The Business Cycle Predicting Your Future Virginia Engineers Conference September 17, 2009

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Learning Objectives 1.Participants will learn and apply the “Power of R” – developing specific offerings for every phase of the business cycle 2.Participants will learn how to leverage the business cycle for their competitive advantage 3.Participants will learn about the five components that comprise every organization

How do you predict your future?

Prediction Alternatives ? Strategic planning has become an administrative “rite” for many businesses

Prediction Alternatives ? Adding 5%-10% to last year’s budget numbers is another way to predict your future

Prediction Alternatives ? Some businesses just “do it on the fly”

The Natural Business Cycle Reward Reinvest Review The Business Cycle Release Research

Research Phase Develop new offerings based on omissions or opportunities in the marketplace

Research Phase Characteristics of this phase include environmental, industry and competitive analyses.

Research Phase The definition of innovation is when your competitor becomes your customer

Referred to as the “market bet” Release Phase

Substantial capital spent on advertising, websites, social networking and “beta” customer trials Release Phase

Firms that “re-start” their businesses every 2 years are caught in a non-viable offerings loop Release Phase

Favorable phase for owners as customers and revenues are increasing exponentially Reward Phase

Monies expended during the Release phase are recovered and cost of sales drops dramatically Reward Phase

The end of this phase is marked with shrinking profit margins, higher levels of re-work and increased customer scrutiny Reward Phase

Free cash flow is reinvested into expansion activities Reinvest Phase

Horizontal and Vertical acquisitions are common during this phase Reinvest Phase

Only have 12 months to complete reinvestment activities – otherwise begin to short-change internal project initiatives Reinvest Phase

What worked? Research Phase

Exploit Your Competitor’s Cycle Realize that your competitor is on a unique cycle that can be exploited for your benefit

Exploit Your Competitor’s Cycle During the Release period, it may be in your best interest to push counter-messages to market

Exploit Your Competitor’s Cycle Even during the Reward phase, there is an opportunity to “beat” your competitor

Exploit Your Competitor’s Cycle And, when you phase “mirrors” your competitor’s try the “follow me” approach

Leverage Your Customer’s Cycle And, no surprise, your customer has their own business cycle!

Leverage Your Customer’s Cycle This is where AIM comes into play

Leverage Your Customer’s Cycle Assessments are quantitative studies that calculate the impact of certain actions or inactions

Leverage Your Customer’s Cycle Implementation services are the core activities that your firm sells

Leverage Your Customer’s Cycle Maintenance offerings provide long- term service care of implemented solutions

Leverage Your Customer’s Cycle For most of the phases, your customers have some “monies” to invest in analysis and maintenance activities

Leverage Your Customer’s Cycle The goal is to effectively time the Reward and Reinvest phases – as these are periods where customers have significant dollars to spend

Maximizing Your Future The Corporate Component Model Environment Strategy Operations Technology Organization

Those aspects that are not controllable by you but necessary to operate your business Environment

The objectives of your business inline with environmental and business cycle realities Strategy

Create an optimal model to achieve your strategy - devoid of people and technology Operational Model

Automate the operational model with technology Technology

Now, add the people back into the model – bringing the operation to life! Organization

There has to be a desire to change Change Management

1.Every business has a natural business cycle that predicts future operational characteristics; 2.This cycle can be exploited to “beat” competitors and leveraged to maximize customer value; 3.Once the cycle is predicted, use the corporate component model to build your business to achieve desired results Key Points

Thank You! Contact Information: Brad Dawson LTV Dynamics