A Simple Formula To Beat Competitors - For Project Based Companies In Digital Space
This is a simple formula (but very difficult to execute) for project based companies to stay competitive. As my background is in software development and digital space, I tailored the formula for Digital and Software Companies (agencies). However, the concepts apply to any project or service based company.
But first lets clarify some basic terminology to avoid misunderstanding.
Who is a project based company?
a company that makes money by completing a project for a client outside of the organization. such as a digital or software agency.
Before defining the formula, we must know what is the goal of a project based company. (You may read this blog post in regards to Goal as well Goal: Making Money Now and In the Future)
The goal of any for profit company is to be an ever flourishing company OR
… TO MAKE MONEY NOW AND IN THE FUTURE.
For a project based company to be an ever flourishing company, in other words the critical success factors for a project based company are:
Clear understanding of Wha it stands for
Having the right-world-class processes in place
The company will have satisfied employees only if:
it created an environment that Knowledge is Shared.
its work environment is open and friendly.
it challenges its employees Intellectuality — as this is crucial for knowledge based organisation.
it trusts its employees to do their job.
it empowers its employees to take Responsibility and Make Decision.
it provides Mentoring to all its employees.
it provides Career Growth path to all its employees.
it pays all its employees fairly and well.
It is not enough to do the above to keep the employees satisfied but the company must know where it stands in the world as this will reflect to its culture.
Why the company exists at the first place?
What is its place in the world?
What does it believe in?
Why do others should work for it or be partner with it?
What does the company do? and How?
What are its values and culture?
Having the right-world-class processes in place is another necessary condition for a project based company to reach its goal, such processes are:
Project Management processes.
Customer Support Processes.
Continues and on going Improvement Processes.
Right Finance and Measurements — As measurements define the outcome and employees behavior.
Right Sales and Marketing (such as Mafia Offer model from Theory of Constraint)
Without delighted and satisfied clients, the project based company can not exists for very long time, therefore delighted clients is another critical success factor for a project based company, and the clients will be delighted ONLY if the company:
Able To Delivery Early and Faster Than Others
Creates Innovative Solutions For Client’s problems and needs
Provides high business value solutions at all times
The focus of this blog will be on delighted clients and we will create the formula from the above four necessary conditions.
Reliability could be translated into delivering what you commit to, doing what you promised.
Couple of things to keep in mind about reliability — these are very important:
For project based companies, reliability is the single most important factor in winning over competition.
… Because the client thinks he/she can rely on the company, She/He is either delusional or thinks the company is reliable and therefore he/she can handover part of his/her fortune , or in some cases most of it, to the hands of the vendor.
Now if the company delivers again and again based on what it promised, then it will create a reliability castle that no one can penetrate.
As you realize, reliability is not an easy thing to achieve, it requires :
the right people
the right mindset
the right process in sales, marketing , project delivery and all areas of the business
Every single employee of the company is responsible for its reliability reputation
… Every single one of you is responsible, In Fact it is indeed in your best interest to make sure your company is reliable. Why?
… because reliability will grow your company and make it more valuable
… the more valuable your company becomes, the more opportunity you will have.
… if you stay in such a company you can grow, learn more and make more money and hopefully enjoy it everyday.
… if you decide to leave, then the new company will respect you more when they see you are coming from an entity that has reliability reputation.
… when every single one of you is reliable then the company’s culture will be based on reliability.
… and then it naturally rejects any idea or any person who may make the company unreliable.
… this also will change the strategic thinking, as culture is around reliability, therefore managers and leaders will plan around reliability, and they will promise only what they can deliver.
You see, reliability culture also increases moral, as trust increases between people within and outside of the company.
Trust is the fruit of being reliable!
I do not need to talk about trust and its advantages when the culture is around trust.
But just think about the time that all people within the company trust each other, openly discuss ideas and most importantly clients trust what they see, hear and promised.
Now, imagine if your client’s CEO meets a prospect’s CEO, and tells him/her that your company is a reliable company and we trust them!
How much easier will it be for your business development and sales team to close a deal with that prospect ?!
How do you measure reliability?
Well, There is a formula and it is based on the amount of work committed to, and amount of days that we missed the commitment.
SUM OF All Commitments in Dollars x Days of Delay = Throughput-Dollar-Days
* Reliability is measured by throughput dollar day, Measurement of things that should have been done and were not.
And the Goal is to reach to ZERO Throughput-Dollar-Day
Reliability is not enough in digital space, You need to be faster in delivery to create a strong competitive edge.
Because things change in the world faster than ever before, technologies and ideas come and go more frequently; Therefore being proactive and also being able to react fast to changes is crucial for all companies.
For a project based company within digital space, being fast and agile is crucial. Because this is what the market expect from agency’s clients.
Therefore, Clients want to get things done faster than ever before and they also want to be able to change them on the fly.
Any project based company in digital space that can delivery such a service is the winner of future digital market.
so what is like to have agility and speed;
if you deliver faster then you have higher capacity
therefore you can delivery more with less work
you can adapt to changes in the market
and you delivery value to stakeholders faster and more often
as result, you can reduce the client’s pay back period and increase their return of investment.
What it will take to be faster;
Right people with the right skill
people who think out of the box and are learning machines
generalise specialists, who can jump on a task to help others, if some one is overloaded and flow of work and value delivery is blocked.
You need to know what makes a flow of work slow and what makes it fast … everyone needs to know about it
and you and your people must learn and share the knowledge.
and of course you will need the right process and tools (didn't I say that already? )
Innovative Solution is not about inventing something completely new. But it can be a small thing such as designing a button on the home page that increases conversion rate or a big and sophisticated solution that impacts client’s business as a whole.
Pay attention to two statements here:
increasing conversation rate
or impacting the business as a whole,
… An innovative solution that does not add business value “May not worth investing”,
… More importantly an innovative solution that is so expensive that the user can not effort it, will not survive the market,
… hence when innovating you need to take into consideration the constraints of the user or in your case the client.
If you propose an innovative solution to a client that cost more money than they can effort then what will happen to that innovative solution?
It will die!
What will happen to Apple, if they invent things that nobody can effort to buy?
They will go bankrupt.
The trick is to find a solution that relives a pain of its users while helping them gain something more valuable and very soon.
These days, there are enough data and theories around innovation.
And many study successes and failures and come up with scientific methods for innovation that anyone can learn and apply to his/her daily life.
Check the works of Peter Drucker and Clayton Christensen , Read their articles, books, and watch their videos. Although there are many other scholars, but you can learn a lot only from Peter Drucker and Clayton Christensen.
Before we review a set of tools for innovation, We need to get to know another framework which it is necessary for successful implementation of any process, especially in knowledge work environment. And that is The Cynefin Framework.
Cynefin is in welsh language, and it means “Habitat” or “an environment of an organism “
Dave Snowden made this term to describe a perspective on the evolutionary nature of complex systems, including their inherent uncertainty.
So, what this has to do with you and your company?
Well, in short, it has a lot to do with Delivery Methods and Solution Design.
I will not describe the framework in details here. But in nutshell, The Cynefin framework help you to make better decisions in regards to what process to implement and how. It helps you to decide:
When to use Best practices,when to combine several best practices — or pick and choose from best practices techniques in order to adopt to your environment.when to experiment and researchwhen and how to come up with innovative solutionsand many more.
You may read these papers to get better idea about The Cynefin Framework:
A leader’s framework for decision making published in Harvard Business Review.and On Understanding Software Agility — A Social Complexity Point Of View
To be innovative you need to act as an innovator. Let’s quickly review how today’s entrepreneurs innovate new technologies and business models:
Behaviour and Mindset of innovative entrepreneurs;
They continuously Observe the world,
They try to Associate different things, theories or phenomenons together,
They Question everything — they ask Why
They Experiment without fear.
They meet new people, Share knowledge, Network all the time.
The above are important to gain more knowledge about and expand your domain of thinking.
Scientific Method is at the core of everything innovative entrepreneurs do.
Because of uncertain environment and unknown unknowns, therefore everything is hypothesis that needs to be tested and validated over and over again until it becomes a fact.
Rapid engineering: long experimentation and test becomes expensive, therefore rapid and incremental engineering (agile) is needed. Several Rapid engineering experiments in parallel is one of the key elements in innovation. You must run several experiments in parallel and conduct them rapidly, keep time as your constraint in order to get faster results.
There are couple of tools that makes the scientific process for innovation easier:
Lean Start-up Method: removing waste from searching a new solution.
Customer development: iterative method for discovering and validating problem and designed solution
Business model and value proposition canvas: frameworks for identifying and creating valuable solutions.
Design Thinking: Developed by IDEAO Design studio for brainstorming and creating solution or product in iterative mode and with customer in the centre.
And based on all the above, here is our formula:
Reliability + Early Delivery + Innovative Solutions = Decisive Competitive Edge for your company