Leading the business - how understanding your businesses commercial imperatives will help you become...

Improving the world through engineering www.imeche.orgImproving the world through engineering 3

Today’s moderator

Eddie Winton


Today’s guest speaker

Steve Pepperell


Introduction

•How ‘Commercial Behaviour’ can help engineers lead the business strategy to Commercial Success

January 2015

•How understanding your businesses commercial imperatives will help you become a better engineer

February 2015

•The challenges the world will face over the next 25 years and what engineers can do about them

March 2015


Today’s Agenda

• Review of Leading the Business Part 1

• Commercial thinking – The value proposition

• Transactional, consultative & enterprise selling

• Commercial awareness explained

• Reviewing the market – useful tools

• Measuring viability

• The engineer’s role in commercial thinking

• Summary


The models we explored in the first ‘Leading The Business’ webinar

Commercial Awareness

Supplier Base

Consumer and/or

Customer

Competition

Behaviours & Attitude

Viability

Strategy




Supplier Base

Consumer and/or

Customer

Competition


Viability

Strategy




Supplier Base

Consumer and/or

Customer

Competition


Viability

Strategy




Supplier Base

Consumer and/or

Customer

Competition


Viability

Strategy


The ‘Value’ proposition

ProductLeadership

•“They are the most innovative”

•“…constantly renewing and creative”

•“Always on the leading edge”

OperationalExcellence

CustomerIntimacy

• “A great deal”

• No-hassle company”

• “They never make mistakes”

• “Customised products and

services”

• “They are very responsive”

• “I am very loyal to them”

Customers tend to have 3 clear ‘Value’ discriminators

Remember: Value has a value only if it is valued!Bryan Dyson

Former CEO of Coca Cola


Value: The common factor in a confusing world

Intrinsic Value Customers see value only in the product and, as a result, define value as the cheapest, easiest way to obtain the supply of product that they need

Extrinsic Value Customers see real value beyond the product and define value in terms of advice, problem solving, customisation, or the capacity to meet special and unique needs

Strategic Value Customers look for an extraordinary level of value from a deep strategic relationship with a few chosen suppliers


Transactionalselling

Consultativeselling

Enterpriseselling

3 Selling modes enables the right approach to the customer


Customer value and the three selling modes

Customer Value Type Selling Mode

Intrinsic valueCustomers

“a cheaper,no hassle pie”

Extrinsic valueCustomers

“a bigger slice of pie”

Strategic valueCustomers

“baking a big pie together”

Transactionalselling

Consultativeselling

Enterpriseselling



Supplier Base

Consumer and/or

Customer

Competition


Viability

Strategy

Commercial Questions for Engineers

• What suppliers can deliver now?• Which suppliers will be better in the

future?• What suppliers are the best innovators?

Will they partner?• What type of risks, are their financial,

delivery failure other?• Are their likely to be mergers or

acquisitions in the supply base? What will be the effect?

• What does the customer or consumer really need?

• Is that what is briefed?• Can you provide it at lower

cost, or higher spec, or environmentally friendly etc?

• Will any of these options result in higher profitability?

• Who is the market leader?• What do you do better than the

competition? Is it important?• What don’t you do as well?• How important are you to suppliers

versus the competition?• Do you know or understand their

New Product Development Strategy?

W

• What behaviours do you need to demonstrate to show Commercial Awareness?

• What is my role in the business in various situations eg Specialist, Project Leader, Negotiator, Manager?

• Are You Getting support for your ideas

• What is the current measure of success eg Profit, Cost, Market Share, Social Impact?

• How can you measure and track performance?

• What is the long term plan, and how will you get there?

• Have you read the Company annual Report?

• Are You clear about what your company is trying to achieve.?

• Do you understand your departments role in achieving these objectives?

• Do you think you are pulling in the same direction ?

• If not what are you doing about it


Competition, suppliers & customers can be analysed using 2 simple tools

Strengths Weaknesses

Opportunities Threats

Positive Negative

Internal

External

SWOT


Example of a SWOT from The Daily Telegraph


Competition, suppliers & customers can be analysed using 2 simple tools


We’re not looking for more information we are looking for insight

Insight is the Aha!Moment

• Understand the issue.

• Commercial problems often involve a large number of disparate factors.

• Swot & Pest help you to understand the wider factors influencing a problem.

• Write down couple of sentences (no more than 100 words) explaining exactly what the issue is.

• This is called ‘The Pivotal Question’ .

• Once the question is properly defined the answer usually follows very quickly


Ansoff’s Matrix – Marketing strategies

Market Penetration

Product Expansion

Market Expansion

Diversification

Lowest Risk Medium Risk

Highest RiskMedium RiskNew

Market

Esta

bli

sh

ed

Market

EstablishedProducts

New Products

Increasing RiskIn

creasin

g R

isk

Igor Ansoff


The viability of a proposal can be measured in many different way’s


The engineer’s role in commercial thinking is A pivotal one

Improved Forecasting

Efficient Production Techniques

Don’t focus on what could be done but on

what needs to be done



Supplier Base

Consumer and/or

Customer

Competition


Viability

Strategy

Summary: Understanding commercial imperatives will help

you become a better engineer & enable you to lead the business


Any questions?

http://www.imeche.org/learning/free-training-webinars

http://www.imeche.org/learning-and-development/courses/meet-our-trainers

Date post:	11-Aug-2015
Category:	Leadership & Management
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Leading the business - how understanding your businesses commercial imperatives will help you become...

Leadership & Management