For business folk still making New Year’s style resolutions about what they’re going to do bigger or better in 2003 – longer-term planning, stronger focus on innovation, and more holistic approach to business practices could be good starting points.
These were areas identified as needing attention in major survey of business capability released late last year by the Ministry of Economic Development. Its Firm Foundations study looked at more than 2700 enterprises across the economy, examining the relationships between business practice and better business outcomes.
The practices they examined were in six broad areas:
* leadership and planning;
* employee practices;
* quality and supplier relations;
* customer focus;
* information and benchmarking;
* innovation and technology.
The survey suggests that increasing attention is being paid to customer and market-driven approaches, various aspects of employer/employee relations, and information management support. That was the good news. Less encouraging was the high proportion of companies deemed “vulnerable”- in other words lacking the necessary practice and performance to be internationally competitive.
An area of relative weakness is the focus on short to medium term. Too few companies use longer-term goals or vision to drive development or worry about wider environmental management.
The report also suggests need for more networking or business “clustering”. “There is scope for many firms to develop stronger relationships with suppliers, and benchmark ideas and performance with other firms,” it says.
One difference between the so-called “leaders” and “laggers” is in their commitment to the “softer” aspects of business development. Report co-author and ministry adviser Stephen Knuckey says it highlights the need for across-the-board improvement in effort.
“There is relationship between adopting holistic approach to business practices and achieving better operational outcomes such as lower costs, on-time delivery, greater flexibility, fewer defects and errors in products and services, and improved levels of innovation.”
Firm Foundations is available online at www.med.govt.nz.
