Business Tools every Management Consultant should know

business toolsEvery organization strives to creating great products/services, innovates, serve customers and create value for shareholders.  How do you accomplish all this in constantly changing business environment?  Organizations needs to build business skills, marketing skills, they need to innovate, build fast, take risks, develop leaderships skills, develop knowledge and resources, build great relationship with customers, partners, suppliers, vendors and the like. All of this calls for business tools and techniques.

Through my consulting career, I have found the following tools to be extremely valuable. Each tool needs to be applied in its own context and situation, and the phase of program/project you are in. A few of them are listed below.

Category Business Tool /Technique Description
Business Strategy SWOT Analysis Strengths, weaknesses, opportunities, and threats. A 2×2 table highlight each area. Can be applied at organization level, department/LOB level, a product or service.

Learn more – SWOT_analysis

  Balanced Scorecard  A forward-looking strategic performance management too, usually along 4 dimensions –

  • Financial
  • Customers
  • Internal Processes
  • Innovation & Learning

Learn more – balanced_scorecard

  Blueocean Strategy (vs. Redocean) Blueocean is creating new markets, new opportunities, tap new customers and make competition irrelevant.

Redocean is playing in existing market space and fighting for larger market share.

Learn more – what-is-blue-ocean-strategy

  Benchmarking Benchmarking is the process of comparing your company metrics to the metrics of your industry competitors.

Common metrics for benchmarking include:

  1. Revenues
  2. Production costs
  3. Employee turnover
  4. Process cycle time

Learn more – BenckmarkingBeyond Benchmarking: Why copy the competition?

  Design Thinking Design thinking is a methodology to solve complex problems, with the eyes of end-user or the customer. Key is customer/business/creative/technology/sales/operations all collaborating and putting a great design.

How do you do it?

  1. Empathize with Customer, focus on customers’ needs
  2. Ideate and design with customer
  3. Develop rapid prototypes
  4. Test to gather feedback from customers
  5. Iterate/Refine

Learn more – Design Thinking

  Growth Share Matrix (aka BCG model)  A model to identify which of your products/investments should be continued.

2 dimensional – Market Share vs. Market growth. Products are classified into –

  • Cash Cows (high market share, moderate growth)
  • Stars (high market share, high market growth
  • Question Marks (low market share, high market growth)
  • Dogs (low market share, low market growth)

Focus on Cash Cows, Stars; evaluate question marks; discontinue dogs;

Learn more – BCG Model

  Porters’ Five Forces The Five Forces model helps businesses determine how well they can compete in the marketplace.

  1. Threat of new entrants
  2. Threat of substitutes
  3. Bargaining power of buyers
  4. Bargaining power of suppliers
  5. Industry rivalry

Learn more – Video explaining Porters’ 5 Forces. More

Marketing Strategy Four P’s of Marketing  The Marketing Mix, also known as the 4 P’s of Marketing, is the combination of product, price, place (distribution), and promotion.

Learn more – marketing-mixrethinking-the-4-ps

Technology Six Sigma  A technique for measuring and improving product quality. The process involves 5 main steps (DMAIC)-

  1. Define
  2. Measure
  3. Analyze
  4. Improve
  5. Control

Learn more – Six_Sigma

  Deming cycle (Plan-Do-Check-Act) 4 step technique to continuously improve product quality.

  1. Plan – planning the work
  2. Do – execute
  3. Check – measure, validate, analyze
  4. Act – make necessary adjustments

Learn more – PDCA

  Total  Quality Management (TQM) TQM is a method in which everyone in organization seeks to improve the quality of products and services through ongoing refinements in response to continuous feedback.

TQM is based on quality management from the customer’s point of view. It is tied to PDCA.

Learn more –  TQM

People Development Johari Window  A technique to help people better understand their relationship with self and others.

Learn more

  Force Field Analysis  A decision-making technique that identifies and reviews conflicting factors when a decision needs to me made.

Can also be equally applied when faced with multiple options needing to pick a winner.

Learn more

I hope these tools will increase your productivity and stimulate your thinking. Now, go create something great!

What are tools do you use in your day-to-day work? Please chime in with your thoughts.