Big Important Things – risk and opportunity identification

30 11 2007

“Big Important Things” (BITs),  are local, regional, national or international circumstances or events that cannot be controlled or prevented, that have a significant effect on current and future business practices.

One should always keep in mind the impact of the “Big Important Things” (BITs) on the supply chain, customers, the competition and your industry.

Those involved in strategy and planning must understand how BITs create enormous risks and opportunities.

One can only react to BITs, they cannot be created or eliminated by an organization.

BITs would include, but not be limited to:

  • Natural and man made disasters – hurricanes, fires, earthquakes, explosions, flooding.
  • Massive economic changes – depression, recession, inflation, currency devaluation, massive layoffs
  • War and Terrorism – security measures, logistics, international trade limitations
  • Government policies – trade barriers, laws and regulations, economic sanctions, embargoes
  • New technologies, – trends and tendencies inside and outside of the industry
  • Environmental or health issues – contamination, unsafe products, epidemics
  • Legal issues – pending or current lawsuits, documentation and reporting, legal precedents
  • Significant global changes in demand or supply – shortages, increased demand
  • Energy costs – trends and tendencies

Contingency plans should be created, worst-case and best-case scenarios developed, and efforts made to lower the risk profile or strategically position the company to take advantage of possible changes in the business environment.

How to use BITs to identify areas of risk and opportunity 

  1. Analyze each of the following elements independently;  strategic raw materials, suppliers, logistics, major customers, the competition, your company, and finally your industry (local, national and internationally).
  2. What is the probability that a BIT would affect each element (impossible, low, medium, high, inevitable) and when (short-medium-long term)?  “My supplier is the only manufacturer in North America of the widgets we need, they are located on the western Florida coast and annually are affected to some degree my hurricanes and flooding.  There is a high probability that a major hurricane will hit them in the short to medium term.”
  3. Use a “what if” line of questioning for those high risk or high impact areas.  “What if a major hurricane hit my supplier and disrupted their production?
  4. What are possible scenarios to reduce your risk, or take advantage of the opportunity.  “Do I have alternative suppliers in place, extra inventory, insurance, how can I protect my customers, who else will this affect and how?
  5. Review this process at least twice a year to take into account changes in the probability of the BITs and modify the contingency plans or strategies accordingly.

Related Links

Analyze and Plan Using 7 Simple Questions

How to Systematically Analyze Any Situation for Better Decision Making

9 Steps to Better Decisions





Lessons in international business – negotiations

17 10 2006

Observations on how to create trust, effective meetings and excellent negotiations with overseas customers, suppliers and partners.

  • Whenever you are involved in international negotiations or global meetings keep in mind that you might be working with the same person for the next 10 – 20 years.
  • Negotiations should be open and straightforward.  Hidden agendas will eventually be discovered and make the next meeting very difficult.
  • Negotiations should involve creating value for both parties.
  • Meetings are important moments where trust is being built and confirmed.  Be honest and clear about your desires.
  • Never agree to something you cannot deliver or perform.
  • Listen, understand and evaluate what your partner is requesting.   What are they saying, and what does it mean.
  • Be certain of what you are negotiating and agreeing to.  If not 100% sure, stop and request clarification.
  • Prepare for the meeting several weeks before it happens.  Refresh and add information weekly.  When you reach the meeting, you will be in control of the information and feel comfortable during the talks.
  • At the end of the meeting, write down the most important points or agreements, with names and dates, and have it signed by those present.  This little tip will save lots of time and trouble for everyone involved.
  • Any agreement must have 100% follow-through.  If for any reason problems arise in the follow-through, immediately contact and communicate the situation to your partner.

Related Links

How to negotiate with Mexican business people

Great international business trip results





Great International Business Trip Results

16 10 2006

In any international relationship communication and understanding are critical for success.

Problems created by; language, stereotypes, misinformation, lack of information, and cultural misunderstandings combine with normal business problems to create a complicated scenario for anyone involved in international relationships and global business.

Prepare your international meetings and business presentations using the following questions as a guide to organize your ideas and focus on actions that will produce positive results for everyone involved.

6 Questions – Create Great International Business Trip Results

  1. What does this organization know about me, my company and my country?
  2. What do they think they know about me?
  3. What can I tell them that they do not know?
  4. What do I know about my international partner, culture and country?
  5. What do I think I know about this business, culture and country?
  6. What can they tell me that I do not know?

1. What does this organization know about me and my company. When you walk in the room an opinion has already been formed about you, your organization, and your ability to perform in the future. These ideas are based upon facts, information and past experience.

  • What has been the history of our relationship in their country?
  • Who has been involved in our mutual business, and why?
  • What promises have been made and kept by both?
  • What promises have been made and not delivered upon?
  • What have the major problems and success been in the past?
  • Press and media, our organizations promotional material.

2. What do they think they know about me. Clarifying the unknowns or presumed realities in a relationship is crucial to success. These ideas may be very damaging and limit your ability to trust one another. What stereotypical behaviour can you avoid or prevent? What can you clarify or refute through information or actions?

  • Behaviour and reacts based upon past experience with your organization.
  • Rumour and innuendo, press and media reports.
  • Negotiation styles.
  • Business objectives.
  • Behaviour, goals and methods of doing business based upon country and cultural stereotypes.

3. What can I tell them that they do not know. Today’s business world requires trust, information and solutions. Reinforcing your need to work with your international partner, providing important information or solutions, and clarifying misunderstandings can only help the relationship.

  • Clarify or destroy cultural stereotypes.
  • Clarify business objectives and why they are important in order to reach these objectives.
  • Provide solutions and alternatives to existing situations and challenges.
  • Provide information of value for their business and strategy.
  • Clearly identify current or potential business problems.
  • Predict and have answers ready for their questions.

4. What do I know about my International partner, culture and country? What do I know is true and not innuendo or interpretation? The numbers, facts, information, agreements and past performance history of the business. Information about the country and the business culture.

5. What do I think I know about this business, culture and country? What preconceived ideas and stereotypes are you working with? What are you assuming and what has been proven?

6. What can they tell me that I do not know? What questions do you need to ask in order to verify information or create plans. What pieces of your information puzzle are missing? This is the time to get your questions answered, what are they?

Related Links

Cultural misunderstanding it can happen to you

Stereotypes and global business

Create great international business relationships

16 Essential questions – the international business traveller’s quiz

Lessons in international business





Analyze and Plan using 7 simple questions

3 10 2006

Who – What – When – Where – Why – How – How much

Project management, organizing a team, writing a business plan, creating strategies, planning meetings, running day to day operations, general analysis and problem solving can be facilitated and improved by using a simple application of 7 basic questions.

The application of the standard reporters’ questions of who, what, when, where, how and how much to a specific situation will help organize the process of analysis and planning.

In order for this system to work, all the questions and answers should be written down. You’ll be building a visual map while defining the objectives, tools, resources, bottlenecks, time limits and chronologies of the problem. It will become clear what the real goals are, what is required, what is missing, who should be involved and when the tasks should be accomplished.

Who – Who is or will be affected by the decision or process? Who are the participants? Who will be involved or affected in some way by the project?

What – What are the objectives and desired results? What is the problem or challenge? What are the options available? What tools are required?

When – When is this supposed to happen? Define the deadlines, time limits and chronologies.

Where – Where is it going to happen? The physical place or space should be defined and examined.

Why – Why are we doing this? Why are we doing it this way or by this procedure? Why is it occurring?

How – How are we going to do it? The mechanisms, requirements, and processes needed in order to achieve the goal.

How much – How much is it going to cost?

Example – You are asked to give a speech on the sales results in Mexico for the last quarter for the upcoming Board of Directors meeting on January 10.

Who – The audience is the Board of Directors. The sales department, marketing, logistics and finance departments have the numbers and explanations of the results. Who is responsible for the agenda, audiovisual set up, room reservations? Are any other members of the company required to attend the presentation? You are the project leader and responsible party for the presentation.

What – The presentation is directed at the Board of Directors, they want to hear about results, expectations and strategies of the sales in Mexico. What questions will they ask, what aspects of the business will be of interest or concern? What information is important?

When – The meeting is January 10. You’ll need all the pertinent sales information by what date? It has be polished into a concise presentation by what date?

Where – The meeting will be held where? How big is the room, what equipment will be required for the presentation.

Why – Why do they want to review this information, is there a problem, is it routine? Why me?

How – Will you give a visual media presentation along with documents? What graphics will you show? Will you be the only speaker? Will the presentation style be serious, upbeat, creative or different from other presentations?

How much – Do you have a budget for the presentation and required materials? Do you have to fly in the Mexican sales representative to be present at the meeting? Do you have to rent equipment, hire caterers or provide refreshments or coffee service?

Related Links

How to systematically analyze any situation for better decision making

9 steps to better decisions