company, we might have a catastrophe. Tighten up your presentation to the world to leverage the free online assets we know as social media.

Designers are using Instagram to showcase their portfolios. Business owners are using Facebook to adjust their product offerings. Twitter breaks news, Tumblr shows trends and Pinterest uncovers customer buying habits. Find the channels best suited to your industry and start making them work for you. Just make sure to tie up any loose ends first.

3. An actively updated blog or website.  If you are so much as selling lemonade, you need a website. Unless you don’t like making money, you need a blog. If you’re not actively engaging potential customers online, showcasing your expertise and properly updating your channels and site, you’re losing to someone who is. Get in a weekly rhythm of updating your digital properties.

Websites drive conversions and blogs drive search traffic. Both can become bottomless pits when it comes to managing your time. It helps to have a set of resources or a resident expert in your corner. WordPress sites, and the like, make updating your content painless but consider teaming-up with an outside firm or consultant. Their insights and strategies can save hours of frustration.

4. A professional look and feel to everything you do. Even if you’re not in the fashion industry, every entrepreneur needs to work on perfecting their own personal style.

There’s a certain beauty to a freshly-minted business card or fine-pressed uniform. Clean, appropriate, smart design is what drives the professional world. Even for multi-colored or explosively creative big-league companies, there is a certain order and form that exists in their business materials that simply screams professional.

If you want to succeed, you will eventually need to develop an eye (or at least an appreciation) for the power of superior branding. Because superior branding is enough to turn a “maybe” into a “yes, please!”

5. A knack for storytelling. This is an often untapped asset in the business world, an escape from being perceived as just another vendor. While a great many might feel like they don’t have one, rest assured: every business has a story worth telling. It may take some soul searching, but once you lock in to that narrative, greater opportunities will begin to present themselves.

The world is filled with truly special individuals and great stories just waiting to be told. Recognize where your products or services come into that story and align yourself with it.

When it comes to keeping things fresh, it helps to keep a journal to recount all of your awesomeness. At a company, it’s about creating the story of a best-in-class service or product that makes life better. And don’t forget: a great story needs great characters!

6. A way to put it all together.  Keeping an ear to the online grindstone is a full-time job. A limitless smorgasbord of productivity apps and software services can leave many anxious and distraught. Turn these feelings into fuel and recognize that anything is possible. Use sites like IFTTT.com to automate certain processes and services like Evernote to keep tabs on your daily readings.

Be sure to take a step back from it all every day. Find time to reflect, with family or through fitness. Keep yourself motivated by seeking out mentors, video tutorials and new information. You don’t need to back yourself into a corner, but you do need a strong focal point to help guide you through hardships the that will inevitably come about. The stronger your focus, the better chance you have of coming out victorious.

In today’s world, it’s never been easier to make your mark in business. The challenge lies in saying something meaningful and relevant. Take part in the global economy, find the balance that best suits you and get ready for big things to happen.

posted on:entrepreneur.com

10 Pointers Every Young Entrepreneur Needs to Know

A young entrepreneur might run across a lot of articles offering advice for the new business owner. But how many articles are actually geared toward the young entrepreneur?

As a former young entrepreneur myself (now I’m 30), I’ve decided to share my insights from my past experiences — all the types of things that I wish someone had passed on to me when I was first starting out.

1. Do what you love.

When I graduated from college I worked at a job that I didn’t like because it paid me well. I hated to go into work each day. I admit that entrepreneurs typically make the worst employees because they want to be out there growing their own enterprise. Figure out what you love and then become the best that there is at it.

Your passion for your product or service will keep you motivated and get you through the tough times. Yes, there will be challenging moments. But when you work on something that you actually care about (as opposed to just trying to make a quick buck), you’ll probably be happy, have direction and fight as hard as you can to make this crazy idea of yours become a reality. 

2. Stay focused.

It’s awfully tempting to jump from project to project, especially when it seems as if a million opportunities are flying by. But don’t become distracted from the big picture. Instead of working on multiple projects, stay on track and complete the task at hand. If you’re working on multiple projects, you can spread yourself too thin, which will have an effect on your performance, productivity and resources. Perfect that one thing instead of working on five so-so projects.

3. Exploit online resources.

The Internet is a gold mine of resources. For example, visit the site of the U.S. Small Business Administration for advice about writing business plans, legal considerations, loans and even local resources to help you get that startup off the ground. Other awesome online resources are the websites of SCORE, America’s Small Business Development Center, Bplans, VentureBeat and, of course, Entrepreneur.com.

4. Find a mentor.

Whether you turn to a local entrepreneur, a business leader or a weathered vet that you meet through LinkedIn, having a mentor is one of the best resources you can have. Not only might a mentor have experience (such as dealing with venture capitalists), he or she also could possess an extensive network and help you connect with the right people to make your startup a success.

Don’t be afraid to cold call or email a big name in the industry. Many of these big names like to help younger entrepreneurs as a way of giving back. I met my mentor when I was 12. He was the owner of a large carpet store. I was his paper boy. I delivered his paper in the perfect location every day for three months till one day I saw him. I asked him straight up, Will you be my mentor? He said yes. He’s still a mentor to me today along with many other people.

5. Take care of yourself. 

I was a young go-getter once. (At age 12 I started my first candy stand and had three at one point.) I know exactly how it is: You think that you’re invincible. Here’s the breaking news: You’re not.

As an entrepreneur, you might find it easy to push aside healthy lifestyle essentials, such as getting exercise, eating a balanced diet and securing enough sleep. But what good will you be if you’re tired or your immune system if weak? Plus, exercise is a great way to relieve some stress.

Don’t forget to make time for yourself. You need to take a break from work or you might burn yourself out. I personally love to listen to books and have since I was a kid. I’m not very good at reading as I have attention deficit hyperactivity disorder so I listen to books. Find what works for you!

6. Define your market.

Failing to define the market is a common mistake of a lot of young entrepreneurs. Always remember to consider if your business plan makes sense for your market. If you’re dreaming up a late-pizza delivery service, do you start it in a business district or a college town? There are a number of ways for you to try to define your market, such as by demographics or psychological factors.  

I always hear people in the fashion industry tell me that their world is a $1.2 trillion market. Technically they may be correct. But if your product is hipster pants, the market isn’t $1.2 trillion. How many hipsters are there in the world? How many of them would purchase your product on a yearly basis? 

7. Be able to explain your business at a whim.

You never know when you’ll have to explain your business. You could run into an investor in an elevator or end up making a sales pitch to a customer while out to eat. Always be ready to clearly and quickly state your mission, service and product or goals.

This is something I learned from Derek Anderson, the founder of Startup Grind, which hosts events for entrepreneurs. He took me to lunch about three years ago and asked me what I did and the business I was promoting. I really didn’t know how to answer. Since then I have refined my pitch so that when someone asks me what I do, I can tell them in five words or less. Practice your 5-second, 15-second and 1-minute pitch over and over. This will help you be able to explain your business to anyone out there in any situation.

Related: Staging the Anti-Conference That Will Pull in Young Entrepreneurs

8. Remember, you run a startup. 

Just because you secured some funding that doesn’t give you the right to act like you’re a rock star. A luxury home, an office with an actual shark tank or a really fast car are all just a big waste of money, especially in the beginning. Remember, you run a little-known startup (and you’re not Richard Branson overseeing a large successful company). Be careful about managing your cash flow and make sure that you keep track of expenses. That’s not being cheap. It’s being wise. You don’t want to burn through all your cash too early.

9. There are still rules.  

A major perk that comes with being an entrepreneur is that you’re the boss. You can make your own hours and develop your vision of a company. In short, you’re doing whatever you want. And it’s awesome. But there are some rules that all entrpereneurs have to follow like registering your business and paying taxes. These are just some of the not-so-much fun things you have to handle. If not, you’re going to be in just a little bit of trouble.

10. Know when to fold ’em.

Sure, I’ve had success running and selling several different companies, but do you know how many I’ve started and stopped because they weren’t taking off?  Tons. Some say 9 out of every 10 business fail within the first couple years. 

Don’t let your pride get in the way of closing your company. I learned this the hard way in college when I launched what became my first failure, Utefan. I knew that what I was doing wasn’t going to work or make money. I kept putting money into it and spending time on it. Eventually I had to give up my pride and stop. Know when to let go.

If you’re not familiar with the classic Kenny Rogers song “The Gambler,”then stop what you’re doing and check it out. It offers some of the best advice ever. Why? Just like any great gambler, you have to know when to fold ’em. Instead of continuing to work on a fledgling business, it’s best to walk away and reflect on what went wrong. It’s not going to be easy. But it’s inevitable. And you’ll take that lesson with on your next venture. 

Why are Indian companies not venturing into next level of tech such as cloud storage, cyber security?

 In a country with the requisite expertise, it’s surprising that few have ventured into the next level of technology such as cloud storage, cyber security and software-defined networking.

But a few startups have bucked the trend and are profiting from it. Take for instance Lucidous Tech, founded by 23-year-old Saket Modi. The two-year-old company is one of the few Indian players in the cyber security space and works with companies like IBM, Microsoft and KPMG.

“The barrier to entry is very high. Even if you’re a worldclass hacker, organisations will not trust a startup,” said CEO Modi, who built credibility by giving seminars on ethical hacking and cyber forensics across India.

His cyber security firm in New Delhi works with about 415 enterprises to develop security products and hacks into their systems to detect vulnerabilities in codes. The company is soon going international and has tripled its revenue since last year.

“It’s very lucrative. Companies will pay a huge price for gaining momentum in this space,” said Ravi Gururaj, chairman of Nasscom Product Council.

With the internet of things becoming a global phenomenon, the security software makers have a chance to build software in uncharted territories. The market is pegged at $95.60 billion (.`5.8 lakh crore) in 2014 and will grow to $155.74 billion (. `9.5 lakh crore) by 2019, according to research firm MarketsandMarkets.

These core technologies power the next generation of computing and lay the foundation for enterprises. But the dearth of Indian companies is glaring.

“There are very few companies. This is the best kept secret in the industry ,” said Jay Pullur, founding member of software product thinktank iSpirt.

Pullur, also the CEO of Hyderabad-based Pramati Tehnologies, said iSpirt talks to global MNCs regularly and have been told that such companies are easy acquisition targets.

Also the market size and opportunity in these technologies have been more than validated.

Take software-defined networking as an example. In simple terms, SDN will do to networking, what cloud did to servers–eliminate physical data centres and virtualise the hardware aspects of networking, untying software from legacy hardware.

So why are there so few entrepreneurs? It is not the lack of expertise. Bangalore hosts the development centres of at least two Silicon Valley-based companies in SDN–Avni Networks and Versa Networks. “We aren’t using our India team for mundane development tasks, like maintenance and bug fixes–a big mistake of many larger companies in tech. Quite the opposite,” said Kumar Mehta, CEO of Silicon-Valley based Versa Networks. The twoyear-old company has received $14.4 million (Rs 87.5 crore) in funding from Sequoia till date.

“The India team is working on the core solution, writing code around the clock with their Silicon Valley peers,” said Mehta, a former employee of Juniper Networks.

Last year, research firm CB Insights said deal activity jumped 75% on the back of large acquisitions by Juniper Networks and VMWare. Between mid-2012 to 2013 to SDN-related startups have raised nearly $416 million (Rs 2,500 crore) across 35 deals.

Cloud storage is another largely unnoticed area.

courtesy:etcio.com

Is your CRM not working for you?

By Kate Leggett

CIOs, very often, have quires for CRM, which go something like this: “we implemented a CRM solution from Vendor X, and it doesn’t work. Nobody is using it, and when they are forced to use it, it is slowing them down instead of making their life easier. Are there solutions from Vendor Y or Z that would do a better job for us?”

The answer goes something like this: “CRM solutions are mature. Most vendor solutions are chock full of features and functions – probably more than you would ever need. Your CRM is not supporting your needs, perhaps, because:

1) You don’t have crisp definitions of your processes, the stages within processes, and the exit criteria to move to the next stage (ex. what are your criteria to promote a lead to an opportunity? Are they the same for all business units?)
2) You have implemented your CRM without doing any customisation or configuration. As a result, your organizational processes are not well supported in your CRM.
3) You have not paid attention to your data quality. Users don’t trust the data that they use.
4) You haven’t spent the time to integrate other systems to your CRM, so you cannot empower your customer facing personnel with all the information they need from your CRM. It’s not helping them get their job done easier or faster.
5) You don’t have the right reports available to your end users to allow them to measure their performance.
6) You haven’t focused on usability or the user experience. The UI is probably not role based, or tailored to what your users need, and you haven’t thought though the actual data elements that are important to your users at the various stages of your processes.
Sound familiar?

A Forrester survey, conducted in partnership with CustomerThink, of 650 business professionals and IT leaders who had been involved in a CRM technology project last year it was found that:

1) Nearly half of survey respondents had faced problems grounded in poor or insufficient definition of business requirements, inadequate business process designs, and the need to customise solutions to fit unique organizational requirements.
2) More than two-fifths said that their problems were the result of people issues, such as slow user adoption, inadequate attention paid to change management and training, and difficulties in aligning the organizational culture with new ways of working.
3) Two-fifths had challenges related to their CRM strategy, such as a lack of clearly defined objectives, poor solution deployment practices, and insufficient solution governance practices.

What does this all mean? Choosing CRM solution is an important step. But it is not enough to ensure success with your CRM project. A CIO must pay attention to CRM strategy, processes, and people factors to ensure success. He must take the time to understand how he will use CRM to generate business value, and spend the time to ensure a perfect fit into your organisation. He just can’t shoehorn a vendor solution without configuration, customisation or integration into operations, and think that it is going to work.

– The author is VP, Principal Analyst Serving Application Development and Delivery Professional at Forrester. The article was first published on Forrester.

courtesy:etcio.com

 

How does greater cloud-readiness translate into higher ROI?

Pop Quiz: If your company has conquered North America and Western Europe and is now looking for the next big market, where should you go? The no-thinking, because it’s obvious, answer is of course China. But if you want low cost of entry and a rapid return on investment you might want to aim a bit further South – to Australia.

While it isn’t as big a market as China (or even India) and may have a higher cost of living, which can make establishing a beachhead there expensive, Australia has significant enough similarities to the western world a well-educated populace, a high income citizenship and desire for new technologies and innovations to make success here far easier. And if you are doing ROI calculations around this decision, it has a key advantage over its Asian peers: higher acceptance of cloud services.

How does greater cloud-readiness translate into higher ROI? Because your company can leverage cloud-based services to reach and serve Australian customers faster, cheaper, and with a better economic model that maximizes the profitability of crossing shores. And in our latest Forrester report, we show you how Australian companies are using the cloud and achieving success through this activity.

We all know that cloud computing enables new service agility and continuous customer experience improvement. Further we know that by taking advantage of pay-per-use economics we can optimize the efficiency, performance and location of the services we build in the cloud to maximize profits. And in the past two years the major multinational cloud service providers have opened Asian and Australian data centers so you can serve this market with very low latency. But it’s the readiness and hunger of the Australian consumer and business market that makes this country so attractive.

And you can see this in the use of cloud services by Australian enterprises, as shown in this report. The key factors:

A tech-forward culture – Australians were fast to jump on smart phones, SaaS and now cloud platforms. And they want their mobile moments satisfied whether from on-continent or off solutions.

A fast follower mentality – Australia has high affinities to the US and the UK but isn’t blind to its distance from these countries. But it isn’t willing to let distance be an excuse for being late to the party. On key technology trends, Australia has been very quick to move from experimentation to full-market adoption. And that pattern is playing out today with cloud services.

A highly educated citizenry – You can’t be tech savvy, especially in B2B without being able to quickly grasp the technologies that enable business innovation and Australians are all over the cloud. In fact, in our interviews with Australian cloud leaders we found a stronger understanding of the realities of cloud services that take many of their peers even in the US and Europe much longer to understand.

Several key vertical markets are the most cloud-forward and thus good immediate opportunities for partnership, early success and strong growth:

Retail banking – where investment banking has led could adoption in most markets, retail is the strongest in Australia. Credit the Age of the Customer down under as Australian citizens are very mobile-forward and open to banking this way.

Media & entertainment – a clear leader in cloud adoption in most markets, it’s no different here. A strongly competitive market facing its own digital disruption is moving quickly to leverage cloud adoption here.

Travel – If you travel the world and have’t run into Australians nearly everywhere you go, then you need to get out more. Australians take full advantage of their time off and thus local tools that help them plan the next great experience are highly sought. Qantas has embraced this trend by creating internal startups to capitalize on these opportunities leveraging cloud services.

eRetailing, local government and many others – In fact the examples of cloud-moves being taken by Australian businesses and companies reaching out to Australian consumers actually surprised us during our research.

Bottom line: If you haven’t prioritized the Australian market and incorporated the use of cloud services to reach and serve it, you may be missing out on a fast and profitable business opportunity. Other Asian countries are harder and more costly to penetrate. While you can’t just pickup your US marketing plan, drop it on Rackspace Cloud and success will follow, you can succeed by thinking local but acting cloud.

courtesy:etcio.com

Success vs Satisfaction

Some may think these terms are synonymous. However, it occurred to me the other day, that while we might be a satisfied customer, this isn’t always elevated to a successful outcome.

There is a big difference from being satisfied at a tactical level and creating success at a strategic level.When implementing quality & risk management solutions, for example, the selection experience and usability of the technology can be very satisfying.But that doesn’t mean it will transform the success of the business.What are the ultimate possibilities of the implementation, beyond automating a process?

The premise of Operational Excellence is not only to achieve customer satisfaction, but to achieve greater success in the business.If you have created a fantastic product and wonderful brand experience that initially satisfies your customers, is that enough? What about extending that opportunity to new markets where other customers would benefit from the same? And what will happen to the life cycle of the customer’s use of the product – will their use be merely satisfying or provide some degree of success or next step? Extending satisfaction to success is the real growth opportunity.

Which brings me back to what the implementation of systems that support Operational Excellence should achieve.Costs,quality,compliance, globalization, and customer demands are forcing manufacturers to find ways to do more with less, and technology adoption is critical to satisfying these demands and also to achieving greater success.For example:

User satisfaction has been important to ensure the easy adoption of quality & risk management tools.As such, disparate and home-grown solutions satisfied immediate requirements for capturing or automating data within siloed functions. Yet, that hasn’t stopped critical quality issues and non-conformances from occurring – a result of focus on satisfaction but not success.

A maturing manufacturing software landscape continues to enable a more refined focus on metrics and KPIs.Automated data management is satisfying a deeper analysis of performance.Success depends on understanding the real-time metrics that enable proactive quality management.

Advancements in next-generation manufacturing software and technology are enabling organizations to more readily identify areas for improvement.By continuing incremental steps beyond satisfaction towards success, these advancements will be key to accelerating operational excellence.As you look to your own technology roadmap,consider not only what will satisfy your functional requirements, but also how implementation, vendor support, time-to-use, and integration amongst systems will deliver success.

courtesy:grcnews.com

India digital Security market to grow 8% in 2014

Delhi: Digital security vendor revenue (hardware, software and services) in India will grow from $882 million in 2013 to $953 million in 2014. Security spending will continue to grow to in 2015 when revenue is projected to reach $1.06 billion. Security services revenue accounted for more than 55 percent of this total revenue in 2013 and this trend will continue into the foreseeable future, says a Gartner report.

“Enterprises in India that traditionally did not focus on, or invest in, a lot of security technologies are now beginning to realise the implications that a weak security and risk posture can have on their business,” said Sid Deshpande, principal research analyst at Gartner.

Vertical markets, such as banking and financial services, that have had a strong focus on security are now preparing themselves for the next wave of digitalisation by investing in technology approaches that can enable them to grow their business securely while embracing digital business models. Though this heightened awareness is creating increased budget allocations for security, there is still a skills deficit in the security space in India, consequently driving up the market opportunity for security consulting, implementation and managed security services.

How different cloud services are competing, pushing up usage

Consumers are already using the cloud widely, even if a lot of them don’t know it. Approximately 90% of global internet users are already on the cloud in some manner, and that number will remain steady as internet usage spreads globally.

But mobile has led to explosive growth in cloud usage. Mobile consumers leverage the cloud to store and consume media, and sync their apps, files, and data across devices. BI Intelligence estimates traffic to the cloud from mobile devices will grow at a compound annual rate of 63% between 2013 and 2018.

Even as cloud usage is exploding, though, consumers remained confused about the cloud, and services specifically aimed at cloud storage still only reach a small share of U.S. internet users. That means companies like Dropbox and Google Drive have a big opportunity to grab users. To do so, they’re slashing prices and upping storage space.

The new report, provides an exclusive comparison of how the different cloud storage companies are stacking up in terms of pricing and offerings. We put this in the context of cloud adoption and traffic, and also look at how well consumers understand the cloud. There’s a big opportunity for cloud storage services that can help internet users understand the benefits of using the cloud, and create seamless services that allow people to easily access their files from any device.

Here are the key points from the report about how consumers are using the cloud:

• Usage of services that employ cloud computing is already a mature mass market.Approximately 90% of global internet users are already on the cloud, and that number will remain steady as internet usage spreads globally.
• Consumer cloud computing is already a mature mass market and mobile has led to explosive growth in cloud usage. Mobile consumers leverage the cloud to store and consume media, and sync their apps, files, and data across devices. We estimate traffic to the cloud from mobile devices will grow at a compound annual rate of 63% between 2013 and 2018, which is significantly faster than the 22% growth rate for overall cloud traffic.
• Yet despite so much usage, consumer awareness of cloud services remains low.Even though most online consumers use cloud-based sites and apps, survey data shows that they’re confused about cloud computing and its value in helping organize digital services.
• There are growing opportunities for wider penetration and usage for consumer cloud-based services. For example, consumer adoption of cloud storage apps, like Dropbox and Google Drive, remains low.
• There is no clear worldwide leader in the consumer cloud space – yet. Apple’s iCloud held an early edge in markets where the iPhone is popular, but suites of cloud-based services from Google, Amazon, and Microsoft are catching up worldwide. More specialized cloud services like Dropbox and Evernote are trying to become platforms in their own right.

In full, the report:

• Forecasts the total audience for cloud computing services over the next five years.
• Quantifies the amount of global traffic to the cloud from desktop and mobile devices.
• Compares consumer cloud awareness to current consumer adoption and usage rates.
• Surveys the opportunity for cloud-based service companies like Google, Apple, Microsoft, Amazon, and Dropbox.
• Analyzes which cloud-based service companies are leading the space.

Strategic Risk Management: Are Organizations Doing It Right?

Strategic Risk Management (SRM) includes the processes which can help to identify uncertainties and opportunities that can affect an organization’s strategies. SRM also supports the core Enterprise Risk Management (ERM) objective of guiding the organization’s strategic business decisions that impact business performance. However, due to lack of awareness about SRM, the capability of ERM processes is limited. The need for organizations now is to understand the important role of strategic risk as part of their overall risk management processes, and how they can leverage technology to manage and integrate SRM and ERM into key decision-making.

Many organization’s ERM frameworks have done a good job in identifying and assessing risk, developing risk treatment practices, and monitoring critical risks. However, these frameworks lack the necessary connection between risk management practices and the strategic direction of the organization. While risk management activities and corporate planning are two separate management processes, in some organizations, many of the key components within the formal risk management cycle are comparable to central elements of the strategic planning process.

Under-utilization of ERM in Strategic Planning:

An important element of the strategic planning process and risk management process is to evaluate the robustness of existing and alternative strategies within a changing risk landscape. This can be done when the ERM principles of risk identification, risk assessment, selection of risk treatment practices, and monitoring and evaluating are used in scenario planning, allowing leaders to evaluate the potential success or failure of a given strategic option.

Figure: ERM and Strategic Planning in Alignment

Case Study: LEGO Group

Lego Group sets an apt example of how an effective SRM enables the organization to consider shareholder value as well as help in risk prevention and mitigation. The explicit management of strategic risks helps the company to avoid value erosion, and drive value creation.

Hans Laessoe, Senior Director, SRM at Lego, convened a group of 30 people in the company including product developers, lawyers, and marketers and asked them three questions:

1) What comprises product development and competitive pressure?

2) What comprises the operating environment?

3) What drives consumer demand?

After a half-a-day of brainstorming aimed at risk identification, 90 critical risks were identified.

Next, Laessoe stressed the importance of driving a consistent basis for financial quantification, and involved people who were well-versed in revenue forecasting. While most of the business units had already developed their strategic plans, Laessoe walked them through these plans with a perspective on strategic risks. Post the scenario and mitigation conversation, Lego Group prioritized its risks using the ‘park, adapt, prepare, and act’ (PAPA) model. This assisted managers in prioritizing their strategic responses given a risk’s likelihood of occurring and speed of change.

Today, whenever Lego adopts a new strategy — for example opening a new factory in China — the corporate management team needs to have a new strategy documented, which includes a ‘Preparing for Uncertainties’ dimension.

The Role of Technology:

A technology solution serves as the foundation for the company’s enterprise-wide risk and control activities. An integrated risk framework ensures streamlined processes for risk assessments, risk analysis and risk mitigation. It helps in accessing structured risk information and risk intelligence, thus resulting in a better understanding of the organization’s risk profile. It assists in integrating risk management into decision-making and strategic planning. This results in a more centralized view of risk that is aligned with corporate strategy and objectives, real-time information used to guide decision making processes and robust board level reporting and reviewing processes. Moreover, an integrated GRC system approach ensures enterprise-wide visibility and control and helps build a strong risk culture.

Integrated Risk Framework

Figure: Integrated Risk Framework

Technology enables more informed decision making with the help of a structured and standardized method of reporting results. Powerful dashboards, charts and heat-maps provide real-time risk information, and strengthen transparency into the organization’s risk and control management. This also supports more effective risk monitoring, reporting, and communication.

Conclusion:

A well-defined SRM process helps organizations to gain critical risk intelligence that is needed to protect shareholder value, drive profits, optimize costs, and tap into new opportunities. Leveraging technology highlights both key areas of uncertainty and key new areas of opportunity, and integrates it into a standard ERM process that allows the organizations to maximize profits and reduce costs.

courtesy:MetricStream