Key activities that will push your business to new heights

Oyugi’s cousin, Ogello, came from Nyanza and spent a week with him and saw how he ran his business. Ogello enjoyed seeing his cousin happy as contrasted to back when he worked in a job he did not enjoy at a rural secondary school.

However, Ogello found Oyugi’s business lacking. While Oyugi found pleasure in the hurried lifestyle of a business owner and feeling that everything he did made a difference to his bottom line, Ogello began encouraging his cousin to break out of the jua kali clearing and forwarding world and professionalise his firm into a registered, functioning, and strategic business.

Oyugi suffered from a typical entrepreneurial and broader managerial pitfall in general; running around feeling busy and important by putting out figurative fires instead of strategising on how to position the company to grow while requiring less work from owners.

Following Osterwalder and Pigneur’s framework Business Model Canvas, Oyugi needs to get his key activities and key partnerships prioritised.

What key activities do your value propositions require? How about your distribution channels, customer relationships, and revenue streams?

Instead of running around solving immediate issues that pop up here and there, Oyugi must segment his main activities into three categories; production, problem solving, platform and networking.

1.Production revolves around developing your product or service into the highest quality required by your customer segment. Product design, the actual manufacturing, and delivering the right volume of product to customers all takes place in the production activity.

Companies in Nairobi’s industrial area and the export processing zone in Athi River concern themselves the most with production-related activities.

So, which activities could make you operate more efficiently and more profitably if you planned in advance and behaved less reactionary?

2.Next, Oyugi should determine and prioritise problem solving activities. How should you build in structures and systems to problem solve within your firm?

Find answers to anticipated problems before they emerge. Organisation development consultants in Kenya, such Wylde International, B-More Consultants, and PTO Consulting focus entrepreneurs in various sectors on preemptive problem solving.

Entrepreneurs should then focus on innovative solutions to customer pain points. Hospitals, NGOs, consultancy firms, and IT companies typically focus their key activities around solving customer problems.

Continuous training, organisation health checks, and knowledge management exist as hallmarks of service sector problem solvers.

3.Finally, business models dominated by a platform as critical to organisational success then require platform or network related activities.

Platforms are broad and can include software, branding, and web portals all functioning as a platform to do business.

OLX utilises an obvious online platform to buy and sell goods in Kenya, Visa maintains a platform of banks, customers, and merchants, while Westlands-based Craft Silicon creates software to solve bank and other client needs.

Such key activities in the above spaces include platform management, service provisioning, and platform promotion.

Now that Oyugi may segment his tasks, he can prioritise the key activities that will yield him the most value instead of fire fighting.

Next, Oyugi must contemplate whether strategic partnerships may enable him to professionalise and reach scale faster. He needs to identify the network of suppliers and partners that make his business model work, then focus attention on them.

In your own business, who are your key partners? Who are your key suppliers? Which key resources do you acquire from partners? Which key activities do partner perform for your business?

Segment partners

Segment your partners into those that may first optimise your business. Your business realistically cannot control the entire supply chain in your industry.

Even dairy behemoth Brookside does not own all the farms that supply it with milk. How might you organise your suppliers, to form reliable supply patterns?

In a strong economies of scale environment, each product you produce costs you less per unit to make than a smaller amount.

As an example, it costs Airtel more on a per client basis to put up mobile phone towers than Safaricom because of Safaricom’s sheer scale, Safaricom may spread the costs for tower construction over a larger customer base.

So, should Airtel partner with the other smaller carriers or other types of technology in order to reach economies of scale?

Next, which partners can reduce your risk and uncertainty? The first such partner that often jumps in an entrepreneur’s mind might include insurers to cover medical, theft, and business failure losses. But risk reduction is much broader.

In a competitive environment, partnerships can reduce your risk but sharing costs, like a bank loan to build a building instead of only from your own funds, or competitors joining forces to create infrastructure.

Lastly, the acquisition of particular resources and activities creates opportunities for partnerships since companies rarely own all the equipment necessary. For example, Samsung relies on Google to provide its operating system.

Utilise partners to assist you in growing your business and improving your margins.

Prof Scott serves as the director of the New Economy Venture Accelerator at USIU’s Chandaria School of Business and Colorado State University. E-mail; [email protected]